FIFA Football Agent Regulations

FIFA has finally approved and published the FIFA Football Agent Regulations (“FFAR”), a number of years after they were first announced and despite significant opposition from the football agency industry.

Below we set out the key requirements and obligations in the FFAR that agents need to be aware of.  Defined terms in the FFAR are used in this note, unless otherwise defined.

Further information and guidance can be found at the Agent section of the FIFA website.

Executive Summary

• The FFAR only applies to representation agreements in connection with an international transfer, not domestic transfers.

• Licensing system for agents reintroduced (including exam).

• Introduction of a cap on commissions.

• An agent cannot limit a player’s right to negotiate his own deals or receive commission on any such deal.

• Parties to a representation agreement have an automatic right to terminate for “just cause”.

• Stricter rules on representing minors, but commission can be paid by minors in limited circumstances.

• Commissions must be paid by the client (e.g. the player, not the club), paid quarterly and pro rata to what the player has actually received.

• Creation of the FIFA Agents Chamber to determine cross border representation disputes.

Scope

• The stated objectives of the FFAR are, amongst other things, to raise standards, limit conflicts, improve transparency, protect players and enhance contractual stability (Article 1).

• The FFAR applies to Representation Agreements and transfers with an international dimension i.e. in connection with an international transfer (Article 2). An agent must become a FIFA-licenced Football Agent to provide such Football Agent Services.  Only a natural person can become a FIFA-licenced Football Agent, not a company.

• If the conduct is not connected to an international transfer, it will be subject to the football agent regulations of the relevant national association (e.g. The FA’s Working With Intermediaries Regulations). Therefore, FA registered intermediaries who only work within England and are not involved in international transfers will not need to become a FIFA-licenced Football Agent.

• Notwithstanding this, member associations are required to implement and enforce agent regulations that are consistent with the FFAR by 30 September 2023 (Article 3). In particular, member associations are required incorporate Articles 11 to 21 of the FFAR by reference, which set out the regulations relating to representation, minors, commission and commission cap, the rights and obligations of agents, players and clubs, disclosure and publication, disputes and disciplinary.  Member associations are not required to implement the regulations relating to licensing.

• The FA will therefore be required to update its Working With Intermediaries Regulations accordingly, meaning that the requirements of Articles 11 to 21 of the FFAR will ultimately also apply to domestic transfers within England. The FA is not required to – and as yet there is no indication that The FA intends to – implement a domestic licensing system along the lines of that set out in the FFAR.

Implementation

• The FFAR enters into force as follows (Article 28):

  • The requirement for agents to obtain a licence came into force on 9 January 2023; and

  • The remaining requirements and obligations of the FFAR relating to the conduct of agents come into force on 1 October 2023.

• Representation Agreements that are currently in force and expire on or after 1 October 2023 shall remain valid until they expire and do not need to comply with the FFAR (Article 22(1)).  Any new Representation Agreement or renewals concluded going forward must comply with the FFAR as from 1 October 2023 (Article 22(2)). A person that has executed any such Representation Agreement must obtain a licence to continue providing Football Agent Services as from 1 October 2023 (Article 22(3)).

• Agents working on international transfers should therefore start factoring in the requirements of the FFAR into all new negotiations and Representation Agreements.

Licensing

• Any agent providing services in connection with an international transfer must become a FIFA licenced Football Agent by:

  • submitting a complete licence application via the FIFA Agent Platform;

  • complying with the eligibility requirements at Article 5 at the time of the application and on an ongoing basis e.g. no previous criminal convictions or bankruptcy, no previous suspensions by regulatory bodies, etc;

  • successfully passing an exam conducted by FIFA (Article 6). This is a 20 question, multiple choice, open book exam, with a 75% pass park covering the FIFA regulations that govern the FIFA transfer system, as well as relevant case studies; and

  • paying an annual fee of USD600 to FIFA by no later than 30 September each year (Article 7).

