FIFA defines Intermediaries in the Regulations for Working with Intermediaries as: A natural or legal person who, for a fee or free of charge, represent players and/or clubs in negotiations with a view to concluding an employment contract and/or in negotiations with a view to concluding a transfer agreement.
So, we see that the Intermediaries shall represent a club or a player in order to get a good deal for their clients. However, before conducting any kind of negotiation on behalf of clubs or players, an Intermediary has to convince them that they are the most suitable person to represent their interests.
Long before the new Intermediaries Regulations came into force in April 2015, a feeling of untrustworthiness surrounded the work of Intermediaries/Agents. People generally believed they should not rely on their promises.
Since April 2015, not knowing the regulations from different countries may cause even more conflicts. Mastering all sets of regulations from different countries is quite a task and lack of knowledge is sure to cause problems.
The Clubs and the Players are in an even more precarious position and should be educated to have a general understanding of the regulations. This will help them make better decisions when deciding if an intermediary is trustworthy.
To assist Players and Clubs assessing the credibility of a particular Intermediary, let’s analyze some of the possible offers, promises or even threats.
1. “Don’t worry, you will not have to pay me a penny.”
Contrary to what seems to first glance, this promise could be true, particularly if it is made to a player.
It is legal and fairly common that Club and Player (represented by the Intermediary) agree on the Club paying all or part of the Intermediary’s fees on behalf of the Player. This means Player doesn’t have to pay anything to the Intermediary.
Clubs enjoy the fact that as companies they are able to exclude the Value Added Tax (VAT) from these payments.
Yet, this offer has conditions. The first one is that the Club will normally operate with a budget that includes any amount not considered salary or transfer fee. Sometimes paying an agent a certain amount might be out of their budget limits. The second one is that the amount is paid on behalf of the Player, so he will still be liable for the taxes arising from this payment in his personal income tax (or equivalent). This is subject to any other alternative arrangements made between the Player and the Club in this respect.
2. “I am going to charge you just the standard 10%.”
This affirmation is just partially true, however, it is not invalid. The matter of the amount of the commission is one of the main points of discrepancy between the different national regulations. It has been vociferously argued against by the Association of Football Agents in England.
The new FIFA Intermediary Regulations recommend a 3% commission fee even when the commissions of 5-10% used to be common practice. The standard 10% could be considered fair, but since the new Intermediary Regulations, most of the National Associations have established different cap systems with fees between 3-10%. Some countries have even fixed the commission in 3%.
Thus, this affirmation requires the application of the National rules.
Furthermore, this offer will probably be joined by number 1, above. The power of negotiation between club, player, and intermediary will determine the commission that the Intermediary is able to charge. In particular, clubs might be keen to pay a higher commission for a player they are interested in. There’s also a possibility of Clubs looking to pay lower commission for players they are not particularly interested in.
3. “I will get you an X-million deal.”
Well, there is no legal provision which impedes the Intermediary to make this promise. However, a client should check the credibility of this affirmation.
For instance, in the case of players, there are different websites which allow checking the estimated salaries of thousands of players. In that moment, the player should be rational and check what other players of similar level are getting in particular leagues.
In the case of clubs, there are fewer chances of being harmed by this kind of promises. Mainly because their negotiation power is bigger and they are more used to acting in the football market. But still, the same advice applies, the Clubs can check the transfer fees paid for different players and evaluate if the promise of the Intermediary is reliable.
In any case, there are different factors to consider regarding each transfer or employment agreement. From the football qualities of the player to his age, nationality and/or position.
4. “You signed a contract with me. You must stay with me for X years”.
The Intermediaries sign a so-called Representation Agreement with their clients. This agreement gathers all the different details of the relationship and can last from days to years.
This is a point where again the different national regulations differ. Each of the National Associations is free to establish a maximum duration for the representation agreement. For instance, the Football Association enforces a limit of 2 years and when that time is up, the contract terminates. All parties are then free to renew if they consider it appropriate.
The contract may state a longer period but if it is contrary to the rules where the contract was signed it can’t be enforceable. So the contract may say 5 years but if it is signed under FA’s rules it cannot be enforced.
5. “I will sue you in FIFA.”
FIFA does not deal with disputes between Intermediaries and Clubs or Players. The only way this could happen is that the contract in question was signed before April 2015.
Nevertheless, this does not mean that the parties do not have a body for resolving their disputes. Even if the parties have agreed to a particular clause or are using a standardized contract, the representation agreement should contain a dispute resolution clause referring the conflicts to the National Association dispute resolution body, an arbitral tribunal like the Court of Arbitration for Sport or even the ordinary courts.
Thus, it is false that the parties can sue one another in FIFA, but certainly, they can do it somewhere else.
Luis De Oleza, Sports Lawyer
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