More 'Alarm Bells' for Football Agents in the UK?
Or Just A 'Knee-Jerk' Reaction By Some.
1st July 2024
The last couple of years has meant a huge amount of upheaval and confusion for many working in and around the football agents world. Yet, that is nothing new, in such a competitive, nuanced and fast-moving industry, where participants have to often be flexible and adapt to new trends and regulations.
Whilst there is currently a considerable amount of uncertainty over the regulations and the relatively new FFAR (‘FIFA Football Agent Regulations’) with the industry awaiting a key ruling from the ECJ (European Court of Justice), does the industry really need a belated intervention from yet another authority?
Are Football Agents to Be Classified as ‘Employment Agencies’?
Last week a circular was sent to all licensed football agents by The Football Association in England (‘The FA’), relating to their consultation with the UK Government’s ‘Department for Business & Trade’ (‘DfBT’), and more specifically ‘The Employment Agency Standards Inspectorate’ (‘EASI’) which subsequently has prompted quite a lot of confusion, if not concern, amongst some of the football agent community.
The main ‘thrust’ of this communication was in relation to the ‘Employment Agencies Act’ of 1973 (‘The 1973 Act’), and what now seems to be the intention of the ‘inspectorate for the state reregulation of the private recruitment sector in the UK’, to regulate football agents as “employment agencies”, and thus require them to comply with ‘The 1973 Act’ and subsequent laws, regulations and compliance requirements therein.
At first glance, what many perceive (somewhat naively) to be the role of a football agent, is seemingly defined in a similar way to that of the ‘DfBT’:
‘Employment agency’
“a business that finds permanent roles where the work-seeker is employed by the hirer either short or long term”
……….. and in essence that is an understandable comparison (if not classification) to make with that of the perceived role of a football agent or agency in the most basic terms.
However, the role of a football agent is far more nuanced than that; given the nature of football governance at varying levels, the transfer system itself (both national and international) and also the multi-faceted role of a football agent that extends far beyond that of finding a client a job or finding a client an employee in many cases.
Was ‘The Writing on The Wall’ Already?
Whilst these intentions of the ‘DfBT’ may come as a surprise to many, it isn’t as much of a surprise to myself. Because of the research done for ‘The Agents Angle’ podcast, my own involvement in the world of mediation when it comes to football related disputes, and also the investment of time I have put into matters relating to FFAR; the ‘writing was on the wall’ in regards to such developments back in the 3rd quarter of 2023.
As around this time, ‘The FA’ undertook a ‘consultation’ process with a group of agents, that they selected, on proposed changes to the NFAR (‘National Football Agent Regulations’) to run in parallel with the FFAR from FIFA. Subsequently, consultation documents were released by ‘The FA’ to the group, and matters relating to ‘football agents’ potentially being classified as ‘employment agencies’ was seemingly first mentioned, e.g. :
“In addition to the Regulations, Participants should also make themselves aware of and comply with the requirements of English law in relation to agents, including where The Conduct of Employment Agencies and Employment Businesses Regulations 2003 apply.”
However, since this time ‘a lot of water has passed under the bridge’ in regards to football agent regulations; not just in England, but also in regards to the over-arching element of FFAR from FIFA. There were suspensions of parts of the FFAR, suspensions of ‘the FAs’ own NFAR, an Independent ‘Rule K’ arbitration hearing (that arguably found more in favour of the football agents than The FA and FIFA), and ultimately the implementation of a revised NFAR by the FA in England.
Yet it is understandable given the fact that many agents weren’t privy to the original FA consultation on the new NFAR (and thus the related FA consultation documents), weren’t licensed at the time or ultimately not as focussed on such minutiae (as some of us) on the matter; that this latest update has prompted confusion and a considerable amount of concern for many …….. well, that is those who actually read the email from the FA (all should read such emails, but too many don’t).
A Feeling of An Industry Being ‘Slowly Suffocated’
Generally, the more experienced amongst the football agent community are a resolute bunch. Relatively unflappable and have the creative minds and legal support to ‘roll with the punches’ and adapt to the challenges that face them …… but even in a matter of days (if not hours), it seems that this announcement is prompting a lot of concern.
Although it may not be admitted by many (if only to avoid showing a sign of weakness), I am confident to say that given what is now several years of uncertainty over FFAR, many in the football agent world feel ‘under attack’. Hence with the likes of a proposed ‘cap’ on agent fees from FIFA as part of the FFAR it is safe to perceive this as the ‘football agent industry’ slowly being suffocated with more and more (often conflicting) restrictions from various quarters ……. affecting BOTH the good professional operators as well as the more unscrupulous elements in the football agent industry.
Recent HMRC Activity in the World of Football Agency and Tax
At this point, it is worth mentioning that the ‘DfBT’ is not the only UK Government agency to take an increasing interest in the world of the football agent, as there has been increased scrutiny, communication, and clarification if not ‘warnings’ from HMRC (the UK tax authorities) in recent years.
However, there is 1 key difference for me in regards to HMRCs engagement with the football agent industry when compared to this latest announcement from the ‘DfBT’. That is that whilst HMRC have arguably changed their approach in recent times, they haven’t seemingly changed their view of the regulations, liabilities and governance that apply to football agent related activity.
Yet this communication from the ‘DfBT’ being ‘thrown into the mix’ at a hugely volatile and uncertain time for football agent industry (primarily caused by FFAR), comes from an authority that has until now demonstrated little (if any) interest in the football agent’s world. This is despite, it being the football agents themselves who have drawn ‘SOME’ parallels between their industry and the likes entertainment, music and modelling agents for many years, BUT these have largely been ignored.
Valid Fears or a 'Knee-Jerk' Reaction from Football Agents?
