CAS Dismisses All Claims By Professional Football Agents Association Related to New FIFA Agent Regulations
Today, the Court of Arbitration for Sport (CAS) issued an Arbitral Award relating to the new FIFA Agent Regulations which were adopted by FIFA in December of 2022 and to be fully implemented on October 1, 2023. The dispute concerns the legality of the new regulations.
The Professional Football Agents Association (PROFAA) is an association under Swiss law whose mission is to safeguard and promote the interests of global football agents worldwide. It agreed with FIFA to have the CAS assess the new FIFA Agent Regulations with a view to achieving legal clarity prior to the enforcement of the new regulations as of October 1, 2023.
The PROFAA sought a declaration that:
1. Article 15 (Service Fee Cap) violated Swiss competition law by imposing a service fee cap and by differentiating the percentage of the applicable ceiling according to the parties involved without good reason;
2. Article 12 (Representation) violated Swiss competition law by limiting the exercise of agent activities to licensed agents, by no longer allowing licensed agents to rely on unlicensed employees or auxiliaries and by allowing dual representation only where it concerns the agent and the hiring club without any justification for such differential treatment;
3. Several articles infringed on EU Law. These articles included Article 5.1(c)(i) (related to prior bankruptcy of agents); Article 12, paras. 8-9 (limiting football agent services only to licensed agents) and 12-13 (limiting an agent's right to a commission if a player negotiates his own contract); Article 14 (related to commission payments); Article 15, paras. 2 and 3 (related to the service fee cap); and Article 19 (related to the disclosure of information related to football agents and their representation agreements with players); and
4. The new regulations were incompatible with national regulations.
In its 90-page decision, the CAS ruled in favor of FIFA on all of PROFAA's claims. Some of the interesting notes of the decision include the following:
1. FIFA enjoys "technical" and "democratic" legitimacy to regulate football agent services because agents are not simply "peripheral" to the world of football and its organizations as a result of their involvement with representing the interests of clubs and players in the core aspects of the entire football system - the employment and transfer of players.
2. It is unlikely that the service fee cap would deprive smaller agencies of being able to earn a reasonable living because they could still earn more for "other services"; those agents could still collect 5%-10% commission for contracts under $200,000, which is precisely the same group of agents that PROFAA argues is most effected by the service fee cap; and these agents might earn more with a 3%-6% service fee cap if representing a player or engaging entity than they would if they received a 10% commission representing the selling entity because the latter commission is a "one-off" commission while the former is earned each year of the individual's contract.
3. The service fee cap is proportionate to commissions in other sports like the 3% cap in the NFL and 4% in the NBA and is tailored to prevent the "prima facie excessive" commissions that were earned by agents from 2015 to 2021.
4. The new regulations justifiably prohibit unlicensed individuals from performing specifically defined football agent services; however, agents and agencies can still use unlicensed individuals to perform activities that are not "football agent services" - such as secretarial services, scheduling services, assisting with practical arrangements for player relocation. FIFA allows agents to "delegate administrative and other menial tasks to assistants and auxiliaries, while legitimately and proportionately only authorizing football agents to provide football agent services."
5. Article 19 (disclosures) does not violate laws cited by the PROFAA in its submissions.
6. The new regulations do not violate Swiss law.
7. The new regulations are not incompatible with Italian and French law.
8. PROFAA's arguments related to MLS - that the regulations violate the CBA between the MLS and the MLSPA - were "unfounded" because the CBA does not address rules and regulations which apply to football agents and does not regulate football agent activity.
FIFA is obviously happy with the result. You can read their reaction here:
There are still cases brought on the national-level by agents in several countries, so we will have to see how this decision affects those cases, if at all. There is also a complaint filed with the European Commission in Brussels. So, stay tuned to learn more about this fascinating issue in the world of football.