After a long waiting period due to the extensive consultation process that the FIFA Regulations on Football Agents (hereinafter referred to as the "new Regulations") had to undergo, the FIFA Council approved the much-anticipated new Regulations last December. The new Regulations aims to fulfill FIFA's objective of modernizing the football regulatory framework and ensuring the security and efficiency of the transfer system, as well as the integrity of the competition and guaranteeing the quality of services provided by football agents. Among other things, it is worth mentioning the establishment of a licensing system for agents, as well as the application of a cap on the fees agents receive.
The new Regulations, part of which came into force on 9 January 2023, replace the 2015 FIFA Regulations on Working with Intermediaries (hereinafter, the "previous Regulations), which represented a significant change to the agent system that had existed until then. The previous Regulations brought a liberalization of the agent sector, as, among other things, it removed the obligation to hold a license to act as an agent and eliminated FIFA's power to resolve disputes between agents and/or football clubs.
The "deregulation" that the previous Regulations entailed led to a series of undesirable consequences for FIFA, which are precisely the ones it now intends to address with the new Regulations. Thus, the main causes that have led to the adoption of a new regulation are: (i) the deregulation caused each member Association to adopt its own regulations regarding intermediaries, creating some confusion in the agent ecosystem; (ii) the liberalization of the licensing system meant that any person, with or without training, could act as a football agent; and (iii) FIFA’s mere recommendations regarding the percentages that intermediaries could earn in each operation caused confusion due to the different regulations of the member Associations.
The following is a schematic explanation of the main changes introduced by the new Regulations:
1. Introduction of a new football agent licensing system. The new Regulations are intended to return to the licensing system that operated prior to the entry into force of the previous Regulations. In this regard, any person who is not licensed under the previous regulations (ed. 1991, 1995, 2001 and 2008) and who wishes to act as an agent will have to undergo the licensing procedure. Thus, as of 1 October 2023, any person who wishes to act as an agent in compliance with the applicable regulations must hold a license to carry out his or her activity.
In this respect, one of the main changes involved in the aforementioned procedure will be that in order to obtain the license, the agent shall pass a 20-question multiple-choice test which evaluates their knowledge of FIFA regulations in relation to the transfer system. Each question will count for 5% and the candidate must have a score equal to or higher than 75%, i.e., he/she must get 15 out of the 20 questions proposed to pass. In this context, it is important to take into account that the FIFA will open two agent exams windows for 2023.
In case the candidate (i) passes the exam; (ii) meets the eligibility requirements; and (iii) pays the annual fee to FIFA (explained below), he/she will be granted an agent's license for an indefinite period of time that will entitle the agent to act worldwide.
In order to maintain such license, the agent shall have to pay the annual fee to FIFA and take Continuing Professional Development (CPD) courses, through which FIFA intends to keep agents up to date in terms of regulations. In this regard, each CPD course will be assigned a number of credits and before completing each course, the agent shall be obliged to pass an evaluation to obtain the credits. In this sense, the agent must have obtained 20 credits before September 30th of each year in order to keep his or her license.
2. Obligation to pay an annual fee to FIFA. Any agent, whether licensed as a result of the new Regulations or already licensed, will be required to pay an annual fee of USD 600 to FIFA. This fee must be paid by September 30th of each year.
3. Eligibility requirements. Article 5 of the new Regulations introduces a series of requirements that agents must comply with, both at the time of obtaining the license and during the exercise of their functions as such. These eligibility requirements are generally related to compliance with regulations and the prevention of illegal activities (prevention of money laundering, not having been suspended for more than two years by sporting bodies, not holding an interest in clubs, academies or leagues, etc.).
The FIFA General Secretariat will be responsible for ensuring compliance with the eligibility requirements established in Article 5.
4. Agents already licensed under the pre-2015 Regulations (ed. 1991, 1995, 2001 and 2008). Agents already licensed will be subject to a different procedure to obtain the new license than the one discussed in the first section of this article.
Therefore, these agents will not have to take the multiple-choice test exam as long as they (i) apply for a license before 30 September 2023 through the FIFA Agent Platform; (ii) prove that they were licensed under the pre-2015 Regulations; (iii) prove that they were registered as an intermediary within a member Association in accordance with the previous Regulations; (iv) meet the eligibility requirements; and (v) pay the annual fee of USD 600.
However, agents who were already licensed will still be required to take the CPD courses. In this respect, as opposed to agents who must pass the exam and obtain 20 credits per year, agents exempted from passing the exam will have to obtain 40 credits per year.
In this context, it is important to note that any agent who fails to comply with any of the aforementioned requirements may have his license provisionally suspended. When an agent fails to comply with any of the eligibility requirements, the license will be automatically suspended, and the case will be brought to the FIFA Disciplinary Committee for a final decision. On the other hand, if the agent does not pay the fee or does not pass the annual CPD courses, the license will be provisionally suspended, although with a period of 60 days to rectify the situation.
5. Maximum duration of the representation contract: the representation contract between an agent and a player or a coach (any mention of a player shall also be understood to apply to coaches, as the new Regulations establish the possibility to represent a Coach) shall have a maximum duration of 2 years and may only be extended by signing a new representation contract. There can be no automatic renewals or extension clauses in representation contracts. In addition, before entering into a representation contract, the agent must inform the client of his right to seek independent legal advice in connection with the representation contract and obtain written confirmation as to whether or not he has opted for such advice.
On the other hand, it shall be noted that a representation contract concluded between an Engaging Entity or Releasing entity and a football agent is not subject to a maximum duration.
