Written by Richard Wee & Wong Zi Ying
“It was a mistake to de-regulate agents in 2015”
— Emilio García Silvero (Chief Legal Officer, FIFA)
Football agent, who is known as a football intermediary, is a representative and intermediary who handles the interests of a player or multiple players. Before FIFA Regulations on Working With Intermediaries (RWWI) being enforced in 2015, they were governed under 2008 FIFA Players’ Agent Regulations (2008 PAR). Article 1(2) RWWI provides that national football associations are required to implement and enforce at least these minimum standards/requirements in accordance with the duties assigned in RWWI, subject to the mandatory laws and any other mandatory national legislative norms. National associations shall draw up regulations that shall incorporate the principles established in RWWI. Because of this Article, RWWI serves the purpose of deregulating the football intermediaries and devolving the responsibility to each of its national associations. After 5 years of implementation, FIFA announced that they are carrying out a massive reform due to the exorbitant amount of remuneration levied by those intermediaries.
The reform aims to safeguard the player’s welfare, increase financial transparency, improve contractual stability and uphold the professional and ethical standards in the intermediaries. Some of FIFA’s proposed reform are listed below:-
FIFA proposes to impose a mandatory commission cap on the intermediaries where (i) 10% of transfer fees for an agent acting for selling club; (ii) 3% of player’s salary for an agent acting for buying club and (iii) 3% of player’s salary for an agent acting on the player.
For intermediaries who act for both the player and buying club, the commission cap is fixed at 6% of the player’s salary which consists of 3% from each party respectively. The European Football Agents Association (EFAA) opposes this whereby they describe it as restricting the freedom to represent and this contravenes with Article 101 and 102 of the European Union Competition Law. In addition to that, some of the well known football agents have threatened FIFA with legal action over plans for a cap on transfer payments.
FIFA plans to limit the number of parties where an intermediary can represent in a single deal to avoid conflicts of interest. This is an enhancement for the player’s interest. However, the dual representation will be allowed under the new regulations whereby the agent may represent the player and the engaging club. This means that intermediaries can only act for both player and buying club, other forms of representations are prohibited.
By imposing the limit of representations, players and buying club could reduce the fees incurred in the transactions. Thus, buying club can provide higher wages to the player.
The de-regulation of the industry in 2015 opened the door to a wide group of people who wished to become intermediaries and the resulting increase of intermediaries to the market. FIFA plans to re-introduce a mandatory licensing system for intermediaries that they will be administered centrally through a web-based examination and as well as carry out regular continual professional development courses to retain their licence which will hopefully help eradicate some of the issues with the existing system. The intermediaries required to submit their application through FIFA’s Transfer Matching System (“TMS”).
A clearing house will be created by FIFA for transfers to improve financial transparency and ensure selling clubs receive solidarity payments for players. The clearing house will be in operation starting from 1 January 2021 and it will begin with the processing of training compensation and solidarity payments.
For the payment of intermediaries through the clearing house is currently scheduled to be implemented in 2022.
Before 2015, FIFA Players’ Status Committee governs and resolves all the agents-related disputes. After the inception of RWWI, FIFA through its circular no 1468,2 mentioned that FIFA is no longer competent to hear disputes involving intermediaries.
The upcoming proposal, however, seeks to develop a new mechanism to resolve all the disputes when the new regulations are adopted. Since FIFA intended to establish an “effective” dispute resolution system, one of the suggestions perhaps is to create an independent arbitration tribunal. Courts of Arbitration for Sport is an example where FIFA may refer to when they carry out such invention.
In the proposed reform, FIFA required all the players and clubs to disclose the full details of all agreed remuneration to be paid to the intermediaries. This is to ensure that the intermediaries are monitored within the system. FIFA’s member associations are required to publish all the names of the intermediaries that they have registered, all transaction in which the intermediaries were involved and all the remuneration received by the intermediaries annually. By publishing all the details for the agent-related transactions, this can ensure that there is nothing hidden behind the bush.
Reaction thus far
- Roberto Branco Martins, general counsel, European Football Agents Association (EFAA): “The members might welcome “80 per cent” of the changes to RWWI – but only if they are involved in what he describes as “an official, formal consultation process.”
- Global player union FIFPro: “We are strongly in favour of the player transfer market evolving so that it becomes more rational and less prone to financial speculation. We want to be sure that players are treated exclusively as athletes, and not as commercial assets.”
- Association of Football Agents: “We cannot accept any regulations that provide for capping of our fees or restrict our freedom to act for any party in a transaction.”
- Jonathan Barnett, who represents Gareth Bale: “FIFA says a lot of things and mostly they are not correct.”
Conclusion
In conclusion, the reforms of FIFA’s RWWI are ongoing, and as expected have received resistance from certain stakeholders. The consultation with the various stakeholders will shape the destiny of these plans but in our view, there is still a long road ahead for these proposals to be accepted and take effect.
Uploaded on 14 September 2020
Photo by Michael Ungacta on Unsplash