"Welcome, Agents, to the footballing family!" 

A new project funded by the European Union to recommend football agents are embraced as stakeholders by the wider community
18 Oct 2019

The output of an exhaustive project titled "Promoting and Supporting Good Governance in the European Football Agents Industry", led by Edge Hill University and co-funded by the European Union, has been released by way of a series of interim reports ("the Findings").

Edge Hill's final report will be delivered at the forthcoming The Future of Sports Law & Business Conference, at the Etihad Stadium, on 1 November and Howard Kennedy Partner Joel Leigh will be in attendance to participate in discussions on the report.

The project examines in-depth the effectiveness, or more accurately the shortcomings, of the FIFA 'Regulations on Working With Intermediaries' (RWWI) first implemented in 2015, including an extensive stakeholder survey.

For those unfamiliar with the intricacies of the RWWI, they were introduced by FIFA to address "the changing realities of modern-day relations between players and clubs as well as to enable proper control and transparency of player transfers" and were minimum standards to be implemented by each National Association.

The Findings identify five key conclusions which can be summarised as follows:

 

1. 'Agent' is preferable to 'Intermediary'

 

The RWWI refers to 'intermediaries', rather than 'agents', and defines them as a natural or legal person who represents players and/or clubs in negotiations with a view to concluding an employment contract or transfer agreement. As such, the RWWI places the regulatory emphasis on the transaction rather than the individual agent.

 

In contrast, the Findings suggest the term 'agent' is preferable to 'intermediary'. This is because 'intermediary' is dry and not understood by the public. It fails to encapsulate the sheer depth and range of services offered by agents, such as scouting or managing a player's career. This would also return the regulatory focus to the individual; it would represent an acceptance of agents as full footballing stakeholders, rather than a necessary evil, to be implicitly kept at arm's length and limited to involvement with transactions.

 

82.5% of respondents to the stakeholder survey strongly agreed or agreed with the proposition that "the job of an intermediary relates to more than just negotiating players’ contracts and includes other aspects including scouting, legal consultancy, career planning, financial planning etc". However, should agents be able to offer advice on regulated aspects of a player's career, i.e. legal and financial issues?  A detailed licensing regime, setting out the scope of an agent's role, would offer significant clarification and limit unscrupulous agents ability to operate at the edges of the industry.

 

2. Recognise agent associations as full stakeholders within the football family



The Findings highlights that agents do not feel their views are taken into account when implementing regulations, with 67.5% of respondents to the stakeholder survey disagreeing with the statement “your organisation was appropriately consulted by FIFA during the framing of the RWWI currently in force”. There is no evidence that FIFA troubled to consult with agents when designing and implementing the RWWI. The Findings suggests that, out in the real world, the footballing community accepts that agents are both a legitimate and necessary part of the industry and should be actively involved in framing the rules.

A significant barrier to giving agents a seat at the footballing table is the lack of a unified body representing them.  

 

Quote mark icon

A significant barrier to giving agents a seat at the footballing table is the lack of a unified body representing them. 