The new Regulations also establish that in the event that a player’s employment contract which has been negotiated by a particular agent extends beyond the duration of the representation contract between such agent and player, the agent shall be entitled to receive his service fee until the termination of the player's employment contract, provided that such employment contract remains in effect and the player and agent have agreed on such matter in the representation contract.
In addition, representation contracts entered into prior to the entry into force of the new Regulations will remain valid but may not be extended. Any new representation contract or renewal thereof must comply with the new regulation as of 1 October 2023.
6. The new Regulations define what shall be understood by «Football Agent Services», thereby framing the agents’ activity as: football-related services performed for or on behalf of a Client, including any negotiation, communication relating or preparatory to the same, or other related activity, with the purpose, objective and/or intention of concluding a Transaction.
7. The representation contract shall only be signed by natural persons. FIFA will not grant licenses to agencies, but only to the agents as natural persons. In any case, agents may still conduct their business through an agency but within an agency only those persons holding a license will be entitled to provide Football Agent Services.
8. Prohibition of dual representation. The agent may only represent one party to a transaction. Exceptionally, and taking into account the nature of transfer operations in football, the agent could represent the Engaging Entity and the player in the same transaction if there is a prior written agreement between such parties and the agent. However, the new Regulations establish prohibitions in relation to the parties with whom the agent may exercise dual representation. Consequently, the agent could not, for example, represent an Engaging Entity and a Releasing Entity in the same transfer transaction, as this would create a conflict of interest.
9. Agent’s representation of minor players. An agent may approach a minor in connection with signing a representation contract six months before the minor reaches the age at which he/she may sign a professional contract in accordance with the regulations of the country concerned (in Spain, for example, 16 years of age). In addition, before making this "approach," the agent will have to have obtained written consent from the minor's legal guardians (cf. Article 13.1 of the new Regulation).
It is important to note that if an agent wishes to represent a minor, he/she must have passed the mandatory CPD course on minors.
It shall also be underlined that the agent may not receive a service fee for services rendered to a minor, with the exception of the case where the minor is signing his or her first (or subsequent) professional contract, in accordance with the regulations governing minors applicable in the territory of the Member Federation concerned (cf. Article 14.9 of the new Regulations).
10. Limitation to exclusivity in representation contracts. The new Regulations establish that clauses that penalize the player for having negotiated an employment contract without the agent's involvement are null and void. The exclusivity clause is permitted, but is limited to the player not being able to sign a representation contract with another agent while under contract with an agent.
11. Approaching players with representation contracts in force. Agents may not, as a general rule, approach (with the intention of signing a representation contract) a player who has a representation contract in force with another agent. However, this prohibition shall not apply in the last two months of a representation contract.
12. With respect to the form of payment for services provided by an agent, the general rule shall be that the agent's client shall pay for the agent's services (Client-pays model). The only exception to the general rule shall be in the case where the agent is representing a player who receives less than USD 200,000 per year in salary (excluding conditional payments). In this case the club and player may agree that the club will pay for the agent's services.
In addition, the new Regulations establish that the payment for services rendered by the agent must be made after the close of the registration periods and in installments every three months for the duration of the negotiated player employment contracts.
13. Introduction of a Service Fee Cap (Article 15). The major change introduced by the new Regulations is the introduction of a cap to the % of fees (Service Fee Cap) that the agent can take in each transaction. To calculate the fee, the salary (if representing an individual or a new club) or the amount paid as a transfer (if representing the Releasing Entity) will be taken into account, without taking into account conditional payments in any case.
Below there is a table with the applicable caps depending on the transaction:
14. Another important aspect of the new Regulations is the establishment of the method of payment of service fees to agents. Under the new regime, payments of service fees to agents shall be made through the FIFA Clearing House.
However, the new Regulations also point out that if the FIFA Clearing House regulations do not establish the procedure for the payment of agents' fees (as it is actually the case), such payments shall be made to the agent directly, until FIFA establishes such a procedure in its regulations.
15. Obligation to report information to FIFA. The new Regulations establish the obligation for agents to upload certain information to the FIFA Agents' Platform within 14 days after the completion of a particular transaction (cf. Art. 16 (j) and (k)). The information FIFA will require from agents may be the following:
- Representation contract;
- Information regarding the payment of the Service Fee;
- In case the agent performs his activity through an agency: its ownership structure, the identity of the shareholders, the percentage owned in its share capital and/or identity of its beneficial owners.
16. FIFA’s disclosure and publication of information regarding agents. The new Regulations states that FIFA will make public certain information about agents, such as (i) the name and clients represented; (ii) information about representation contracts, such as the expiration date of the contractual relationship; (iii) fees paid to agents, etc.
17. Introduction of a new dispute resolution system. The new Regulations establish the FIFA Agents' Chamber as the body responsible for resolving disputes arising out of or in connection with representation contracts with an international dimension, as of 1 October 2023. Disputes submitted to this Chamber shall be free of procedural costs. In case the dispute does not have an international dimension, the national Federation shall be responsible for settling it.
It is also important to note that the FIFA Disciplinary Committee may also sanction agents in case of non-compliance with the FIFA regulations applicable to agents, i.e. the new Regulations, the FIFA Statutes, etc. In this regard, FIFA will only be competent to sanction the agent in relation to representation contracts with an international dimension.
18. National member Associations shall establish national agent regulations by 30 September 2023. The national agent regulations will be applicable to operations that do not have an international dimension, i.e. national transfers, representation contracts without an international dimension or renegotiation of an employment contract in a national context. In addition, National Associations will have the power to enforce the regulation through their dispute resolution bodies.
Undoubtedly, with this new reform, FIFA seeks greater transparency, weighting and security in the activity of agents, reintegrating them into the sphere of organized football. We will have to be aware of the effects of its application.