The Problems with Football Agents

SoccerMovieMom logoThe 2011 film Soka Afrika got me wondering, how does a player in Africa find the right agent? How do players avoid scams by fraudulent football agents that will turn them into victims of human trafficking?

Unfortunately, what I discovered is that football agency is like a cancer: it stays hidden in the body for a long time, it spreads, and it can only be eliminated with a powerful cure. So the answer to my question is that there is no simple way to protect oneself. Perhaps to avoid culpability, FIFA chose to step away from the whole issue and let each country federation find its own solution.

This article collects the information I found about football agency and the means of corruption that it facilitates.

where football agency causes problems
  • FIFA deregulation of football agents
  • Unfair or corrupt practices when signing players
  • Human trafficking through both fake and registered agents
  • FIFA ban on Third Party Ownership

FIFA declines to regulate football agents

Here in the USA, we are familiar with salesmen, agents, and lawyers, across many industries. Most industries are regulated for consumer protection. Real estate agents, who get 6% of the sales price of your house, must be tested, certified, and licensed. Your lawyer has to pass a board exam, which many fail the first time. Your doctor goes to medical school, internship, and residency for almost a decade before he examines you.

But to become a football agent anywhere in the world, the barriers to entry are few. In 1994, after football began to bring in big money, FIFA started regulating football agents, largely to protect the clubs. At one point, to be a FIFA Agent, you needed to pay some money, pass a written test, have proof of insurance, and be of good reputation. In 2015, FIFA abandoned regulation and eliminated those requirements, leaving the country federations to define their own controls.

A very brief history of key rulings and FIFA regulations of agents
  • 1994 – Players’ Agents Regulations (PAR) created the FIFA Licensed Agent, an individual who required an interview, bank guarantee, and free of criminal record
  • 1995 – EU ruling on Bosman allowed players free agency
  • 2001 – FIFA Players’ Agent Regulations added a certification test, code of conduct, banned tapping (poaching), and must apply in country of residence
  • 2005 – UEFA created home grown rule
  • 2008 – FIFA Players’ Agent Regulations (2008 PAR) refined the above and added bookkeeping
  • 2015 – Regulations on Working with Intermediaries (RWWI) – FIFA abandoned regulation of agents and defined intermediary as a person or business entity, is registered not licensed, and cannot be remunerated in an employment contract with a minor

All countries are affected by the deregulation. In England in 2013 before FIFA deregulation, there were 450 football agents. After deregulation, by 2016 the number tripled to 1,500. FIFA requires that federations list their registered agents, but many countries, such as South Africa, do not.

USSoccer’s list is here. Note that because of the Collective Bargaining Agreement with the MLS Players Union, all MLS employment contracts go through the MLSPU. Players can negotiate other benefits on an individual basis with their clubs.

In 2017, Italy paid the second highest agents’ commissions in the world, at $343M. Beginning in 2018, Italy became the first nation to step up requirements, and they did it at a governmental level. A sports agent must be an EU citizen, pay annual fees, pass a test, have an education, and not be a criminal in the last 5 years. There is also a national registry (Comitato Olimpico Nazionale Italiano), and any contract using a non-registered agent is null and void. In addition, family members can no longer represent the player unless they are registered agents (FIFA has always allowed family members this exemption).

Unfair or corrupt practices when signing players

While Italy is #2 in football agent commissions, England of course is #1, spending $490M in 2017. Even when there wasn’t a lot of money in English football in the beginning, certain corrupt practices took hold and were institutionalized. These include:

  • Bungs, where managers want a percentage to take a player on their team
  • Duality, where an agent represents both sides
  • Conflict of interest where a manager’s agent often represents players as well
  • With the 2015 FIFA regulations, tapping up (poaching) is no longer forbidden. An Intermediary can approach a player who is already under contract.

For a good writeup on the twisted logic in why clubs use intermediaries and agents in transfer negotiations, read Gabriele Marcotti’s Jul-2015 article for ESPN.

It should obviously be a conflict of interest when an agent represents both the manager and the player, or represents the club and the player. If you google this, conflict of interest in agency representation seems to be a known problem in many sports around the world. But no sport has had the stomach to tackle it.

