Goodbye agents, hello ‘intermediaries’
It’s well known that not many people empathise with football agents. Often depicted as the embodiment of the game’s post‑1992 years of excess, those who help broker transfers and secure lucrative contracts for their clients may find sympathy hard to come by even if controversial new regulations could potentially reduce their future income.
As of Wednesday, Fifa will no longer be responsible for an industry worth billions, the governing body deregulating a business that, it claims, is rife with underhand and unlicensed transactions across the world. In an attempt to increase transparency, it will be the duty of each national association to supervise agents and a licensing system that has been in place for years will end.
“I think it’s going to create anarchy and everybody is going to be sorry about it,” says Mel Stein, chairman of the London-based Association of Football Agents. “Fifa couldn’t cope so they decided to hand it over to the individual territories. I can see the bloke in the pub who knows a parent or a footballer’s dad saying ‘I’ll represent you’ and then undercutting everyone.”
It is not difficult to understand why the AFA, which represents around 450 of the 550 licensed agents in England, is so exercised by the changes. Fifa is recommending that agents – who will now be officially known as “intermediaries” – have their commission on player transfers and contract deals capped at 3%. At present this figure varies but usually falls between 5% and 10%.
In some cases this will significantly reduce the amount agents can earn from deals. However, it is not the only new measure that could change the existing landscape. Stein – who was previously an agent who represented Paul Gascoigne – met the Football Association last week to present a 13-point agenda and has appealed against Fifa’s plan to the European Commission, a process that is ongoing.
The licensed football agent will be a thing of the past. Intermediaries will no longer be required to pass an exam to qualify. In theory, anybody can become one, providing they have an “impeccable reputation” – essentially are without a criminal record – have no conflicted interests, and in England pay £500 to register with the FA.
Fifa argues the new system will prevent money-laundering in the game, stating that currently only 25-30% of transfers across the world are conducted by licensed agents. It hopes the guidelines will be adopted by each association, who will enforce a “full disclosure and publication of the remuneration and payments made to intermediaries”.
Stein, who is lobbying for the AFA to self-regulate the industry in this country, said: “It is clearly wrong and anti-competitive to have this kind of price-capping.The FA are saying we’ve got to do it because that’s what Fifa are telling us to do. The 3% cap will destroy the business of probably 50% of my members.”
The effects are likely to be most pronounced in areas where national associations hold little sway, with fears that corruption could be increased, rather than decreased, in such locations as Africa and South America once the doors are opened to all.
Of particular concern is how the changes will affect players under the age of 18. The FA has prohibited intermediaries entering into agreements with youngsters before the year they turn 16 but Fifa’s rules do not forbid such contracts.
Under the Fifa guidelines no intermediary is allowed to be remunerated for a transfer or contract deal with a player under 18. The FA is examining this aspect of the recommendations, with some believing that any money owed to an agent for work with a youngster will be backdated until the player in question turns 18.
Stein added: “It will be a return to the ‘wild west’ before regulation and I’ll tell you why. They’re saying you can’t make a charge for a professional player unless he’s 18. So that means whoever did Raheem Sterling’s deal could not have charged. What will happen is they won’t charge anything, they’ll go the club and say: ‘You give us a scouting agreement for £1m a year’, and that will push it underground.”
Steve Gallen, the Queens Park Rangers Under-21 manager who worked closely with Sterling, said agents would negotiate means of payments regarding talented youngsters. “Of course that is what’s going to happen – they won’t charge straight away but the money will come later on,” he said. “With the deregulation, I’m sceptical. We’ll have to wait and see but I’m cautious at how it will work out. When a young star comes along agents are already sitting outside his house. I’ve known parents who have come to me and said: ‘We’re at breaking point, we’re getting 15 calls a night coming into our house phone.’”
In England, where the FA has worked to ensure all transfers adhere to Fifa regulations, there is doubt as to the impact deregulation will have, despite what the AFA argues. The exact phrasing in the FA guidelines regarding the 3% cap is open to interpretation, stating it is a “recommendation” and that players, clubs and intermediaries “may adopt” the benchmarks.
John Mehrzad, a sports law barrister at Littleton Chambers, said: “Coming from a barrister’s perspective, the wording in the guidelines is not binding, it’s discretionary. My view is the AFA’s perception of it becoming a ‘wild west’ simply won’t happen in practice. The majority of the top-level players are represented by one of a series of very large agencies and have tremendous connections.”
Jon Holmes, one of Britain’s first sport agents, said: “Agents on the continent originated really in order to facilitate moves from players in countries behind the iron curtain coming into Europe. The big mistake that was made, in my opinion, was when it became obvious that players needed proper advice and the PFA shirked the responsibility to organise licensing. It has basically become a jungle.”
Discussions between the AFA and the FA remain fluid. In an industry that is already cutthroat, it remains to be seen whether Fifa’s deregulation opens up a can of worms or, as intended, increases transparency.
Gordon Taylor, the chief executive of the PFA, said: “We’ve had years of trying to monitor and regulate. Now there’s no exam. I suppose there’s an attempt there to increase transparency but you just wonder how difficult it will be to keep track of. But there is need for transparency in transfer fees – if this leads to more of that then good.”