This year’s FIFA congress in Sao Paulo should not be
remembered only for the controversy surrounding the bid for the World Cup 2022
in Qatar. The controversy was surely at the centre of the media coverage, but
in its shadow more long-lasting decisions were taken. For example, the new Regulations on
Working with Intermediaries was approved, which is probably the most
important recent change to FIFA regulations. These new Regulations will
supersede the Regulations on Players’
Agents
when they come into force on 1 April 2015. In this blog post we compare the old and
the new Regulations followed by a short analysis and prospective view on the
effects this change could have.
The Road to the
New Regulations
Players’ agents, or “intermediaries” should we use
FIFA’s new terminology, provide their services to football players and clubs to
conclude employment contracts and transfer agreements. FIFA has been regulating
this activity since it introduced the first Regulations on players’ agents on 1
January 1996. Even though the Regulations were amended several times since then,
it is only during the last five years that a permanent consultation process was
put in place. According to a FIFA
press release, the consultation process involved member associations,
confederations, clubs, FIFPro and professional football leagues. Surprisingly
however, the press release does not mention whether agent stakeholders, such as
Pro Agent were also consulted. The
ultimate objective of these consultations was to propose a new system that is
more transparent and simpler in its implementation and administration.[1] At
the beginning of 2013, a Sub-Committee for Club Football was set up to deal
exclusively with the issue of reforming the Players’ Agents Regulations. Later
on that year the Committee presented a draft for the FIFA Congress 2013 based on the following three
findings:
The current licensing system should be abandoned
A set of minimum standards and requirements must be established in FIFA’s future
regulatory framework
A registration for intermediaries must be set up [2]
The draft Regulations were finally approved by the
FIFA Executive Committee on 21 March 2014 and by the FIFA Congress on 11 June
2014. Furthermore, the three objectives outlined are supposedly reflected in
the new Regulations.
A Rough
Comparison of the Old and New Agents/Intermediaries Regulations
In the following flowcharts we have summarized the key
requirements enshrined in both the old and the new agents/intermediaries FIFA
regulations. This provides a clear comparison of the differences and
similarities existing between the two regulatory frameworks.
Flowchart: Becoming an Agent under the Old FIFA
Regulations
FlowchartRegulationsPlayers'Agents.jpg (179.7KB)
Flowchart: Becoming
an Intermediary under the New FIFA Regulations
FlowchartRegulationsonWorkingwithIntermediaries.jpg (146.5KB)
By abandoning the old licensing system, the procedure
to become an intermediary becomes much simpler than before. The applicant does
not have to undergo an examination by FIFA anymore, nor does he need to
conclude a professional liability insurance in his own name or provide a bank
guarantee from a Swiss bank for a minimum amount of CHF 100,000. Furthermore,
in contrast to the old Regulations, legal persons can now also act as
intermediaries. Thus, in the near future we can expect players such as
Cristiano Ronaldo, Radamel Falcao and coach Jose Mourinho to be represented by
the agents’ company GestiFute rather than simply the agent Jorge Mendes.
However, it should be noted that FIFA’s new
Regulations on Working with Intermediaries are to be considered as minimum
standards or requirements. In accordance with Art. 1(3), the right of
associations to go beyond these minimum standards/requirements is preserved. In
other words, national associations can set higher thresholds for becoming an
intermediary should they wish for. In order to better understand the practical
reality of the regulation of agents it is therefore necessary to analyse to
what extent different associations set different standards and requirements.
Registration
Under the new Regulations, the national associations will
still be responsible for adopting a registration system regarding the
intermediaries. However, several important changes between the old and the new
Regulations can be deciphered, including the contractual terms between the
intermediary and the player/club and the remuneration terms.
Contractual
terms
Under the old Regulations, the representation contract
between the agent and the player and/or club would only be valid for a maximum
period of two years. Moreover, the contract could be extended for another
period of maximum two years (Art. 19(3) of the old Regulations). According to
Art. 3 of the new Regulations, "intermediaries must be registered in the
relevant registration system every time they are individually involved in a
specific transaction". Players and clubs disclose all the details to the association
when called upon. Thus, by allowing players not to be contractually bound to a
specific intermediary for a specific period of time, the bargaining position of
the player when engaging the services of an intermediary is likely to increase.
Remuneration
terms
In both the old as well as in the new Regulations the
amount of remuneration shall be calculated on the basis of the player’s basic
gross income. [3] Nonetheless,
where under the old Regulations the remuneration is calculated on the basis of
the player’s annual income, under the
new Regulations the remunerations is calculated on the basis of the player’s
income for the entire duration of the
contract. Moreover, as stipulated in Art. 7(3)a) of the new Regulations,
the “total amount of remuneration per transaction due to intermediaries (…)
should not exceed 3% of the player’s basic gross income for the entire duration
of the contract”. Secondly, the new Regulations prohibit any payment to
intermediaries when the player is a minor.[4] With
the new provisions on remuneration FIFA hopes to avoid that intermediaries
exploit players. Indeed, in many countries it is still common practice for players
to (unknowingly) sign contracts with their agents forcing them to pay a much
higher share of their income. This was perfectly possible under the old
Regulations since it did not provide a remuneration limit due to the players’
agents and there was no prohibition regarding remuneration to the agent when
the player is a minor and should be way more difficult under the new
Regulations.
Conclusion
With the new
Regulations FIFA attempts not to regulate access to the activity anymore, but
instead to shape the practice itself: players and clubs are authorised to
choose any parties as intermediaries and can change intermediary at any moment
since they are not bound by a contract with the intermediary. Furthermore, with
the remuneration limit of 3% of the player’s income FIFA aims to limit the risk
of players being exploited by their intermediaries.
Even though FIFA has explicitly stated the new
Regulations will not deregulate the profession, it seems that it is placing the
main responsibility to regulate onto the national associations. Not only will
all the national associations be required to introduce a registration system,
but they are also responsible for enforcing the rules and for imposing sanctions
in case the new Regulations are breached. As we have seen, when selecting an
intermediary, players and clubs shall act with due diligence. However, the
definition of the interpretation of the notion of due diligence is left open and
could differ from country to country.
With the game of football becoming ever more
globalised and with an ever increasing amount of international transfers of
players, regulating the profession of agent/intermediary at the national level is
becoming increasingly difficult. In this context, FIFA has adopted a surprising
orientation by delegating the responsibility to regulate the profession to the
national associations.
[1] http://www.fifa.com/aboutfifa/organisation/administration/news/newsid=2301236/
[2] http://www.fifa.com/aboutfifa/organisation/bodies/congress/news/newsid=2088917/
[3] The Regulations on Players’ Agents, Art. 20(1)
and the Regulations on Players’ Agents, Art. 7(1)
[4] The Regulations on Players’ Agents, Art. 7(8)