The role of football agents
The most widely known role of football agents is when an individual agent or an agency acts on behalf of an individual player in negotiating playing contracts and other commercial contracts for that player.
An agent will usually be paid by a percentage of the money that the player earns or by an annual fee.
Football agents owing a fiduciary duty to the players which they represent
It is a well established principle of the relationship between football agent and the football player which they represent that the agent owes the player a fiduciary duty to act in the best interests of that player.
Can football agents also act on behalf of a football club?
Certain football clubs will also employ licensed agents to work on their behalf when negotiating a deal with a particular player. As agents will often have the required skills and understanding of how to negotiate deals with particular players it is often seen as a desirable position for a club to employ someone in this capacity.
Can the same agent act on the behalf of a player and a club wishing to sign that player?
It is in direct conflict with Article 19 of the FIFA Players’ Agents Regulations that a football agent represents both a player and a club in relation to the same deal.
What does Article 19 say?
Article 19 states the following:
A players’ agent may only represent the interests of one particular party per transaction. In particular a players’ agent is forbidden from having a representation contract, a cooperation agreement or shared interests with one of the other parties or with one of the other parties’ players’ agent involved in the player’s transfer or in the completion of the employment contract.
Why is this the case?
An agent is prohibited from acting on both sides of a negotiation as it is deemed to be a clear conflict of interest.
What is meant by a conflict of interest?
A conflict of interest occurs whereby an individual involved in something, in most cases a commercial deal, where they have an interest with both sides. a football agent clearly would be in breach of his fiduciary duty to act in the best interests of the player which he is paid to represent if he is also representing the club negotiating with that player. A single agent would be unable to get the best deal for both the player and the club.
Does this happen that football agents often act on behalf of both parties?
It is felt to be quite a common occurrence in English football that an agent will act on the behalf of both of the parties.
Often if this is the case the agent will wish to receive the commission that he is due from the transfer fee from the club rather than the player.
Why is this the case?
From a tax point of view in the UK, if the commission were to be paid to the agent by the player then the player would be required to pay a high level of income tax. In order to get around this the agent may wish to be paid by the club and may have to act creatively to make this a reality.
How is this done?
One of the ways in which an agent may wish to get paid by the club within the FIFA Rules is to suspend his representation of the player at the exact point when he has found a club which is willing to purchase the services of the player. The agent will then switch sides to represent the club. In most cases another agent from the same agency will step in and represent the player.
Accordingly this would not be in breach of the FIFA Regulations as the agent would be acting for the club with his commission then being paid by the club removing the requirement for the player to pay the income tax.
Is this practice able to done under the Football Association Regulations applying specifically to the use of agents in English football?
Under the English FA Regulations the prohibition has been extended not only to cover agents but also covering the same agency representing both the player and a club in a negotiation meaning this would not be able to happen under the stricter FA rules.
Have there been any cases in English football where this has found to be the case?
There have been certain cases involving English football teams where this has found to be the case. In one high profile case a club contacted agents representing certain players stating that the club would pay the agent a certain fixed amount if he could ensure that his agent accepted certain terms in the contract which were imposed by the club.
This is a clear breach of the agent’s fiduciary duty as the agent unbeknown to his client was trying to negotiate the deal the club wanted not the deal which was in the best interests of the player.
What happens once the deal has been concluded?
Once a deal has been concluded the club is required to submit forms to the Football Association stating which parties were involved in the transaction.
Was this done in the above case?
This was done in the above case but the forms showed that the agent was acting simply on behalf of the club and not on behalf of both the club and the player.
What is the problem with the club doing this?
When the club does this they are in clear contravention of the industry specific regulations which are established by the Football Association. As a consequence of this the club is not only out of line with the requirements of the Football Association but they have also behaved illegally under the laws of England and Wales in their failure to confirm contractual relations.
This means that the clubs may face investigation in relation to tax by HM Revenue and Customs.