• FIFA will hold two football agent exams in 2023. The following application deadlines will apply:

  • from 9 January 2023 to 15 March 2023 for the first FIFA football agent exam on the 19 April 2023; and

  • from 1 May 2023 to 31 July 2023 for second FIFA football agent exam on 20 September 2023.

• Agents working on international transfers should therefore start taking steps to apply for a FIFA licence as soon as possible.

• Agents formerly licensed as an agent pursuant to the FIFA Players’ Agent Regulations (1991, 1995, 2001 or 2008 editions) are exempt from the requirement to pass the exam established by the FFAR, subject to providing evidence of the same and meeting the other eligibility requirements in the FFAR (Article 23).

• A FIFA licenced Football Agent must also participate in FIFA’s Continuing Professional Development (“CPD”) programme and earn a minimum of 20 credits per CPD calendar year to maintain their licence (Article 9).

• A FIFA licence is issued for an indefinite period, subject to the Football Agent continuing to comply with the FFAR, and the licence authorises the Football Agent to conduct Football Agent Services on a worldwide basis (Article 8).

Representation

• An important requirement that all agencies should be aware of is that only a FIFA licenced Football Agent may enter into a Representation Agreement with a client, not the agency itself (Article 12(2)). Agencies will therefore need to carefully consider how they protect their interests in players represented by the agents employed by the agency.

• Unlike the current position, a Football Agent may only perform services for one party to a transaction (Article 12(8)). The only exception to this is dual representation, where a Football Agent represents both the player and the engaging club.  Therefore, a Football Agent cannot work for the player and the releasing club, for both clubs, or for all parties to the same transaction (Article 12(9)).  A Football Agent is not permitted to circumvent these restrictions by acting through a Connected Agent e.g. an agent at the same agency or an agent that it has entered into a contractual or other arrangement with, whether formal or informal, to co-operate with.

• Significantly, a clause in a Representation Agreement that: (i) limits a player’s ability to autonomously negotiate and conclude an employment contract without the involvement of the agent; and/ or (ii) penalises the player if they autonomously negotiate and/or conclude an employment contract without the involvement of the agent, will be null and void (Article 12(13)). Although not expressly stated, we would anticipate that this restriction would not apply where a Football Agent has already materially negotiated or renegotiated an employment contract on a player’s behalf.

• Another significant development is that a Representation Agreement may be terminated at any time by either party if there is just cause to do so (Article 12(14)). A party revoking or terminating a Representation Agreement without just cause must compensate the other party for any resulting damage. The FFAR states that there is just cause to terminate when a party can no longer reasonably be expected, according to the principle of good faith, to continue the contractual relationship for the agreed term, including, but not limited to a Football Agent’s licence being withdrawn or suspended.  However, this provision is particularly vague and may potentially lead to an increase in disputes where a player seeks to terminate a Representation Agreement on spurious grounds in order to be represented by another agent.

Minors

• Unlike the current FA regime where a player may be approached after 1 January in the year that they turn 16, the FFAR provides that a minor or their legal guardian may only be approached no more than six months before the minor reaches the age where they may sign their first professional contract in accordance with the law applicable in the country or territory where the minor will be employed (and once prior written consent has been obtained from the minor’s legal guardian) (Article 13(1)).

• Significantly, a Football Agent may receive a fee where a minor signs their first professional contract, which is a positive for agents representing minors (Article 14(9)). However, a Football Agent may not receive a fee from a minor in any other circumstances.

• Before representing a minor, a Football Agent must: (i) successfully complete FIFA’s designated CPD course on minors; and (ii) comply with any requirement to represent a minor established by the law applicable in the country or territory of the member association where the minor will be employed (e.g. The FA’s enhanced authorisation requirements) (Article 13(2)).

Agent fees

• Perhaps the most controversial aspect of the FFAR is the new cap on agent fees (Article 15), which is as follows:

• The calculation of a player’s annual remuneration is based upon the player’s gross financial compensation for employment set out in a negotiated employment contract, which includes base salary, any sign-on fee, and any amount payable if certain conditions are fulfilled (for example, a loyalty or performance bonus). In calculating whether a player’s annual remuneration exceeds USD200,000 (or equivalent), conditional payments should not be taken into account (Article 15(2)).

