The New FIFA Football Agent Regulations

In general, football agent associations strongly condemn FIFA’s decision to place a cap on agents’ fees and prohibit multiple representations. These criticisms rest on a general belief that agents are beneficial to players, so restricting their activities is not only undesirable but detrimental. The cap, it is argued, might have the effect of driving the “majority” of (minor) agents out of the market, with players allegedly being left with less bargaining power in relation to clubs. Furthermore, in more general terms, agents critique FIFA’s entitlement to regulate the agency profession, which the associations argue is outside of the governing body’s remit of powers.

In the face of these criticisms, it is expected that lengthy legal proceedings will be brought in several jurisdictions, both under national and EU law.

This article will discuss why reform was needed, the historical context of the reform, the fundamental provisions and dates of the new FFAR, our main points of concern regarding the regulations, and the perspectives of both FIFA and the football agents.

1) Why Was Reform Needed?

The FFAR are being introduced to change how the occupation of football agents is regulated. The regulatory change arises amidst FIFA’s concern that the current system leaves players subject to abuse, and the integrity of football in question. In 2020, FIFA published on their website the overarching objectives of the agent reform. They hope that the regulations will “improve transparency, protect player welfare, enhance contractual stability, and… raise professional ethics and standards” (FIFA, 2020). The FFAR will replace the FIFA Regulations on Working with Intermediaries (“FIFA RWI”), a widely criticized set of regulations that failed to achieve their objective of adequately regulating the agency/intermediation profession by a process of deregulation.

However, as will be discussed, the new regulations have been severely criticized by associations of football agents and other experts on the matter.

2) Historical Context: From FIFA PAR to FIFA RWI

As previously mentioned, the FFAR will replace the FIFA RWI. The RWI were published by FIFA in 2014 and entered into force in April 2015, replacing the FIFA Player’s Agents Regulations (2008). To a certain extent, although the FFAR have been issued because of the “failure” of the two previous attempts at regulation, the regulations re-introduce aspects of both prior regulations. As such, it is useful to briefly review the previous systems adopted by FIFA.

FIFA Player’s Agent Regulations (2008)

As most of our readers will remember, the FIFA Player’s Agents Regulations established the figure of the so-called “FIFA agent”. Although legally improper, this was the colloquial market term for a natural person who, having obtained a license through an exam, was permitted to exercise the agency profession throughout the world. Dual representation was forbidden, and the license was limited to natural persons (as opposed to legal persons, i.e. companies). Agents could benefit from the FIFA dispute resolution system but were also subject to the disciplinary powers of the worldwide football governing body.

FIFA Regulations on Working with Intermediaries (2015)

The 2015 FIFA RWI replaced the FIFA PAR, deregulating the system and introducing the concept of an “intermediary”. A somewhat artificial distinction, attention was shifted to the transaction. FIFA’s change in approach was fuelled by their belief that a large parallel market existed, due to the publication of figures that recorded a licensed player agent acting in merely 25% to 30% of international transfers. Given the low percentage, it was thought that clubs and players were generally disregarding the regulations, and not reporting transactions. Criticisms also arose over there being significant divergences in national regulations regarding the activities of players’ agents, and an opaque examination system.

Under the current RWI, everybody, in essence, can act as an intermediary. All that is required is a registration and a demonstration of having a self-certified impeccable reputation. Legal persons are admitted into the definition of intermediary, and multiple representation is allowed based on specific disclosure requirements. Furthermore, it is prohibited to remunerate an intermediary for services rendered if the player concerned is a minor. There is also a non-binding recommendation to cap agent fees to 3% of the value of the transaction. The non-binding recommendation came after FIFA initially intended to introduce a hard 3% cap. However, following the threat of legal actions, particularly from the EAFA (“English Association of Football Agents”) and the EFAA, the 3% cap was finally kept as a mere recommendation.

The FIFA RWI only implemented a system of minimum standards, leaving national associations the freedom to impose additional rules and requirements. However, due to the national regulations lacking harmony and legal certainty, this approach is largely unsatisfactory and inefficient. For example, the registration of an intermediary in a particular national association is only valid in that association. Thus, if the intermediary intends to perform services (or transfer a player) in another association, he must register there as well. In addition, every national association has its own regulations and requirements, which is highly ineffective and costly.

Furthermore, intermediaries currently cannot bring their disputes before the FIFA jurisdictional bodies. As a result, it is significantly more challenging for intermediaries to recover their credits in certain international transactions. The intermediaries’ options are limited to the CAS in its ordinary composition (which might be too costly if the amount in dispute is not significant), or local courts, with the risk of lengthy proceedings submitted to a judge who may not be familiar with sporting matters.

In the end, FIFA concluded that the current intermediary system needed further reform. The RWI had not worked as expected or met the intended aims. FIFA believe that the football market is currently driven by speculation rather than solidarity, with training clubs receiving little transfer compensation and facing contractual instability. They also warned about the increasing influence of agents, with the connected risk of a conflict of interest.

3) Key Dates to Note

After approximately four years of consultation with the relevant stakeholders, and several re-drafts, the final version of the FIFA FFAR was adopted by the FIFA Council on 16 December 2022 and published on 6 January 2023. The timeframe of the regulations, published by FIFA, explains that some provisions entered into force on 9 January 2023, and that others will be implemented at a later stage.

