Soccer Sports Business Sports Law

English Football Association Proposes New Regulations For Agents

Football agents in England’s top division are among the most polarizing figures associated with the sport. Tasked with managing the financial affairs of their clients, agents will begin to pop into the headlines during contract negotiations and high-profile transfers. To young players, agents at times will assume the role of a parent, guiding them on and off the pitch. Since many players come from disadvantaged backgrounds or leave the education system early, an agent’s duty to their clients extends far past the traditional view of signing endorsements and negotiating contracts. On the opposite bench, fans and the front office have a tendency to be united against player representatives. Data published last season by the English Football Association showed fees paid by clubs to agents rose by 38 percent in 12 months – up from £160m to £220m in 2016-17. A recent report from Sky Sports News details the English Football Associations’ plan to curb exorbitant agent fees by shifting the financial burden from clubs to the players they represent.

Last Thursday, top officials of the English FA met to propose a new series of changes aimed at regulating/ restricting the business of player representation. The proposed changes include an “exam” to assure that anyone working as a player’s agent is qualified to act in their best interest. By all accounts this is a positive change, protecting both the players and teams from agents trying to take advantage of the individuals they represent. Emulating the process familiar to those looking to become an agent licensed by the NFLPA, except nowhere near as stringent.

The second proposed change requires all approved agents to do business through a UK bank account, in addition to providing an annual financial statement to the FA. Again, a positive change for the sport but will certainly be met with opposition from agents. The FA wants to end the practice of hiding money in offshore banks/businesses to avoid taxation. You may have heard the legal proceedings the Government of Spain filed against Barcelona star Lionel Messi after the International Consortium of Investigative Journalists published the Panama Papers detailing his, along with his father’s, use of offshore companies in Belize, Uruguay, and Panama to avoid paying millions in taxes. These changes are all in an effort to clean up the sport deeply rooted in corruption.

The third, and perhaps most important to the committee is the elimination of lump sum payments. In the past, agents would be granted the entire percentage of the negotiated contract shortly after finalization of the terms. Instead, players will pay their agents over the course of their contract, dissuading both player and agent from jumping to a new team before the contract has ended. The final piece of the proposed regulations looks to end the practice of “dual representation”. Where an agent can be representing a player but also be hired by a club to handle contract negotiations and sign players. A practice which was only allowed in 2015 after FIFA voted to deregulate the way agents operate. This not only leads to higher agent fees but is a clear conflict of interest, and puts Premier League clubs in a competitive disadvantage in many cases. Reportedly 60 percent of all transfers are made by intermediaries representing the interests of both a player and a club.

A Premier League’s working group has consulted a team of employment lawyers as they prepare for a fervent opposition to the regulation and ultimately reduction of the earning potential of player reps to a 5 percent cap of the total deal. These changes have the potential to transform the way business is done and will be something I’ll be following closely.  

For the full story check out: Premier League footballers could be forced to pay agents