From October 2023, new FIFA Regulations strictly regulating the practice of football agents are due to come into force. What changes has FIFA prepared? Is the entry into force of these regulations at risk? What does it mean for domestic and international agents? Below is an elaboration in the published video.
When do the FIFA Regulations on football agents come into force?
FIFA’s new regulations on football agents are already in force to the extent that they regulate licensing examinations. Registration for the first round of examinations is open until 15 March. Enrolment for the second round is expected to last until the end of July 2023. In subsequent seasons, registration will take place until the end of March and the end of September. However, the regulations described below will come into force in October. All exisiting agency contracts are to be brought into the line with the incoming FIFA regulations by the end of September.
FIFA sued – postponement of coming into force
FIFA has been sued by an organisation of football agents. The lawsuit has been brought before the Court of Justice of the European Union, which is to examine ehether the regulations restrict the activities of football agents in Europe too much. As a result of this lawsuit, it is possible that the entry info force of these regulations could be postponed and later amended or even withdrawn.
Licenses for agents
FIFA’s new regulations on football agents make it mandatory for an agent to obtain a special licence. Without a licence, a football agent cannot act as an intermediary in transfers and football contracts. This applies to domestic and international agents. The licence will be subject to an annual fee to FIFA.
Only an individual meeting specific criteria will be able to obtain a football agent’s licence:
- No criminal record for offences such as drug trafficking, organised crime, tax offences, corruption, sexual offences;
- No disciplinary sanctions resulting in at least two-year suspension from professional sport;
- No connections with FIFA bodies, national associations and clubs or individual leagues;
- No connections in the last 12 months with Betting operators.
In addition, a football agent will not be granted a licence if he or she has acted as an agent without the required licence in the last two years. A licence will also not be granted to persons who have either gone bankrupt within the last five years or who have influenced the operation of a bankrupt company (e.g. as a board members, shareholders).
Club and player may act alone
One of the changes is that a football agent cannot restrict the right of its client (either the player or the club) to act alone, even if the football agent has a contract with them. Previously, it was common to find various contractual penalties and exclusivity clauses that made it unprofitable for the player and the club to act alone – the agent was due to a fee anyway. Consequently, the football agent could behave passively and make money from either the footballer or the club with which he signed the contract. According to FIFA’s new regulations on football agents, this will be impossible. Any provision restricting the player’s ability to act independently is prohibited.
However, this does not mean that the player will be able to choose another agent despite the contract being in force – there may be a contractual penalty for such behaviour by the player.
Disclosure of transactions
The football agent will be obliged to inform the player of all payments to the agent and all agreement he has entered into in relations to brokering the transfer. Each footballer should therefore have access to a detailed breakdown of what remuneration his agent receives and from whom. The amounts paid by club will also be disclosed if the club covers the commission fee on behalf of the player or jointly with the player.
Agents will be obliged to disclose and send all information related to individual transactions to FIFA. This will give FIFA control over the financial flows between sports clubs, players and football agents. This is also linked to the transfer of payments through the FIFA Clearing House. FIFA’s new regulations on football agents also prohibit additional contracts that would conceal an agent’s earnings or aim to circumvent FIFA regulations. For example, it is prohibited for a football agent to enter into an additional contract of employment or assignment with a client (player or a club).
FIFA’s new regulations on football agents require disclosure of:
- the agency concract;
- any other agreement of the football agent with the plat;
- agreement with other agents, e.g. concerning the sharing of commissions;
- other information relevant to the settlements;
- information about the football agency;
- other information indicated on the special platform for football agents.
Agent’s commission – how much a football agent earns after the introduction of the service fee cap
FIFA’s regulations on football agents place a cap on agent’s earnings. The maximum commission an agent will receive from a player is either 5% or 3% (with an annual salary of more than $200,000.00) Similarly, the commission is capped if the football agent acts on the transfer for the club acquiring the player. In such a situation, however the agent may act simultaneously for the player and the acquiring club. In such circumstances, the agent’s maximum commission is 10% or 6% respectively, which also depends on whether the player’s annual earnings exceed $200,000.00, with the club and the player paying half of the commission each.