4) Key Aspects of the New Regulations

How to Become a Licensed Football Agent?

i. Pre-conditions to becoming an Agent

Defined as a “natural person licensed by FIFA to perform Football Agent Services”, the new regulatory framework is centered around the concept of a “Football Agent”. This definition is similar to what was established under the FIFA Player’s Agents Regulations issued in 2008. “Football Agent Services” comprise “football-related services performed for or on behalf of a Client, including any negotiation, communication relating to or preparatory to the same, or other related activity, with the purpose, objective and/or intention of concluding a Transaction”. The new definitions are significantly different from the previous regulations, which revolved around the concept of an “Intermediary”, for whom a license was not needed.

Certain eligibility requirements are applicable. If not met, an individual is prohibited from securing an agent license. Most notably, in art. 5.1 of the regulations, an individual is not able to be an agent if they hold either personally, or through an agency, an interest in a club, academy, league, or Single-entity league. This restriction is in line with other provisions of the regulations which aim to limit the possibility of a conflict of interest. For instance, art. 16.3 of the FFAR prohibits an agent from offering or paying any advantage in any manner to, amongst others, officials or employees of member associations or clubs, as well as friends or family of those party to a representation agreement with that agent. Agents are advised to be attuned to these restrictions, given that such arrangements can occur in the reality of the football market. As the consequence of a breach of these (or other) provisions is the potential failure to obtain an agent license (or, if subsequent to its obtainment, its withdrawal), football agents should make sure to respect them.

The agent license will be issued worldwide and be valid for an indefinite period. However, to maintain their license, Football Agents must comply with the continuing professional development (“CPD”) requirements annually. Furthermore, and interestingly, “clients” now also include (beyond players and clubs) football coaches, whose agent activity is regulated for the first time by FIFA.

ii. The Agent’s Exam

To obtain a license, which allows the football agent to exercise his activity worldwide, the Individual must pass an exam organized by FIFA through a central licensing system. The exam will take the format of a multiple-choice test in English, Spanish or French; the candidate will need to correctly answer at least 15 out of 20 questions on a variety of FIFA regulations that govern the football transfer system, as well as relevant case studies. If an applicant passes the exam and complies with the eligibility requirements, he must then pay an annual license fee to FIFA.

As an exception to the requirement to pass the exam, a person formerly licensed as an agent under the FIFA Players’ Agent Regulations (1991, 1995, 2001 and 2008 editions, called “Legacy Football Agents”) will not need to be re-examined. However, for this to be the case, the former licensed Agent must submit his application for a license no later than 30 September 2023, providing proof that they were licensed and registered as an intermediary under the previous system.

Furthermore, certain member associations have their own domestic agent’s exam as part of their national law licensing systems. Provided that the national association is offering an exam that meets FIFA’s requirements (which shall be submitted to and approved by FIFA), if an agent passes the domestic exam, they will be exempt from the need to complete FIFA’s.

A domestic system may be applicable, for instance, in countries such as France and Italy, where a national licensing system is already established under the relevant national law. In such a case, a national agent licensed by, for instance, the FIGC or the FFF may be exempt from taking the FIFA exam. As such, they would be allowed, provided all other requirements are complied with, to act worldwide. Conversely, it is our understanding that an agent who passed the relevant FIFA exam under the umbrella of a national association other than the FIGC or the FFF, would still be barred under national laws from acting in France or Italy, unless he complies with the specific requirements set forth by the country in question.

Both Legacy Football Agents, as well as individuals licensed through a national agent’s exam, are still required to meet the ongoing licensing requirements – and for the first five years, they need to earn double Continuing Professional Development credits.

What Are the New Rules on Representation Contracts?

iii. Minimum Details

An agent can only provide services to a client if they have a written representation agreement with that Client. The regulations include a set of minimum details that the representation contract must incorporate in order to be valid, including the:

• Names of the parties
• Contract’s duration, if it is applicable
• Amount of service fee due to the Football Agent
• Nature of the Football Agent Services to be provided
• Signatures of the parties.

Furthermore, the regulations introduce a maximum period of two (2) years for which the representation agreement concluded between an Individual and a Football Agent can be valid. In addition, the contract is not tacitly renewable, meaning it cannot be automatically renewed without action of either of the parties. Conversely, no maximum duration is established for a representation agreement with a club. As is well known, the maximum term of validity of a representation agreement is a point of crucial importance for agents. Under the old 2008 FIFA PAR, such validity was also generally limited to two (2) years. The FIFA RWI did not contain any indication as to the maximum length. However, most of the intermediaries regulations issued by national associations establish a maximum time duration, typically between 2 and 3 years.

iv. The Service Fee Cap

The introduction of a “cap” concerning the maximum service fee receivable by a Football Agent is undoubtedly the most debated aspect of the new regulations, closely followed by the limitation on multiple representation (which is analyzed in chapter “vii” below).

The service fee cap for each Client is described in the table below:

In the first drafts of the new regulations, it was proposed that the cap would only apply to service fees established as a “percentage” and not, for instance, to “lump sum” fees. However, after determining that this would be inefficient and easy to circumvent, FIFA applied the cap to any kind of service fee payable to football agents.

