football-agents

The deregulation of football agents

The 1st April saw a shakeup to the current system that is used to govern agents in football. New FIFA regulations have been enforced and the FA have also updated their rules to ensure compatibility with the new regulations. The changes have been met with mixed reaction from those in the industry with many citing the irony of the new regulations leading us down a path of deregulation amongst agents.

A brief history on the governance of agents

The formal governing of agents has existed in football for nearly a quarter of a century, though agents have operated within football since the second half of the 19th century. FIFA introduced rules in 1991 that required agents to be registered with them. These rules were altered in 2001 and agents then needed to register with the national association where that particular agent was from or lived[1]. Further changes were made in 2008 by FIFA and have remained intact until now. The new regulations were first proposed in 2009 as a way of addressing a number of shortfalls identified by FIFA in the current system; namely that an estimated 70% of transfers are undertaken without licensed agents. Many submit the view that the reason for this high figure is that the 2008 regulations were simply not implemented consistently[2].

The new regulations

There are a considerable number of important changes brought in by FIFA which will be discussed in detail in due course. For the benefit of readers the changes identified by this author as important are as followed:

  • Agents now referred to as intermediaries
  • Registration to become an agent has been altered
  • Companies now may register as an intermediary (thus free to represent players)
  • 3% remuneration cap on wages
  • No maximum duration on representation contracts between player and intermediary

Agents now referred to as intermediaries and the changes to registration

Agents will now be referred to intermediaries and signifies the departure from the previous licensing system. In practice there is little, if any, difference between an agent and an intermediary. The change in name has been enforced in order to encompass individuals who weren’t previously agents but represented players and negotiated their contracts which were, according to FIFA’s estimations at least, a common occurrence. The interpretation of who is an intermediary is significantly widened and no longer do individuals need to have experience in working within the football industry.

The FA, in accordance with the new FIFA regulations, have updated their rules and have scrapped the need for the exam that was previously required to be licensed as an FA agent. Instead intermediaries will now submit a yearly application to be approved by the FA. Providing no conflict of interests exists and the individual’s reputation cannot be called into question, registration will be granted. Individuals wishing to register must not have any unspent convictions for violent and/or financial crime, be prohibited from standing as a director of a company, be suspended by any professional body, be required to notify personal information to police under part 2 of the Sexual Offences Act 2003, be suspended from the administration of any sport or be bankrupt. This ‘soft licensing’ system is a considerable step back from the previously tightly regulated procedure.

While it remains to be seen what the practicalities will be, it is a worry that the broad scope of this definition will be abused by individuals wanting to deceive footballers, particularly young players.

Legal entities permitted to act as intermediaries

Whole companies will now be able to register themselves as an intermediary to act on behalf of a player. Previously only humans could represent a player but this change allows for agencies like IMG, Stellar Group and Gestifute to now be the named intermediary. This change is particularly beneficial for agents as the long-standing law of companies being separate legal entities may absolve intermediaries from any indiscretions for the most part. It is worth noting at this point that all intermediary activity by the company must be undertaken by registered intermediaries.

However it does cause confusion for the players being represented by the company. Players will only have the right to be represented by said company but will have no right to be represented and looked after by a specific individual. It is likely therefore that there will be a significant increase in disputes between players/clubs and intermediaries as a result of the changes.

The FA’s jurisdiction over intermediaries

A point of confusion in the new regulations is that the FA no longer appears to have jurisdiction over intermediaries in the event of misconduct. FIFA regulations do not state that the FA needs to have any kind of jurisdiction over them however the FA’s new regulations state that a breach of their regulations will be considered as misconduct for the purposes of FA rules[3]. Additionally intermediaries will now be defined as ‘participants’ by the FA in order to ensure they come under the jurisdiction of FA rules. Furthermore it is expected that an application to register as an intermediary will be subject to the condition that the individual (or company) submits to the FA’s regulations and the jurisdiction of the FA.

In is already clear that the FA will still continue to regulate the activity of intermediaries as seen in the FA Regulatory Commission case of The FA v Kleinman, Levack, Rahnama and Brighton & Hove Albion. This decision was dated in February 2015, before the implementation of the new regulations, and holds that some of the intermediaries (agents) involved are to be banned from intermediary activity.

Recommended remuneration cap

Intermediaries have long had a reputation of always wanting to make as much money as they can for themselves. It will come as no surprise therefore that FIFA’s recommendation for intermediaries to receive no more than 3% of a player’s basic wage[4] was met largely with disdain. It is currently being argued that this rule infringes intermediaries’ competition rights and action is being taken to the European Commission.

The 3% cap however is only related to a player’s basic wage and no the agent’s fee which is a common clause in many transfers. The agent’s fee is not capped in anyway and can be as high or as low as negotiated. It is likely that, should the challenge to the European Commission be unsuccessful, many intermediaries will simply look to increase their agent fees to compensate for the 3% cap.

The argument against the cap is that it will have a knock-on effect on players. Intermediaries will have less desire to go out and get the best deal for their clients should they know they are capped on what they can earn.

Perhaps in the knowledge of the current action on this rule the FA, while still including this rule in their version of the regulations, are likely to not actively promote or encourage this particular rule.

Duration of young player’s representation contracts

Worryingly the new FIFA regulations no longer include a rule on the maximum duration of a contract between an intermediary and a player. For younger players there is a real possibility of abuse of these contracts. The potential to bind a young player into a representation contract which lasts the large portion of their career exists. It is highly like therefore that there will nw be an increase in disputes between players and intermediaries as players will eventually come to the realisation that this lengthy contract they are bound to is not beneficial to their careers.

Furthermore minors will now be able to be signed under a representation contract by an intermediary providing a legal guardian is present and signs the contract. At this point the intermediary would not be able to accept payment until the player turns 18. It is a precarious situation where an intermediary could simply sign hordes of young players and hope that just a few of them go on to command large transfer fees etc.

The FA has gone above and beyond FIFA in their version of the regulations and has sought to protect minors by only allowing a maximum representation contract of 2 years. The concern for intermediaries here is that many will not feel incentivised enough to achieve a good deal for their player due to the fact that they will no remuneration for players 17 and younger. It seems odd that an agent going about his work in a proper and integral manner is unable to be paid for his services.

Links


References

[1] Art. 2, Players’ Agent Regulations (2001)

[2] Player Contracts: FIFA Regulations on Working with Intermediaries: Analysis – Littleton Chambers

[3] F(1), FA Regulations on Working With Intermediaries

[4] s.7(3), FIFA Regulations on Working with Intermediaries

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