FIFA football agent regulations
Background
In December 2022, new FIFA Football Agent Regulations (FFAR) were approved by the FIFA Council, and the new regulations then entered into force on 9 January 2023.
The new regulations have great practical significance for players, clubs and football agents.
In connection with the implementation of FFAR, there will be a transition period until 30 September. Until this date, intermediaries/agents who are registered within the current system will be able to operate as normal, but from 1 October everyone who wants to work as an agent must have a FIFA license.
In order to obtain a FIFA license, one is required, among other things, to pass an agent exam. In 2023, there will be two opportunities to take the exam:
- 19th April;
- 20th September.
There is one exception to the requirement to take an exam. Agents who were licensed until the intermediary regulations came into force in 2015 will be able to be licensed without taking an exam.
Historically about football agents
For many years a FIFA license was a condition to be able to operate as a football agent. The system with football agents lasted until 2015, when FIFA replaced the agent arrangement with a new set of regulations, Regulations on working with intermediaries.
The background for the change was that FIFA had registered a strong increase in the overall fees of football agents. In 2014, the year before the change came into force, according to FIFA, 236 million dollars were paid to football agents. In addition to these official figures, FIFA believed that the real fees of football agents were higher. Furthermore, FIFA noted that many football transfers were carried out by unlicensed football agents, and that transfers were not very transparent, which made it difficult to map the overall costs associated with a transfer.
In connection with the publication of the intermediary regulations, FIFA stated that they wanted to establish a set of regulations that does not regulate access to the market with regard to who can be a football agent or intermediary, but which facilitates better control, monitoring and transparency, where the clubs can choose which intermediary they want, as long as this period defines minimum conditions.
Challenges with intermediaries - new arrangement for football agents
Experience clearly shows that there are a number of challenges linked to the system of intermediaries compared to how this worked under the arrangement with football agents.
Firstly, in contrast to the arrangement with football agents, it is more or less free for everyone to act as an intermediary, which may have resulted in several people who do not necessarily have good skills representing clubs and players during transfers and contract signings, which can go beyond football clubs and football players.
The system with intermediaries has not worked as desired. Agent fees have only continued to rise and the total remuneration to intermediaries is four times higher than under the previous arrangement until 2015. FIFA is therefore replacing the current arrangement with intermediaries with a new set of regulations for football agents.
Summary of the system of intermediaries
FIFA's regulations for intermediaries contain a set of minimum criteria that the national associations are obliged to follow.
The biggest change compared to the regulations for football agents was that FIFA moved away from the licensing scheme where passing an agent test was one of the conditions for being licensed as a football agent. In the intermediary regulations, there are few restrictions regarding who can act as intermediary in an agreement between club and player beyond the fact that the intermediary must meet certain minimum criteria, including that a intermediary must have an unblemished reputation and not have a contractual connection to a national association or FIFA that could lead to a potential conflict of interest . Both individuals and companies will be able to register as intermediaries, without any requirement for professional competence or a license.
The system stipulates that the intermediary must accept the publication of transfers, payments and agreements in which the intermediary has been involved. The national association must publish the names of all registered intermediaries together with individual transfers in which the intermediaries have been involved, and the total fees for each individual intermediary.
It is worth noting that the intermediary regulations have a provision to protect minor players, as it is forbidden to pay intermediaries for transfers involving minor players, i.e. anyone under the age of 18. There is still an opportunity to enter into a representation contract with players under the age of 18.
Most important provisions in FIFA's agent regulations
Cap on agent’s fees
FIFA's agent regulations have provisions that cap agent fees. Today, it is common for agents to take between 5-10 per cent of the contract value, but in some cases much more. With the new provisions, the agents' earning potential will be limited. The limits are as follows:
- Agent who acts for a new club - 3/5 per cent of the player's salary.
- Agent acting for the player - 3/5 percent of the player's salary.
- Agent who acts for both player and new club - 6/10 per cent of the player's salary.
- Agent who acts for the selling club - 10 percent of the transfer fee.
Whether a fee can amount to 3 or 5 percent of the player's salary depends on whether the player's annual agreed salary, not including bonuses, exceeds USD 200,000. Only the excess amount of USD 200,000 must be subject to a cap of 3 per cent, while up to 5 per cent can be agreed for the first USD 200,000. In case of double representation, i.e. where the agent represents both the buying club and the player, double payment may be required, i.e. 6/10 per cent of the player's salary.
Of the provisions in the agent regulations, this cap is the most controversial. It marks a significant change in relation to the intermediary regulations. It is also a question of whether these provisions are in conflict with competition law principles.
Although such caps can help to bring down commissions, a number of practical problems arise when we consider how the limits might apply across different football leagues. In particular, the caps will affect agents who represent players and clubs outside the most attractive leagues.
Representation agreements and transitional arrangements
Both under the new and previous regulations there is a requirement for a representation agreement between agent and player or club. The most important difference in requirements for a representation agreement under the new regulations is that the representation agreement must satisfy the new regulations, i.a. regarding caps on fees. As a transitional arrangement, the following applies:
Representation agreements that were in force at the time FIFA's agent regulations were approved – i.e. 16 December 2022 – will remain valid until their natural expiry and cannot be extended.
For agreements entered into between 17 December 2022 and 30 September 2023, it is a requirement that they be in accordance with FIFA's agent regulations when they come into force on 1 October 2023.
