The new FIFA Football Agent Regulations (FFAR), governing the regulation of football agents, partially came into force in January 2023 but are due to be fully implemented on 1 October 2023 – by which time, all national associations (such as The FA) must implement domestic football agent regulations that are to sit alongside the FFAR.
As a reminder, the primary changes under the FFAR include, amongst others, the re-introduction of a licensing system for agents alongside a new agent's exam, a restriction on multiple representation and a cap on agents' commission. These changes are assessed in greater detail in our earlier article here. However, in recent weeks, there have been a number of legal challenges across Europe in relation to the introduction of the FFAR, including before the Court of Arbitration for Sport (CAS), which gave its ruling in July 2023 in favour of FIFA confirming the legality, validity and proportionality of the FFAR (which we considered in further detail here) and in the German courts, which we consider the implications of below.
Background
On 24 May 2023, a regional German Court (District Court of Dortmund) issued a preliminary injunction against FIFA, which prevented FIFA from enforcing specific provisions of the FFAR in Germany (the Injunction).
The Injunction applied to a number of provisions of the FFAR, including the cap on agents' commission and the prohibition on multiple representation.
FIFA's response
In light of the Injunction, FIFA has outlined how it will implement the Injunction with the intention of providing stakeholders with clarity and removing ambiguity regarding the application of the FFAR in Germany whilst the Injunction is effective.
This includes confirmation that:
- The FFAR will be suspended in their entirety for all transactions with a "link to the German market". This applies retrospectively as from 24 May 2023.
- A transaction with a link to the German market will be deemed to exist as soon as any party to a transfer (agent, club, player or coach) has a link to Germany. The suspension of the FFAR will then apply to all parties to the relevant transaction, regardless of their domicile.
- All claimants in the procedure before the German regional court will, with retroactive effect as from 24 May 2023, no longer be bound by any provisions of the FFAR, on a worldwide basis and regardless of the location of their business activities.
Whilst FIFA emphasises that it will abide with the Injunction for as long as it is in effect, it notes the Injunction is inconsistent with the CAS Award and reserves its right to challenge the Injunction.
What does this mean?
The obligation on the German Football Association (DFB) to implement national football agent regulations has been suspended. As a result, the FFAR will not apply in Germany for the time being.
Whilst FIFA's response applies to Germany, it makes clear that other national football associations are still obliged to implement their own national football agent regulations. However, they will need to provide an exemption for any transactions with a link to Germany.
There may well be several unintended consequences from this latest decision by FIFA. For example, it is possible that agents representing German players may expedite deals during this current period. Additionally agents could also go out of their way to try to link any other on-going transactions to Germany in some way, such as potentially by forming relationships with German agents.
What next?
In summary, the regulatory landscape for football agents in in a state of flux.
As a result of FIFA's action in Germany, and with a number of similar legal challenges taking place in other jurisdictions within Europe, there is a significant amount of uncertainty regarding the implementation of the FFAR. In England, for example, we are awaiting the outcome of a Rule K arbitration tribunal hearing that has been brought by a number of agencies against the FA's proposed implementation of the FFAR in England. Neither the outcome of the arbitration hearing, nor the FA's national regulations implementing the FFAR, have been made publicly available as at the date of writing, despite the fact that we are less than two weeks away from when the regulations are due to come into force.
If the agencies are successful in this case, it leaves the possibility open that the FA could find itself in a similar position to the DFB with FIFA having to suspend the FFAR in England too. Additionally, given the timeframes, and the fact the FA's domestic version of FFAR has not been published, it is not entirely clear how representation agreements can be expected to be compliant with the FFAR (and the FA's version of the FFAR) from 1 October 2023.
If, in addition to Germany (and potentially England), the FFAR cannot be implemented by a number of the leading national football associations as a result of decisions by domestic or European courts, where there is still a pending European Court of Justice decision on this matter, and FIFA is forced to suspend the FFAR in these jurisdictions, it would represent a significant blow to FIFA.
Preparing for FFAR
However, in our view, FIFA is likely to prevail. Therefore, agents and clubs should prepare themselves for the introduction of the new regulatory framework as soon as possible.
In particular, as a starting point, agents should consider what changes they now need to make – including urgently updating representation contracts with players to ensure that they are compliant, whilst clubs will need to ensure that its own template agreements and processes are updated to reflect the changes.
If you require any advice on the FIFA Agent Regulations or the FA's national version (once published) or regarding how the changes will impact your club or business, please contact Simon Leaf, Oliver Millichap or Tom Murray.