shedding light on fifa's regulations on working with intermediaries

Commentary on the Regulations

On this page, you will find an analysis of, and commentary on, the new Regulations. This page will be continually updated with new resources and by clicking on the title of each resource below, you will be taken to the relevant place on this page:

The FA regulations on working with intermediaries – At a glance

The FA was the first national association to release domestic regulations supplementing the FIFA Regulations on Working with Intermediaries. Below are just some of the key points to note.

    • If a person or company wishes to represent players or clubs in transfers or contract negotiations, they will first need to register with The FA as an Intermediary via The FA's online portal.

     

    • In order to register as an Intermediary, applicants have to satisfy The FA that they have an impeccable reputation by confirming that they meet the requirements of The FA's Test of Good Character and Reputation for Intermediaries. Once an Intermediary is registered, they will be permitted to conduct 'Intermediary Activity' (which includes entering into a Representation Contract with a client).

     

    • Registration lasts for one year, after which the Intermediary will need to renew the registration on an annual basis if they wish to continue conducting Intermediary Activity. The fee payable upon registration is £500 and each time the registration is renewed annually a renewal fee of £250 is payable. The fee upon first registration will be waived for Licensed Agents, but they will have to pay the renewal fee each time they renew their registration. The fee upon first registration will not be waived for those who were registered lawyers, overseas agents or close relations under the old licensing system.

     

    • Registered Intermediaries are entitled to use the designation "FA Registered Intermediary" after their name in business relations.

     

    • Anyone (whether they are a relative of the player, based overseas or a lawyer) who wishes to represent players or clubs on transfers or contract negotiations will have to register as an Intermediary and will be subject to the same rules (except where the individual is a lawyer who only provides Permitted Legal Advice).

     

    • If an Intermediary wishes to represent a player who is a minor (under 18), or to represent a club in respect of a minor, they must obtain a specific authorisation from The FA to do so. In order to apply for this additional authorisation, the Intermediary needs to provide The FA with a Disclosure and Barring Service check (formally a CRB check) or equivalent if based overseas. An Intermediary can apply for the additional authorisation at the time of registration or at any time whilst registered and, if granted by The FA, the additional authorisation will last for 3 years.  An Intermediary cannot enter into any agreement with a player in relation to Intermediary Activity before the 1st day in January of the year of the player’s 16th birthday.

     

    • Legal persons (i.e. companies) can also be registered as Intermediaries, though only a natural person already registered as an Intermediary himself / herself can register the company as an Intermediary and carry out Intermediary Activity on its behalf. Only natural persons can apply to The FA for additional authorisation to deal with minors.

     

    • An Intermediary must have entered into a validly executed Representation Contract with a player or club before carrying out any Intermediary Activity on his or its behalf. The Representation Contract must contain, as a minimum, the Obligatory Terms which appear in bold in the new Standard Representation Contract. These Obligatory Terms are relatively brief and it is open to the parties to agree additional terms (something we certainly recommend), though the maximum duration of a Representation Contract with a player remains 2 years.  This is different to the position under the FIFA Regulations, under which there is no maximum duration of a representation contract.

     

    • Representation contracts signed before 1 April 2015 were required to be re-submitted by the Intermediary within 10 days of the Intermediary registering with The FA. The Intermediary is then permitted to conduct Intermediary Activity under that pre-existing representation contract. If the pre-existing representation contract is with a minor, it will only be enforceable following re-submission to The FA if the Intermediary is authorised by The FA to deal with minors.

     

    • Players and clubs can remunerate Intermediaries in much the same way as under The FA Agents Regulations. A player can discharge his liability to his Intermediary by: (i) paying directly, (ii) the club making deduction(s) in periodic instalments from the player’s net salary, or (iii) the club paying the Intermediary on the player's behalf as a taxable benefit. All payments by clubs to Intermediaries other than deductions from a player's net salary must be made through The FA’s designated account.

     

    • Remuneration when acting for a player remains calculable on a player's basic gross income and an Intermediary's entitlement after expiry of the Representation Contract will continue for as long as the relevant employment contract remains in force. Intermediaries are prohibited from passing any remuneration directly relating to Intermediary Activity to any other person (unless that other person is a sub-contracted Intermediary).

     

    • Players or clubs are prohibited from making payments to an Intermediary if the player concerned is a minor (i.e. under 18).