Individuals / Engaging Entities

If the football agent represents an individual (i.e., player or coach) with a salary under USD 200,000, the service fee is limited to 5% of his remuneration under the new contract. If the Individual’s annual salary exceeds this USD 200,000 marker, a 3% service fee cap is applied to the excess amount. The same cap is established if the football agent represents the engaging entity.

As will be discussed later in this article, the regulations permit a football agent to represent, at the same time, the Individual and the engaging entity. Accordingly, both amounts can be cumulative. In this case, the total maximum cap is determined as 10% of the Individual’s remuneration when the Individual’s annual salary is below USD 200,000, and 6% for any salary exceeding this amount.

Releasing Entities

A football agent acting for a releasing entity (i.e., the selling club) can receive up to 10% of the amount of transfer compensation. The regulations clarify that the calculation of the transfer compensation from which to determine the salary cap will not include compensatory amounts paid for breach of contract (per article 17/ Annexe 2 RSTP) or sell-on fees.

A Brief Analysis

The differentiation in the service fee cap, depending on whether the Client is an individual, releasing entity, or engaging entity, is one of the reasons why the cap has been criticized. The disparity is most apparent when considering that the Agent representing a releasing entity in a transaction can receive a conspicuous amount of up to 10% of the transfer compensation, whilst the Agent representing the player is limited to up to 5% of the Individual’s remuneration (on the basis that the Individual is earning under USD 200,000). Football agents representing a player may have provided years of services and undertaken many expenses to support the player; critics argue that it seems unjustifiable that the Agent representing the releasing entity could earn a vast amount more than the Agent who has potentially inputted so much prior work.

Rules to Prevent Circumvention

The regulations also seek to prevent circumventions by establishing a presumption, whereby, if a football agent performs, in the 24 months prior to or following a transaction, “Other Services” for a client involved in that transaction, those services will be deemed to have formed part of the “Football Agent Services” performed in that transaction, unless proven to the contrary. These “Other Services” may involve providing legal advice, financial planning, scouting, managing image rights and negotiating commercial contracts.

The rule also extends to “Other Services” performed by the “Connected Football Agent”, defined as “a Football Agent that is connected to another Football Agent as a result of (i) being employed or retained by the same Agency through which Football Agent Services are conducted; (ii) them both being directors, shareholders in, or co-owners of the same Agency through which Football Agent Services are conducted; (iii) them being married to one another, domestic partners, siblings of one another, or parent and child or stepchild; or (iv) them having made any contractual or other arrangement whether formal or informal to co-operate in the provision of any services or to share the revenue or profits of any part of their Football Agent Services”.

As such, unless the football agent and/or client, fails to rebut the presumption, the fees received by the Football Agent (or the Connected Football Agent) for providing “Other Services” in the twenty-four (24) months prior to or following a Transaction will also be included in the amount calculated as part of the cap.

Therefore, if, for instance, a club and a football agent (or an agent connected to him) would enter a “scouting” contract that resulted in the Agent (or an agent connected to him) receiving a total that was more than the service fee cap established by the regulations, the club and football agent would be in breach of the rules unless they are successful in proving the “genuine” nature of such a scouting contract.

v. “Client Pays” Model

A further change has been made with regard to the payment of agents. Both the old FIFA PAR and the FIFA RWI allowed the Agent (intermediary) representing a player to be remunerated by the club, provided that the player had given his written authorization to this happening. However, FIFA recognized that this caused a significant problem in the market. In practice, players who allowed clubs to make payments of commission to the player’s agent “on their behalf” would effectively not perceive the payment as an expense of their own, since the money would never come from their pocket. With this in mind, the new regulatory framework is based on the so-called “Client Pays” model, establishing the principle that payment of the service fee due under a Representation Agreement shall be made exclusively by the Client of the Football Agent. Accordingly, a client is not permitted to contract with, or authorize, a third party to make such a payment on their behalf.

The regulations only provide for an exception where an individual (player or coach) authorizes the engaging entity to pay the agreed service fee to the Football Agent, provided that the Individual’s Remuneration (but not considering any conditional payments) is less than USD 200,000 (or equivalent). In such a case, the payment shall not affect the fiduciary duty of the Football Agent to the Individual or give rise to any agency relationship between the Football Agent and the Engaging Entity. Likewise, the service fee payment made by the Engaging Entity on behalf of the Individual must be no higher than the agreed service fee in the Representation Agreement between the Individual and Football Agent. The Engaging Entity is not permitted to deduct any service fee payment made under this exception from the Individual’s remuneration.

vi. Permitted Content of Representation Contracts

The FFAR also include provisions that directly regulate, and in essence limit, the contractual relationship between the agent and his client, by determining certain aspects of the content of the parties’ representation agreements.

Remuneration ‘actually’ Received

To start, the FFAR determine how service fee payments must be paid. For instance, only the Remuneration actually received by an Individual is subject to the payment of a service fee, calculated on a pro-rata basis (art. 14.7, FFAR). No payment shall be due to a Football Agent if the Individual does not actually receive any part of the Remuneration (art. 14.7, FFAR). Additionally, a Football Agent is not entitled to receive any service fee not yet due deriving from a negotiated employment contract where “the individual is transferred to another engaging entity before the negotiated employment contract expires” or where “the negotiated employment contract is prematurely terminated by the Individual without just cause and the Football Agent still represents the Individual at the time of said termination” (art. 14.12, FFAR).

