Do the New FIFA Football Agent Regulations Favour the Bigger Agencies ..........
......... Whilst Also Harming Football?
30th March 2023
There is little doubt that the new FIFA Football Agent Regulations (FFAR) are seen as damaging for many across the football agent industry, not least with the capping of agent commissions. The new FFAR have met vehement and seemingly justified opposition from the football agent industry as a whole, and for good reason, whilst also drawing some criticism in the media and from other football participants.
I must however point out that there is no high-level academic study, research or market analysis behind this article, just purely a theoretical prediction based on what has gone before with football agent regulation and knowledge gained of the industry by myself over ‘too many’ years. Subsequently, what furthers the matter of theory with this piece is that I believe (at the time of writing : 280323), it is highly likely that the new FFAR will not come into force in full given how many legal challenges it is facing around the world. And any such partial implementation may first have to abandon the element of ‘capping’ agent fees in order to make any headway.
The capping of agent fees, whilst well-reasoned in a small number of cases, will in my view (and the view of many others), be damaging to football as a whole not just the agents. And whilst this ‘capping’ will be detrimental to most (if not all) agents and agencies both large and small, it is worth considering whether such a step will actually favour the big agencies and possibly be damaging to football overall.
Most Agents Grow Out of the ‘It’s Not Fair’ Mentality
It is fair to say that I also went through the phase as an agent and intermediary for some years bemoaning the influence of the big agencies, with their ability to influence players, clubs and the market as a whole ……. with a mentality of ‘it’s not fair’ and that it was anti-competitive.
Understandably, it is difficult for any agent not to have this view once you have had a client ‘poached’ from you, despite doing a good job for them, fulfilling your contractual obligations to them and working all the hours to help them. Likewise, when trying to secure a new client it is infuriating to put in the time with a player (and often their family) only to have them sign with another person (not always an authorised license or intermediary) solely on the basis of them brandishing a business card from a big agency with a list of superstar players ‘on their books‘.
Yet once a player comes to the attention of one of the big agencies and ‘have their head turned’ (or their families influenced), there is little an independent agent can do apart from rely on the integrity of the client, and their ability to see through the ‘stardust’ sprinkled over them (but then again, most agents know not to hold their breath).
One would have hoped that the football regulations and football authorities would be able to tackle the scourge of ‘poaching’ by agents, but in reality, any such provisions do little to protect smaller agents from such activity. Unless, that is, that the agent in question wants to wage an almost unwinnable battle against a large agency with a plethora of legal resources at their disposal, they are best advised to walk away and start again …. however ‘bitter a pill’ that is to swallow.
Yet with some experience under their belt (and after a few clients ‘poached’), when an independent or smaller agent actually steps back and assesses the situation, it is just business, similar to your small independent retailer when compared to a superstore. The superstore can handle more customers, have multiple branches, stock more items, and run major advertising campaigns; whereas your small retailer will have to hope for customer loyalty and finding a niche they can offer to customers (clients) that the ‘big operators’ may have overlooked or ignored.
This is not to say that an independent agent or smaller agency cannot be successful or an effective ‘disruptor’ in the football agent industry, in fact many are quite adept at being an irritant to their larger competitors. In addition to this, those who come into the industry with substantial resources (e.g. financial backing, influence, contacts) can make a sizeable impact on the industry and often compete with the larger agencies, albeit on a limited scale.
Rise of the ‘Super-Agencies’
The term ‘super-agent’ is one that has developed and become established over the last 10 years or so, and thus has seemingly become an accepted term in the football vernacular. And although some take great pleasure in using the term ‘super agent’ to categorise themselves or others, it is fair to say some take offence. For many of us mere mortals, we have no accurate measure of what the term ‘super agent’ means or how you categorise a super-agent – something I pondered in an article some 2 years ago : Players don’t need ‘Super Agents’ …. they just need ‘Good’ ones), do they wear their underpants on the outside of their trousers?
However, now we seem to be entering a new phase in the football agent world, beyond that of the ‘super agents’, and thus moving towards ‘super agencies’.
When I first became involved in the football agent industry it was true to say that in the UK there were several well-known and established larger agencies and agents in the market who were very much ‘at the top of the food chain’.
As an independent smaller agent/agency, your paths would sometimes cross with them once in a while (although rarely their ‘head-honchos’); whether it be an agent themselves or their ‘runners’, ‘scouts’ or ‘gophers’ as some may refer to them (I prefer ‘unlicensed agent’). And whilst it was clear these larger agencies often ‘cut deals’ with one another (often at the expense of a smaller agent), despite being fierce rivals, it was a market where with hard work, knowledge, ability and a certain amount of good fortune, a smaller agent/agency could compete with these ‘bigger fish’ on a case-by-case basis.
However, in recent times the number of agencies at the top of the food chain has somewhat diminished, due to various mergers and takeovers, hence we now end up with a few ‘behemoth’ agencies that are often multinational, and some could argue control the football transfer market to an extent (another matter FIFA allegedly want to address with the new FFAR).
Agents and Agencies ‘Cutting their Cloth’ Accordingly
With the proposal for capping agent fees as part of the new FFAR, there is no doubt that agents and agencies large and small will be impacted upon in the way they operate, and possibly the level of service they can offer to football clients.