When agents represent multiple parties to a transaction, they can collect large parts of player transfer fees. Supposedly, when Paul Pogda moved to ManU in 2016 for £89 million, agent Mino Raiola collected £41 million from Juventus, Manu, and Pogba. According to UEFA President Aleksander Ceferin, agents are demanding as much as 50% of the transfer fee, or they will not bring the player over.

Law professor Eleanor Drywood wrote a chapter in the 2016 book, “The EU as a Children’s Rights Actor Law“. She summarizes how the laws of the European Union have been applied to issues of sports such as the football transfer system. She argues that legal cases have shown the EU is moving to a sports policy that is not purely economic but also emphasizes social value. To me, this means the fractures caused by Brexit will allow the corruptions to continue and reach even greater heights in both England and the EU.

The best article on the consequences of the de-regulation of football agents is a Jul-2017 article by Nick De Marco. According to De Marco, absent regulation by the FIFA or the football associations, disputes are being settled through arbitration and the courts. Damages for fraud or breach of contract are sought in civil court, and criminality is never pursued.

Human trafficking through both fake and registered agents

According to Professor Drywood, the 1995 Bosman decision not only brought free agency to European sports, it also stimulated a shift toward global recruitment of players, because it eliminated nationality-based quotas.

In 2005, UEFA instituted the homegrown player rule to encourage more development of local players. However, a player could be defined as homegrown in a country if he had been trained by a club for at least 3 years between the ages of 15 and 21. This motivated clubs to recruit even younger, working to scout and identify players much younger than 15. A strategy is to bring over a parent first, and then bring over the child under the pretext of following the parent’s work.

According to the CIES Observatory, in 2014 there were only 566 African players in the 31 European first divisions. But to footballers in African countries, playing in Europe continues to be seen as a good way out of poverty. Thousands have tried to get to Europe for tryouts in lower leagues, mostly under illegal pretenses. The demand to migrate make the players and their families easy prey by people purporting to be agents or purporting to have connections to European agents or clubs.

These stories have been documented in Soccer’s Lost Boys and Soka Afrika (watch SA with a grain of salt), and many articles such as this primer by Dr James Esson.

However, I also recommend reading Ed Hawkins’ excellent 2015 book “The Lost Boys: Inside Football’s Slave Trade”. An investigative journalist, he pretended to be an English scout and conducted his own sting operation to draw out unscrupulous agents. He traveled to West Africa to see first hand the many football academies and how trafficking processes are implemented by working within or around the legal systems.

Sadly, by the end of the book, he questions the veracity of football trafficking stories, and whether some migrants cite such narratives as a means to gain refugee status or benefits. Online scams are certainly real, where fake agents take money from susceptible teenagers and then disappear. But former migration officials agree that it doesn’t make economic sense for a trafficker to bring a player to Europe and then abruptly abandon him without even taking him to a trial.

However, I recently corresponded with a police officer in Nigeria, who says that football trafficking continues today. Perhaps in another 5 years we will have better insight as to why such incidents continue despite media education.

FIFA ban on Third Party Ownership

Third Party Ownership (TPO) was the norm in South America, Spain, and parts of Eastern Europe, but FIFA banned it when it deregulated agents in 2015. In TPO, investors bought a stake in a player or paid his salary in exchange for a share of future transfer fees. A side effect of TPO was that it made South American players more expensive, because clubs needed to pay back the TPO investors.

At the time of the FIFA deregulation, TPO was opposed by then UEFA president Michael Platini, as well as FIFPro, because it put pressure on a player to transfer. It also created an economic bubble in player salaries.

Politico claimed that there were 1,500 players in Europe who were part-owned or paid by outside investors, and collectively worth an estimated €1 billion. In 2012, Sporting Lisbon used a TPO to pay €3 million for Marcos Rojo and then sold him 2 years later for €20 million.

In Conclusion

In my opinion, FIFA’s decisions have repeatedly shown themselves to be economic, much like any other business. FIFA has often decried money going “outside of football”, which I infer means money going into the pockets of people who are not clubs, FIFA executives, or federation officials.

FIFA’s decisions have had very little focus on benefitting players, workers, women, children, LGBT, or fans. The problems with football agents stem from FIFA’s economic mission, but FIFA suffers from the same metastatic corruptive cancer as football agency. I am convinced the only cure is to create a new worldwide organization to administer football and soccer in a way that truly unites and benefits the world.

Update Jun-24-2018: I added the information I learned from Ed Hawkins’ book.