     

    • The Regulations recommend that players, clubs and Intermediaries may adopt a commission rate of 3% of the player’s basic gross income for the entire duration of the relevant employment contract, or 3% of the transfer fee paid if the Intermediary is engaged to act for a club to conclude a transfer agreement. Depending upon the outcome of the Association of Football Agents’ complaint to the European Commission in respect of the equivalent provision in the FIFA Regulations on Working with Intermediaries, it is possible that this provision will be subject to further scrutiny in due course.

     

    • The FA will publish a list of every transaction in which an Intermediary has been involved and the total consolidated amount of all payments made by each club to Intermediaries.

     

    • Intermediaries can act for two or more parties to a transaction provided that all parties give their informed written consent and the dual/multiple representation rules are complied with in full.

     

    • Intermediaries cannot, directly or indirectly, have an interest in a club (i.e. cannot own more than 5% or be in a position to exercise significant control over a club). Likewise, a player, club, club official or manager cannot, directly or indirectly, have such an interest in the business or affairs of an Intermediary's Organisation.

     

    • The FA can charge an Intermediary who breaches the Regulations with misconduct.

     

    • Disputes involving Intermediaries can, if provided for in the relevant contract(s), be resolved as between the parties under Rule K (Arbitration) of the Rules of The Association.

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    25 differences between the FIFA Agents Regulations and Intermediaries Regulations

    We’ve identified below 25 changes introduced by, or resulting from, the Intermediary Regulations when compared with the current agents’ licensing system. In this section, the Intermediaries Regulations are referred to as “IR”, whilst the Agents Regulations are referred to as “AR”.

      • No licence – there will no longer be a need to be licensed to represent players / clubs. Under the AR, players / clubs can only engage licensed players’ agents, the licences being issued by the agent’s national association. Under the IR, any person or entity who meets certain minimum criteria can potentially represent a player / club. Rather than being licensed for a number of years, intermediaries will simply have to register with a national association every time they act in a transaction.

       

      • No exam – an intermediary will be able to represent players / clubs without having to pass an exam. In order to obtain a licence under the AR, a person has to pass a notoriously difficult exam overseen by FIFA and held twice per year by national associations. The exam tests candidates on both national and international football rules and regulations as well as principles of civil and contract law and is FIFA’s way of ensuring “the appropriate training and standard of players’ agents” (see Articles 1.4 and 8 of the AR). Without passing the exam, which individuals have to pay to sit, an individual cannot be a licensed agent.

       

      • No insurance – a licensed agent under the AR is required to have professional liability insurance of at least CHF 100,000. Under the IR, there is no requirement that an intermediary has insurance in respect of his / her / its representation services for players / clubs. That said, insurers have confirmed to us that they will still offer professional liability insurance if an intermediary wishes to take out such cover.

       

      • Representation contract – as under the AR, intermediaries must conclude a representation contract with their client, but there are a number of differences, including:
        1. under the AR, rep contracts cannot last for more than 2 years. Under the IR, there is no limit on their duration;
        2. there is a FIFA standard form rep contract for use by agents under the AR (although many agents used their own version or their association’s template). There is no template under the IR;
        3. under the AR, the agent is advised (but not required) to send copies of the rep contract to the relevant associations. Under the IR, the rep contract must be lodged with the association when the intermediary is registered; and
        4. under the AR, a rep contract is required to contain at least: the parties’ names, the duration and remuneration due to the agent, the general terms of payment, the date of completion and the parties’ signatures. Under the IR, in addition to those points the rep contract must set out the scope of the services and the termination provisions.

       

      • Recommended remuneration – possibly the most controversial of the IR’s provisions is the recommendation that players and clubs may adopt a commission rate of 3% of the player’s basic gross income for the entire duration of the relevant employment contract (or 3% of the transfer fee paid if the intermediary is engaged to act for a club to conclude a transfer agreement). The AR are silent on the appropriate level of commission (though do specify that if the rep contract fails to provide for the level of commission payable, the default rate is 3% – however, rep contracts rarely fail to specify the commission rate). One principle that has not changed between the AR and IR is that no payments between clubs of transfer compensation, training compensation or solidarity contributions may be made to intermediaries or agents, and neither may own any interest in any transfer compensation or future transfer value of a player.

       

      • Minors – under the IR, players and clubs are not permitted to make payments to an intermediary in respect of minors (anyone under the age of 18). The AR does not restrict payments to agents with reference to the age of the player. Whether or not national associations will implement rules that provide otherwise, particularly when minors who are 16 or 17 can sign lucrative playing contracts, remains to be seen.

