The FIFA Regulations on Working with Intermediaries and its implications to the licensed players’ agents from an international perspective

Kostas Antoniou attorney-at-law in Athens and in-house legal advisor to the Qatar Football Association high lights some of the legal problems that players' agents will face after the first of April 2015. 

Introduction

Upon a process initiated as from 2009, the long-awaited Regulations on Working with Intermediaries (hereinafter, the “New Regulations”) were finally approved by the FIFA Executive Committee on 21.03.2014¹ as well as adopted accordingly by the 64^th FIFA Congress in Sao Paolo on 11.06.2014², whereas FIFA, by means of its circular no. 1417 dated 30.04.2014³ has already presented the basic points of such regulatory reform, which will affect the daily activity of all concerned parties, i.e. clubs, players, an agents and national associations, their rights as well as their obligations accordingly. However, as I shall demonstrate further ahead, such New Regulations, even though they introduce a completely new regime in which all relevant parties shall be called to exercise their corresponding functions, could possibly create an environment that may safeguard the future Intermediaries if dealt with properly by the relevant stakeholders. At the same time, the new regulatory regime appears to be a threat to the interests of the current licensed players’ agents, mainly in relation to the possibility of the enforcement of final decisions either from FIFA or from CAS upon appeal. Definitely though, all these considerations appear to be dependent on the reaction of the 209 national football associations, on the shoulders of whom lies now mainly the implementation of the New Regulations.

Basic principles of the New Regulations

Coming now to the basic principles of the New Regulations, which will be entered into force as from 01 April 2015, as you will note, from a prima facie study, it is obvious that they are changing radically the current system governing the activity of players’ agents as it currently regulated under the applicable FIFA Players’ Agents Regulations (hereinafter also referred to as: the “FIFA PAR”) which came into force as from 01 January 2008. Even though we still have to wait for the implementation of this new system at national level from the respective national associations, as it has been expressly stated by FIFA - not only in the content itself but also in the Preamble of the New Regulations - “these new regulations shall serve as minimum standards/requirements that must be implemented by each association at national level, the latter having the possibility of further adding thereto”. On this account, being absolutely pertinent as to the subsequent obligations of the national associations in relation to the implementation of the New Regulations at national level, in a nutshell, the main and basic principles⁴ of these New Regulations that will govern the activity of the so-called intermediaries⁵ could be briefly summarized as follows:

• The licensing system, as it has been implemented in accordance with the current FIFA PAR⁶, will be abandoned (Art. 11 par. 2) whereas a registration system should be put in place by the national associations (Art. 3 and 4). Consequently, the Intermediaries will not undergo also a FIFA exam anymore;

• The Intermediary should have an impeccable reputation (Art. 4 par. 1 and 2) whereas he should not have any contractual relationship with leagues, associations, confederations or FIFA that could lead to a potential conflict of interests (Art. 4 par. 3);

• Clubs or players using the services of Intermediaries should at least submit the Intermediary Declaration (Art. 3 par. 2 and Annexes 1 and 2) whereas the Representation contract (Art. 5) concluded between the Intermediary and the player and/or club must be deposited with the association (Art. 4 par. 5) during the registration of the Intermediary with the association;

• Legal persons may also act as Intermediaries (Definition and Article 4 par. 2);

• Associations are required to implement and enforce at least the minimum standards/requirements subject also to national law and shall draw up regulations that shall incorporate the principles established in the Regulations (Art. 1 par. 2 and Art. 10 par. 1);

• More importantly though, the right of associations to go beyond the minimum standards/regulations is preserved (Art. 1 par. 3), therefore, the national associations may set more strict requirements regulating the activity of Intermediaries;

• Associations shall make publicly available at the end of March of every calendar year the names of all Intermediaries they have registered as well as the single transactions in which they are involved, whereas additionally shall also publish the total amount of all remunerations or payments actually made to Intermediaries by their registered players and by each of their affiliated clubs (Art. 6 par. 3);

• With regards to payments (Art. 7), the New Regulations recommend – and subsequently do not impose - the following figures, which may be adopted by the concerned parties: a) if the Intermediary is acting for the player, then a 3% maximum of the player’s basic gross income for the entire duration of the relevant employment contract shall apply, b) if the Intermediary is acting for a club in order to conclude an employment contract with a player, then a 3% maximum of the player’s eventual basic gross income during the entire duration of the relevant employment contract shall apply, and c) in the event of a transfer agreement, the Intermediary acting on behalf of a club in order to conclude a transfer agreement is again limited to 3% maximum on the eventual transfer fee⁷;

• Dual representation is now permitted upon the agreement of both the player and the club concerned, to be notified to the relevant national association together with the respective documentation (Art. 8 par. 3), whereas no conflict of interests would be deemed to exist upon agreement of the parties concerned prior to the start of the relevant negotiations (Art. 8 par. 2);

• With regards to the imposition of disciplinary sanctions, this competence lies only upon the national associations (cf. Art. 9 par. 1) whereas FIFA Disciplinary Committee may decide on the extension of the sanction to have worldwide effect as per the FIFA Disciplinary Code⁸.

