Premier League Proposed Changes to Football Agent Regulations (Sep’18) : A Reason to Be Sceptical, Hopeful, Dismissive or Just Simply Unperturbed?

 

Over the past 24 hours I have been asked my opinion by quite a few people on the reports in the media of the proposed changes in agent regulations that will be discussed at a Premier League meeting today (Thursday 13th September 2018). This may be because of my involvement in the industry for an extended period and that I have maintained a campaign for the implementation of more effective and viable football agent (intermediary) regulations even prior to FIFA and the likes of the FA abandoning the old system, license and much of the old regulations in April 2015.

Whilst I can hear the sharpening of pencils of the majority of the England football media to heap praise on the Premier League for tackling the ‘scourge’ of football agents (if only to curry favour on other matters); let’s just try and put this whole story in perspective. Not least to see if it really deserves all the praise it may well get, similar to a case of a national football team who exceeds expectation and scrapes into the quarter finals of a world cup.

** Please Note for the purpose of this article I refer to ‘agents’ when referring to both football agents and the succeeding clarification of Intermediaries as per FIFA’s regulation change in April 2015.

 

So firstly, before I look at some of the reported proposals; what I would like to say is I will personally treat the media reports with a pinch of salt for three main reasons:

• There is little or no detail on the proposals
• • We have heard similar sentiment before from the Premier League and others but nothing has ever materialised and such sentiment regurgitated on the closing of previous transfer windows
• They are as it stands just proposals

So, let’s look at each of the various reported proposals:

 

Players to Pay Their Own Agents Fees

Ok this is probably the most widely reported aspect, and for me like some of the other proposals ‘IN PRINCIPLE’ it is a step in the right direction for several reasons. Not least that if the agent is representing the player (and their interests) then it is only right and proper that the player (as the client) pays the agents fees.

Now before several agents jump on me from a great height, there are cases where there is a legitimate case of the agent providing services to the club (e.g. assisting in the relocation of an overseas player and helping them settle), and to the player. But cases of where the agent provides a substantial service to the club on the basis that they only originally represented the player are few and far between.

From my observations, duality has become a deFacto standard in football and accepted by the typical participants in a transaction (i.e. player, agent, club), as in a round about way it benefits them all in reducing the tax liability for some. And in recent years there are cases of triality where an agent may get paid by not only the buying club and player but also the selling club.

And just as an additional note here: people need to be aware that the somewhat skewed agents figures reported annually need to be more closely examined and better explained. Not least as these figures not only include the fees paid by clubs to agents for services to the club – they should also include the fees paid by clubs ON BEHALF OF THE PLAYER! ……….. I will refrain from discussing payments that may or may not be declared (for whatever reason) and thus are missing from those annual reports.

So, if this happens what is my envisaged result: I don’t honestly think it will make that great a difference (apart from HMRC) and will in most cases see the players loyalty/signing fees and salaries rise to incorporate the increased agents fee due from the player. And before some bright spark pipes up to say ‘well the clubs won’t pay’ – they probably will, if only to get the player they want, after all, haven’t the clubs facilitated such activities as duality and triality in the first place?

 

An End to Dual Representation – Nothing New!

So, I have just briefly touched on dual-representation when commenting on the players paying their own agent’s, fees rather than the club paying the agents fees as the two matters are very much linked.

And as everyone jumps up and down to applaud this ingenious brainwave from the premier league wait just a minute as this is not new. Duality (dual representation) was NOT previously permitted, only for the regulations to be relaxed by the FA several years ago.

Now as I understand it the decision to relax the rules on Dual Representation in English football (as it is not permitted in some other sports) was welcomed by some but met with repulsion by others not least HMRC, as this in effect left a loophole that could be exploited and thus reduce the tax that would be due in relation to agent’s fees in relation to such things as VAT, NIC and income tax

Now again, as with clubs paying agents fees I won’t argue that there are some legitimate cases where an agent may well represent both the club and the player in providing services to both as part of the same transaction.

However, where my concern does lie is in the matter of a conflict of interests and the potential for exploitation cases of which I have both heard of and experienced. In my mind an agent who represent a player, has a primary duty to that player and their fiduciary duty is to put the interests of their client (the player) first above their own interests. So, whose interests do they put first if they represent both player and club, more so in a scenario where they could earn a higher commission from ‘club A’ but know the player would be better at ‘club B’ is their judgement not clouded if not conflicted.

So, if this happens what is my envisaged result: As I said an end to duality is nothing new, but it is not a case of just banning duality, it simply won’t work. As before ways were found to circumvent the restrictions and there will be again. A more constructive and thorough way of addressing conflicts of interest need to be found and a viable set of regulations implemented.

 

(Re-)Introduction of an Agents Exam – Nothing New!

I can’t help but smile at this suggestion of reintroducing agents’ exam for so many reasons.

Firstly, the exam was effectively abandoned by FIFA in April 2015 along with the old licensing system and subsequent regulations, and subsequently the FA followed suit.

