How much football players will pay their agents – new FIFA regulations

How much football players will pay their agents – new FIFA regulations

As of October 2023, new FIFA regulations strictly regulating football agents are to come into force. The questions of how much a football agent earns under the new regulations and how much football agents will be paid by footballers and whether clubs can pay football agents on behalf of players will be answered in this article.

When FIFA Regulations on football agents come into force?

FIFA’s new regulations on football agents are already in force to regulate licensing examinations. From October, however, the regulations described below start to apply. This means that until October 2023, agency contracts can look like they have until now, as they are not strictly regulated by PZPN or FIFA. However, as of 1 October, agency contracts with football agents must be brought into line with the new regulations. It is in the interest of the players to ensure that the contracts are brought in line with FIFA regulations, as these are regulations that are beneficial to them.

Do FIFA regulations on football agents apply in Poland?

The question may arise whether the FIFA regulations on football agents apply to Polish agents and Polish players? Indirectly yes. Although the FIFA regulations only apply to international transactions (where the club and player are from another country or the agent and player are from another country), they impose the same (or stricter) rules at the national level. This means that all the rules described in the article will also apply to Polish agents operating only in Poland with Polish players. Alternatively, the rules may be modified to be less favourable for football agents. Polish agents and Polish players must therefore also comply with FIFA regulations.

Agency contracts – without a contract the agent will not receive a commission

Football agents must now enter into written agency agreements with players. These contracts must indicate:

  1. Parties to the contract;
  2. Length of duration (max. 2 years);
  3. Amount of commission (percentage of the player’s earnings);
  4. the services of the football agent, i.e. what the agent will do as part of the contract (e.g. negotiating the contract with the club, checking the player’s contract with the club);
  5. Signatures of both parties.

The contract can be signed either in person on the original or by email exchange of signed scans of the document. Without a contract, the agent is not entitled to receive any remuneration. Importantly, the contract must be signed even before the football agent proceeds to negotiate the player’s contract. We will describe contracts in more detail in a separate article.

Agents’ commissions – how much a player will pay an agent?

FIFA’s regulations on football agents introduce a cap on agents’ earnings, the so-called service fee cap. Until now, this has not been capped and football agents have taken a commission of whatever amount they were able to negotiate. This was usually at the expense of the players’ wages – part of the budget allocated to their salaries was passed on to the football agents. However, the players themselves did not feel this, as they did not make any bank transfers.

Currently, the maximum commission an agent can receive from a player is 5% (for a player’s salary up to $200,000.00) or 3% (for an annual salary above $200,000.00) of the player’s contractual earnings. This refers to the player’s total gross contractual earnings, so bonuses, bonuses (e.g. for goals, for number of minutes played) are also included here. However, non-monetary benefits from the club, e.g. provision of a car or accommodation, do not count here. This means that, according to FIFA regulations, a football agent will receive a maximum of 5% of a player’s contractual salary. For high-value contracts, the agent’s commission drops to as low as 3% of the player’s salary.

The idea is that such a regulation will make agents negotiate the highest possible salaries for players, because the higher the player’s salary, the more the agent will earn. Football players, in turn, are to feel first-hand how much it costs to maintain football agents and decide for themselves whether the commission charged corresponds to the quality of the service provided by the agent in question.

Can a club pay a football agent’s commission for a player?

According to the FIFA regulations on football agents, football agents may only be paid commission by their client personally, i.e. the player with whom the agent has signed a contract. It is prohibited to transfer the obligation to pay the remuneration to another entity. This means that clubs will no longer be able to pay football agents for their players.

The exception to this is if the player is to earn less than $200,000.00 per year at the club in question. As indicated earlier, all the player’s earnings at the club – including bonuses and bonuses (e.g. for goals, assists, number of minutes played) – are included in this limit. If the player earns less, the club may pay the agent’s salary on behalf of the player. However, the agent continues to be paid in accordance with the provisions of the agency agreement. As a result, the agent will receive the same remuneration as he would have received from the player, and other agreements in this respect are not permitted.   The club cannot accept an obligation to pay additional remuneration. Nor can it otherwise modify the player’s arrangements with the football agent.

At the same time, if the football agent is paid by the club, the commission no longer has to be paid by the player. An exception to this is if the agent simultaneously represents (based on a previously signed agency agreement and the agreement of both parties) the player and the club acquiring the player on transfer. In that case, the agent may be paid by both the club and the player, each at either 3% or 5%, according to the rule described above. In such a situation, it is also impossible to transfer the commission charged to the player to the club. Thus, if the football agent acted for the club, the player must pay the agent’s remuneration himself out of his salary.

We have covered football agent earnings from the clubs’ perspective in a separate article.

On the other hand, it is permissible (but only at the written request of the player!) for the club to deduct the agent’s remuneration from the player’s salary and to transfer these payments directly to the agent. The club will then inform the player each time how much it has deducted from the player’s salary and transferred it to the agent.

Does a player have to pay a commission to an agent if he is not paid by the club?

According to the new FIFA regulations, the player pays the agent a commission calculated as a percentage of the salary actually received from the club. In our view, the regulation therefore says explicitly that if the club does not pay the player’s salary then the player does not have to pay the commission to the agent until he receives payment from the club.

There is, however, a legal argument for the agent’s commission to be paid on the amounts that the player should have received under the contract, regardless of whether they were actually paid. After all, the agent has performed his service and is therefore due a fee. It is also difficult to attribute responsibility to the agent for the club’s performance of the contract.

Divergent interpretations are therefore possible and FIFA avoids a clear answer to this question. It is therefore recommended that this situation be clearly regulated in the contract.

Payment terms

The football agent’s commission should be payable in quarterly instalments (every 3 months) in arrears, paid after the close of the transfer window, on the amount of salary due to the player under the contract. The amount of each instalment depends on the player’s earnings during the relevant period. This also includes any bonuses or bonuses from the club. For example, if a player has earned 15,000.00 PLN in a given quarter, he should pay the agent (at 3% commission) 450 PLN.

Payment in advance for the entire round, as practised up till now, is not permitted.

If the player’s contract is terminated early, this reduces the remuneration paid to the agent. In other words, if the player’s contract was only in force for 2 months (rather than 3 months) in a particular pay period, the agent’s commission is calculated on the 2-month salary. For example, if the player earns 5,000.00 PLN per month (assuming no bonuses during this period) and the contract was terminated in the second month of its validity, the agent will receive from the player (at 3% commission) 300 PLN.

Method of payment of the football agent’s commission – 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 footballers. Instead, they will transfer the amounts due to FIFA, which will then check that the amounts transferred match and that the contract complies with FIFA regulations, and only then transfer them to the football agent. Players will not be allowed to pay agents directly unless the FIFA Clearing House (or its Polish equivalent) is not yet operational on the day the regulations come into force.

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 the football agent. Until then, players can pay salaries directly to the agent’s account.

It is also unclear what solution the PZPN will introduce and it is necessary to wait for further developments.

A summary

Players should therefore bear in mind that, from now on, they will have to pay agents a commission every three months. It can amount to a maximum of 5% (3% for the largest contracts) of the player’s monthly base salary. The obligation to pay the commission to the football agent cannot be transferred to the club. The remuneration will not be paid directly to the football agent’s account, but through special bodies of either FIFA or PZPN.