       

      • Free of charge – the definition of an intermediary makes it clear that the IR cover those individuals / companies who represent players / clubs free of charge as well as for a fee, whereas the definition of an agent under the AR covers only those agents who provide representation services for a fee.

       

      • Companies – whereas under the AR only natural persons (individuals) can become licensed agents, under the IR both natural and legal persons (i.e. individuals and companies) can act as intermediaries. Interestingly, ‘officials’ (as defined in the FIFA Statutes) cannot be intermediaries, but players do not fall within the definition of officials, leaving open the possibility of a player acting as an intermediary (subject to there being no conflict of interest).

       

      • National association’s rules – the IR make it clear that associations are permitted “to go beyond” the minimum requirements in the IR. The AR on the other hand provide that associations are only permitted to deviate from the AR where they do not comply with national laws.

       

      • Onus on player / club – the IR make clear that the onus is firmly on the player / club engaging an intermediary to ensure compliance with the rules, submit requisite documentation to the relevant association and ensure the intermediary registers with the association in every transaction, whereas the licensing system under the AR enables FIFA to impose a greater degree of responsibility on licensed agents because they are already subject to FIFA’s rules under the terms of their licences.

       

      • Intermediary Declaration vs Code of Conduct – agents are required to sign the Code of Conduct under the AR. It contains numerous obligations regarding professionalism, truth, respect and clarity in an agent’s bookkeeping. The Intermediary Declaration has a different focus, not seeking to control the way in which an intermediary provides his / her / its services, but rather centred on affirming the rules set out in the IR themselves and confirming the intermediary’s agreement to the various transparency and disclosure provisions in the IR.

       

      • Impeccable reputation – under the AR, an applicant for a licence must have an impeccable reputation, which they are deemed to have if no criminal sentence for a financial or violent crime has ever been passed against them. It is left to associations to determine how to assess this – the English FA requires a Criminal Records Bureau check. Under the IR, an intermediary must still have an impeccable reputation but all that an association has to do to meet its obligation to be satisfied in this regard is receive from the intermediary a signed Intermediary Declaration which declares he / she / it has such an impeccable reputation – nothing other than the intermediary’s own declaration is required, meaning there is little scrutiny of an intermediary’s compliance with the rule.

       

      • Conflicts of interest (1) – the AR makes clear that an applicant for a licence cannot hold a position as an official, employee, etc at FIFA, a confederation, association, league, club or any associated organisation. Under the IR, before an intermediary can be registered by an association, it must be satisfied that the intermediary “has no contractual relationship with leagues, associations, confederations or FIFA that could lead to a potential conflict of interest.” This is not an absolute prohibition (as exists under the AR), in that if a contractual relationship with, for example, an association does not in fact lead to a conflict of interest in the player transaction in question, it may not prevent the registration of the intermediary.

       

      • Conflicts of interest (2) – under the AR, agents are prohibited from having shared interests with the agent of another party to the deal. Under the IR, a conflict of interest will not exist if the intermediary discloses in writing any actual or potential conflict of interest and obtains the written consent of the other parties involved prior to the start of the relevant negotiations.

       

      • Conflicts of interest (3) – ‘dual representation’ is permitted under the IR. Under the AR, agents are prohibited from representing more than one party, and could only be paid by one party, in a deal. The IR permit a player and club to engage the same intermediary if both provide their express written consent prior to the start of the relevant negotiations. In such case, the player, the club or both parties can pay the intermediary.

       

      • Disclosure and publication (1) – there is a greater focus in the IR on players and clubs disclosing to associations “full details of any and all agreed remunerations or payments of whatsoever nature…to an intermediary”. If requested to do so, players and clubs also have to disclose contracts with and records concerning intermediaries and a confidentiality provision in an agreement restricting disclosure in this way would be a breach of the IR. The focus on transparency in the IR is far greater than in the AR.

       

      • Disclosure and publication (2) – under the IR, at the end of March each year associations have to name (e.g. on their website) all intermediaries who have registered as well as the individual transactions in which they were involved. Associations must also publish the total sums of payments made to intermediaries by all players and additionally by all clubs within their territory. Associations may (but are not obliged to) make available to their players and clubs information relating to transactions that breached the IR. Under the AR, associations publish an annual list of licensed agents, but disclosure of the total sums paid to agents and the deals in which agents are involved is not required.