Joel Leigh
Partner, Howard Kennedy
desupra div-ului
in div
<div style="margin-left: 40px;"> <p style="margin-bottom: 8pt;">The European Football Agents Association (<strong>"EFAA"</strong>) is the leading organisation identified in the Findings and is the European umbrella institution representing a number of national agent associations, including the UK, Spain and Germany as well as number of affiliate members from countries such as Brazil and Australia. However, both the EU and FIFA have been slow to engage with it. The Findings recommends that EFAA, and other properly constituted agent associations, should be officially recognised as stakeholders within the football family and actively supported by FIFA and other stakeholders, to increase representation of agents.</p> <p style="margin-bottom: 8pt;">The RWWI removed the requirement for agents to hold a formal licence, instead requiring them to self-certify that they hold no un-declared conflicts of interest and maintain an impeccable reputation. Perhaps unsurprisingly, given the potential for this arrangement to drive a coach and horses through the RWWI, the Findings recommend the re-introduction of a full blown licensing system (to be developed and implemented by FIFA) for agents, as well as a written examination and requirement to partake in on-going training, as a precursor to retaining that licence.<strong>&nbsp;<br /> </strong></p> <p style="margin-bottom: 8pt;">&nbsp;</p> <p><strong>3. FIFA should regulate agents with the support of public authorities</strong></p> <p>&nbsp;</p> <p style="margin-bottom: 8pt;">The Findings also provide a thorough analysis of the institutions and mechanisms through which the proposed regulations could be implemented, including:</p> <ul> <li>National law;</li> <li>EU law;</li> <li>International law;</li> <li>Collective bargaining; and</li> <li>International federations;</li> </ul> <span>The Findings conclude that, because the footballing industry is a global one, an international solution is preferable because: "a properly functioning and uniform set of globally applicable rules allows the regulator to monitor and enforce sanctions and an effective dispute resolution system facilitates the efficient and economical settlement of disputes<br /> </span></div> <p style="margin: 0cm 0cm 8pt 40px;">Respondents to the stakeholder survey overwhelmingly preferred any global solution to be self-regulatory, with 90% either strongly agreeing or agreeing that &ldquo;FIFA should retain competence to regulate intermediaries".<span>&nbsp; </span></p> <p style="margin: 0cm 0cm 8pt 40px;">The Findings concur, noting that FIFA is best placed to deliver an international solution, thanks to its significant experience of regulating agents and the ability to adapt regulations to fast changing industry practices in the sector. More specifically, the Findings state FIFA must regulate the activities of agents "in accordance good governance principles, particularly genuine stakeholder consultation, and with the support of public authorities, particularly the EU". </p> <p style="margin: 0cm 0cm 8pt 40px;">It is recognised that the EU have facilitated positive developments within the sport, for example achieving better governance standards, but the Findings recommend that as long as FIFA implements good governance principles in regulating agents' activities, "EU institutions should offer the football authorities a wide margin of appreciation when supervising the regulatory choices made by football." In doing so, the Findings recognise that were self-regulation to fail, the EU will in all likelihood be forced to step in and impose the central regulation of agents, similar to the football intermediaries law implemented by Italy in 2018.</p> <p style="margin: 0cm 0cm 8pt 40px;">The Findings also questions whether UFEA should be given a greater role in agent regulation given that 92.7% of the $1.89 billion spent by clubs on agent commissions since 2013 was paid by clubs from UEFA Members. UFEA already have significant influence in shaping regulation, being both the Chair of the EU's Social Dialogue Committee and a member of the FIFA Task Force. The Findings indicate this should continue but is inconclusive about giving UFEA a more formal role in regulating agents, simply highlighting the constitutional difficulties that would arise were both FIFA and UFEA given jurisdiction to regulate agents.<span></span></p> <p style="margin: 0cm 0cm 8pt 40px;"><span>&nbsp;</span></p> <p style="margin-left: 40px;"><strong>4. Harmonise the regulation of agents at a global or at the very least EU level</strong></p> <p style="margin-left: 40px;">The RWWI introduced a minimum standard all national associations must implement, allowing individual associations to introduce more stringent regulations on agents as necessary. The Findings highlight that whilst there is nothing inherently wrong with this, as the minimum standards required by the RWWI were low, there has been a varied response from national associations in implementing such measures. This has led to a fractured regulatory landscape across Europe. This conclusion is reinforced by the stakeholder survey, with only 12.5% of respondents agreeing "that the RWWI and the national association regulations have brought consistency to standards in terms of intermediary regulations across the EU&rdquo;.</p> <p style="margin-left: 40px;">The Findings cite a simple example of this inconsistency, being the significant variations in registration fees for agents across Europe, ranging from zero in counties such as Croatia, to thousands of Euros in countries such as Portugal.</p> <p style="margin-left: 40px;">These inconsistencies make it difficult for footballing stakeholders to operate across borders, increasing the administrative burden and the likelihood of making unintentional technical errors. The Findings also highlight that the current regulatory landscape may be incompatible with both EU and national laws, on the ground that agents' economic activities are being unlawfully restricted, in addition to which there are unequal opportunities for agents across EU jurisdictions.</p> <p style="margin-left: 40px;">The Findings suggest that the complexity and inconsistency inherent in the RWWI actively discourages compliance; 77.5% of respondents to the stakeholder survey agreed that the "current intermediary regulations are easily circumvented".</p> <p style="margin-left: 40px;">&nbsp;</p>

The European Football Agents Association ("EFAA") is the leading organisation identified in the Findings and is the European umbrella institution representing a number of national agent associations, including the UK, Spain and Germany as well as number of affiliate members from countries such as Brazil and Australia. However, both the EU and FIFA have been slow to engage with it. The Findings recommends that EFAA, and other properly constituted agent associations, should be officially recognised as stakeholders within the football family and actively supported by FIFA and other stakeholders, to increase representation of agents.

The RWWI removed the requirement for agents to hold a formal licence, instead requiring them to self-certify that they hold no un-declared conflicts of interest and maintain an impeccable reputation. Perhaps unsurprisingly, given the potential for this arrangement to drive a coach and horses through the RWWI, the Findings recommend the re-introduction of a full blown licensing system (to be developed and implemented by FIFA) for agents, as well as a written examination and requirement to partake in on-going training, as a precursor to retaining that licence. 

