From football agents to intermediaries
Background
In 2014, FIFA's Congress made a decision that the agent regulations should be repealed and replaced with a new regulations with effect from 1 April 2015. In a historical perspective, agents have played an increasingly central role in recent years in connection with agreements concluded between football players and football clubs. The first FIFA agent regulations came into force in 1991 and were later amended several times. A major revision of the regulations was carried out in 2000/2001, where FIFA introduced national licensing schemes, requirements for liability insurance and requirements for the completion of a written examination. The regulations were also amended in 2008, which was the edition that was in effect until the regulations were repealed in 2015.
After FIFA began to record the cash flows in the transfer market, there was a clear increase in agent fees. In 2014, according to FIFA's figures, $ 236 million was paid to player agents. This, according to FIFA, constitutes only a fraction of the real agent fees. For the sake of comparison, it can also be mentioned that in the same year, according to FIFA, just over $ 4 billion was paid in transfer fees for transfers for 13,000 professional players. In 2009, the FIFA Congress decided to implement changes to the agency scheme as a result of several challenges. The reasons given by FIFA were:
1) Many transfers were carried out without licensed agents, as many non-agents still assisted clubs and players in connection with transfers, with what were typical agency tasks. Clubs could, for example, pay people who were not registered as agents such as scouts or other types of consultants, making the "agent's" role unclear. According to FIFA's calculations, between 70 and 75% of all transfers worldwide were carried out with non-licensed agents, while still providing agent services.
2) Many transfers were, according to FIFA, little transparent, both the transfers that were carried out with unregistered "agents" and transfers where licensed agents were used. Lack of transparency made it difficult to map the overall costs associated with a transfer.
3) In several countries, the FIFA regulations were contrary to national law.
4) It was unclear what different roles the agents had in connection with a transfer, as they could act as representatives of both clubs and players, and turn sides of the table from one transfer to another.
FIFA's congress in 2009 decided to create a working group to work out the new scheme. After five years of work on the new scheme, the FIFA Congress adopted in June 2014 a new regulatory framework, «Regulations on working with intermediaries» (RWI). The regulations came into force on 1 April 2015, and replaced the old agent regulations.
In connection with the publication of the decision, FIFA stated what was the overall objective of the new regulations:
“The new system does not regulate access to the activity but provide a framework for tighter control and supervision of the transactions relating to transfer of football players in order to enhance transparency. The regulatory approach taken to achieve this is the introduction of minimum standards and requirements, as well as a registration system for intermediaries who represent players and/or clubs in concluding employment contracts and transfer agreements. They aim to provide players and/or clubs with the opportunity to choose any party they wish to engage as an intermediary, as long as this party meets specific criteria, fulfils best practice standards and respects certain key principals.”
The core of FIFA's expressed goal was thus to establish a regulatory framework that does not regulate access to the market with regards to who can operate as an intermediary, but to facilitate better control, monitoring and transparency, where the clubs can choose which intermediary they want, as long as it meets defined minimum conditions.
Key elements of the new regulations
The FIFA regulations contain a set of minimum criteria, which the national federations are obliged to follow. The regulations stipulate that each national federation can to a certain extent adopt provisions that come in addition to FIFA's minimum requirements.
Certain provisions in the intermediary regulations may be worth noting. Firstly, FIFA abolishes the licensing scheme where passing an agent exam was one of the conditions for being licensed as an agent. The new scheme has few limitations with regards to who can act as an intermediary in an agreement between club and player. The intermediary must meet the minimum criteria established by FIFA, possibly supplemented by criteria set by the national association. Under FIFA's minimum criteria, an intermediary must have an impeccable reputation and not have a contractual relationship with the national federation, FIFA or similar organizations that could lead to a potential conflict of interest. Both individuals and legal entities will be able to register as intermediaries, without requiring any professional competence. The idea behind FIFA is that they want a shift in focus for regulation. As mentioned, one of the goals of FIFA with the new scheme was that instead of controlling access to the ability to represent the player or club, FIFA wants it to be the activity itself to be regulated. The goal is to ensure greater openness about who is represented by whom, how much the intermediaries are paid and who is paying.
Secondly, the system adds that the intermediary must accept the disclosure of transactions, payments and agreements where the intermediary has been involved. It is basically the players involved and the clubs that are responsible for submitting relevant documentation to the national union. The national association is obliged to publish the names of all registered intermediaries together with individual transactions where the intermediaries have been involved and the total remuneration of each intermediary. The national association is also responsible of disclosing any disciplinary sanctions imposed on intermediaries.
Thirdly, only national federations can impose sanctions on breaches of the regulations. Previously, FIFA had the exclusive competence to impose sanctions on international transactions, that is, all transactions across federations, or with a non-resident player, while the national federations only had the competence to impose sanctions for national transactions. There are probably critical voices that will argue that this is an important reason why FIFA has accepted the changes, as it is obvious that dealing with international disputes between agents and players / clubs was extremely resource-intensive for FIFA.
Fourthly, a provision has been introduced to protect minors. It is prohibited with remuneration of intermediaries for transactions involving minor players, i.e. all under the age of 18. It is still possible to enter into a representation contract with players under the age of 18. It is worth noting that, according to FIFA's regulations, a maximum limit is not set for how long a representation contract can last.
Fifth, it is recommended that the remuneration of the intermediary should not exceed three percent of the contract value (the value of the player's gross base salary during the contract period, possibly of the transfer fee). Initially, the proposal from FIFA was that this should be binding, but after protests by agency associations this was changed to a recommendation.
Sixth, the new regulations open for double representation. As long as the intermediary informs in writing that he represents several parties to the transaction, and this is accepted by the parties concerned. In the agency regulations, there was a ban on double representation without exception.
Challenges
Experience with the new system clearly shows that there are a number of challenges associated with the scheme with intermediaries.
Firstly, as previously mentioned, the only condition for communicating is that the intermediary has an impeccable attitude. Previously, relatively difficult agency examinations were conducted by FIFA, together with a requirement to pay a yearly agent fee. The change may have led to more people who do not necessarily have the right competence, represent clubs and players at transfers and contract signatures. Poor advice can have large impact on clubs and players. If a player commits himself to an intermediary for two years it can be difficult to get out of the contract, and having a poorly-qualified intermediary for two years can be devastating for a player's career.
Secondly, which is another side of the sharp increase in the number of intermediaries, is that this increase can lead to more disputes between intermediaries, where the dispute issue is who has a valid representation contract with a player or club. Under the previous scheme, with fewer agents, this was relatively clear, but with many more intermediaries in the market we can get an increase in cases where several intermediaries claim to represent the same player.
Looking ahead
It is obvious that the new regulations have had some starting problems that FIFA has to solve. In particular, agent associations have clearly stated that changes need to be made, and changes may be required as a result of legal proceedings. UEFA has also indicated that they will adopt regulations that complement the regulations for the European unions. Whether there is a separate arrangement in Europe, or whether FIFA changes the regulations remains to be seen.
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