• Significantly, it should be noted that if a player’s annual remuneration is above USD200,000 (or equivalent), the excess above that amount shall be subject to the reduced cap (Article 15(2)).

• An important change to be aware of is that unlike the current position where a club may pay commission on the player’s behalf as a benefit in kind, under the FFAR commission must be paid by the client directly i.e. by the player, rather than the club on the player’s behalf (Article 14(2)). The only exception to this is that a club may pay commission on a player’s behalf where the player’s annual remuneration is less than USD200,000 (or equivalent) (Article 14(3)).  In cases of dual representation, the maximum an engaging club may pay is 50% of the total fees due (Article 14(10)).

• Unlike the current regime where the parties can agree their own payments schedule, the FFAR places significant constraints on how commission must be paid to an agent. Specifically, any commission must be paid after the closure of the relevant transfer window and paid in quarterly instalments for the duration of the negotiated employment contract (Article 14(6)).  In addition, commission must only be paid on remuneration actually received by a player, calculated on a pro-rata basis (Article 14(7)).

• All commission must be paid via the FIFA Clearing House in accordance with the FIFA Clearing House Regulations (Article 14(13)).

Rights and obligations

• FIFA licenced Football Agents must comply with the rights and obligations at Articles 16 and 17, most notably:

  • a Football Agent may approach and enter into a Representation Agreement with a player represented by another agent in the final two months of their exclusive Representation Agreement (Article 16(1)(b));

  • a Football Agent must upload various documentation relating to a Representation Agreement to the FIFA Agent Platform (Article 16(2)(j));

  • where a Football Agent conducts its business through a corporate entity, the Football Agent must upload various information to the FIFA Agent Platform, including information about the beneficial ownership and shareholders of the agency (Article 16(2)(k));

  • a Football Agent’s licence will automatically be provisionally suspended if the Football Agent fails to: (i) meet the eligibility requirements at any time; (ii) pay the annual licence fee; (iii) comply with the CPD requirements; or (iv) comply with their reporting obligations (Article 17).

• Players and clubs must comply with the rights and obligations at Article 18.

Agents Chamber and disciplinary matters

• FIFA has set up the Agents Chamber of the Football Tribunal in order to determine disputes arising out of or in connection with a Representation Agreement with an international dimension (without prejudice to a party’s right to pursue such a claim in the national courts) (Article 20). Any such claim must be lodged within two years of the event giving rise to the dispute.  The intention of this is to make it easier for parties to pursue cross-border claims relating to Representation Agreements.

• The FIFA Disciplinary Committee is competent to impose sanctions on any agent breaching the FFAR (Article 21). National associations remain competent in relation to Representation Agreements without an international dimension.

Conclusion

Whilst much of the FFAR is similar to the previous FIFA Regulations on Working with Intermediaries, there are a number of significant developments that agents must consider and grapple with, not least the new licensing regime, limits on multiple representation, primary responsibility on clients to pay commission and the cap on commission.

Although the reaction from agents has generally been negative, there are some positive developments, such as the new Agents Chamber which will make it much easier for agents to pursue cross-border claims for unpaid commission and the ability to receive commission from minors in limited circumstances.

It remains to be seen whether the football agency industry proceeds with a legal challenge to the implementation of the FFAR (as has been threatened).  Nevertheless, all agents who conduct agency activity with an international dimension should immediately start taking steps to:

• complete a licence application via the FIFA Agent Platform, noting that where an agent is required to sit the football agent exam, applications should be made by either 15 March 2023 or by 20 September 2023 in order to sit one of the two the football agent exams to be held in 2023; and

• ensure that all new Representation Agreements comply with the FFAR as of 1 October 2023 (nothing needs to be done in respect of existing Representation Agreements, which will remain in force and be compliant until their expiry).

Do not hesitate to contact Oli Hunt or James Hill at Onside Law should you require any assistance to better understand the FFAR and ensure you comply with it.