So, the first question is could the FA have retained the exam (even enhanced it) and the simple answer is yes, not least as the original exam was two part: one part set by FIFA and one part set by the national association in the territory of the examination (i.e. The FA in England). However, it is my belief that the FA ‘showed their hand’ early hear in that they intended for an easy life as even prior to the last exam the FA was informing applicants that the license was going to be abandoned and did they really want to sit the exam.

Now the good natured side of me would say that this was the FA trying to save people some money, however many other may well turn round and say this isn’t the typical FA approach and were they (i) seeking an easy life and not holding two or three exams, (ii) going the easy route of just processing new applications down the line, all safe in the knowledge that the fees lost on exams sittings (as I recall approx. £130) would be recouped in the new licensing system requiring £500 first time round.

The second thing to mention is the unjustified public and industry ridicule the exam received as being multiple choice, it was surely easy? I can tell you from personal experience it definitely was not (although not as difficult as the IAAF exam). To reinforce this fact, the reported pass rate on the exam (depending on the date of sitting and who you ask) was between 7% and 15% in England (I have never heard a reported pass rate in excess of a 20%), surely that is the sign of a tough exam but not one that is impossible.

It is also worthwhile noting that should you talk to an agent/intermediary or indeed lawyer who ridicules the exam, ask them if they actually sat it and how they got on, the response may well be interesting. As I personally recall sitting in a room with several senior agents and sports lawyers who comfortably ridiculed the exam, but with the exception of myself and one other had never actually sat the exam. Whilst I openly recognise their experience and knowledge may be comparable to the required knowledge to pass the exam (or indeed exceed it), it is not enough to just dismiss something with little or no knowledge of the process.

So, if this happens what is my envisaged result: In my opinion again, this is a positive step and should never have been scrapped in the first place. However, from my experience in the industry in addition to an initial entry exam to establish required basic knowledge there should be an ongoing programme of professional development and an education pathway (neither of which currently exist for agents).

In light of the knowledge that many new intermediaries and untested agents have entered the industry since 2015 and have fallen foul of quite basic regulations to the disadvantage of themselves, their clients (players and clubs) and football as a whole, surely there is no better proof that qualifying the basic knowledge of participant agents is absolutely necessary.

 

Agents to Present an Annual Return – Nothing New!

Unfortunately, I am going to have to repeat myself here and say this proposal is again nothing new, similar to the proposal to end ‘dual-representation’ as this was previously in place but abolished.

Previously it was the requirement of every licensed agent to submit annual returns to the FA through the likes of the AG2 form and the AG8 form, however these were again made obsolete by the FA. This was done somewhat surreptitiously in my recollection, as one year after submitting my return to the FA I followed up to ensure they had received it, only to be told they no longer required the return …. it would have been nice to have been told but I was not alone and this is a typical example of the quality of FA communication.

Now, the more suspicious amongst the football community (not to mention some tax and legal professionals), may also ask other questions as to the withdrawal of these declarations. The reason why I say this is that it is my understanding that sometime prior to this disappearance of such agent declarations the FA were subject to a court instruction to make such information available to HMRC, so could this have any bearing at a time when matters such as agent fees, image rights and EBTs in football were being closely scrutinised by the authorities.

My own personal recollection is that the FA never even informed me that I no longer had to submit my annual return, until I had actually submitted and then chased it up to ensure I was not in breach of the regulations for a late submission – only then I received a response

So, if this happens what is my envisaged result: Well I think that although needed there will be considerable push-back and resistance from two main groups, firstly the agents and also (more surprisingly to some) probably the FA.

I don’t think anyone who had to complete the previous declarations was a fan of the forms and the mind numbingly and time absorbing process it was. This wasn’t so much down to the fact that it was complex but more the fact that the forms and the process were poorly conceived and a lot of information was unnecessarily completed or not required.

The other key thing to consider is whether it is totally fair that the income of individual agents or agencies is widely available, after all there are very few professions that have their salaries made widely available. And although I agree there needs to be greater transparency, is it not the way in which annual declarations of how agents fees are published by the leagues and the FA that should be reviewed to give greater transparency as to who paid who and for what, and with a percentage of who paid what to an agent rather than an actual figure – the importance is that the authorities have these figures to highlight clear misdemeanours rather than someone’s income however great or small.

So why might the FA not want such declarations reintroduced, and firstly I would say that they will bemoan that they don’t have the time or resources to process such declarations not just from past experience but because they aren’t the body that they used to be ……. I won’t go into whether there was another reason the declarations quietly disappeared in the first place.

However, I do agree that there is a place for these declarations if implemented in a sensible and well thought out way. And with the technology and processes available to us now being far in advance to those that existed previously, this should simplify and speed up the overall process for all. Added to that if the information submitted was corroborated via various parties effectively (akin to the way international transfers are managed by FIFAs TMS) it may well help us towards a more transparent system.

