FIFA introduces licenses for Agents .

After nearly 8 years of the existing regulations, FIFA is returning to the idea of licensing football agents and greater control over the intermediaries' market, including the introduction of maximum transaction fees. You will read about how the new system is supposed to work and who it affects in today's post.

Who do the new regulations apply to?

Firstly, it should be emphasized that the new regulations will apply to transactions "with international dimension", meaning those related to international transfers or for other reasons having an international character. This means that FIFA's introduced regulations do not bind intermediaries operating solely in the domestic market. However, there is a "but", FIFA requires national federations to incorporate most of the regulations into their internal rules. They have until the end of September this year to do so.

From when?

The new regulations will come into force from October this year, with the provisions governing the obtaining of licenses already effective as of January 9, 2023. Contracts concluded before the approval of the new regulations (December 16, 2022) remain valid, and contracts concluded after that date should be adjusted to the new regulations no later than October 1, 2023.

Who will be able to become an agent?

As mentioned at the outset, FIFA is returning to the system of licensing football agents. A transaction intermediary will therefore be a person who obtains a positive result in the exam, pays the annual fee, and meets the following requirements:

Submit truthful statements in the application;
Have not been convicted for offenses related to organized crime, drugs, human trafficking, corruption, bribery, money laundering, tax evasion, fraud, match-fixing, embezzlement, misappropriation, breach of fiduciary duties, forgery, legal abuses, sexual exploitation, violence, stalking offenses, child or vulnerable adult abuse, human trafficking,
Have not been suspended by sports organizers or governing bodies for a period longer than two years, nor have been disqualified or removed for conduct contrary to ethics or professional conduct,
Are not representatives of FIFA, UEFA, national football associations, bodies representing the interests of clubs or leagues, with the exception that sitting on bodies representing football agents is permissible,
Do not hold shares in a club, academy, or league,
In the 24 months prior to applying for the license, have not been recognized as acting without the required license,
In the 5 years prior to applying (or thereafter), have not declared bankruptcy, nor been a director, managing person in a company that declared bankruptcy or was liquidated,
In the 12 months prior to applying (and thereafter), have not been associated with entities engaged in sports betting.

Submit truthful statements in the application;
Have not been convicted for offenses related to organized crime, drugs, human trafficking, corruption, bribery, money laundering, tax evasion, fraud, match-fixing, embezzlement, misappropriation, breach of fiduciary duties, forgery, legal abuses, sexual exploitation, violence, stalking offenses, child or vulnerable adult abuse, human trafficking,
Have not been suspended by sports organizers or governing bodies for a period longer than two years, nor have been disqualified or removed for conduct contrary to ethics or professional conduct,
Are not representatives of FIFA, UEFA, national football associations, bodies representing the interests of clubs or leagues, with the exception that sitting on bodies representing football agents is permissible,
Do not hold shares in a club, academy, or league,
In the 24 months prior to applying for the license, have not been recognized as acting without the required license,
In the 5 years prior to applying (or thereafter), have not declared bankruptcy, nor been a director, managing person in a company that declared bankruptcy or was liquidated,
In the 12 months prior to applying (and thereafter), have not been associated with entities engaged in sports betting.

How can one become an agent?

An individual meeting the above requirements, after paying the examination fee, will be able to take a test conducted at the headquarters of national football associations to verify their knowledge of FIFA regulations. Only a natural person can obtain the license, but this does not exclude functioning in the form of a company. Intermediaries who obtain the license will have to undergo further training (CPD points), under the risk of license suspension.

What about individuals currently registered as transaction intermediaries?

Such individuals are not exempt from the obligation to obtain a license. However, agents who have obtained a license based on the regulations introduced in 2008 or earlier, and have been registered as transaction intermediaries continuously from April 1, 2015, until the adoption of the new regulations do not have to take the exam. This refers to individuals who became intermediaries by passing the exam earlier and remained professionally active during the specified period.

What requirements will new contracts have to meet?

Contracts must still be in written form, with contracts made with players (or coaches) not exceeding a duration of two years. This limitation also applies to any clauses providing for conditional or automatic extension of the contract. Such provisions will be void. Contracts must specify the duration of the agreement, the amount of the commission, and the duties of the intermediary. The rule will be that the intermediary can represent only one side of the transaction.

An exception is the possibility of providing services for both the player (or coach) and the acquiring club.

As before in transfer agreements and football contracts, the agent should be named specifically if they mediated in the transaction. A significant change is that the player (or coach) remains entitled to represent themselves in contacts with the club, and the contract with the intermediary cannot restrict the player in this regard, for example by imposing contractual penalties (which was a fairly common practice). The conclusion of the contract should be preceded by the player's (or coach's) consultation with a lawyer or a written statement waiving such consultation.

The regulations also introduce a prohibition on contacting a potential client earlier than two months before the expiration of their current exclusive contract with the intermediary.

Contracts with underage players may be concluded no earlier than six months before the player reaches the age at which they can enter into their professional contract. However, agents may be compensated in situations where a minor player signs a professional contract.

What will be the commission rates?

Undoubtedly, the most important change resulting from the new regulations is the introduction of limitations on the amount of commissions.

The rule will be that the client of the intermediary pays the commission, so the football player or coach if the intermediary does not represent the club in the transaction. This rule has one exception, namely when the contract (football or coaching) provides for compensation (of the player or coach) lower than $200,000 annually (excluding bonuses), then the acquiring club and the player (or coach) can agree that the intermediary's compensation will be paid by the club.

An agent will be able to represent only one side of the transaction, except for individual clients (coach/player) and the acquiring club.

The intermediary's compensation will be calculated as a percentage of the player's or coach's compensation, and in the case of representing the releasing club, as a percentage of the transfer fee (maximum of 10%). The commission calculated from the compensation should not exceed 5% - for annual compensation below $200,000, 3% - for annual compensation equal to or higher than $200,000 (on the portion above $200,000). Representing two sides of the transaction, the intermediary can demand respectively 10 and 6 percent.

Commissions are to be paid quarterly, proportionally to the compensation actually received by the player or coach.

To ensure compliance with the specified limits, the following measures will be implemented: payments will be carried out through FIFA (clearing house), and there will be a presumption that all services provided by the intermediary to the client within the 24 months preceding the conclusion of the contract (transfer) were provided under the intermediary agreement.

What will be the effect of the new regulations?

In my opinion, everything depends on whether FIFA and national associations will be able to rigorously enforce the provisions regarding the maximum commission rates. Remember that the introduction of licenses is a return to the regulations in force before 2015 and a "liberation" of the profession. FIFA has already unsuccessfully attempted to "tame" the market. However, if the new regulations prove to be effective, the barrier to entry into the market will be higher, and the profession itself may become less attractive to potential candidates.

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