The Gatekeepers – „No deal without me“
THE CURRENT SITUATION
As I have mentioned in previous blogs, the current situation allows agents to act on behalf of the player, signing club or releasing club or all three parties in a single deal. However, some agents specialise in acting for a single party. The majority of agents will act for a single party, but it is possible for certain agents to represent more than one, including the player and the clubs. In this episode I will discuss the difference between agents that only represent clubs (club agents), those that represent players (player agents) and why clubs would use agents for themselves. Furthermore, I will propose the argument that agents that only represent clubs should be regulated differently to player agents.
At the moment there are three types of agent. The kind that mainly represents players in deals, then others that represent mainly clubs and finally those that work under a dual or multiple representation contract for two or more parties. See my previous blogs for more details on this.
There is a significant difference in the day-to-day work of a club agent and a player agent. Whilst they are both bracketed under the same license of the football association they are a part of, their actual responsibilities are far apart. Player agents take on the role of scouting young footballers, build a relationship with them and their families and support them through their career, on and off the pitch and beyond. They are tasked with protecting the interests of their client and maximizing their potential and earnings from their football career and their endeavours afterwards. A player agent often covers a 360° array of components of their client’s career: from marketing, media and PR, to holidays and house insurance, to charity work and business ventures. Not to mention the slightly important task of negotiating employment contracts, transfers and salaries!
Ultimately, club agents are brokers. They do not have to take on the variety of tasks that a player agent has to as they do not have a duty of care or responsibility for a player. Instead, they are directly representing the club. A club that is looking to sign a player will often not go directly to the agent of the player. Instead, they will provide an agent with the information of the player they’re after and an offer that they can take to the player’s agent.
It is a common strategy that is regularly seen in transfer deals in the world of football. It has become the norm for a club to have a specific relationship with one or, at most, a handful of agents that they will bring into every deal.
Many of these ‘club agents’ are very experienced and used by the clubs after establishing themselves in the industry, developing strong relationships with clubs and creating a network that gives them the ability to benefit a football club. However, the issue lies with the fact that interestingly many of these club agents are friends or relatives of officials in the club. The sporting director, head of recruitment, board members, president and even the coach can influence which agent the club uses.
It seems an obvious solution for football clubs to minimize their expenditure on agency fees by going to the agent of the player directly with an offer. However, a club official can bring a friend or family member into the deal as well in order to benefit themselves from the fees.
For example, club A wants to sign Player Z. An official at club A notifies his brother who is given the authority, under the umbrella of an agent’s license, to act on behalf of the club in the deal. The club gives a mandate to the agent for his services and may offer a commission as part of the mandate contract which would be classed as a club expense. Alternatively, they would offer no remuneration directly but encourage the agent to share the commission that is earned by the player’s agent.
The brother of the club official then approaches the player’s agent and explains that he would be able to help the agent move his client to club A. If the club was not giving the agent commission, he would then also negotiate with the player’s agent a percentage of the final agency fee paid which could be as much as a 50% share and would likely drive up the value of commission that would be negotiated with the club and player. In some cases, it is possible for the club agent to receive double payment from the player’s agent and the club, further increasing the attraction for a club official of bringing in a close associate. It is estimated that if a club did not use an agent and went to the player’s agent directly, commissions and agency fees would fall an average of more than 50%.
From this example, it is clear that the club would save money if they went to the player’s agent directly. However, by appointing an agent themselves, the club official sometimes benefits from the deal themselves. They are able to provide a payout to their friend or family member and may even take some of it for themself as part of the deal. This method of using a club agent facilitates for kickbacks and acts as a vehicle for the club official to make money for themselves.
How many fans knew that this was part of the money that their club spent on agents each year? How many fans knew that their club even had its own agent? Some clubs are fully owned and under control of these stakeholders who have the right to choose their agent. However, in clubs where the fans are majority stakeholders, such as Bayern Munich or Barcelona, it is not understandable that the clubs can choose to use an agent and waste money on their commissions. The numbers must be publicly documented for fans, especially in these clubs that are structured as a members’ association.
In my opinion, the extent of the differences between club agents and player agents must be established and understood. The consequences of this would cause football authorities to create a new regulatory approach to club agents that is separate from the rules for player agents. The roles of each profession are different so why should the regulations be the same?
I believe that FIFA should only regulate agents that are representing the players. A club should use the agents that represent them in the same way as they lawyers, consultants and tax advisors. This happens in both the signing and releasing clubs. The agents are working on behalf of the club to pursue their interests just as these other parties would.
By changing these regulations, the football associations and authorities would be able to separate player and club agents. They would gain increased transparency into the market. This would give clubs the power to decide for themselves how club agents can be used and if they really need to use one. This also provides protection for the agents who represent the players.
If FIFA were to take it upon themselves to regulate club agents then they should consider implementing a completely separate set of regulations to that of player agents as they do entirely different things!
In conclusion, club agents and player agents are very different. The contrast lies in the extent and variety of their responsibilities and day-to-day work. Currently, both of these professions are regulated under the same umbrella, despite the differences.
I believe that there is a problem in football with clubs, club officials and their relatives or friends. Officials are maneuvering their close ones into positions as club agents and hiding behind the agent umbrella in order for them to make monetary gains themselves.
For this issue to be solved the differences between the two types of agent must be understood in order to create separate regulations to monitor and improve the standard.