What are the Main Issues of Football Agent ‘Conflicts of Interest‘, and more importantly the Possible Solutions?

Rather unsurprisingly the whole issue of ‘conflicts of interest’ in regards to Football Agents and Agent Activity may have become worthy of its own article, not least because the industry is strewn with ‘conflicts of interest’ whether intentional or innocent (at least initially). ‘Conflicts of interest’ straddle other issues in regards to football agents and come in different forms in regards to football and football issues.

‘Conflicts of Interest’

Conflicts of interest’ in regards to football agents are wide and varied; from matters such as TPO (Third Party Ownership), ‘duality‘ (dual-representation), ‘triality’, or agents representing managers or even being related to clubs or officials – football is littered with such concerns.

Football has more than it's fair share of agent problems. What are the main issues and problems, and more importantly the possible solutions.

TPO (Third Party Ownership)

Why not address arguably the biggest conflict of interest topic when it comes to football agents first, and although not solely in relation to agents, TPO was brought into the spotlight somewhat through agent activity.

When first entering the industry, I was a fervent believer that TPO was downright wrong and must be driven out of football and akin to a form of ‘modern-day slavery‘ (based somewhat on the media and rumours). But I am big enough now to admit that I was blinkered. Thanks firstly to the chance meeting and subsequent discussions with an eminent and well-respected Brazilian lawyer (and agent) on the subject of TPO and TPI (Third Party Investment) as I like to refer to the more legitimate methods, he explained the advantages and opportunities that well managed and ethical TPI brought to the world of football and a greater number of its participants.

The underlying fact is, that in some parts of the world, TPO/TPI is a readily accepted part of not only business but also part of the culture, and as such FIFA was somewhat misguided in 2015 to believe a global ban on TPO in football would work. Granted some countries long before 2015 took a similar approach to FIFA in trying to ban TPO, but attempts to ban a long-accepted practice by some was rather short-sighted by FIFA, and at worst has ‘driven it underground‘, and at best meant the ban is ignored and has somewhat further disrupted the integrity and transparency of the game.

What should have happened in my opinion is that FIFA should have employed a more realistic approach and introduced globally accepted controls on TPO, allowing certain jurisdictions (and National Associations) to add to them if they wished, and others to continue with TPO in a way that they could justify as part of their culture and law.

For me the ‘three main pillars’ in trying to effectively regulate TPO/TPI in football whilst not impacting and imposing on people’s cultures and business practices can be underpinned by three core points from FIFA:

  1. The individual human rights and free-will of the player are protected at all times
  2. The players registered club must at all times hold a majority in the registration (playing) rights of the player.
  3. Any ownership by a third party in the playing/registration rights of a player (with exception of the players registered club) must be authorised and published by FIFA

I readily accept the morally corrupt and dirty underbelly of TPO, is still, unfortunately, operational in some parts of the world, but the only way I believe to undermine this element, if not eradicate it, is with an effective and regulated TPI model from FIFA.

Duality‘ (Dual-Representation) and ‘Triality

NOTE : Please indulge me, as I have decided to claim the term ‘triality’ as my own, given that the first time it was used in public was at a UK Government Commons Select Committee in 2016 where the FA Chairman (now FIFA VP) and FA Head of Communications claimed he (they) had never heard of it before. Yet it was myself who coined the phrase to the person who first used it on the committee, to describe where the same agent (or a connected one) represents the buying club, selling club and player in a transaction/transfer.

The second big issue regarding conflicts of interest with football agents is that of ‘duality‘ and in some cases ‘triality’. By this, I mean whereby in a transfer/transaction, the same agent (or a connected one) represents the player, the buying club and/or possibly the selling club in the same transaction.

For me I believe there has been a steady ‘creep’ towards the concept of ‘triality’ from ‘duality’ (possibly due to some regulations being relaxed), and whilst I readily accept ‘duality’ does present concerns of a clear ‘conflict of interest’, ‘putting the genie back in the bottle’ from something that has become common practice in the industry over a substantial period of time, will I think prove nigh on impossible, and may well be illegal to ban. This is not to say I agree with ‘duality’ or for that I think it should be banned (as I used to), however, I do believe it needs effective monitoring and regulation, after all in many cases it is arguable that a claim for ‘duality’ is legitimate and the same agent provides services to 2 parties (clubs and/or player) in the same transaction.

However, in terms of ‘triality’, I think there is a legitimate reason for it to be outlawed (not solely on grounds of ‘conflicts of interest’), and that an agent may only legitimately be allowed to represent a maximum of two parties in any one transaction if authorised to do so. There should be a legitimate set of guidelines put in place to allow for it under certain accepted circumstances in that :

  1. the commissions paid by the parties are proportionate to the services provided,
  2. the % of the commissions paid by the initial client to the agent shall not be less than 50%, and
  3. the services provided to clubs are approved by the governing bodies.

Secondly, I also think there is a legitimate argument that the authority to represent clubs should now come with its own separate authority to that in representing players (as in some other sports), whether this is a separate license or accreditation. And before I am accused of legitimising a ban on ‘duality’ by the ‘back door’ and/or inviting a ‘bar to entry’ in providing services to clubs, that is not the purpose, and as such, any authorisation should be legitimate and minimal. This will firstly give authorised agents added legitimacy (as it does for those who are ‘FIFA Match Agents‘), and would give the authorities a means to remove authorisation and therefore this would act as a deterrent to those who exploit ‘duality’ or undertake ‘triality’.

