Update: From 1 June 2019, stricter rules have come into effect for sports agents, including football agents, following a new decree from the Flemish government. Read our blog post about this.
Update: From July 1, 2020, new rules have come into effect for football agents following an adjustment to the Federal Regulations.
The sports agent / football agent
A sports agent, in this case the football agent, is defined as follows by the largest sports federation in the world, FIFA: “a natural or legal person who, either for a fee or free of charge, represents players and/or clubs in the context of negotiations with a view to an employment contract or represents clubs in negotiations with a view to concluding a transfer agreementHowever, depending on the institution or sports federation, the definition of the term can vary greatly.
In general, it can be stated that a sports agent is an intermediary who acts between the athlete on the one hand and a third party such as a sports club, sponsor or a federation on the other. Although this task is the main and main activity of the broker, some brokers also offer additional services.
In other words, a real estate agent can exert a great influence. This means that as an athlete or sports club it is very important to carefully check whether an agent is necessary, which agent you work with and which tasks you want to entrust to the agent. With regard to the latter, it may be appropriate, given the possible conflict of interest and to create an additional control function, to appoint a third party for financial and legal guidance. Where an agent can be of great importance, the interests between the agent and the athlete are not always 100% aligned.
Sports agents typically work with a commission that is calculated as a percentage of the transfer fee, negotiated fees or wages. The additional services provided by the broker are either settled within this commission or funded by an additional fee.
The fact that the impact of sports agents and their fees cannot be underestimated is evident not least from the turnover achieved in this sector. Forbes calculated that the 40 largest companies in this sector received a sum of $2.1 billion in commissions in 2016. In Belgium, football agents received exactly 22,380,807.12 euros in commissions for the 2015-2016 season, according to the Royal Belgian Football Association.
From this perspective, it is important, as an athlete or sports club, to be aware of the rights and obligations you have in this regard.
The rights and obligations of the athlete and the sports agent
The broker’s mediation activities, namely negotiating transfers and looking for a club or player, fall entirely under the definition of private employment mediation as included in Article 1 of the Decree of 10 December 2010 on private employment mediation. The relevant decree on private employment placement must be complied with and regulates a number of important rights and obligations.
The Decree applies as soon as employment placement activities are carried out in the Flemish Region, regardless of where the employment agency – or the sports agent – is located. The employment agency – the sports agent – must not be recognized according to the Flemish Decree (this may, however, be required by the sports federation in question). Article 5 of the decree, which establishes a list of conditions for the employment agency, must nevertheless be complied with. The social and fiscal obligations must be followed (art. 5, 4°), the managers must not have previously been convicted of financial crimes (art. 5, 3°), the employee (athlete) must be treated objectively and respectfully (art. 5,7°), etc.
In principle, the employment agency may not charge compensation from the employee. An exception is provided for athletes, allowing brokers to also charge compensation from the athlete. In light of this, the decree has included a number of important additional obligations for the broker.
For example, the calculation of the commission for the mediation of the paid sportsperson is recorded. The commission is calculated on the anticipated total gross annual income of the paid athlete for the total duration of the contract.
The broker can – according to art. 8 of the decree – only demand compensation – on penalty of a prison sentence and/or fine – in the following cases:
- The commission fee is determined in advance in a written agreement between the agency and the client. If private employment services are offered together with other services, the commission for the different services is determined separately;
- The employee expressly and in advance agrees to the commission;
- All parties have an original copy of this agreement.
However, the most important rights of the athlete can be found in article 5.16° and art. 5.20° of the Decree.
According to art. 5.16° there is a prohibition on exclusivity, which means that the agent cannot contractually stipulate that the athlete will also call on him for a subsequent mediation.
Art. 5.20° states that the agent cannot demand compensation if the athlete wishes to terminate the mediation or collaboration prematurely or does not wish to respond to a proposal from the agent.
In concrete terms, this means that the athlete can terminate his contract with the sports agent at any time. However, it should be noted that the agent may also have concluded an agreement with the athlete about other services that do not fall under the Private Employment Agency Decree.
The regulations of the sports federations
Although national legislation (e.g. laws and decrees) has priority, the regulations of national and international sports federations regarding agents should also be checked.
For example, brokers who wish to act in professional cycling must take an exam organized by the UCI. After passing, they are recognized by the UCI as a UCI Riders’ Agent. The UCI regulations – the Riders’ Agent Regulations – in turn stipulate in art. 2 that riders may only be assisted by a recognized Riders’ Agent in their negotiations with World Tour teams, professional continental teams or race organizers. However, the UCI provides an exception for lawyers.
The UCI also provides a model contract in its regulations where – unfortunately in our opinion – only compensation is provided that amounts to a percentage of the rider’s salary. This means that the Riders’ Agents, even if they were only present at the contract negotiations, can often still claim relatively high compensation. Although Riders’ Agents are often very useful, from this perspective it may be advisable in certain cases to only call on a lawyer with whom a one-off fee can be agreed.
FIFA, in turn, abolished the agent licensing system in football on April 1, 2015. We currently work with a registration system in which transfers must also be accurately registered.
More information about the specific regulations of the sports agent can be found on the websites of the various sports federations.