 

Agents Fees to Be Paid Over the Length of a Contract

This is another proposal which I believe is a step in the right direction, yet where is the sentiment in this: is it to protect the player, protect the club or as I very much doubt, a measure to protect both.

I appreciate that is probably as clear as mud, but let me try to explain. I have come across instances whereby a player has in effect not received a salary for the first part of his contract with a new club and this is primarily down to the fact that either in the representation agreement or the playing contract, the agents fee for the whole contract and other fees (e.g. commercial, signing-on) is due on the player transferring.

This in effect leaves the player without an income until the agent’s commission is paid and I totally agree if this is the problem the proposal is meant to rectify, but I would ask why hasn’t the likes of the PFA sought to address this before now with the likes of the FA and the leagues?

On the flip side is the sentiment behind this to protect the clubs and their playing assets, and I am not saying there is anything wrong in this if they recognise the need to protect the player as well. I openly recognise that the investment that clubs make in their playing staff (transfer-fees, signing on, loyalty, and salary) needs to be protected and to secure the loyalty of the player and the fact that they honour their contract is important.

So, if this happens what is my envisaged result: I won’t go into the various complexities and possible complications that may be caused by this proposal, and if implemented correctly it will be effective – but I sense there will be considerable ‘push-back’ from various participants.

Overall the proposal needs to acknowledge that the interests of all parties need to be recognised and protected, so with this proposal I would say the ‘devil will be in the detail’ and I will be interested to see more on how it will be implemented. In all honesty, Premier League Clubs should have the ability to independently address such issues to protect their interests.

 

Agents Must Have a UK Bank Account to Where Fees Can Be Paid

Again, given what I have read, heard and experienced in the industry this again is an important and constructive proposal, yet I hasten to add I am not a lawyer and have little knowledge as to whether this could be construed as illegal under such factors as a ‘restraint of trade’.

However, what I would say is that with legal human-rights considerations set aside, this is probably the quickest and simplest proposal to introduce. The reason why I say this is that part of the overall mechanism is already in place: the FA clearing house, and all FA Registered Intermediaries (previously agents) are required to submit bank details to receive payments from the ‘FA clearing house’.

The ‘FA Clearing House’ is recognised by some overseas associations as a ‘blueprint’ for a successful agent’s payment system in that all payments made to agents by clubs have to go via the ‘FA Clearing House’. Yet ‘all is not rosy in the Wembley garden’, as I have heard disapproving comments from various participants including agents (one well-known agent in particular readily springs to mind) and clubs, in that the system is slow and inefficient, at times resulting in late payments and incorrect payments that affect many businesses – even to the extent where legal challenges have been made against the FA for delayed payments and withholding moneys.

So, if this happens what is my envisaged result: As I said I think this is the most, realistic, and may be the simplest proposal to introduce, that is if it receives the acceptance and cooperation of the FA.

However, I believe that the ‘FA Clearance House’ system and processes may need to be reviewed so as to facilitate a clear, smooth, fair and transparent payment mechanism – as by some accounts it is far from this, and some even argue that the ‘Clearing House’ is illegal if they hold funds for an extended period of time without reason (as the FA are not a financial institution or bank – which is unlike the ‘clearing house’ reported today to be implemented by FIFA at some point in the future , which will be operated by a bank).

 

 

IN CONCLUSION

 

So, as I said when I started this article whilst I applaud many of the reported proposals and indeed the apparent sentiment driving them I will reserve judgement until we see the final proposals.

Also, I will not be holding my breath on the implementation of acclaimed ‘improvements’ as I have heard this before from several stakeholder parties including the Premier League and their members ……. leaving me thinking this is a periodical PR exercise to feed the sports media and gain a positive reaction from a wider supporter audience in taking to task those ‘parasitic leaches’ that are agents.
One party who I can confidently conclude will be over the moon with these changes if they are applied is HMRC, yet I believe they will share my hesitation in celebrating any improvements until they are actually implemented, not least implemented effectively.

You may be wondering why I am so negative that these proposals will materialise soon (if at all in the near future). Well given that I have approached the various stakeholders now for almost 4 years highlighting the problems that transpire and present possible solutions I have at the most received an ear from some (not saying they were actually listening) whilst representatives of the Premier League (with one exception) couldn’t even summon up the courtesy to acknowledge or reply.

There is no doubting improvement with the regulations is needed, and the football stakeholders need to acknowledge they made a mistake in 2014/2015 in allowing the abandoning of the old system to go ahead without a contingency plan and now they are playing catch up to put things right. Also, I am absolutely adamant that the Premier League, despite their power and influence, cannot do this alone. They need the buy in of other stakeholders and participants and their agreement to share the responsibility and not ‘pass the buck’ as before.

If the genuine will and intent of the Premier League is there to bring about improvement for the right reasons, it is a step in the right direction. And despite some of the proposals now being uttered having being scrapped by others in an ill-judged manner in the past, maybe just maybe the Premier League is doing the right thing in cleaning up the mess on footballs street that has been left steaming by two carthorses called FIFA and FA.

 

 

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