Given the new “Client Pays” model (discussed above), these restrictions seem beneficial from the point of view of protecting the interests of Players, since it ensures that they will only have to pay Agents after having received the money themselves. This prevents Players from being left with debts to Agents without the revenue stream from which they can pay. It also avoids the scenario where a Player is left indebted to two agents, for instance, if he used a new Agent for a subsequent transfer. Conversely, for Agents, this model might prove detrimental. It may result in their remuneration being delayed, or perhaps never materializing, through no fault of their own. This may mean that Agents could face less certainty regarding their payments, including whether the full payment will be received, and if so, how much of it will transpire. Furthermore, it means that Agents are subject to the Player taking responsibility over the payment and co-ordinating it as required, which many may feel is less reliable than a Club’s financial department commandeering the same role.

The Service Fee and the Representation Contract

The regulations further demand that, for a Football Agent to be entitled to receive a service fee, the service fee must correspond with services set out in advance in a representation agreement that is still in force when the relevant Football Agent Services are performed. A Football Agent can receive a service fee after the representation agreement has expired (where an employment contract has a duration longer than the corresponding representation agreement), but, according to art. 14.5, only as long the Client has expressly agreed to this in the representation agreement, and the Individual’s negotiated employment contract is still in force.

Read a contrario, the provision essentially means that a Football Agent would normally be entitled to receive a service fee only during the period of time when the representation agreement is in force, even if he has negotiated a longer employment contract for the Client while leaving the possibility for the parties to determine otherwise in the contract. As will be discussed further below, this seems critical.

Limitation on Certain Clauses in Contracts with Exclusivity

The regulations also allow individuals to act independently when negotiating their employment contracts. Besides this, they explicitly forbid any clause in the representation agreement that either limits the ability of an individual to negotiate or conclude an employment contract without a football agent or penalizes an individual for doing so: if a clause in the representation agreement attempts to do this, it is simply void and thus will be diregarded. This would seem to refer to a certain type of penalty clause, which is rather recurrent in the practice; and is another critical aspect that will be discussed in greater detail below.

Termination of Contract

Furthermore, the FFAR explicitly permit either party to, at any time, revoke or terminate the representation agreement. However, if there is no just cause for the termination, damages may be due to the other party. Correspondingly, if it would seem unreasonable per good faith for either of the parties to have to continue the relationship until the contract’s expiry, either party has just cause to terminate the representation contract. Listed examples of such a situation include when the player has been banned from football, if the Agent has his license withdrawn, or if the club is prohibited from registering new players.

Consequently, an agent must be very careful not to fall under any of the listed situations or commit any violations listed of the FFAR, which would cause his license to be withdrawn, so that he is not prevented from enjoying his entitlements under his representation contracts.

Who Can a Football Agent Represent?

vii. Prohibition on Dual and Multiple Representation

As previously mentioned, the concept of dual or multiple representation constitutes the second most debated aspect of the new regulatory framework. Under the new regulations, dual or multi-representation will be forbidden, except for the situation in which the Football Agent is representing the Individual and the engaging entity simultaneously. However, for the Agent to be able to do this, both parties must have provided prior explicit written consent. In that case, as discussed above, the football agent may be entitled to receive up to 10% of the Individual’s remuneration (if that remuneration is below USD 200,000). Any excess over USD 200,000 will be subject to a service fee cap of 6%. All other scenarios (the Agent representing both clubs, the releasing club and the Individual or all parties in the transaction) will be forbidden and thus subject to sanctions.

FIFA intends to avoid circumventions of the rules by extending the prohibition to “Connected Football Agents”, regarding which the definition has been given above.

Under the old 2008 FIFA PAR, players’ agents could never act for multiple parties in the same transaction. This prohibition was removed under the FIFA RWI, provided that all parties gave explicit consent and all relevant documentation was lodged with the competent national association. However, FIFA has decided to reinstate the ban, apart from the aforementioned exception. The rationale for this is, in essence, the existence of a perceived “non-disposable” conflict of interest for football agents when representing different sides of the same transaction. In addition, it is thought that it would not be sufficient for clients – particularly players, who are not always aware of all relevant details and their exact rights as clients – to give their consent.

viii. New Rules on Minors

Furthermore, FIFA have also used the new agent regulations as an opportunity to introduce a certain degree of flexibility in relation to the representation of minor players. However, they have also attempted to maintain the fundamental principle of minors’ protection, as many stakeholders in the industry believe young players are most acutely subject to the imbalance in power that players sometimes suffer in relation to their agents. This is particularly so when minor players are attempting to start their career in professional football, where opportunities may seem limited but professional advice is still needed.

As such, while the previous RWI prohibited intermediaries from receiving any remuneration in relation to transactions involving minors, the FFAR now dictate that the Football Agent can be remunerated in relation to transactions involving minors, but only when it is the Minor’s first or subsequent professional contract (in accordance with the relevant national laws where the minor is registered or will be employed).

The earliest time a Football Agent can perform services in relation to a Minor is six months before the age at which the Minor is first able to sign a professional football contract. The time at which a Minor can first sign a professional football contract is decided by the laws of the country or territory in which the Minor is registered or will ultimately be employed.

Furthermore, a Football Agent who wishes to perform minor-related services must complete a CPD course on Minors first. In addition, the representation agreement with the minor must be signed by their legal guardian and the minor themselves.

