What to Consider in Agreements with Transaction Intermediaries .
For many players taking their first steps in senior football, one of the first contracts they sign is with a transaction intermediary. At the current stage of professionalization in sports, signing a contract with a transfer intermediary often precedes signing the first professional contract chronologically. The collaboration with an intermediary aims primarily at promotion and securing a professional contract, followed by further development and playing in the best possible clubs. Since the intermediary becomes responsible for the player's career, it is essential to clearly define the terms of cooperation in the contract with the transaction intermediary. It is worth having a lawyer analyze its provisions for potential risks and financial consequences.
While this post does not replace individual legal advice, I point out 5 issues that should be carefully considered.
- Is the contracting party listed on the list of transaction intermediaries?
The Polish Football Association's resolution on transaction intermediaries defines a transaction intermediary as follows:
“Transaction intermediary” (hereinafter “intermediary”) is a natural person, legal entity, or other organizational unit registered with the Polish Football Association (PZPN) in accordance with the provisions of this resolution, who represents the Club or player free of charge or for a fee in negotiations and concluding a transfer agreement or a Professional Football Playing Contract (including commission or agency agreements), labor mediation, or any other legal relationship.
The condition for providing services in representing players is therefore being listed on the intermediary list at the PZPN. The Polish Football Association publishes on its website a list of natural and legal persons registered as transaction intermediaries. You can find the list of intermediaries for the 2015/2016 season HERE.
Why is this important? According to point 10.7 of the PZPN resolution on intermediaries, a Club or Player that enters into a Representation Agreement with a person who does not have the qualifications of an Intermediary is subject to disciplinary liability. Disciplinary penalties for players as provided in the disciplinary regulations include, for example, a monetary fine not less than 1,000 PLN or disqualification.
- Remuneration/Compensation of the Agreement.
At the outset, attention should be paid to contracts involving minor players. According to the PZPN resolution on intermediaries, it is prohibited to sign mediation agreements under which a player under 18 years of age would be obliged to pay the intermediary in connection with the conclusion of a contract or transfer agreement, as well as agreements containing an obligation to pay such fees in the future. Failure to comply with this provision may result in disciplinary sanctions (also for the player).
As for other contracts, the agreement should clearly specify whether it is paid or unpaid, and if payment is provided for, it is necessary to ensure a precise definition of the grounds for payment of the remuneration. Often, mediation agreements are structured in such a way that the intermediary is compensated by the player's club if the contract with the club is concluded as a result of the intermediary's actions. Of course, for this purpose, it is necessary to conclude a separate agreement between the intermediary and the club. The second model commonly used is one in which the player pays the intermediary a fee defined as a percentage of their earnings. In this case, it is necessary to precisely determine the amount from which the remuneration is calculated, payment terms, as well as the documents based on which the payment is to be made - for example, invoices. I have written more extensively on this topic HERE.
- Duration of the Agreement.
After the change in regulations, mediation agreements can be concluded for any specified period with the indication of the start and end dates of the agreement. Therefore, it is legally permissible to conclude an agreement for, for example, 10 years. However, entering into a long-term agreement with an intermediary should be approached with a great deal of caution. Of course, the intermediary entering into an agreement with a minor player will want to conclude it for a longer period than until the player reaches the age of majority, so that they can receive remuneration for the activities performed. In the case of relatively long contracts, it is important to clearly specify the situations in which the party to the agreement is authorized to terminate it so that in the event of a problematic cooperation (especially with contracts with reserved "exclusivity," as discussed below), non-performance or improper performance, the player is not "stuck" with the intermediary.
- Exclusivity
Mediation agreements are divided into agreements with the "exclusivity" clause and without it. In the first case, the player undertakes not to grant power of attorney to conduct his "football" affairs to other persons outside the intermediary specified in the agreement. In the second case, the player may authorize several intermediaries. In the situation of concluding several "non-exclusive" mediation agreements, there is a risk that more than one intermediary will claim remuneration in connection with the signing or extension of the contract. To avoid such situations, it can be stipulated that a particular intermediary is authorized to negotiate exclusively with strictly specified clubs. For example, intermediary A may represent the player before clubs A, B, C, and intermediary Z before clubs D, E, F. Another solution is to precisely define the activities that entitle to the commission. These reservations mainly concern cases where the player is obligated to pay the commission.
- Arbitration Clause.
And finally, perhaps the least obvious issue. According to the aforementioned PZPN resolution, all property disputes arising between intermediaries and clubs or players resulting from mediation agreements should be submitted for resolution to the PZPN Football Arbitration Court. In other words, the agreement should include a clause on arbitration. According to Article 110 of the Disciplinary Regulations:
For failure to perform, incomplete performance, or negligent performance of obligations specified in the Statute of the Polish Football Association, resolutions, decisions, or guidelines of the Polish Football Association, the professional league, or other entities within the structures of the Polish Football Association, violation of moral and ethical norms applicable in football, as well as failure to perform, incomplete performance, or negligent performance of decisions of public administration bodies concerning football, penalties are imposed: (...)
Therefore, in certain cases, the absence of the mentioned clause may result in disciplinary liability for the player as well.