       

      • Payments by clubs – under the AR, an agent contract by a club has to be paid by way of a lump sum. Under the IR, that lump sum can be paid in instalments if agreed by the parties.

       

      • Disciplinary sanctions (1) – it is associations that are responsible for imposing sanctions for violations of the IR. They must publish and inform FIFA of any disciplinary sanctions taken against an intermediary (though not a player or club) and the FIFA Disciplinary Committee will decide whether to extend the sanction to have worldwide effect. Publication of such disciplinary sanctions is yet another example of the push for transparency. Under the AR, it is the FIFA Disciplinary Committee that imposes sanctions if a disciplinary issue arises in international transactions and its decisions are not made public.

       

      • Disciplinary sanctions (2) – whereas the AR specify the disciplinary sanctions that could be imposed on agents, players, clubs and associations (including for example the minimum level of fines), the IR merely state that associations are responsible for imposing sanctions on any party that is under the remit of FIFA / association(s) and that violates the IR, leaving it open to the associations to determine the appropriate sanctions.

       

      • Prohibition on betting – intermediaries are required in the Intermediary Declaration to declare that they will not take part in betting, gambling, etc. connected with football matches. It is not yet clear how long the prohibition on betting etc. would continue to bind the intermediary. There is no such prohibition in the AR.

       

      • Lawyers / family – whereas lawyers and parents, siblings and spouses are exempt individuals under (and therefore not bound by) the AR, there is no equivalent exemption under the IR, so such persons will be required to comply with the new rules.

       

      • Prohibitions on approaches – under the AR, agents are permitted to approach only those players who are not under an exclusive representation contract with another agent. The IR do not seek to control which players can be approached. Furthermore, under the AR, agents are prohibited from approaching a player under contract with a club to persuade him to leave his club. There is an express presumption that an agent of a player who terminates his contract without just cause has induced that breach of contract (with potentially serious ramifications for the agent). There is no such express presumption under the IR.

       

      • Dispute resolution (1) – under the AR, the FIFA Players’ Status Committee provides a dispute resolution forum for international disputes. Under the IR, FIFA does not provide a dispute resolution forum and is not competent to hear disputes regarding intermediaries. Indeed the IR does not even specify what dispute resolution measures must be implemented by associations. Parties are therefore free to agree in the rep contract the competent tribunal of their choice for the resolution of disputes.

       

      • Dispute resolution (2) – any international dispute to be heard by the FIFA PSC must be brought within 2 years of the event giving rise to the dispute and no more than 6 months after the agent loses his licence or terminates his activity. Claims will not, it seems, be time barred under the IR (subject to the relevant rules of the association / national laws).

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      Concerns about the new FIFA Regulations

      What is FIFA’s rationale for abolishing the football agents’ licensing system? Essentially, FIFA believes that the system has failed. It alleges that 70–75% of international transfers are conducted by unlicensed individuals.

      But whilst no-one can accuse FIFA of a knee-jerk reaction to the problems identified with the agents’ licensing system – after all, the consultation process lasted 5 years – the new Regulations have drawn widespread criticism, not least from licensed agents. Some of those critics point out that licensed agents themselves were not included in FIFA’s consultation process.

      Moreover, it is worth stressing that certain European national associations have regulated the agents’ system fairly effectively and indeed have spent many years putting in place systems in order to do so. The figures concerning unlicensed agents do not accurately reflect the position in those national associations.

      However, it’s important to acknowledge that FIFA governs world football. Whilst a number of European associations have successfully controlled and regulated agents’ activities, the same cannot be said for many of FIFA’s 209 member associations and it is that fact which has played a key role in FIFA’s decision.

      FIFA simply lacks the resources to rectify such a large-scale problem. Accordingly, it has decided to bring an end to the licensing system altogether.

      But are the new Regulations the answer? Below is a summary of some of the concerns that have been raised:

      3% recommendation

      An aspect of the Regulations that has come under particular fire from certain critics is the recommendation in Article 7(3) that players and clubs may adopt maximum commission rates of:

      (i) when an intermediary is acting on a player’s or club’s behalf to conclude an employment contract, 3% of the player’s basic gross income for the duration of the relevant employment contract, or

      (ii) when an intermediary is acting on a club’s behalf to conclude a transfer agreement, 3% of the eventual transfer fee.