If a football agent violates these rules, he may receive a fine or a suspension of his licence of up to two years.

What Else Should Football Agents Know?

ix. Transparency and Publication

FIFA also launched a FIFA-operated digital platform as part of their desire to enhance transparency in agent dealings. This platform will handle the entire processes of licensing, dispute resolution, reporting and CPD. In turn, agents will have certain obligations to comply with concerning these systems, such as uploading all relevant agreements, payments, and client lists to the platform. Clubs will upload representation agreements into the existing FIFA TMS alongside any other agreements with the Football Agent. FIFA will publish a variety of information including, but not limited to, Football Agents’ details, their clients, particulars of transactions, and notable aspects of uploaded representation agreements. FIFA also announced that on a future date, still to be confirmed, service fee payments will be made through FIFA’s Clearing House.

An increase in transparency certainly brings some benefits to parties. To ensure that exclusivity clauses and agreements are being respected, agents will be able to analyze the clients of other agents, and the transactions other agents are party to. By enjoying greater access to information about transactions, players and clubs will have the opportunity to gauge, in comparison to others, the value and quality of the services that they are receiving. For FIFA, the increase in transparency will aid in their assessment of compliance with FFAR.

However, there are also threats to the activity of agents caused by the transparency requirements increasing. Fundamental information relating to their activity will be made public, including the amount of remuneration they have received, which exposes the agent and his business model. Furthermore, agents will face an increased administrative burden that may distract them from their ordinary operations.

x. Disputes and Disciplinary

To efficiently handle disputes arising out of representation contracts, FIFA will create an Agents Chamber as part of the Football Tribunal, which will hear international disputes involving agents. These include not only disputes between agents and their clients, but also, interestingly, those between agents themselves. This may be the case, for example, when two agents form a partnership, share a fee, or are involved in a transaction together. There will be no procedural costs for such disputes between football agents and their Clients.

The re-introduction of the ability of agents to bring their disputes before FIFA dispute resolution systems is a welcome regulatory change. Until now, agents were forced to either take their dispute to CAS or bring their claim before national courts. A centralized FIFA dispute resolution system will be beneficial both to agents as well as to clients in terms of costs and length of proceedings, as well as ensuring the enforcement of decisions, bringing greater legal certainty to all stakeholders involved.

Furthermore, agents will be subject (alongside all other football stakeholders) to the FIFA Disciplinary and Ethics Committees, who can apply sanctions to any agent or Client that violates the FIFA regulations. Sanctions are applied for breaches of the agent regulations and vary in severity. The most severe of circumstances may result in the agent’s license being suspended for a period of time or even withdrawn. Since, as detailed above, the regulations specify that the loss of a license represents just cause for a Client to terminate a representation agreement, agents must make sure that they respect the regulations at all times, so as not to incur any potential violation.

For domestic disputes, as part of the national associations’ agent regulations, national decision-making bodies will be identified that will be responsible for adjudicating national transfer disputes. National associations will also be entitled to introduce and apply the sanctions that they deem appropriate.

The New Agent Regulations: What do We Think?

Which Aspects of the new Regulations seem Beneficial for Football Agents?

Having discussed the content of the new Agent Regulations, it must be acknowledged that the FFAR will bring certain benefits to the industry of football agency.

1. The Worldwide Agent Licence

The reformed Agent Licence will entitle Agents to carry out their Football Agent Services worldwide. Under the RWI, each national association enjoys discretion to introduce their own rules and requirements. As a result, intermediaries have to become registered in each country where they operate. This is not only costly but also involves a considerable administrative burden that will now be avoided. As many Agents operate internationally, the introduction of a worldwide license will be highly advantageous to them, allowing them to operate without any further restraint or administrative burden.

2. The Return of FIFA’s Jurisdiction

Another significant advantage of the new regulations is the re-introduction of FIFA’s jurisdiction to hear disputes involving agents, with no procedural costs involved for disputes between agents and clients. The new ‘Agents Chamber’ in the Football Tribunal will mean a consistent and authoritative set of jurisprudence can be created by a specialized decision-making body. This jurisprudence will ensure that parties enjoy greater legal certainty surrounding how the regulations will be applied and upheld. It will also result in a more effective dispute resolution system, less costly than an ordinary proceeding before the CAS, that is faster and with a better enforcement system than ordinary courts.

3. Representation of Minors

An additional benefit that the FFAR bring to Agents is that they can now be remunerated in transactions involving minors, as long as the minor is signing his first or subsequent professional contract, in accordance with the relevant national laws where the minor is registered or will be employed (which for many countries is either 16 or 17 years old). The rules under the FIFA RWI, still in force until 30 September 2023, prohibit any type of remuneration to intermediaries if the player concerned is a minor.

It is clarified that minors can now be approached to enter into a Representation Agreement within six months before they are able to sign a professional contract. This system seems to better protect both the agent and the minor player: from one side, minors need professional advice from agents well before they turn 18 since that age is crucial for the development of their professional careers; from the other side, it seems fair that an agent providing a similar professional advice is remunerated (which, as mentioned, is forbidden under the FIFA RWI).

