Extra time and sudden death shoot out for the FA’s implementation of National Football Agent Regulations?

Background

In attempt to reform the regulation of football agents, the new FIFA Football Agent Regulations (FFAR) came in to force on 9^th January 2023. FFAR replaced the existing regulations on working with intermediaries. The main changes introduced by FFAR were:

• from 1^st October only natural persons licensed by FIFA may perform football agent services;
• in order to be licensed such individuals must pass an exam (unless grandfather rights apply) and pay a fee;
• agents will not be able to represent multiple parties in one transaction (such as a player and a club). However, an agent may represent a player and a buying club (but not the selling club) in the same transaction where both parties have given their prior written consent;
• agent fees will be capped (between 3 to 5% of the player’s annual remuneration where the agent acts for the player or buying club, 6 or 10% of the player’s annual remuneration where agent acts for both the player and buying club, or 10% of transfer compensation when acting for the selling club) depending on nature of agent’s client(s) and value of deal;
• players will now be required to pay their agents directly via the “client-pays” model – previously clubs could pay on the behalf of the player (which gave rise to benefit-in-kind tax issues); and
• players can now represent themselves, notwithstanding any restriction in the representation agreement which shall be deemed null and void.

Legal challenges

Both the FFAR and the ENFAR have been subject to legal challenges.

The implementation of FFAR has been challenged in several jurisdictions, mainly on the basis that FIFA do not have a mandate to regulate the activities of agents in the relevant jurisdictions. Such challenges include:

• The Court of Arbitration for Sport (CAS) dismissed a challenge brought by the Professional Football Agents Association in relation to the legality and validity of FFAR and that FFAR is compatible with EU, Swiss, French and Italian law
• Germany – the Mainz Regional Court made a referral for preliminary ruling to the European Court of Justice (ECJ) which was followed by the Dortmund Regional Court issuing an injunction against FIFA and the German FA preventing them from implementing FFAR in Germany pending the outcome of a referral to the European Court of Justice
• Switzerland – the Swiss Federal Competition Commission has been asked to consider the validity of FFAR
• Netherlands – the Central Netherlands Court rejected a claim for an injunction deciding rather to wait for the ECJ ruling referred to above

Consequences

As a result, whilst FFAR will still be implemented internationally (including, seemingly, transactions and representation agreements with an international element), the FA’s current Working with Intermediaries Regulations will remain in force in relation to domestic transactions and representation agreements and it will be business as usual for agents for such transactions. This may well see agents seek to push through contract renewals to benefit before any caps on fees come in to force.

This will clearly give rise to uncertainty and confusion, especially considering that the ENFAR (whether in draft or final form) has not yet been published. Whilst the record breaking summer transfer window has only recently closed, the winter window is on the horizon.

What comes next will depend on the tribunal’s award – the tribunal could find in the FA’s favour, giving the green light to implementation of ENFAR but could potentially mean that ENFAR is not implemented in its current form and it’s back to square one for the FA.

Position in Scotland, Wales and Northern Ireland

We understand that the respective positions as to implementation of national football agent regulations in the other Home Nations are as follows:

• The Football Association of Wales’ Agent Regulations are unaffected and remain in force
• It is unclear what the position is in relation to Scotland and Northern Ireland

If you require any advice please contact Tomos Lewis or Dov Katz.