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The end of the road for the football agent? FIFA regulations to cap agent fees draw closer…30th January 2020 Corporate
Earlier in January, around 200 football agents, including well known figures such as Mino Raiola and Jorge Mendes, gathered in London to protest against FIFA’s proposed plans to cap fees that agents can levy for arranging a transfer. With FIFA intending to implement the plans as early as the 2020-2021 season, the situation is quickly reaching a boiling point.
The catalyst for the proposed reforms appears to be the deal that took Paul Pogba from Juventus to Manchester United in the summer of 2016 for £89 million. Thanks to investigative work by journalists Rafael Buschmann and Michael Wulzinger, it transpired that £23 million of the fee was to be paid to Pogba’s agent, Mino Raiola. Exactly what Raiola did to demand such a fee is unclear, but this is far from a one-off. According to a recent FIFA investigation, $653.9 million was paid to intermediaries (agents) across 3,558 transfers in 2019 alone. Fees are only going in one direction – the amount paid to agents in 2019 has quadrupled since 2015.
In the face of such vast, and spiralling sums, FIFA has decided to attempt to regulate the market. In September 2019, their Football Stakeholders Committee recommended the following steps:
- agents of a selling club would be entitled to a maximum of 10% of the transfer fee;
- agents of the player or the buying club would be entitled to 3% of the player’s gross income for the duration of their employment with the new club;
- the reintroduction of a mandatory licensing system for all agents; and
- all agents’ fees to be paid via a FIFA clearing house (which will calculate all fees due to agents).
The above proposals were put to the FIFA Council in October 2019, and were unanimously endorsed with the justification that they will “protect the integrity of the system and prevent abuses”. This, perhaps unsurprisingly, has not gone down well with agents, who claim that they have not been consulted on the changes. Further, agent Jonathan Barnett, who counts Gareth Bale amongst his many clients, has been quoted saying that “the truth is FIFA doesn’t know exactly what an agent does”.
One area of the reforms that appears ripe for challenge is the potential impact on agents’ freedom to compete. In particular, whilst players would still be free from any form of salary cap, and clubs would be able to set as high a fee as the market allows, there would be a substantial limit on agents’ ability to compete freely with the introduction of the caps.
In addition to the competition issue, there is also the potential for agents to simply levy their fees under separate cover, perhaps by a yearly retainer or by a direct payment from the player in question.
Whilst the proposals are still officially in draft form, and in spite of the issues raised above, it seems likely that FIFA will push to bring the changes in sooner rather than later. The strongly worded press release that followed the meeting of Raiola et al confirmed the feeling that FIFA is determined to regulate and reform this famously deregulated area of football.
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