In any case, the FFAR require agents that work with players under 18 to undertake a ‘Continuing Professional Development’ course on Minors, which will be a valuable safeguard to the interests of younger players. Due to FIFA’s concerns that vulnerable Minor players have been subject to situations whereby they have been enticed to a foreign country by a Club and then abandoned, the highest level of protection for Minors is always desirable. With agents being informed of relevant issues that may apply to Minors, young players will be able to have an advocate that is aware and able to safeguard their interests.

4. A Potential Safeguard to Poaching

Another potential benefit for Agents is art. 16 of FFAR, which seems to aim to prevent Agents from poaching another’s clients. The article prohibits football agents from approaching or entering into a representation contract with a client that is a party to an exclusive representation agreement with another agent. The only exception to this prohibition is when the agreement in question is due to end within the next two months. The effect of this article may be that agents who enter into exclusive representation agreements feel greater security in their contracts, strengthening contractual relationships and providing agents with a legal basis to protect their interests.

Our Main Points of Concern

However, despite the aforementioned advantages, there seem to be several notable areas of concern regarding the new regulations.

1. The Commission Cap

The primary concern of the new FFAR is the introduction of the cap on remuneration. The cap is problematic for several reasons.

The initial criticism of the commission cap rests on what may be viewed as a severe breach of the parties’ freedom to contract. In a broad sense, FIFA’s ability to intervene in the contractual relationship that agents have with their clients is questionable, since this may be seen as falling within a private contractual sphere that FIFA may not be entitled to control. FIFA’s intervention in the private financial agreement between an agent and a client impedes heavily upon the ability of an agent and their client to freely contract, imposing tight restrictions on a fundamental aspect of their agreement. Agents who oppose the cap label it as not only undesirable but unnecessary; and argue that their clients have the capacity to agree to an arrangement without the need for FIFA to exert an influence. Thus, it is highly debatable whether FIFA should be entitled to limit the remuneration that agents can earn.

FIFA famously announced in 2020 that “in the last year alone, football agents earned USD 653.9 million in fees, four times more than in 2015” (FIFA, 2020). This comment seemed to reflect their concern that some agents demand too much of the player’s salary, and is the predominant critique on which FIFA justify the cap on remuneration. However, the figure may actually represent an increased use of agents in general, rather than the same number of agents increasing their payment demands. The commercialization of football seems to be exponentially growing, making deals more commercially complicated than before. Thus, the increase in money being paid to Agents could merely be the market naturally reflecting the more significant role that Agents have taken on in the market and the increased demand for Agents.

It is also argued that the cap will simply bring circumvention: instead of simply limiting commission fees, agents and their clients may simply find other ways to pay a similar amount of money, an undesirable situation due to it being likely obscure practices would emerge.

Finally, the way in which the cap is structured is also debatable. In particular, the agent representing the “releasing entity” might cash an amount of up to 10% of the transfer compensation, while the Agent representing Individuals might see its compensation limited to 3% of the latter’s remuneration (if representing only one party in the transaction for figures above USD 200,000.00). This distinction does not seem reasonable. Agents who act for players have normally invested years of work and many resources in following and promoting their clients. Conversely, agents acting for the selling club might occasionally be simple “intermediaries” or “brokers” which merely intervene in the single transaction. Why should the latter earn more than the former?

2. The Limitation on Multiple Representation

Another fundamental concern regarding the new regulations rests on the prohibition of the ability for football agents to represent multiple parties in a singular transaction. Per art 12.8, under the FFAR the only instance where dual representation is permitted is when an agent is representing both an individual and an engaging entity in the same transaction. FIFA’s prohibition of multiple representation rests on an assumption that agents who represent multiple parties will face unavoidable and inevitable conflicts of interest, which will prevent them from protecting their clients’ interests to the highest degree.

However, it may also be argued that both clubs and players are autonomous and independent legal beings who are capable of validly and freely providing consent. If the parties agree that they would prefer for the same agent to coordinate all of their interests with the aim of ensuring the transaction completes successfully, it is questionable why FIFA should be able to prevent this. The transfer process involves the mutual agreement of many interested parties, and it may be considered beneficial for an agent to have open access to the information and desires of all parties to enable agreements to ultimately be reached. If the parties felt like this would impede their interests being protected to the fullest extent, they could simply elect not to consent to utilize the same agent as the other contracting parties.

Furthermore, it is arguable that, where an agent fails to protect a party’s interests, the ramifications would be better dealt with privately between the parties, such as through claims for breaches of contract or the termination of the representation contract.

3. Limitations to Contractual Freedom

Both limitations discussed above (to the agent fee as well as to multiple representation) mark a significant restriction of the parties’ contractual freedom. However, it is not only in relation to the above matters that FIFA tightly restrict the parties’ freedom of contract, despite this being a fundamental principle of Swiss law (art. 19 par. 1 of the Swiss Code of Obligations).

To start, the regulations introduce a maximum length of a representation contract between an individual and an agent, it being restricted to two years (art 12.3, FFAR). Furthermore, art. 13 of the regulations prohibit the agents’ ability to include a clause in their contracts penalizing individuals for negotiating or concluding an employment contract without involving the agent. This would seem to refer to a certain type of “penalty clause”, rather frequent in exclusive contracts in the football industry; by not permitting its inclusion, FIFA would also be restricting the parties’ freedom of contract and decreasing the level of legal protection offered to agents (while keeping in mind that, under Swiss law, the judge would anyway have discretion to reduce penalty clauses fixed at an excessive amount).