Main challenges of the New Regulations from an international perspective

Having mentioned the basic points of the New Regulations, it appears evident that we are talking about a complete different reality in the world of players’ or clubs’ representation. New challenges⁹ can already been anticipated not only from the point of view of the players’ agents, the players and/or clubs, but also from the national associations since their role shall be more vital and active in the light of the new obligations imposed to them. However, from a clearly legal point of view, I can already see several uncertainties as to the new legal regime in which the current licensed players’ agents/future intermediaries will be called to operate that go to the heart of their activity and more importantly to the enforcement of their rights deriving from final decisions.

In this respect, in terms of contractual disputes of international dimension, as per the New Regulations, FIFA does not appear to be competent any more for dealing with such kind of matters, contrary to the present situation¹⁰. From a mere comparison of the FIFA PAR and the New Regulations, even though there is a specific reference to the competence of the FIFA Players’ Status Committee (hereinafter also referred to as: the “FIFA PSC”) in the FIFA PAR, the New Regulations are silent on this matter. On account of the above, given that the activity of a players’ agent in the modern football reality has been developed so far to the extent that it is actually rare the occasion of a players’ agent acting only in the territory of his national association, such change seems to create a serious problem that will certainly affect the activity and more importantly the rights of players’ agents from a financial and judicial point of view.¹¹

Having said that, for me the main issue that will affect definitely the legal rights of the current licensed agents is the issue of the enforcement of final decisions via the usual channel of the FIFA Disciplinary Committee, which, even though sometimes takes more time than expected, at least it is an effective means of legal enforcement of final decisions issued either by FIFA or by CAS upon appeal¹².

In particular, a players’ agent, having a final decision issued either by a FIFA competent body or CAS upon appeal, may request the initiation of disciplinary proceedings against the party at fault in order to protect his legal rights deriving thereof. As mentioned above, even though this process appears to be time consuming, at the end in the majority of cases is definitely effective, since the parties at fault, be a club or a player, in order to avoid the disciplinary sanctions from the FIFA Disciplinary Committee are – in the majority of cases - obliged to respect the relevant decisions.

And at this point the protection of existing or future rights of players’ agents comes into the discussion.

From a players’ agent perspective, a matter that has to be properly emphasized and definitely evaluated is whether such New Regulations could have an impact on the existing or future rights of players’ agents deriving from final decisions taken by the competent bodies of FIFA, and in particular the FIFA PSC, the Single Judge of the FIFA PSC or CAS upon appeal of a FIFA decision. For all of us who are dealing with the proceedings at FIFA, it is a common truth that legal proceedings may sometimes take time, not only in front of the judicial body deciding on the dispute (FIFA PSC or Single Judge of the FIFA PSC) but mainly before the disciplinary bodies (FIFA Disciplinary Committee). From the moment a matter is forwarded from the FIFA PSC to the FIFA Disciplinary Committee, it takes approximately – and conservatively – around three (3) to four (4) months in order to initiate the disciplinary proceedings against the default party. Practically this means that until we reach the stage when the FIFA Disciplinary Committee may take a decision on the respective matter, it is possible that more than 6-7 months may have elapsed.

Nevertheless, in the light of the New Regulations¹³, “with the coming into force of these provisions, the previous licensing system shall be abandoned and all existing licenses will lose validity with immediate effect and shall be returned to the associations that have issued them”, which practically means that the current players’ agents lose the legal link and their membership rights with the relevant national associations and FIFA and consequently with the enforcement mechanisms foreseen under their respective regulations. On the contrary, I also doubt whether the new so-called Intermediaries will be able to initiate or continue such proceedings in the light of the wording of Art. 3 of the FIFA Disciplinary Code, which foresees the natural and legal persons subject thereto¹⁴.

Knowing that several players’ agents could have already at their disposal final decisions from FIFA or CAS awards upon appeal, or they will acquire in the next coming months, there is a considerable risk that they will not be able to request the enforcement of their rights deriving from such decisions against the parties at fault, i.e. either the clubs or the players via the enforcement mechanism provided under the FIFA Disciplinary Code.

