FIFA’s new regulations for football agents: The current state of play

The core substance of the regulations, which apply to international transfers, are due to come into force on 1 October 2023.[1] The FFAR require national football regulators (including the FA) to adopt regulations consistent with or stricter than the FFAR before that same date.

Given the numerous legal challenges brought against the FFAR and its domestic equivalents, there is some uncertainty as to what rules will apply come that deadline. India Swall and Sarah Ward explain the current position.

The key changes

The new FIFA regulations introduce several key changes:

• Licensing – Since 9 January, agents have been required to pay an administrative fee of US$600 to obtain a licence, which includes costs for background checks and application processing. Agents must also pass an exam to demonstrate their knowledge and understanding of the rules and regulations governing player transfers.
• Triple Representation – FIFA has looked to ease concerns of agent conflicts of interest by prohibiting triple representation. Dual representation is still permitted where an agent is acting for both a player and a purchasing club in the same transaction, provided that both parties give their prior written consent.
• Commission Cap – FIFA has introduced a commission cap which, where a player’s annual remuneration is above US$200,000, is broken down as follows:
  • 3% of player’s gross remuneration if acting for the player;
  • 3% of the player’s gross remuneration if acting for a purchasing club (this can be added to the cap above, if the agent is also acting for the purchasing club); and
  • 10% of the transfer fee if acting for the releasing club.

The rules regarding triple representation and the commission cap are due to come into force on 1 October 2023.

FIFA’s motivation

FIFA’s decision to implement a commission cap is a direct response to the widespread criticism surrounding the high levels of remuneration directed at agents in recent years. The new rules aim to modernise the existing football regulatory framework and protect the transfer system by bringing more transparency and fairness to the agent industry.

Reaction and impact

Some have welcomed the regulations, viewing them as a necessary step towards bringing more fairness and control to the industry. These stakeholders believe that the commission cap and other provisions will help prevent inflated fees and ensure that a larger share of funds is directed towards clubs and players. However, the reaction among agents has been largely resistant, with agents making the following criticisms (among others):

• the commission cap restricts agents’ ability to earn a fair income and undermines the value they bring to player transfers;
• FIFA failed to consult with agents during the development of the new rules;
• the commission cap would result in a shift in the financial burden to players, as agents will begin to charge consultancy fees on top of their capped commissions.

Implementation: legal challenges

The implementation of FFAR has encountered several legal challenges already, including:

• Germany – in April, the Mainz Regional Court asked the European Court of Justice (ECJ) to issue a preliminary ruling on whether the FFAR were compatible with EU competition law. In May, the Dortmund Regional Court issued an injunction against FIFA and the German Football Association, temporarily preventing the regulations from being implemented in Germany pending the ECJ’s ruling. The ECJ’s ruling is unlikely to be handed down before 2024.
• Netherlands – the European Football Agents Association and Pro Agent were less successful. In May, they were denied an injunction to prevent FFAR’s implementation in the Netherlands, pending the ECJ’s ruling.
• Court of Arbitration for Sport (CAS) – on 24 July, following a request for arbitration filed by the Professional Football Agents Association, CAS ruled that FFAR are compatible with various aspects of EU, Swiss, French and Italian law.
• UK – in June, the FA published a statement on its website saying that the agencies CAA Base, Wasserman, Stellar and ARETÉ have commenced arbitration proceedings to challenge the implementation by the FA of the National Football Agency Regulations relating to English domestic transfers. The FA has confirmed that an expedited timetable has been agreed and it expects that a decision will be given by an arbitral tribunal appointed under FA Rule K by 30 September 2023.[2]

The key question: Does competition law apply to FFAR?

The main issue in the legal challenges to the implementation of FFAR is whether it is subject to EU and/or national competition law. The agents’ principal challenge is that features of FFAR are in contravention of the rules prohibiting anti-competitive agreements and abuse of a dominant position. In granting the injunction against FIFA and the German Football Association mentioned above, the Dortmund Regional Court considered there were strong arguments that the FFAR amounted to a “hardcore price or purchasing cartel” and an abuse of dominance by the two authorities.

FIFA’s argument is that competition law does not apply to FFAR because of the well-established principle that sporting rules are exempt if they are necessary and proportionate to achieve legitimate objectives, such as protecting players, increasing transparency and raising ethical standards. CAS was persuaded by this argument when it recently ruled in FIFA’s favour. However, the weakness in this argument in those proceedings which have not yet concluded may be that rules relating to agents are not ‘sporting rules’ but instead regulate economic activity which is ancillary to the sport. Even if the rules are deemed to be sporting rules, the question will be whether the restrictions imposed are necessary and proportionate to achieve the aims they are pursuing.

Of course, this is just another example of the competition law rules being used to challenge contentious developments within the world of football. As well as its preliminary ruling on FFAR, preliminary rulings from the ECJ are awaited on the application of competition law to:

• the establishment of the European Super League; and
• UEFA’s rules on home-grown players.

Conclusion: FIFA’s new regulations for football agents

The FFAR aim to introduce significant reform to the football agent industry in the UK and globally. While the introduction of administrative fees and licensing exams have been relatively well-received, the commission cap has sparked considerable debate and resistance from agents.

As it stands, the football industry should prepare for the rules to be implemented in full from 1 October 2023, although a lot will depend on the various ongoing legal challenges. As has been seen by the variation in approaches of CAS and certain national courts, it is not yet clear what the international and domestic position will be on the intended ‘go-live’ date.

If you have any queries about FIFA’s new regulations  for football agents or need any advice in this area, please do not hesitate to contact India or Sarah.

[1] New FIFA Football Agent Regulations set to come into force

[2] NFAR Arbitration update (thefa.com)