As with any business if your earning potential and the price you can charge is reduced (i.e. capped), the quickest and simplest method to counteract this is to cut your costs. And no doubt agents and agencies, large and small will be looking at many areas of their business operations to figure out where to make such cuts or alternatively reduce the ‘scope’ of their services to clients.
Yet, whilst the big agencies will understandably have to make larger cuts and potentially make more staff redundant, I think it safe to presume that these cuts will be similar (on a comparative scale) to the steps smaller agents and agencies will have to take.
Whilst a large agency can legitimately claim having to cut dozens (if not hundreds) of staff, it is fair to question whether they could keep those staff on with reductions to the salaries of higher earning members of staff or cut overheads in other areas. Also, it has to be considered that in running a larger operation costs and resources can be shared more effectively between global offices, i.e. with one marketing department and one HR department managing the operations for multiple offices rather than multiple duplicate departments at each regional office thus reducing company overheads.
For a smaller agency the options as to where to cut costs is far more limited, and it is fair to say for many agents, even without the imposition of a ‘cap’ on their income (under FFAR), it is a matter of surviving month to month with a smaller pool of clients who are more likely than not playing ‘lower down the ‘football ladder’’ (with reduced revenue potential).
Some may argue that players lower down the ‘football ladder’ don’t need as much in the way of agent resources as those at the top, but in many cases, this isn’t always true. Yes, the complexity of arrangements at the higher echelons of the sport in terms of such things as tax and image rights may require more specialist resources, but when it comes down to player care, the duty of care owed to a player (as a client) by their agent isn’t dictated by the level at which they play.
In fact, in an effort to ward off the ‘poaching’ activities of other agents and retain their clients, it is absolutely vital that smaller agents/agencies maintain as a high a standard of service to their clients as possible (if not go beyond) and thus a cut in the level of service they offer to clients is rarely an option and they often have to bear any losses incurred themselves.
Needless to say, it is inevitable that should the cap on agent fees currently forming part of the FFAR come into force, it will drive many hard-working, knowledgeable and professional independent agents/agencies out of the market, leaving a vacuum that will need to be filled.’.
Increased Market Influence (if not Control)
With the almost inevitable disappearance of smaller agencies and independent agents with the new FFAR, it doesn’t remove the fact that many in the football industry (e.g. players, clubs, coaches/managers) will still require professional representation and support that such smaller agent entities would have otherwise provided.
There is little doubt that the larger agencies will continue to operate (albeit remodelling, if not scaling down their business operations), but will they want to ‘trouble themselves’ with clients lower down the ‘footballing ladder’ whose market value won’t be as profitable? It is quite likely that these football participants will be left without adequate representation, help and support (well not at the level that is required), yet still possibly having to pay for the ‘privilege’.
Necessity Driving a ‘Black Market’ and Unlicensed Agent Activity
Will the smaller agents and agencies disappear altogether? I don’t think they will, well not in the legitimate way in which I have written about above. With the vacuum created by the loss of the smaller operators there will still be a demand for agent services, and as has been the case in the past, those who cannot operate within the rules, may choose to operate outside of the rules.
It is highly likely that with overly restrictive regulations and a cap (under FFAR) it makes the viability of operating as a licensed FIFA ‘Football Agent’ nye on impossible, and thus some will take the option to act outside of the regulations ….. not to thrive necessarily, but to merely survive.
The problem of ‘unlicensed agent activity’ is what many in football governance and the various FIFA regimes have strived to address for many years, with stronger and more effective football agent regulations. However, by imposing a restrictive cap in the FFAR it is reasonable to think that a black market and unlicensed agent activity will ensue.
As I (and others) have been told on numerous occasions in the past, the football authorities ‘can do nothing about unlicensed agents, as they are unlicensed’. Yet whilst the new FFAR go further than any agent regulations in the past by highlighting a ‘need’ to address unlicensed agent activity, this in itself creates another problem, as the only way to penalise ‘unlicensed agent activity’ is to sanction those who engage with ‘unlicensed agents’.
Whilst meaningful sanctions against those (clubs, players, coaches etc) who engage with ‘unlicensed agents’ under the new FFAR are for many a welcome measure, it is also fair to say that in combination with potential problems caused by the cap and FFAR, it leaves players who need agent support at risk of exploitation or sanctions as they search for adequate representation and support.
Players Left ‘On the Hook’
You won’t find many people more in favour of the introduction of effective football agent regulations than myself – regulations that ensure that the representation of footballers is of the highest standard, and encourage agents to look after the players best interests first and foremost; after all, that is why I became involved in the industry and became a licensed agent in the first place many years ago.
However, with the new FFAR and the imposition of a ‘cap’ on agent commissions I believe this will leave players (and coaches/managers) at risk of not being adequately represented or even being exploited.
With a reduction in the number of smaller agencies and independent agents, the need for the big agencies to ‘plug financial holes’ (created by capping) and the likely growth of a black market of unlicensed agents, leaves a minefield for players (plus clubs and coaches) to navigate, where a wrong decision could hamper their career, risk a footballing sanction, damage their reputation or result in them being exploited.
Whilst writing this article I have tried to steer clear of using a particular ‘Star Wars’ related phrase, but I can resist the temptation no longer. The fact is that independent agents and smaller agencies ‘bring balance to the force’ of the football agent world, the imposition of a cap will destabilise and disrupt that balance.