Art. 15.2 lit c) of FFAR states that the calculation of the transfer compensation may not include: i. any amount paid as compensation for breach of contract pursuant to Article 17 or Annexe 2 of the RSTP; and/or ii. any sell-on fee. With this, it would seem that FIFA has also introduced rules determining the exact payments from which an agent can calculate their share of remuneration. This would represent a questionable limitation. In particular, sell-on payments are normally considered as being part of the transfer compensation in a broad sense (e.g. they are normally accounted for the purposes of calculating the amount due for the solidarity mechanism), as they form part of what is offered to a club in order to agree to release a certain player. By limiting the conception of ‘transfer compensation’ in this manner, FIFA are even further restricting an agents’ ability to co-ordinate their financial affairs with their client in a manner that both parties deem appropriate.

In addition, relating to the contractual limitations discussed under Chapter 4. Vii above, an Agent loses his entitlement to the service fee once the representation agreement has expired, even where an employment contract has a duration longer than the corresponding representation agreement unless the Parties have established differently in the representation contract. As said above, this seems a critical restriction. For example, if one considers the possibility that a Football Agent negotiates, in the last month of validity of their representation contract, an employment contract for a player that lasts 5 years, the Football Agent would prima facie only be entitled to be remunerated for that month during which the representation contract is still in force. This appears an evidently unfair situation to the agent. As a further restriction, discussed above, a Football Agent also loses his entitlement to the commissions not yet due arising out of a negotiated employment contract when the individual is transferred to another club or when individual terminates the employment contract without just cause, if the Football Agent still represents him at the time of said termination.

4. Potential language barrier

Last but not least, FIFA has announced that the exam will be held online in English, French and Spanish for all candidates. Furthermore, the same database of questions will be used regardless of the testing venue.

Otherwise said, candidates will have to undertake an exam of a certain degree of complexity, exclusively in one of those languages. However, the license will be applicable worldwide and, therefore, also demanded for national transactions - unless FIFA introduces the possibility for member national associations to release a domestic license valid for transactions at a purely national level (which, to the best of our understanding, is currently not provided for).

As such, a person not fluent in one of these languages may be barred from exercising his profession at a national level - if it means they cannot pass the exam. This may be the case even where said languages are not needed for the type of work the Agent performs, for instance, a national transfer. This may prove significantly detrimental for intermediaries who don’t speak the required languages but currently operate in countries that have a significant national football market, such as Brazil, Russia, China and the Middle East.

Overall, such restrictions will heavily impact the activity of agents and may mean that they are forced to operate in an industry far less lucrative and a lot less financially secure.

6) FIFA vs. Football Agents

As discussed above, the agent regulations have been strongly criticized, in particular, by agents’ associations such as the Football Forum and the EFAA. Consequently, it is almost inevitable that legal actions will result, both in accordance with domestic laws (notably in countries such as Germany, the UK and Switzerland) and from an EU law perspective.

The Position of FIFA

To be able to analyze the regulatory backdrop upon which these legal claims may rest, it is important to understand the position of FIFA. Since 2020, FIFA have expressed four goals regarding what they hope the agent regulations will achieve. These are to “improve transparency, protect player welfare, enhance contractual stability and also raise professional and ethical standards” (FIFA, 2020). They explain their belief that abusive and excessive practices currently exist in football, which they are hoping to eradicate. In 2022, FIFA’s Head of Agents explained his hopes for the reform to protect integrity in the sport and help the transfer system to function effectively (FIFA, 2022a).

FIFA’s position often seems closely linked with a discussion of the amount of money that agents have been documented as receiving. In their annual report of Intermediary activity published in December 2022, FIFA detailed how club spending on intermediaries has now almost returned to pre-pandemic levels, with USD 662.8m being spent in 2022 (FIFA, 2022c, p.7). Later in the report, it is mentioned that, for deals with transfer fees under USD 1m, there were some occasions where the service fee exceeded the transfer fee itself (FIFA, 2022c, p.12) .

Furthermore, there are fears that agents will encourage players to agree to transfers that don’t suit their professional careers due to an incentive on the Agent’s behalf to receive their cut of the resulting transfer fee. This, it is felt, could undermine contractual stability and disadvantage players. FIFA seem to want to avoid agents being able to influence transfer decisions and manipulate football due to prioritizing financial considerations over sporting best interest.

The Position of the Agents

From an agent’s perspective, representative agent organizations have been very vocal in their responses to FIFA’s proposals, for several reasons. A significant number of critics argue that the agent regulations are contrary to EU competition laws, due to being an artificial restraint on the market. In line with Article 101.1 of the TFEU, agreements cannot be created that “have as their object or effect the restriction, prevention or distortion of competition within the EU”. Article 102 of the TFEU also prohibits abuse of dominant position within the internal EU market, “in so far as it may affect trade between Member States”. Following the criteria established in the landmark case of Meca-Medina, to determine whether a sporting organization has acted compatibly with EU law, three elements must be evaluated. These include: the objectives of the rules; whether restrictive effects are inherent to these objectives; and whether the rules are proportionate to the objectives.

FIFA have frequently reiterated their aims regarding their regulatory intervention in football agency, which all seem to rest on a fundamental belief that agents currently exercise “exploitative and abusive practices”.

