Representation Agreements – New FIFA Regulations and Things to Consider

On 6th January 2023, FIFA published new FIFA Football Agent Regulations (FFAR) which were officially approved on 16th December 2022 and came into partial force on 9th January 2023. The new regulations will be in full force by 1st October 2023. This includes representation agreements which must satisfy the new regulations.

There will be a transition period whereby representation agreements that were in place as of the 16th December 2022 will remain valid until the expiry of the agreement. Any new representation agreements or renewals of existing representation agreements concluded after 16th December 2022 must comply with the new FFAR from 1st October 2023.

The Minimum Clauses of a representation agreement

 

Like the previous regulations, there is a requirement for a representation agreement an intermediary and player, coach and club.

However, there are key changes under the new FFAR which in intermediary must bear in mind to ensure that they are compliant and for players, coaches and clubs to take note of.

Every representation agreement must:

  1. Be in writing and signed by the parties (if the player is a minor then the legal guardian also needs to sign the contract)
  2. Contain the names of the parties
  3. Specify the duration of the agreement
  4. Specify the commission to be paid to the intermediary
  5. Specify the nature of the services to be provided

Representation agreements between an intermediary and club are not subject to any maximum duration, whereas representation agreements between an intermediary and a player and club will have a maximum duration of two years. It is important to note that representation agreements are not automatically renewable and at the end of the two years, both parties will need to sign a new agreement if they wish to continue.

A key consideration under the new FFAR is that before entering into a representation agreement, all intermediaries will be obliged to inform the player/coach in writing that they should consider taking independent legal advice in relation to the agreement and obtain the written confirmation from the player/coach that they have either obtained or decided not to take such independent legal advice.


Additional Clauses to Consider

 

Whilst it is helpful to have a standard representation agreement which contains the minimum clauses as detailed above, intermediaries, players, coaches and clubs should also consider inserting more detailed provisions in the agreement to better protection their position.

  • Remuneration


An integral clause to consider is the commission owned as the transactions usually involve large sums of money. The standard representation agreement includes a provision for commission which is detailed as a percentage. The new FFAR introduced a cap on fees that an intermediary can earn. If the annual remuneration is above $200,000 or equivalent, then the remuneration above that amount is capped at 3% and if the remuneration is less than or equivalent to $200,000 the cap is at 5%.

The new FFAR also prohibit clubs paying agent fees on the player’s behalf, unless the remuneration is below $200,000. The player must be aware of the tax implications in relation to this.

The remuneration provisions require much more detail to ensure that the parties are adequately protected.

  • Termination
The standard representation agreement does not include wider termination rights for either the intermediary or player/clubs. There need to be specific exit clauses inserted into the termination clause which includes a right to terminate if either party breaches the agreement or if an intermediary gets suspended. A significant change in the new FFAR is that a representation agreement may be terminated at any time by either party if there is just cause to do so, which includes but is not limited to, situations where the intermediaries license is withdrawn or suspended and/or the player has been suspended from playing Football. Under the new FFAR, players have the right to terminate their representation agreements if no matter how short or when any suspension of the intermediary takes effect which places great emphasis on intermediaries to comply with the rules.  
  • Exclusivity
This clause states that the intermediary must be solely and exclusively responsible for the representation of the player/club in any agency activity. Under the new FFAR, the players/coaches are entitled to act independently when negotiating their employment contracts. They explicitly forbid any clause in the representation agreement that either limits the ability of an individual to negotiate or conclude an employment contract without an intermediary or penalize an individual for doing so. If a clause in the agreement does this, it is null and void. The exclusivity clause should be worded in a way that the player/coach can still conclude a contract without the involvement of an intermediary. This avoids a situation where the player/coach can no longer act without the consent or participation of an intermediary.

  • Boilerplate

These clauses can be overlooked by parties but are extremely important as they deal with the interpretation, validity and enforcement of an agreement. Certain boilerplate clauses which should be inserted into a representation agreement include:
  • An entire agreement clause to avoid the possibility of pre-contractual statements forming part of the agreement.

  • A severance clause to avoid the entire agreement being unenforceable if a clause is invalid.

  • A confidentiality clause as the parties will have access to sensitive information such as the terms of the agreement.

  • A governing law and jurisdiction clause to assert which country’s law governs the agreement and where potential actions may be brought.

Conclusion The parties must ensure that they are not entering into an unreasonable agreement. Legal advice should be obtained prior to entering into an representation agreement to ensure that the interests of players, coaches, clubs and intermediaries are fully protected.