Football&Law: The new FIFA Football Agent Regulations (FFAR), April 2023
Meanwhile, the first FIFA exam took place on April 19, 2023. Based on the new FIFA regulations, the FFAR, this exam must be passed (a minimum of 75% correct answers) in order to work as a so-called “football agent” – currently still referred to as “intermediary” – after October 1, 2023. This newly created exam requirement has caused a lot of commotion within the football agency/intermediary industry, even resulting in lawsuits in the Netherlands and abroad (Article NOS and Article Erkutsogut). The main two reasons for these lawsuits are 1) to get the exam requirement imposed on this profession off the table and 2) to get the “cap” set in the FFAR on commission rates abolished/adjusted. But what exactly do these FFAR entail; what will change and as of when?
AS OF WHEN DO THE FFAR TAKE EFFECT?
Until the upcoming summer transfer window that runs in principle through Aug. 31, 2023, intermediaries are authorized to carry out their activities as intermediaries in football under the current FIFA Regulations on working with Intermediaries (RWWI). From Oct. 1, 2023, these RWWI will fully expire and intermediaries must comply with all requirements as outlined in the FFAR. Thus, for the winter transfer period that will take place in January 2024, all intermediaries must comply with the requirements set forth in the FFAR as of Oct. 1, 2023, or else they will no longer be allowed to exercise their activities as intermediaries as far as FIFA is concerned.
WHAT EXACTLY WILL CHANGE WITH THE ENTRY INTO FORCE OF THE FFAR?
In summary, the main changes as of October 1, 2023 are the following:
- The title “intermediary” will be replaced by the title “football agent”;
- The football agent can only be a natural person and no longer – as before – can also be a legal entity. In this way, football agents can no longer hide behind a legal entity in case of possible abuses;
- The football agent can operate worldwide, whereas the intermediary had to register with the national soccer association in each independent country (at a cost of around EUR 500 per country) in order to carry out activities as an intermediary in that country;
- The football agent receives a license that is in principle valid indefinitely (provided he continues to meet his ongoing requirements), whereas the intermediary had to re-register annually on April 1 (in each country again);
- Before the prospective football agent can receive a license he must pass the FIFA exam (a test of twenty (20) multiple choice questions, testing approximately 500 pages of FIFA regulations) delegated to the national associations, where previously there was no exam requirement for the intermediary;
- Continuing annual training requirements will apply to football agents (Continuing professional development, CPD), where there were no annual training requirements for intermediaries;
- If a player earns less than < USD 200,000 gross per year, a football agent may charge the player up to 5% commission per year on this salary as a “service fee” and may also charge the hiring club (subject to the player’s prior written consent) up to 5% commission per year on this salary (thus 10% in total). If a player earns more than > USD 200,000 gross per year, a football agent may charge the player up to 3% commission per year on this salary as a service fee and the hiring club (subject to the player’s prior written consent) also up to 3% commission per year on this salary (thus in total 6%). No limit previously applied to intermediaries;
- If a football agent acts for a selling club in a transaction, he can agree a maximum of 10% commission calculated on the transfer fee as “service fee” with this selling club. No limit previously applied to intermediaries;
- A football agent may no longer act for a selling club and a hiring club or player at the same time, even if the parties have previously agreed in writing, whereas previously intermediaries were allowed to act for all parties involved in a transaction provided a written agreement was reached in advance;
- The service fee percentage may only be calculated on the fixed salary, i.e. not on conditional bonuses, and only on amounts actually received by the player, intermediaries were not previously subject to these restrictions in determining their service fee;
- The service must be paid every three (3) months to the football agent, where previously the intermediary could agree the payment period(s) – either annually or in a lump sum – himself with the client;
- If the player is the client of the football agent then the player himself must pay the “service fee” to the football agent, where previously the player could also authorize the hiring club to pay the intermediary on his behalf;
- Football agents must declare within fourteen (14) days in a digital “Agent platform” of FIFA all activities they perform/agreements they sign, where for intermediaries there was no such obligation;
- If the aforementioned obligations under 6) to 13) are not fulfilled (on time) by the football agent, the sanction will be suspension or eventually even revocation of the license, where such supervision of intermediaries in the past was/could not be so strict because FIFA did not supervise via the digital “Agent Platform” set up for that purpose;
- FIFA will publish all clients, their relationship (exclusive or non-exclusive) and its duration, the services provided and the service fee received for it from each football agent, where this information of intermediaries was not shared publicly in this way by FIFA or the national associations;
- There will be a special FIFA Agent Chamber that will deal with international disputes between football agents and clients/parties in soccer (clubs or players), where previously there was no special recourse for intermediaires to FIFA. National disputes will still in principle be handled by the competent chamber of the national associations.
A lot will normally start to change for football agents, now intermediaires, as of October 1, 2023. Those changes are already in full swing with the requirements to be met in advance. Whether all changes can stand the test of national – and European legislation will have to be proven in the coming period in the various legal proceedings that have been initiated throughout the world. Until then, the FFAR are there as they are now and FIFA, in cooperation with the national federations, will quietly continue to roll them out, as many intermediaries already experienced on April 19. It therefore promises to be a “heated” (post)summer on the transfer market, in the courtrooms and, for some, in the textbooks…😉 Next exam opportunity for the targeted football agents is mid-September 2023.
If you have questions about this or other football-related matters or other aspects within (international) sports and labor law, please contact Joes Blakborn or Max Hazewinkel, lawyers specializing in football and other sports-related matters, at Van Diepen Van der Kroef Advocaten in Amsterdam.
Amsterdam, 21 April 2023