 

3. FIFA should regulate agents with the support of public authorities

 

The Findings also provide a thorough analysis of the institutions and mechanisms through which the proposed regulations could be implemented, including:

  • National law;
  • EU law;
  • International law;
  • Collective bargaining; and
  • International federations;
The Findings conclude that, because the footballing industry is a global one, an international solution is preferable because: "a properly functioning and uniform set of globally applicable rules allows the regulator to monitor and enforce sanctions and an effective dispute resolution system facilitates the efficient and economical settlement of disputes

Respondents to the stakeholder survey overwhelmingly preferred any global solution to be self-regulatory, with 90% either strongly agreeing or agreeing that “FIFA should retain competence to regulate intermediaries". 

The Findings concur, noting that FIFA is best placed to deliver an international solution, thanks to its significant experience of regulating agents and the ability to adapt regulations to fast changing industry practices in the sector. More specifically, the Findings state FIFA must regulate the activities of agents "in accordance good governance principles, particularly genuine stakeholder consultation, and with the support of public authorities, particularly the EU".

It is recognised that the EU have facilitated positive developments within the sport, for example achieving better governance standards, but the Findings recommend that as long as FIFA implements good governance principles in regulating agents' activities, "EU institutions should offer the football authorities a wide margin of appreciation when supervising the regulatory choices made by football." In doing so, the Findings recognise that were self-regulation to fail, the EU will in all likelihood be forced to step in and impose the central regulation of agents, similar to the football intermediaries law implemented by Italy in 2018.

The Findings also questions whether UFEA should be given a greater role in agent regulation given that 92.7% of the $1.89 billion spent by clubs on agent commissions since 2013 was paid by clubs from UEFA Members. UFEA already have significant influence in shaping regulation, being both the Chair of the EU's Social Dialogue Committee and a member of the FIFA Task Force. The Findings indicate this should continue but is inconclusive about giving UFEA a more formal role in regulating agents, simply highlighting the constitutional difficulties that would arise were both FIFA and UFEA given jurisdiction to regulate agents.

 

4. Harmonise the regulation of agents at a global or at the very least EU level

The RWWI introduced a minimum standard all national associations must implement, allowing individual associations to introduce more stringent regulations on agents as necessary. The Findings highlight that whilst there is nothing inherently wrong with this, as the minimum standards required by the RWWI were low, there has been a varied response from national associations in implementing such measures. This has led to a fractured regulatory landscape across Europe. This conclusion is reinforced by the stakeholder survey, with only 12.5% of respondents agreeing "that the RWWI and the national association regulations have brought consistency to standards in terms of intermediary regulations across the EU”.

The Findings cite a simple example of this inconsistency, being the significant variations in registration fees for agents across Europe, ranging from zero in counties such as Croatia, to thousands of Euros in countries such as Portugal.

These inconsistencies make it difficult for footballing stakeholders to operate across borders, increasing the administrative burden and the likelihood of making unintentional technical errors. The Findings also highlight that the current regulatory landscape may be incompatible with both EU and national laws, on the ground that agents' economic activities are being unlawfully restricted, in addition to which there are unequal opportunities for agents across EU jurisdictions.

The Findings suggest that the complexity and inconsistency inherent in the RWWI actively discourages compliance; 77.5% of respondents to the stakeholder survey agreed that the "current intermediary regulations are easily circumvented".

 

Quote mark icon

The Findings suggest that the complexity and inconsistency inherent in the RWWI actively discourages compliance; 77.5% of respondents to the stakeholder survey agreed that the 'current intermediary regulations are easily circumvented'.

