Civil Litigation and Consumer Rights
Introduction to Football, Commission and Agents
Football Intermediaries 3% compulsory commission fees, how fair are they?
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´´.
FIFA replaced the FIFA Player´s Agents Regulations, which ceased to exist on the 1st April 2015 and the licensing system for agents was replaced by a licensing system for intermediaries in accordance with FIFA regulations on working with intermediaries´´.
International Transfer fees
FIFA TMS published a report (TMS Report) regarding the use of intermediaries in international transfers between January 2013 to November 2017. It states that since 2013, USD 1.59 billion was paid as commission fees to club intermediaries. Clubs from the ´´Big 5“ countries (England, France, Germany, Italy and Spain) and Portugal accounted for 83.4% of the global spend on commission fees paid to intermediaries.
TMS report did not provide any data on commission fees paid to players intermediaries or to any intermediaries in domestic transfers, but The Football Association Report released information regarding of payments and transactions between clubs and registered Intermediaries, as Intermediary Fees from 1st February 2017 to 31st January 2018, clubs paid; Premier League £211.011.187, EFL Championship £42.183.048, EFL League One £3.527.338, EFL Two £958.969, National League £188.869.
FIFA states that intermediaries play an important role in the world of football. The intermediaries represent players and/or clubs in negotiations with a view to concluding an employment contract or represent clubs in negotiations with a view to concluding a transfer agreement.
FIFA defines an Intermediary as ´´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´´.
The FA (Football Association) Intermediaries Registration, the intermediary registration process is accessible via The FA Whole Game System for individuals and companies wishing to conduct an ´´Intermediary Activity´´ will have to fill the below forms:
- The FA Regulations on Working with Intermediaries.
- Working with Minors – Enhanced Disclosure and Barring Service Checks
- Test of Good Character and Reputation for Intermediaries
- Declarations Acknowledgments and Consents for Legal Persons
The registration fee for individuals and Companies is £500 (+VAT) for the initial one-year renewal and £250 (+VAT) for every annual renewal.
The intermediary to work with minors needs to get special authorization from the Football Association. Representation Contracts under FIFA Player´s Agents Regulations. the maximum duration was 2 years and could be renewed if both parties agreed, however, under the new regulations for intermediaries there is no maximum duration.
Knowledge of the Game
The role of Intermediaries in football is frequently in the spotlight, however, the intermediaries do need to have football knowledge, business and legal knowledge, contact within football industry, work experience with a sports agency and social skills may help an intermediary to be successful.
FIFA regulations on working with intermediary’s remuneration article 7 payments to intermediaries:
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:
a) The total amount of remuneration per transaction due to intermediaries who have been engaged to act on a player’s behalf should not exceed three per cent (3%) of the player’s basic gross income for the entire duration of the relevant employment contract.
FIFA pretends to make the intermediary commission fees as compulsory, and The Association of Football Agents (The AFA) which represents the interests of the majority of Registered Football Intermediaries in England, does not agree.
Is Football a Free Market? If there are no caps on player transfer fees between clubs and players’ salaries, why a cap on intermediary agency fees? The AFA considers that commissions should be between the agent and the player when the representation contract is signed and between the agent and the club when a transfer is being negotiated. AFA considers a commission cap anti-competitive and unlawful.
Also, The AFA considers publishing details of the transfer transactions and in particular the commission fees, it is likely to involve a breach of privacy, confidential information and data protection for Players, clubs and intermediaries.
A compulsory 3% commission fee negotiating a renewal of Cristiano Ronaldo´s employment contract or endorsement could be considered fair but for an unknown player, the intermediary could not cover the cost of his activities.
FIFA´s compulsory 3% commission fee is anti-competition? The conversation and negotiations between the stakeholders in the Football Industry did not bring an agreement between the parties and other issues like registration of intermediaries, commission fee payments, continuing education of the intermediaries and compulsory professional liability insurance are on the agenda for conversations and negotiations.
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While every effort has been made to ensure the accuracy of the information provided in this article, it does not constitute legal advice and cannot be relied upon as such. Each legal case and issue may have unique facts and circumstances, as a result legallex does not accept any responsibility for liabilities arising as a result of reliance upon the information provided. For further help and guidance, you can always rely on and seek advice from our experienced lawyers.