A NEW ERA FOR FOOTBALL AGENTS

World-renowned football agent Mino Raiola sadly passed away last week.

From humble beginnings working in his family’s pizza business, he dealt his way to the top of the football intermediary business and earned himself a reputation for striking multi-million deals involving high-profile players such as Pavel Nedvěd, Zlatan Ibrahimović and Paul Pogba.

However, how far would a young Raiola have made it in the world of football intermediaries should the regulations FIFA are proposing already have been implemented?

While proposals are yet to be implemented and are set to reportedly be approved by the FIFA Council before June, the new statutes include a number of restrictions aimed to “protect the integrity of football and prevent abuses” and will be game changing as to how agents conduct their business.

FIFA plan to reintroduce a mandatory licensing system which will require agents to be suitably qualified and to undertake regular professional development courses, in addition to passing an exam.

This is nothing new, since a similar licensing system existed in the past, but highlights FIFA’s desire to professionalise and raise the standards of intermediary activities.

New regulations also hope to tackle one of the most controversial and, in practice, quite common aspects in the agency business: preventing conflicts of interest and restricting multiple representation in cases where an agent works for both the player and buying club.

This practice hit the headlines a few weeks ago when Stefan de Vrij’s case against his former agent, the Dutch company Sports Entertainment Group (SEG), was made public.

The defender filed a suit against SEG related to his move from SS Lazio to Inter Milan in 2018 as a free agent for not having disclosed to him that they were also acting for the buying club, with whom SEG agreed a commission of EUR 9.5 million plus a sell-on fee.

The player argued a clear, undisclosed conflict of interest by SEG and claimed that had it not been for this dual representation by SEG, he would have been able to get a better deal with his new employer.

The Court of Amsterdam found to be in favour of the player and awarded damages amounting to EUR 4.75 million, plus interest and costs.

However, the most controversial restriction is the proposed cap on agent commissions.

FIFA has previously had a hands-off approach to the astronomical fees some agents can receive from transfer deals, although new regulations aim will establish a hard cap of (i) 10% of the transfer fee if the agent acts for the selling club; (ii) 3% of the player’s salary if the agent acts on behalf of the buying club and (iii) 3% of the player’s salary if the agent acts for the player.

The cap will increase to 6% (3% plus 3%) if the agent acts on behalf of the player and buying club (the only permitted dual representation scenario), provided that both parties have expressly consented to such representation.

The governing body’s aim is to both avoid ‘excessive and abusive practices’, as well as reinforcing the connection between agent fees and players’ salaries, so that in the future the negotiations will focus on securing larger salaries for players, which in turn will result in larger commissions for agents.

FIFA also seeks to achieve greater transparency by (i) requiring further disclosure of an agent’s work and payable commissions and, (ii) eventually paying agent commissions through the FIFA Clearing House.

To handle the implementation of the proposed regulations, FIFA created the Agents Chamber which will decide disputes involving football agents during a recent FIFA Football Tribunal.

FIFA are looking to shape a different world for agents to the one that saw Raiola become one of the most prominent sports agents in the world, but also an intermediary who regularly represented more than one party during a transfer and was reported to have demanded eye-watering commissions.

Should greater scrutiny, licensing and financial control be on the horizon, expect the world of football agents to drag their heels: Football Forum – described as an international movement for football agents and previously presided over by Raiola – has openly threatened FIFA with legal action against the cap on commissions and agent regulations.

Time will only tell how this plays out, but one thing is clear: a new era for football agents is approaching.

Carlos Hurtado
Senior associate of sports at Baker McKenzie