As from April 2015, new FIFA regulations on the cooperation between a football player and a player’s agent will enter into force. These new regulations have been heavily debated from an agent’s perspective. One of the main reasons for this is that the agent license is longer required to represent a football player during the transfer and contract discussions with a club.
Although this is often overlooked, the new regulations also have a substantial impact on the legal relationship between a player and his agent. It seems that players should become even more careful when entering into a contract with his agent. It is clear that FIFA did not take into account the protection of the player when creating the new rules.
In this contribution you will find the major points of attention when you as a player enter into a representation contract with an agent.
Pursuant to the previous FIFA agent regulations, the duration of a representation contract could not be longer than 2 years. This meant that the agent and the player could re-evaluate their cooperation every 2 years. Depending on the local jurisdiction and the governing law of the contract, no early termination of this representation contract was possible unless compensation was being paid.
Under the new regulations, no maximum duration has been provided. This means that, unless local regulations state otherwise, the representation contract could be longer than 2 years. Therefore players should pay extra attention to the duration of the contract.
We are of the opinion that a fair representation contract should be based on mutual trust and respect. Therefore it should always be possible to terminate the contract.
If the agent does not wish to include a termination clause in his representation contract, the player should at least provide the required flexibility, which allows the player to terminate the contract at certain moments (e.g. after every summer and window transfer window).
FIFA furthermore mentions in the new regulations that termination provisions should be included in the representation contract. It is important that at least gross misconduct or negligence on behalf of the agent should be included as grounds to immediately terminate the representation contract by the player prior to the expiry of the contract.
Other reasonable grounds would be the fact that the intermediary has been caught in a conflict of interest or has been involved in criminal activities.
The new regulations recommend a remuneration for the agent of 3% of the gross income of the player for the entire duration of the contract.
When entering into a player’s agent contract, the player should therefore take a careful look at not only the exact amount to which the agent is entitled, but also to (i) the calculation basis for his fee, (ii) the payment details (monthly, yearly,…).
It should be clear that this is only a recommendation and not at all an obligation for the agents. To give you a reference: in the American film business, it is market practice that the manager and the agent each are entitled to 10% of the income of the star they are representing.
In football business, this often is less than 20% but agents have various other sources of income of which most players do not have any idea. For example: sell on percentages, economic rights, a percentage on the image rights, a commission from the private bankers to which they refer the players,… In other words, most football agents earn a lot of hidden commissions. It should be made clear in the representation contract that such is not acceptable.
Finally, it is recommended that the player clearly provides that a payment to the agent shall only be required in case the agent has been effectively involved in the transfer and has thus contributed to the transfer and the new labour contract. Often agents try to include clauses that they are entitled without having contributed to the transfer. This is not acceptable, but unfortunately common practise produced by some agents.
The new regulations do not provide anything regarding exclusivity clauses. Therefore it should be noted that there is no legal obligation for the player to grant exclusivity to the agent.
If exclusivity is granted, such clause should be carefully drafted in a way that the player still can conclude a contract without the involvement of the agent. This avoids a situation in which the player can no longer act without the consent or participation of his agent. This clause provides substantial flexibility for the player in case of a conflict with his agent.
The abovementioned points of attention only take into account the general FIFA regulations. The local associations have the responsibility to implement these regulations. It could be possible that these general regulations are being supplemented by local regulations. Also these regulations should therefore be taken into account prior to entering into a representation contract.
Especially the exact legal nature of the relationship may be important in this respect. In certain jurisdictions this nature will determine mandatory or supplementary legal rights and obligations for the involved parties.
Qualifications and experience are not required
Although every transfer includes an important life-changing event, the new regulations don’t mention qualifications or experience needed to represent a player in individual contract negotiations. Given the fact that the recent trend of globalization and professionalization in football requires in-depth knowledge in various fields, it is remarkable that a person without specific educational and professional background in sports, law and finance can take part in contract negotiations. A player has every interest to benefit from services provided by experts with the necessary qualifications. Therefore it’s a shame FIFA did not take this into account while composing the new regulations, confronting players with a higher risk of improper advice. The player needs to cope with this by ensuring that he is well-assisted.
Agents have all reasons not to inform their (future) clients correctly about the exact scope of their relationship and representation contract. The player should always try to aim at as much as flexibility as possible without thereby undermining the entire objective of such relationship.