As such, I would like to present the following indicative scenarios, which can make things more clear:

Scenario A: The Players’ Agent X has acquired a final decision from FIFA or CAS upon appeal against the Club Y. Even though X has already requested or will request from FIFA Disciplinary Committee the initiation of disciplinary proceedings against Y, the FIFA Disciplinary Committee has not taken any action up to 31.03.2015. Will the FIFA Disciplinary Committee initiate disciplinary proceedings against Y?

Scenario B: The Players’ Agent X has acquired a final decision from FIFA or CAS upon appeal against the Club Y. Indeed, upon X’s request, FIFA has initiated disciplinary proceedings against Y. However, no formal decision has been taken by the FIFA Disciplinary Committee up to 31.03.2015. Will the FIFA Disciplinary Committee take a formal decision after 01.04.2015 against Y?

Scenario C: The Players’ Agent X has acquired a final decision from FIFA or CAS upon appeal against the Club Y. Indeed, upon X’s request, FIFA initiated disciplinary proceedings against Y. However, a formal decision was taken by the FIFA Disciplinary Committee only after the 01.04.2015. Is Y entitled to file an appeal to CAS? Which could be the chances of success for such appeal?

Scenario D: The Players’ Agent X has acquired a final decision from FIFA or CAS upon appeal against the Club Y. Despite X’s request before 31.03.2014, FIFA eventually denied to initiate disciplinary proceedings against Y in the light of the New Regulations. Is X entitled to file an appeal to CAS? Which could be the chances of success for such appeal? In the alternative, is X entitled to request the continuation of the proceedings under his capacity as Intermediary?

As we may understand, the above mentioned scenarios are just indicative of the numerous potential problems that the existing licensed players’ agents may face in the future, particularly related to the enforcement of final decisions via FIFA Disciplinary Committee, where the general principle of lex mitior could possibly have an important role for the legal assessment of a case¹⁵. As such, I am not optimistic whether the current licensed players’ agents will be able to pursue their legal rights through the channel of the FIFA Disciplinary Committee. It is a completely different discussion that falls outside the scope of the present article how the future Intermediaries will be able to pursue their rights deriving from final decisions of the respective courts or judicial bodies.

Conclusion

In the light of all the above, it is clear that such New Regulations will change radically not only the rights and obligations of all parties concerned, i.e. the players’ agents, the players, the clubs and the national associations, but more importantly will have a serious impact on the existing or future rights of the current licensed players’ agents particularly related to the enforcement of final decisions issued by the competent judicial bodies of FIFA or CAS awards upon appeal. As it has been reported in the media¹⁶, the Association of Football Agents in England has already appealed to European Commission against FIFA’s reform foreseen under the New Regulations on several grounds, whereas other national players’ agents associations may have already initiated or will initiate similar proceedings. In addition, national associations may have difficulties not only in the interpretation of the New Regulations, which contain several grey areas, but also in finding a feasible system that will provide transparency, legal security as well as protection for the rights of the players’ agents currently licensed. And it is clear that this will not be an easy task.

Having said that, the New Regulations could be considered as mainly a delegation of responsibilities to the national associations but definitely not a de-regulation, as has been mentioned by others. FIFA’s decision to open the “game” to a big pool of individuals as well as legal entities if the wish to be involved in the respective activities is a reflection of a reality that says that in every licensed agent correspond other ten non-licensed. The changes of the new concept introduced by the New Regulations that have been mentioned above lead to the conclusion that FIFA wished to assign a considerable proportion of its responsibilities to the national associations, who may have a more direct control over the activities of players’ agents. FIFA’s intention was to create a more transparent but flexible legal framework, which the national associations are now called to adjust and implement at national level in accordance also with their national mandatory laws.

Nevertheless, what still remains a mystery to me is for which particular reasons FIFA decided to eliminate the competence of its judicial bodies with regards to contractual disputes of international dimension, in particular the FIFA PSC and the Single Judge of the FIFA PSC as well as the FIFA Disciplinary Committee with regards to the imposition of disciplinary sanctions to the relevant parties. As we have analyzed above, this approach will definitely have an impact not only towards the choice of the proper forum for initiation of legal proceedings against the default party but more importantly towards the enforcement of a final decision against the party at fault. What would be the problem for FIFA if an Intermediary, who has fully complied with all relevant provisions of the New Regulations, could initiate proceedings against the breaching party before FIFA’s competent bodies? What would be the problem for FIFA if an Intermediary would still be able to acquire a final decision from FIFA or CAS and then seek the enforcement of the relevant disciplinary sanctions as per the FIFA Disciplinary Code against the party not respecting its corresponding obligations? As I have mentioned above, these are just few of the issues that go to the heart of the legitimate rights of currently licensed agents and also of the future intermediaries.