Joel Leigh
Partner, Howard Kennedy
desupra div-ului
in div
<p style="margin-left: 40px;">Consequently, the Findings recommend the adoption of harmonized and uniform regulations relating to agents at a global level or, as a minimum, at an EU level. They also suggest that to prevent the fragmentation of the European single market, national associations should operate a system of mutual recognition, to cover the eventuality of some applying more stringent standards than others.</p> <p style="margin-left: 40px;">&nbsp;</p> <p style="margin-left: 40px;"><strong>5.&nbsp;</strong><strong>Bring agents into the footballing family via the carrot and stick of rights and obligations</strong></p> <p style="margin-left: 40px;">The Findings highlight that FIFA has historically handed the global regulation of agents to national associations due to the onerous level of administration involved. This has raised serious and to date unanswered questions about the standards and consistency of compliance, enforcement and sanctions within those associations. There are, to put it mildly, varying cultures of both compliance and resource, leading to incongruities such as a wild variance in the examination pass rates for agents.&nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;&nbsp;<br /> There are also potential issues of bias. For example, under the RWWI there are no longer mandatory referrals to FIFA for international disputes, meaning that agents from outside the association running a dispute resolution process may feel disadvantaged. It is an idiosyncrasy that a dispute at national association level can be referred to the Court of Arbitration for Sport (under Article 57 of FIFA Statues (2016)), yet FIFA refuses jurisdiction for intermediary disputes (under FIFA Regulations on the Status and Transfer of Players (RSTP) (Art 22)).</p> <p style="margin-left: 40px;">Respondents to the stakeholder survey believe change to the dispute resolution process is required, with only 10% agreeing that "the resolution of disputes involving intermediaries is working well&rdquo;. The Findings propose that agents are brought into the fold by being given both rights and obligations, enforced by both the national and international footballing authorities. They also recommend that enforcement and dispute resolution should form the core of new regulations and that stringent but proportionate sanctions be imposed on all stakeholders who breach such regulations, not just agents.</p> <p style="margin-bottom: 8pt;">&nbsp;</p> <p style="margin-bottom: 8pt;"><span style="font-weight: bolder;">Comment</span></p> <p style="margin-bottom: 8pt;">Despite the depth and breadth of the Findings, at their core are two key themes; (1) bringing agents into the footballing family by giving them a voice and (2) creating uniformity in agent regulation across Europe. These are undeniably sensible conclusions. However, are they utopian? How easy will it be to implement regulations which attain these goals?</p> <p style="margin-bottom: 8pt;">One hurdle to overcome is the sheer number of footballing stakeholders involved in implementing any new regulations. The Findings consider football stakeholders as a homogenous group but in reality, they are diverse, each with their own list of priorities. They include; FIFA, UFEA, national footballing associations, the European Union, national legislative bodies, clubs (both those in Europe and globally), players, agents, coaches and other backroom staff and fan representatives. The list goes on.</p> <p style="margin-bottom: 8pt;">Crafting and implementing regulations for agents which succeed in delivering the recommendations in the Findings, whilst also satisfying each of the stakeholders, is going to be a monumental task.</p> <p style="margin-bottom: 8pt;">For any new regulations to be successful, the consultation and implementation would need to led by either FIFA or the EU (as the most powerful stakeholders), with support from all others. The process would need to be clearly set out giving each stakeholder, including the agents, an opportunity to comment on proposed regulation. However, ultimately the process must be under either FIFA's or the EU's hegemony.</p> <p style="margin-bottom: 8pt;">To ensure agents are fully recognised as stakeholders and consulted on proposed regulations, agents should consider organising themselves into a unified body; the Findings' suggestion that more than one representative body could be recognised hold dangers. Differing agent organisations could have conflicting opinions on any given subject and consequently, agents would be unable to meaningfully contribute to debates within the footballing community. Instead, it may be prudent to have one recognised agent representative organisation in the form of EFAA, and it should be internally organised to ensure that it represents the majority consensus amongst all agents.</p> <p style="margin-bottom: 8pt;">The Findings identify FIFA as being best placed to offer international harmonised regulations for agents which address many of the concerns set out in the Findings; we agree this is a sensible conclusion. However, a difficulty arises in that FIFA seem unwilling to take on this responsibility. As the Findings note, FIFA has already handed responsibility of regulating agents to the national associations due to the administrative burden it placed upon it. What has changed in the interim which means FIFA would be in a position to manage a far more stringent global regime with increased administrative requirements, such as licensing, a dispute resolution mechanism and an enforcement mechanism? Would FIFA be provided with the necessary resources by other stakeholders? Until FIFA signal their enthusiasm to undertake the significant regulatory role the Findings expects of them, we feel the Findings' proposals should be treated with a degree of caution.</p> <p style="margin-bottom: 8pt;">The issues surrounding agent regulation are in some ways analogous to the Brexit process; a variety of stakeholders knowing what they don't want but unable or simply unwilling to agree on what they do want, the best way forward or the ultimate form which the proposed regulation should take. The Findings present a valiant effort to find a successful path to effective regulation. However, just as with Brexit, until the stakeholders indicate a willingness to both partake in the process of forming new regulation and reach&nbsp;a consensus on the form it should take, it is questionable when the regulation proposed by the Findings will materialize.</p> <p style="margin-bottom: 8pt;">Meanwhile, look out for our follow up pieces delving into these recommendations in more detail as the conference approaches and in its immediate aftermath.</p>

Consequently, the Findings recommend the adoption of harmonized and uniform regulations relating to agents at a global level or, as a minimum, at an EU level. They also suggest that to prevent the fragmentation of the European single market, national associations should operate a system of mutual recognition, to cover the eventuality of some applying more stringent standards than others.

