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"Deregulation" of the football agent profession (part 2 ).

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At the beginning of the previous entry, I mentioned the FIFA guidelines regarding the new regulations governing the activities of football agents. On March 20-21, 2014, the FIFA Executive Committee approved new regulations regarding the functioning of the football manager market, as a consequence of the deep reform initiated in 2009. Indeed, a lot is set to change. And these changes are supposed to come into effect very soon, on April 1, 2015.

 

HOW IT'S GOING TO BE?

 

First of all, "football agents" and manager licenses are "disappearing". From April, there will be a legal definition of an intermediary 1)intermediary. An intermediary will be a natural or legal person, who represents players and/or clubs, for a fee or free of charge, in negotiations aimed at concluding a player's contract or represents clubs in negotiations aimed at concluding a transfer agreement 2)A natural or legal person who, for a fee or free of charge, represents players and/or clubs in negotiations with a view to concluding an employment contract or represents clubs in negotiations with a view to concluding a transfer agreement

 

From the definition itself, two important changes emerge. Firstly, an intermediary can also be a legal entity, such as a limited liability company or a joint-stock company. Previously, football agents, or more precisely football managers (according to Polish regulations), could only be natural persons. At this point, I allow myself a digression. Considering the fact that FIFA regulations only define minimum requirements for intermediaries, and each football association is obliged to introduce its own regulations in this regard, taking into account the specific legal nature of Poland and the provisions of the civil code, which require applying regulations on legal entities also to organizational units with legal personality, one might assume that the profession of an intermediary will also be possible in the form of a partnership. It would be unjustified, in my opinion, to differentiate the rights of these entities, especially since the regulation clearly aims to broaden access to the profession.

 

Furthermore, for example, a debtor of a general partnership has broader possibilities of enforcing obligations than a debtor who is a natural person. However, returning to the definition itself, the second significant change is that intermediaries will be able to represent both sides simultaneously in contract negotiations, which already follows from the use of the conjunction "and" in the definition 3)using the English conjunction "and". This is confirmed in point 8.3 of the regulations, according to which the requirement for such dual representation is the submission of statements by the club and the player expressing consent to the representation of both sides 4)previously, such a practice was explicitly prohibited. Additionally, the statement must specify who will be remunerating the intermediary.

 

Now that we've come to the issue of remuneration, it is necessary to discuss an issue that unjustly raises the most controversy, namely the FIFA-recommended commission rate for intermediaries, which is 3% of the player's negotiated salary in the case of player contracts, and 3% of the transfer fee in agreements between clubs. As I mentioned in the previous part of the article, the standard rate currently is around 10%. After the changes, it will be... exactly the same, meaning it will be the percentage that the parties agree upon. The FIFA recommendation itself is not binding for anyone, so the discussed provision, in practice, will not affect market practices.

 

The 3% commission in the currently applicable regulations constitutes a so-called default commission, meaning it is applied when the parties have not specified the intermediary's remuneration in the contract. A more significant issue, for example, in the context of Krystian Bielik's recent transfer, is the prohibition of making any payments to intermediaries providing services in the transfer of a minor player.

 

The question arises of how individual associations and federations will supervise the activities of intermediaries. Despite the abolition of licenses, registration with the football association will be required. Considering the requirement to indicate in the contract that it was concluded with the participation of an intermediary and to send a copy to the association, the association will maintain a register of all transactions concluded with the involvement of intermediaries. Before registration, the intermediary will be required to submit a signed declaration, the template of which is annexed to the relevant regulations. Only a person with an impeccable reputation may be entered in the register, and if a legal entity is to be registered, this requirement applies to members of the management board or other body authorized to represent it. The issue of an impeccable reputation has not been further discussed, but it can be assumed that not much will change in this regard, and the requirement of a clean criminal record (for specified types of offenses) will be maintained.

 

National associations are also required to monitor whether the intermediary holds a position in the federation, football association, league, FIFA, etc., which could ultimately lead to conflicts of interest. What instruments are to be used to enforce the established rules? FIFA envisages sanctions, although detailed provisions in this regard are to be established and implemented by national football associations.

 

As for the intermediary agreement itself, under the new regulations, the parties will be able to determine the duration of the agreement freely. Previously, the maximum period for which the contract could be concluded was two years. The requirement for professional liability insurance has also been abolished, which will certainly lower the "entry barriers" to the market.

 

HOW WILL IT WORK?

 

As I mentioned at the beginning, FIFA regulations only provide minimum guidelines for national football associations, which are obliged to take them into account when adopting their own regulations. The FIFA guidelines clearly state that it is permissible to go beyond these minimum standards, so it is difficult to predict the exact shape of the new regulations. However, it may turn out that they will closely mirror FIFA regulations (as was the case with the existing resolution), with the caveat that PZPN and other associations will have to regulate sanctions and other matters independently. We will certainly take a closer look at the final form of the changes on the blog in April. As for assessing the effects of deregulation, we will have to wait even longer.

Photo by Yellow.Cat / Foter / CC BY

 

  1. intermediar
  2. A natural or legal person who, for a fee or free of charge, represents players and/or clubs in negotiations with a view to concluding an employment contract or represents clubs in negotiations with a view to concluding a transfer agreemen
  3. use of the English conjunction "an
  4.  so far, this practice has been expressly prohibited