Agents Representing Managers, Coaches and Club Officials

The growing representation of coaches/managers (and on rare occasions other club officials) has only come about in recent years as they arguably become ‘celebrities’ in their own right and a legitimate asset for the clubs who employ them and the brands and events that utilise their name and image. As such the representation of managers and coaches has become more and more prevalent in the modern era, and as such the same agents who represent players come to represent managers and thus leaves the way open for a potential ‘conflict of interest’, even if this was not the initial intention.

As such, I think that whilst there may not be the requirement for an agent’s license for the representation of managers or coaches (well not just yet), I do believe there needs to be a central register, maybe not for unnecessary scrutiny, but at least for transparency.

Whilst some may argue that the agent of a club official should not be able to represent any players at that club, I do have some empathy with that viewpoint. However, I believe the argument riddled with problems and as such an unworkable approach, if not illegal.

A more realistic approach I believe, would be that in combination with the a central register as previously mentioned as to the agents of club officials, the authorities limit (sensibly) the number of players at a club represented by the same agent as the club manager, limit the number of transactions the agent can be involved in at that club annually, and thus monitor activities more closely without unfairly impinging on the rights of a player or club official, and also the ability of the club to sign players (within reason).

Agents (Directly) Related to Club Officials

The media love nothing more than to highlight cases where a club official is related to an agent, especially when things go wrong and the manager is the reported link between the two and alleged to make things go surprisingly smoothly. Whether it be the manager’s brother who is an agent or even the son of the club’s head coach or chief executive working for an agency, I think we can be excused for believing this will more than likely lead to a ‘conflict of interest’.

The matter of a club official being related to an agent (or a ‘consultant’ to an agency) is, I accept, a difficult issue for the authorities to address, and has been for many years with a few well-publicised cases. Not least, as imposing a barrier to such relations being an agent or working for an agency could be deemed unfair if not illegal.

Yet, I think there are measures that can and should be taken in limiting the risks for a ‘conflict of interest’ in this instance, similar to that previously mentioned with agents representing club officials. Firstly, limit the number of players at the club in question that are represented by the agency or a connected agent, and secondly, restrict the related agency employee from acting in any agent-related activity related to that club where their relation is a club official.

‘Shared Business Interests’

Shared business interests’ in football can be wide and varied, but they are no doubt a source for possible ‘conflicts of interest’ and a means to try and ‘exercise influence’ when it comes to football agents. But I think the important thing here is to firstly separate

  • shared football business interests’, and
  • other ‘shared business interests’.

In terms of shared football interests, I think this a far more pressing matter to tackle and arguably easier to monitor and regulate, yet many of the football authorities have made a ‘rod for their own backs’ by ‘blurring the boundaries’ of what is, and is not allowed.

Take for example the 5% shareholding that is allowed by The FA for agents in an English club. Does that mean the 5% shareholding in a league 2 club may be able to exercise the same level of influence as a 5% shareholding in a Premier League club? In addition to this, it has been identified that the FA’s regulations have very different restrictions on the 5% dependant on whether it is an English club or an overseas club. Added to this there are cross-boundary issues, whereby for example an agent in one territory can own a limited shareholding in a club in one country but a far larger amount in another club in another country, thus allowing them to possibly influence transfers between clubs.

As such I think there needs to be a clear and definitive ‘line in the sand’ on the ownership and shareholding in both clubs and ‘academies’, and that such a shareholding should not be permitted for agents (i.e. 0%). Whilst I realise this cannot be eradicated 100%, through clever accounting and the use of indirect mechanisms such as trusts, hedge funds and holding companies, it would go some way to reduce the risks.

In terms of shared ‘non-football business interests’, this is again something I openly acknowledge is so very difficult for the football authorities to monitor in terms of a ‘conflict of interests’. Whether it be a player or manager who owns a share in the same racehorse as an agent solely for their love of another sport or the more nefarious and questionable activities of a club official who shares business interests in a loss-making company with an agent to move monies about. How can the football authorities tackle these issues?

The answer for me is that they should at least try and make such matters as transparent as possible and encourage football participants to declare such interests. If legitimate and innocent, then there is nothing to fear when such declarations (or lack thereof) are compared with those of the likes of company’s house or cross-referenced with HMRC. However, as demonstrated in the past, some football authorities have demonstrated a reluctance to share information with other authorities until their ‘hand is forced’ on legal grounds, and some authorities whether they be tax authorities or others have been heard unofficially to intimate that they believe the football authorities have in the past possibly looked to obstruct them in gaining information on football agent-related activity.

<<< Part 2 of this Article looked further into Football’s Agent Issues and Problems

Focussing on the Delicate Matters of ‘Transparency’, ‘Protection of Minors and the ‘Capping’ of Agent’s Fees’

<<< Part 1 of this Article looked why Football has more than it’s Fair Share of Agent Problems – What are the Main Issues and Problems, and more importantly the Possible Solutions?

Focussing on – Agent Registration & Licensing along with Agent Regulations and Sanctions from the football authorities

http://footballagentblog.chironsportsandmedia.com/2019/04/football-agent-problems-solutions-regulations-sanctions-licensing-registration-pt1/ :