Besides only having a few days to consider this communication from the ‘DfBT’ and some of the supporting documents (yet, not ‘the 1973 act itself); and also the fact that I am not an employment lawyer or have any extensive experience of the employment agency and entertainment agency world, I can understand the concern of many in the football agent community in perceiving there are huge problems ahead in roundly classifying football agents as ‘employment agencies’ and making them subject to the ‘Employment Agencies Act’ of 1973.
Yet the line that may have ‘triggered’ many a football agent in relation to this matter (should they not have thoroughly reviewed the supporting guidance) is that:
‘Employment agencies and businesses are prohibited from charging fees to workers for finding or trying to find them jobs’.
Quite rightly this comment when used alone, will cause alarm bells to ring for football agents given that many work primarily for players (i.e. workers), and it is that client that is the primary source of an agent’s commission.
Furthermore, there are many problems in treating football agents somewhat ‘blindly’ as ‘Employment Agencies’, and seizing on the basics of this concept, such as the basic definition from the ‘DfBT’ of an ‘employment agency’ under the act, i.e.:
‘an ‘employment agency’ provides or holds itself out as being capable of providing work-finding services’
Thus, it is understandable, the concern amongst some football agents, given that definition and the fact that the description befits the role perceived by many as that performed by a football agent. Whilst those in the football industry will accept that in many cases, the role of the football agent goes far beyond that of ‘work finding’, this definition could be another demonstration of a lack of understanding of an industry that already feels greatly misunderstood.
Dual-Representation ('duality')
Another reference to ‘employment agencies’ regarding regulations in the documentation from the ‘DfBT’ that may cause alarm amongst football agents, is that:
‘if the agency charges the work-seeker a fee for finding them work they are prohibited from charging fee to the hirer’
This opens up an age old ‘can of worms’ in the world of football agency relating to ‘duality’ (dual representation), which under NFAR and FFAR is in certain cases accepted, given largely the long-standing and broad acceptance of ‘duality’ in the football agency world.
However, on further examination of the supporting guidance from ‘‘DfBT’’, there are exceptions which in turn could apply to football agents, and thus allay some of the fears of football agents, i.e. :
‘Employment agencies and businesses are prohibited from charging fees to workers for finding or trying to find them jobs.
Exceptions to this are for finding jobs for performers and certain other workers in the entertainment field, and photographic or fashion models’.
Operating Client Accounts & Receiving Money on The Client’s (player) Behalf
‘operating a client account where the agency receives money from a hirer (club) on behalf of a work-seeker (player)’
This requirement for ‘employment agencies’ may understandably seem like ‘overkill’ from an operational perspective for independent agents and smaller agencies.
Yet more notably, it will seemingly conflict with some elements of football agent regulations; such as, whereby the agent is not permitted to receive money on behalf of the player (work-seeker) from the club (hirer). PLUS, the matter of such things as ‘clearing house’ mechanisms in football also needs to be considered, not least the FIFA Clearing House.
‘Transfer Fees’ in the World of ‘Employment Business’
‘Employment businesses can charge a transfer fee to a hirer when one of its temporary work-seekers is taken on permanently, or through another employment business by the hiring company (or a third party that the hirer introduces them to)’.
This is another aspect that may cause confusion not just amongst football agents, but also amongst the wider football community who deal in agent related matters. Not least the conflict it could cause in relation to certain football governance aspects such as TPO (Third Party Ownership), and disguising the ‘true nature’ of a contractual relationship. However, on closer scrutiny of the ‘DfBT’ regulations, this does not relate to ‘Employment agency’ definition as the envisaged classification for football agents.
However, it could cause some confusion on matters whereby a transfer initially involves a trial for a player or a short-term contract arrangement, that then develops into a longer-term arrangement/contract with a club. Thereby possibly being adjudge to be in contravention of some national or FIFA agent related regulations.
Are The Concerns of Football Agents Well Founded?
After considering the information available at this time on the matter, it is my belief that whilst some agents have expressed concern over the proposal for football agents being subject to these regulations and classified as ‘Employment Agencies’, there may not actually be as much to be concerned about as some may think.
In rushing to digest the limited information provided in the communication from ‘the FA’, it is understandable how this could be perceived as a yet another attack on the football agent industry, that is still reeling from the challenges and problems prompted by the FFAR from FIFA.
Yet on further detailed examination of the supporting guidance that is available from the ‘DfBT’, whilst it seems there may well be further compliance requirements for football agents in being classified as ‘Employment Agencies’, the threat to their livelihoods that may be perceived may well be somewhat misguided.
This is especially prevalent when the allowances that seem to be made “for employment agencies that find work for certain occupations in the entertainment and model sector (including professional sportspersons)” are considered.
Hence further clarification needs to be sought on how the role of the football agent will be handled under these regulations before complaints be made and/or alarm bells sounded. The football agent industry needs to ensure that the ‘DfBT’ needs to properly understand the various roles of football agents and how the industry operates; rather than rely on this being conveyed by third parties such as The FA or FIFA.
What Next?
Moving forward, it is vitally important that all licensed agents who have questions, queries or concerns about this notice and the envisaged changes, take up the invitation to relay these to the ‘EASI’ and the ‘DfBT’. This is not only to assist these authorities to better understand the role of the football agent and the football agent industry itself; but also, to obtain clarification on the regulations themselves and allay any concerns that they may have.
Much has been said in recent times about the poor (if not failed) ‘consultation’ process by FIFA with football agents regarding the FFAR, and also a history of a lack of effective consultation between the football authorities and agents on a plethora of other football agent regulatory matters.
As such, it is my belief that there is the potential for these regulations (if applied fairly and correctly) to actually assist in further professionalising the ‘football agent’ industry, if not help those who operate conscientiously within the industry itself.