Conversely, agents inter alia argue that, by significantly limiting the sums payable to agents, it is almost inevitable that smaller agents, who may rely on taking a larger proportion of a smaller sum, will be driven out the market. The desire for agent reform seems to focus on a very niche group of agents who do high-value European transfers. However, these agents do not reflect the reality in which most football agents operate. For instance, the English FA alone (as of 26th September 2022) has 2,210 registered intermediaries (The FA, 2022). Considering that FIFA has 210 other affiliated associations, there are far more agents operating than those recognized through high-value transfers. Outside of Europe, or in European lower leagues, remuneration to players is significantly lower than those that reach the headlines. Although the FFAR differentiate between players earning below and above USD 200,000 in annual remuneration, the actual amount of money these lower-profile agents are left with could be minimal compared to the work they must invest into the player in the months or years leading up to the transfer. The risk and time that goes into Players is rewarded with the hope of payment further down the line– which, if eradicated, may make the profession less attractive. It is noted that this might also affect the position of the clients themselves, who may see their opportunities being limited. A player or a club might be willing to pay a (particular) agent more than what the cap requires if this may mean a better service is offered to him. Consequently, the limitation might have a detrimental effect on players and clubs as well.

The remuneration cap presents a significant challenge to the lower-profile players' agents, who may find their livelihood has become financially unfeasible, and may subsequently be forced to leave the profession. The result of this will be a decrease in competition in the market. As a result, the FFAR may result in a restriction of competition by its effect. With their commission capped, agents may simply not be able to justify the work that they must put in with the reward that will ultimately be received. Consequently, it could well be argued that less intrusive and more proportionate measures could effectively achieve the goal of preventing exploitative and abusive practices of agents without a need to cap commissions. Alternate accountability mechanisms could be introduced to address FIFA’s concern that agents may have financial incentives to facilitate transfers more often and where sportingly unsuitable for the player. For example, a robust Code of Ethics could be put in place, and FIFA jurisprudence could take a hard line against abusive or exploitative practices, invalidating any agreements where it is felt the Agent acted to the contrary.

As another basis for critique, agent associations have questioned FIFA’s lack of involvement of stakeholders, including themselves, in official consultation. The Football Forum, who describe themselves as an ‘international movement of football agents and players’ (The Football Forum, 2022a), have made this criticism, whilst arguing that FIFA’s regulations take contractual powers away from players. EFAA, on its side, argues that, since FIFA’s process of regulatory change lacked sufficient qualities of good governance and consultation, it is more likely that a contravention with EU law will be found (EFAA, 2022b).

Furthermore, and more generally, agent associations share a broader concern regarding the institutional competency of FIFA to regulate the agency profession. Some feel, like the Football Forum, that for football to be truly global, power should not be limited to a “restricted group of people” (The Football Forum, 2022a).

In essence, it is likely that the matter will be brought to the attention of the European Commission and the European Court of Justice, which will take into account all the elements described above to determine whether certain provisions of the FFAR contravene fundamental principles of EU competition law.

Conclusions

In summary, the new FIFA Football Agent Regulations undoubtedly introduce certain provisions that will significantly benefit stakeholders of the football industry. For instance, the licensing system and CPD requirements to ensure the quality of Football Agents will offer safeguards to clubs and players and could help prevent disputes, while at the same time allowing agents to act on a worldwide basis. In addition, the centralized dispute resolution system will create a clear and consistent set of jurisprudence concerning agents.

However, the move from a very loose regulatory landscape to one far more restrictive (namely in the financial limitations it imposes) seems to swing the pendulum too far. It might have been preferable to introduce the provisions that promote transparency and quality assurance without intervening too far into private contractual agreements and financial decisions of parties. Indeed, FIFA as the sole regulator of football have fundamental scope to impact the game. Limiting the activity of agents to the extent set out in the FFAR is highly problematic.

However, given the inextricable link between the activity of agents and the game of football that FIFA regulates, it seems impossible to disentangle FIFA’s intervention. Nevertheless, as agents heavily impact the game and its legal, commercial, and social intricacies, it would be most desirable for this control to be exerted after thorough mutual discussion with agents, who are most attuned to the profession's issues. As discussed at length above, agents vehemently oppose the commission cap, and complain of the inappropriateness of FIFA intervening into areas where an agent and their clients should enjoy freedom to contract. Such issues will certainly be brought to the attention of the EU institutions as well as before ordinary courts in different jurisdictions.

As such, although it is unclear how agents will modify their practices due to the regulations, what is clear is that the introduction of these regulations will not mark the end of this long-running regulatory story.

Stefano Malvestio is an Attorney-at-Law at Bichara e Motta Advogados; Master (LL.M) in International Sports Law at ISDE in Madrid. Stefano was recognized by Who’s Who Legal as a leading sports lawyer in Brazil in 2018, 2019, 2020, 2021 and 2022 and as a Global Elite Thought Leader in 2019, 2020, 2021 and 2022 - LinkedIn / Email

Georgia Wray is a Legal Intern at Bichara e Motta Advogados, currently enrolled in the Master (LL.M) in International Sports Law at ISDE in Madrid - LinkedIn / Email

In case you would like to receive more information about the new FFAR and the announced FIFA agent exam, please feel free to contact the authors.