On account of the above, it is interesting to see which will be the path that the several national associations will follow with regards to the implementation of the new system proposed under the New Regulations as well as the results of the actions taken or to be taken by associations of football agents or players’ agents individually against the purported reform by FIFA. National associations have been delegated with the difficult task to find a balance between the current reality, the need of further transparency in football transfers and the need for protection of the rights of the currently licensed players’ agents. However, to my personal opinion, the way the New Regulations were adopted as well as the challenges that all relevant stakeholders will be called to face is another indication for the need of the establishment of an international association of players’ agents, which can stand as an equal and strong partner in the current football reality.

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1 http://www.fifa.com/aboutfifa/organisation/bodies/news/newsid=2301310/.

2 http://www.fifa.com/aboutfifa/organisation/bodies/congress/news/newsid=2363136/. The content of the New Regulations can be downloaded here  whereas a summary issued by FIFA can be found here.

3 Fifa circular 1417.

4 For more information on the relevant comparison between the FIFA Players’ Agents Regulations (2008) and the Regulations on Working with intermediaries, see Oskar van Maren “A Short Guide to the New FIFA Regulations on Working with Intermediaries”.

5 As per the definition of FIFA (cf. page 4 of the New Regulations) an intermediary is “a natural or legal person who, for a fee or free of charge, represents players and/or clubs in negotiations with a view to concluding an employment contract or represents clubs in negotiations with a view to concluding a transfer agreement”.

6 See Art. 5-18 of the FIFA PAR.

7 Important Note: Such figures provided by FIFA are only a recommendation. As it is stated in Art. 7 par. 3, “while taking into account the relevant national regulations and any mandatory provisions of national and international laws, and as a recommendation, players and clubs may adopt the following benchmarks…”.

8 See Art. 136-141 of the FIFA Disciplinary Code (edition 2011 currently in force).

9 See also Nick De Marco: The end of the licensed football agent? .

10 See Art. 30 par. 2 of the FIFA PAR, which states “In the case of international disputes in connection with the activity of players’ agents, a request for arbitration proceedings may be lodged with the FIFA Players’ Status Committee”.

11 As such, a question that comes up is what should the Intermediaries include in the future representation agreements that they will be called to sign with the clubs or players. Even though the scope of this article is not to provide such solutions, the following alternatives appear to be a prima facie solutions to this issue: a) ordinary courts either of the domicile of the intermediary or the domicile of the club/player, b) National Dispute Resolution Chamber, if provided under the respective regulations of the association concerned, c) Court of Arbitration for Sport, as first instance court (ordinary procedure). Nevertheless, such choice of forum should be evaluated beforehand in accordance with the particularities of each and every case, as such, it is absolutely necessary that the Intermediaries should seek proper legal advice before entering into any such contract.

12 See Art. 64 par. 1 of the FIFA Disciplinary Code (edition 2011), which states as follows: “1. Anyone who fails to pay another person (such as a player, a coach or a club) or FIFA a sum of money in full or part, even though instructed to do so by a body, a committee or an instance of FIFA or a subsequent CAS appeal decision (financial decision), or anyone who fails to comply with another decision (nonfinancial decision) passed by a body, a committee or an instance of FIFA, or by CAS (subsequent appeal decision):a) will be fined for failing to comply with a decision; b) will be granted a final deadline by the judicial bodies of FIFA in which to pay the amount due or to comply with the (non-financial) decision; c) (only for clubs:) will be warned and notified that, in the case of default or failure to comply with a decision within the period stipulated, points will be deducted or relegation to a lower division ordered. A transfer ban may also be pronounced; d) (only for associations) will be warned and notified that, in the case of default or failure to comply with a decision within the period stipulated, further disciplinary measures will be imposed. An expulsion from a FIFA competition may also be pronounced.”

13 See Art. 11 par. 2.

14 See Art. 3 [Scope of application: natural and legal persons]: The following are subject to this code: a) associations; b) members of associations, in particular the clubs; c) officials; d) players; e)match officials; f)licensed match and players’ agents; g)anyone with an authorization from FIFA, in particular with regard to a match, competition or other event organized by FIFA.

15 See CAS 2012/A/2817 Fenerbahçe SK v. FIFA & Roberto Carlos da Silva, par. 122-124.

16 http://www.telegraph.co.uk/sport/football/news/11047063/Association-of-Football-Agents-appeals-to-European-Commission-over-Fifas-reforms.html.