      FIFA would say of course that the benchmarks in Article 7(3) are recommendations, not mandatory caps; that such recommendations can be freely adopted or disregarded by players and clubs as they wish; and that with recent figures showing that the average commission paid by clubs to agents for international transfers is 28% of the value of the transaction, curbing excessive representatives’ fees can only be positive.

      But it’s not difficult to see why critics of the provisions would dismiss such arguments out of hand. Indeed, it has been asserted by the Association of Football Agents (the representative body for around 500 football agents in England) that Article 7(3) is unlawful under domestic and European competition law and it has lodged a complaint with the European Commission. That complaint is due to be heard by the Commission before the scheduled implementation of the Regulations on 1 April 2015.

      Whilst it may only be a recommendation and not a mandatory cap, the likely effect of the 3% recommendation in practice is that some players and clubs will refuse to pay more than that level of commission. In certain transfers, 3% would make the intermediary a handsome sum. But paradoxically, there’s a risk that those lucrative transfers are in fact the ones where intermediaries receive higher percentages (due to a club’s desire to secure the services of a sought-after player). On the other hand, the less high-profile deals may see the parties refusing to pay more than the 3% recommendation simply because they can, leaving the intermediary with an even smaller slice of an already meagre pie.

      Of particular concern is the possibility that the 3% recommendation disincentivises intermediaries and therefore leads to a drop in the quality of representation services provided to players. The outcome of the Association of Football Agents’ challenge before the European Commission in respect of this aspect of the Regulations is keenly awaited by all concerned.

      Minors

      The restriction on payments to intermediaries in respect of minors is another contentious aspect of the new Regulations.

      It may be that a 17 year old in England signs a 3 year contract on £5,000 per week, earning the player over £750,000 during the contract, and yet the intermediary is not permitted to earn any remuneration regardless of the part they played in securing the contract.

      This complete restriction seems somewhat unjustifiable and it may be one of the areas that will be subject to further regulation in numerous national associations’ rules, subject of course to national laws.

      Suitability of intermediaries

      A further issue, set against a background of public concern about corruption in football, is that the new system potentially opens the door to inappropriate persons becoming involved in player representation. This risk is arguably compounded by the self-certification of an intermediary’s 'impeccable reputation'.

      This may be of particular concern in relation to younger players. An intermediary whose background has not been subject to any real scrutiny could potentially enter into a lengthy agreement with a player of school age that entitles the intermediary to remuneration for years after the player’s 18th birthday (remember, the Regulations impose no limit on the duration of a representation contract).

      Set against a background of FIFA’s determination to afford greater protection to minors, not least its restrictions on the Transfer of Minors in the Regulations on the Status and Transfer of Players, it could be argued that the new Regulations focus on the wrong issue. They impose a blanket ban on payments to intermediaries in respect of under 18s (ignoring the fact that lucrative professional contracts are signed by some under-18 players - see above), but open the door to potentially lengthy rep contracts between young children and persons subject to minimal scrutiny.

      It seems likely that this is one of the areas that will be subject to further regulation in national associations’ rules, subject of course to national laws.

      Quality of representation services

      Another serious concern is the potential for players (and to a lesser degree clubs) to be represented in sub-optimal fashion, if not downright badly.

      Whilst the agents’ exam became unnecessarily difficult in recent years, it did constitute a functioning barrier to entry and, most importantly, ensured in FIFA’s own words “the appropriate training and standard of players’ agents”. Only those who had genuinely studied and acquired a deep understanding of the rules and regulations would pass the exam. With the removal of that filter, for want of a better word, there is the real risk that players may end up being represented by individuals or corporate entities that do not have the knowledge, experience or attributes to represent their clients to an acceptable, let alone optimal, standard.

      Some form of mandatory educational programme for intermediaries could lessen this risk, possibly with Continuing Professional Development ensuring that requisite knowledge and skills are maintained. If correctly focussed, this would not only promote better quality representation across the industry, but would also likely bring about more consistent compliance with the regulations governing both intermediaries and player contracts and transfers generally.

      Dispute resolution

      Under the Regulations, FIFA will not be competent to hear disputes regarding intermediaries and indeed provides no dispute resolution forum.

      Unless a national association’s rules bring registered intermediaries under its jurisdiction and provide a dispute resolution forum, disputes between intermediaries and clubs or players concerning fees may end up being resolved in the national courts. National associations will need to consider whether they are prepared to provide an efficient and confidential arbitration system for the resolution of claims involving intermediaries, which many consider preferable to ordinary litigation in the courts.
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