 

5. Bring agents into the footballing family via the carrot and stick of rights and obligations

The Findings highlight that FIFA has historically handed the global regulation of agents to national associations due to the onerous level of administration involved. This has raised serious and to date unanswered questions about the standards and consistency of compliance, enforcement and sanctions within those associations. There are, to put it mildly, varying cultures of both compliance and resource, leading to incongruities such as a wild variance in the examination pass rates for agents.                                                                                                                            
There are also potential issues of bias. For example, under the RWWI there are no longer mandatory referrals to FIFA for international disputes, meaning that agents from outside the association running a dispute resolution process may feel disadvantaged. It is an idiosyncrasy that a dispute at national association level can be referred to the Court of Arbitration for Sport (under Article 57 of FIFA Statues (2016)), yet FIFA refuses jurisdiction for intermediary disputes (under FIFA Regulations on the Status and Transfer of Players (RSTP) (Art 22)).

Respondents to the stakeholder survey believe change to the dispute resolution process is required, with only 10% agreeing that "the resolution of disputes involving intermediaries is working well”. The Findings propose that agents are brought into the fold by being given both rights and obligations, enforced by both the national and international footballing authorities. They also recommend that enforcement and dispute resolution should form the core of new regulations and that stringent but proportionate sanctions be imposed on all stakeholders who breach such regulations, not just agents.

 

Comment

Despite the depth and breadth of the Findings, at their core are two key themes; (1) bringing agents into the footballing family by giving them a voice and (2) creating uniformity in agent regulation across Europe. These are undeniably sensible conclusions. However, are they utopian? How easy will it be to implement regulations which attain these goals?

One hurdle to overcome is the sheer number of footballing stakeholders involved in implementing any new regulations. The Findings consider football stakeholders as a homogenous group but in reality, they are diverse, each with their own list of priorities. They include; FIFA, UFEA, national footballing associations, the European Union, national legislative bodies, clubs (both those in Europe and globally), players, agents, coaches and other backroom staff and fan representatives. The list goes on.

Crafting and implementing regulations for agents which succeed in delivering the recommendations in the Findings, whilst also satisfying each of the stakeholders, is going to be a monumental task.

For any new regulations to be successful, the consultation and implementation would need to led by either FIFA or the EU (as the most powerful stakeholders), with support from all others. The process would need to be clearly set out giving each stakeholder, including the agents, an opportunity to comment on proposed regulation. However, ultimately the process must be under either FIFA's or the EU's hegemony.

To ensure agents are fully recognised as stakeholders and consulted on proposed regulations, agents should consider organising themselves into a unified body; the Findings' suggestion that more than one representative body could be recognised hold dangers. Differing agent organisations could have conflicting opinions on any given subject and consequently, agents would be unable to meaningfully contribute to debates within the footballing community. Instead, it may be prudent to have one recognised agent representative organisation in the form of EFAA, and it should be internally organised to ensure that it represents the majority consensus amongst all agents.

The Findings identify FIFA as being best placed to offer international harmonised regulations for agents which address many of the concerns set out in the Findings; we agree this is a sensible conclusion. However, a difficulty arises in that FIFA seem unwilling to take on this responsibility. As the Findings note, FIFA has already handed responsibility of regulating agents to the national associations due to the administrative burden it placed upon it. What has changed in the interim which means FIFA would be in a position to manage a far more stringent global regime with increased administrative requirements, such as licensing, a dispute resolution mechanism and an enforcement mechanism? Would FIFA be provided with the necessary resources by other stakeholders? Until FIFA signal their enthusiasm to undertake the significant regulatory role the Findings expects of them, we feel the Findings' proposals should be treated with a degree of caution.

The issues surrounding agent regulation are in some ways analogous to the Brexit process; a variety of stakeholders knowing what they don't want but unable or simply unwilling to agree on what they do want, the best way forward or the ultimate form which the proposed regulation should take. The Findings present a valiant effort to find a successful path to effective regulation. However, just as with Brexit, until the stakeholders indicate a willingness to both partake in the process of forming new regulation and reach a consensus on the form it should take, it is questionable when the regulation proposed by the Findings will materialize.

Meanwhile, look out for our follow up pieces delving into these recommendations in more detail as the conference approaches and in its immediate aftermath.

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