If, on the other hand, the agent acts for the relinquishing club on the transfer of the player, the agent may receive a maximum of 10% of the transfer value.
Who can pay the football agent’s commission?
According to the FIFA regulations on football agents, agents may only be paid commission by their client, i.e. either the player or the club with which the agent has signed a contract. It is prohibited to transfer the obligation to pay the remuneration to another entity. Until now, it was usually the clubs who paid the football agent’s commission in full and the players did not care about the agent’s earnings. This is now set to change. Clubs will not be allowed to pay the football agent’s fee on behalf of the player.
The exception to this is if the player is expected to earn less than USD 200,000.00 per year with the club concerned. Then the club may pay the agent’s salary on behalf of the player, but in accordance with the provisions of the agency agreement. This means that the agent will receive the same remuneration as he would have received from the player, and other agreements in this respect are not permitted.
Agent will not receive commission on future transfer
It was also previously practiced to provide a football agent with a commission for carrying out a subsequent transfer of a player from a club, even if he was no longer the transfer agent for that player and was not involved in the transaction at all. Under the latest FIFA regulations, this will not be possible. This is due to the following rules:
- The agent cannot represent both the player and the ceding club at the same time.
- The club’s independent action on the transfer will exclude the agent’s right to a commission.
- The maximum duration of an agency contract is 2 years – transfers occasionally take place after a player has been with one club for less than 2 years.
he football agent’s commission will now be payable in instalments on a quarterly basis, paid after the close of the transfer window, on the base salary payable to the player under the contract. If the player’s contract is terminated early, this will reduce the remuneration paid to the agent. However, upfront payments for the entire round will not be allowed, as has been the practice so far.
Payments to football agents – FIFA Clearing House
Football agents’ commissions should be paid by the FIFA Clearing House (or by another national association body). This means that agents will not receive transfers directly from players or footballers. Instead, the players will transfer their fees to FIFA, which will then check that the amounts transferred match and that the contract complies with FIFA regulations, and only then pass them on to the football agent.
Currently, FIFA Clearing House does not yet handle payments to football agents. It is possible that this rule will not come into force evenly in October 2023. It is necessary to follow official FIFA announcements to see when exactly the Clearing House will start handling payments to football agents.
Can an agent represent a club and a player at the same time?
According to the FIFA regulations on football agents coming into force from October 2023, a football agent may only represent one entity in a single transaction. Exceptionally, it is also permissible for a football agent to act for both the acquiring club and the player at the same time. This is only possible on transfers of that player and with the prior written consent of the player and the club for dual representation. However, it is completely excluded for a football agent to act for the acquiring club and the transferring club on a single transfer.
In addition, if a club has a brokerage agreement with an agent but carries out the transfer without the involvement of an agent, the club will not have to pay the football agent any commission.
Length of contract
The contract of a football agent with a client (player or club) may last a maximum of 2 years. No automatic renewal clauses are allowed. In order for an agency contract to last longer than 2 years, it is necessary to sign a new agency contract after the expiry of the previous one.
However, this does not affect the football agent’s commission payable on transactions carried out during the term of the relevant contract. Thus, if a football agent brings a player to a five-year contract, he is entitled to the payment of commission for the entire five years, even if his agency contract is not renewed.
The introduced legislation also regulates other issues related to the activities of football agents. They must, for example, ensure that the player does not wish to consult a lawyer on the draft agency contract, pay annual licence fees, register and document their activities on a special online platform. The legislation also regulates the protection of players under the age of 18.
Do the FIFA regulations on football agents are applicable in Poland?
The question may arise whether the FIFA regulations on football agents apply to Polish agents? Indirectly yes. Although FIFA’s regulations only apply to international transactions (where all persons involved in the transfer or signing of a contract are not from one country), they impose the same (or stricter) regulations at the national level. This means that all the rules described above will also apply to Polish agents operating only domestically.