Will Some Football Agents Mistakenly 'Cap' Their Own Commissions - and FIFA 'Get Their Way'?

21st June 2023

A recent conversation with a long-standing agent about the ‘state of play’ with the new FIFA Football Agent Regulations (FFAR), and the uncertainty surrounding their implementation and the subsequent effect they may have both in the short and long term, raised further ‘alarm bells’ in terms of errors that some agents may understandably make in representation agreements/contracts with clients concluded and signed between 16th December 2022 and 1st October 2023.

Although I covered various aspects of the impact of the FFAR on the Summer 2023 ‘Transfer Window’ in recent articles (e.g. ‘Could the Uncertainty of This Summer’s Football Transfer Window with the New Football Agent Regulations Sow the Seeds of Confusion, Discontent, Conflict and Disputes?’), I am happy to admit this particular observation came about more by chance at a later stage, following the aforementioned conversation.

As I stated in the linked article above, it was perfectly plausible that agents (and their clients) would have to have a variety of terms, conditions and variables in those agreements signed between December 2022 and October 2023 to facilitate (and comply with) the variations provided in:

1. the 2015 FIFA Regulations on Working With Intermediaries (RWWI),

2. the first phase of FFAR regulations implemented in January 2023

AND

3. the second phase of FFAR regulations dues to be implemented in October 2023.

What Will Happen in October 2023? - Your Guess is as Good as Mine

The simple fact (at the time of writing) is that there are numerous influential factors that still have a bearing on the implementation of FFAR in the coming weeks and months, including:

An injunction in place against FFAR in Germany
A judgement due imminently from CAS (Court of Arbitration for Sport) on FFAR
A ‘Rule K’ Arbitration hearing scheduled in England opposing the FA implementing FFAR
Possibility of an appeal in the Netherlands against FFAR
Cases due in Belgium and Switzerland against FFAR
The matter of FFAR due to be heard in the ECJ (European Court of Justice)
Possibility of other cases and injunctions elsewhere in the world.
Rumour of some jurisdictions not able to uphold FFAR (either in part or full) due to national laws and legislation.

As such, come the 1^st October 2023 (the scheduled full FFAR implementation date from FIFA), what will happen in regards to football agent regulations and the agreements and contracts that are subject to the regulations, is very unclear. However, what I am confident in saying, is that one or more of the above will have an impact on FFAR and its implementation in some way.

This overall uncertainty has made the situation very complex for agents (and their clients) in negotiating, concluding and signing representation agreements/contracts in recent times. This in turn has a ‘knock on’ effect with the negotiation of transfer, employment and commercial agreements in the applicable transfer windows. How these agreements are structured and concluded will have an impact from (and on) the aforementioned representation agreement, and vice versa.

Yet, whilst agents may have well structured and established representation agreements/contracts as well as the more template based ones provided by national member associations (both of which may have been suitable), the complexities of the potential outcomes over FFAR need specialist and high level legal skills to navigate this strange predicament shrouded in confusion and uncertainty.

Old (bad) Habits Die Hard

The need for specialist legal advice in these circumstances is imperative for both agent and client, and in many ways, this is a positive thing. However, there are quite a few negatives to consider, and whilst many of the higher-level agents and agencies have qualified and experienced specialist football/sports lawyers on call (if not even in-house) to steer them through the uncertainties of FFAR and the possible implications, this is not the case for a vast majority of agents, clients and other football participants.

Some agents may well rely on (albeit by necessity, rather than choice) old agreements, standardised templates from a member football association, turn to a less specialist lawyer or sadly ‘muddle through’ with representation agreements/contracts that do not necessarily comply with the FFAR either in full or in part.

This will without doubt lead to agreements that don’t comply with the FFAR or even the laws of the applicable jurisdiction. Not only will this lead to the parties (i.e. agent and client) being subject to possible breaches of uncertain football regulations and national laws; it also leaves them more susceptible to potential dispute and conflict between themselves as part of the applicable agreement.

Further Confusion, If Not Disputes?

Whilst many of these representation agreements/contracts will not seek acrimony and dispute, but instead attempt to make the best of the confusion over the FFAR both, there is no doubt many such agreements will end up in dispute either directly or indirectly in relation to the FFAR.

As I covered in an article back in April 2023, resolving disputes in football are costly, time consuming and often complicated, not least because football participants are required by FIFA and the other football authorities to resolve their disputes through quite prescribed arbitration mechanisms.

Subsequently, I am confident in saying that the confusion over FFAR (especially with those representation agreements signed between December 2022 and October 2023), will result in a lot of disputes between various parties in relation to agent related agreements. Sadly, this is not something a large number of participants can afford, irrelevant of how justified, right or legitimate their claims and/or complaints may be, as the costs often outweigh the ‘returns’ in terms of time, money and effort.

A lot of people are starting to become more aware of the benefits of mediation in football disputes, and that is the reason why I started to offer qualified football mediation services – to offer a cost effective, quick and creative means of resolving football related disputes. Arguably, the level of confidentiality and resolution provided by mediation lifts it even beyond the confidentiality and resolutions offered by many forms of arbitration. With independent mediation, FIFA and the football authorities may not even be aware of any settlement to the dispute (or even the dispute itself) unless the parties agree jointly to disclosure.

Needless to say, the confidentiality provided by mediation is also incredibly valuable in an industry where the slightest hint of weakness, lack of knowledge, hesitancy, vulnerability, susceptibility is to be avoided to maintain reputations and livelihoods.

FIFA ‘Slight of Hand’ - or Achieving a Questionable Objective by Chance?

Whilst some at FIFA may greet this uncertainty with a wry smile, if only for the confusion it has caused amongst the football agent fraternity, the phrase ‘confusion reigns supreme’ seems quite apt in this case. A small and very suspicious part of me is thinking what if FIFA meant to cause such confusion and uncertainty that meant the ‘cap’ on agent commissions and other more contentious facets of FFAR were subsequently adopted subconsciously (even by the agents themselves).

Admittedly, I am not averse to a conspiracy approach when it comes to the football world, whether it be FIFA, a club, a football body or anyone else for that matter. However, given my involvement and observations of the implementation of the RWWI in 2015 by FIFA, there may well be some resemblance from the old FIFA regime’s approach back then (with RWWI) to that of the newer FIFA regime and FFAR.

The matter that in the ‘run up’ to 2015, FIFA put a ‘cap’ on agent commissions in various draft versions of the RWWI, and then seemingly removed it in others, whilst also changing the fact that it was detailed as a mandatory cap, and then changed to an advisory cap always made me think that FIFA were never confident of getting a mandatory cap imposed. Yet, by making it such a talking point, causing confusion and ultimately implementing an advisory cap in the RWWI, maybe this was enough to put it in the football psyche and the advisory cap thus adopted as an industry (or deFacto) standard.

There is no doubt that for many years, FIFA regimes (new and old) have wanted to implement a cap on agent commissions, this is not something new for 2017/18 (2023). Hence with FIFAs approach to FFAR over the last 4-5 years, could the approach be that dissimilar to that of 2015 with RWWI?

Is there doubt within FIFA over the legality of a cap on agent’s commissions (as in 2015) despite their bravado and uncompromising approach? And as such, is the thought process that with uncertainty over the cap on agent commissions (and other elements of FFAR), that agents may be forced to implement agreements that will comply with the FFAR in full after the 1^st October 2023 should the FFAR be implemented in full …….. thus imposing the cap themselves, even if it isn’t legal or lawful?