For representation agreements entered into on 1 October 2023 and later, it is a requirement that they must be in accordance with FIFA's agent regulations.
According to the new agent regulations, there are minimum requirements for representation agreements that agents entering into representation agreements must comply with. The representation agreements must:
- be in writing and signed by the parties (and where a minor is involved, must be signed by the agent, the minor and their legal guardian);
- contain the names of the parties;
- specify the fee to be paid to the agent;
- specify the duration of the agreement.
Representation agreements between an agent and a club are not subject to any maximum duration. In contrast, representation agreements between an agent and a player/coach will have a maximum duration of two years.
When entering into representation agreements with players and coaches specifically, the regulations require that the agent inform the individual of their right to receive independent legal advice before signing and that this is confirmed in writing.
Who can pay the agent's fee and when must the fee be paid?
Today, it is common for the club to accept paying the agent's fee even if the agent represents the player, and often the agent's fee is paid out as a lump sum. In FIFA's new agent regulations, this is a bit more complicated.
Eventually, all payments of fees to agents relating to transfers of an international dimension will be made through the FIFA Clearing House, which was recently established. With a clearing house, FIFA aims to centralize all payments related to football, including agent fees, in any case where the agent fee originates from an international transfer. When the conditions for paying the agent's fee are met, FIFA will calculate the agent's fee and claim it from the club or player responsible for the payment. Once FIFA has received the payment, they will forward the amount to the agent.
While agent fees are today often paid as a lump sum, the new regulations stipulate that where agents represent players, the agent's fee must follow the player's payments, and take place every three months, through the FIFA Clearing House.
In contrast, FIFA Clearing House will probably not handle the payment of agent fees from the start, it will probably take a couple of years before this is in place. It is not clear how this will work from October, but it is likely that the payments will initially go directly from the club or player to the agent.
In contrast to the previously accepted practice where clubs accept to pay the player's agent, according to the new regulations players themselves must pay the agent's fee directly to the agents themselves, unless the player earns less than USD 200,000 per year. In such cases, the buying club may pay the agent's fee on the player's behalf. In Norway, the clubs will in the vast majority of cases still be able to pay the agent's fee on behalf of the players.
Dual representation
One of the main aims of FIFA's agent regulations is to limit conflicts of interest and to protect clients from unethical behaviour. So the general principle is that a football agent can only act on behalf of one party in a transfer.
The only exception is that a football agent can perform services for a player and new or existing club in the same transfer. A prerequisite for such dual representation is that both club and player have given express written consent in advance. If they have, the club can pay up to 50% of the total agent fee.
This means that a football agent cannot perform football agent services or for:
1. Selling club and player;
2. Selling and buying club;
3. All parties to a transfer.
The relationship with the national federation's agent regulations
FIFA's agent regulations apply where there is a representation agreement with an "international dimension" and where there is behavior that falls under the regulations and is linked to an international transfer.
A representation agreement will have an international dimension where a registration of a player who falls outside the regulations takes place in connection with an international transfer for a player, i.e. where the player's transfer takes place between clubs in two different national football associations.
As such, where there is no international dimension, i.e. in purely national transfers or resignations of players, the national football agent regulations shall regulate the relationship. Each national football association must establish national agent regulations by 1 October.
The nationality of the football agent or player or coach is irrelevant in determining whether a representation agreement has an international dimension, the decisive factor being the international nature of the transfer.
Dispute resolution
Under the previous regulations, there was no specific dispute resolution for disputes between agents and/or players. In practice, such disputes were either settled in national or international arbitration courts, e.g. the Court of Arbitration for Sport, or by national courts.
According to FIFA's agent regulations, FIFA will have jurisdiction over all agent disputes that have an international dimension under a separate judicial body, the FIFA Agents Tribunal. Decisions by FIFA's Agents Tribunal can be appealed to CAS.
FIFA's exam for football agents
As mentioned, it will be a requirement to be licensed as a football agent that you have passed an agent exam.
The exam will consist of 20 multiple choice questions covering "current football rules" and will last 60 minutes. It is a requirement that 75 percent of the questions are answered correctly in order to pass. The exam is not limited to the content of FIFA's agent regulations alone, and includes other FIFA regulations and circulars. Most of the questions will be taken from the agent regulations and FIFA's transfer regulations, Regulations on the Status and Transfer or Players (RSTP).
It is worth noting that lawyers and family members who also wish to act as agents are not exempted from taking the exam.
Licensed agents must pay an annual license fee of USD 600. In addition, national football associations will be able to charge an examination fee.
A license once granted is for an indefinite period and is not transferable. An important difference from the current arrangement is that an agent license authorizes an agent to carry out agent activities worldwide. This is in contrast to the previous arrangement where intermediaries had to be registered in each association in which they operated.
Summary
FIFA's new regulations for football agents will come into full force on 1 October 2023, and from then on it will not be possible to act as an agent unless you have passed the exam or have been exempted from the exam due to licensing as a football agent from before 2015.
For players, clubs and agents, the new regulations involve major changes, and it is important for these groups to familiarize themselves with the changes in order to safeguard their own interests and to ensure that one does not violate FIFA's regulations, as this may result in sanctions from FIFA.
Parts of the regulations must be seen in the context of FIFA's clearing house and national football associations' own provisions on football agents, and it must be expected that FIFA and national football associations will have to establish new systems and routines for the practice of the new scheme up to 1 October, and probably also some time after this.
