Life as a player agent can be tricky at times. A new test was scheduled last week: 20 multiple-choice questions on transfer rules and civil law, reflection time 60 to 90 minutes. That was the new license test that the world football association came up with for those who want to work as player consultants in the future. Fifa announced that there were 6,586 registrations worldwide, including 145 from Germany.
The year 2023 could be a drastic one for the world of player advisors, and the 20-question test is the least of it. Fifa has drawn up new regulations. It came into force provisionally in January and is to apply in full from October. But now there are increasing doubts that the regulations are legally tenable.
The work of players’ agents has been heating up and dividing the industry for years – not least because a lot of money is involved. According to Fifa, around 600 million euros flowed worldwide per year for the consultants, and that only for international transfers; for all national ones there is also a sum in the mid three-digit million range. The central element of the Fifa reform is now a license requirement for consultants and above all: an upper limit on commissions. This should usually be a maximum of three percent of the player’s salary – or ten percent of the transfer fee.
When it comes to the penalty, that’s a Fifa thing – it’s different when it comes to economic activities
Accordingly, the consultants’ guild is in turmoil, many conflicting interests are at play. “One of the things that bothers me is that Fifa wants to significantly restrict an entire industry in its professional practice without democratic legitimacy, thereby elevating itself to become a global legislator. Where does it justify this omnipotence fantasy from?” says Philipp Wehler, Managing Director of the Association of German Players’ Agents (DFVV). Other consultants generally welcome it when there are more binding rules, but are bothered by the specific elaborations. And various players do not want to accept that someone simply dictates the prices in a free market, but take legal action against it.
Your leverage is antitrust law. In general, sport and antitrust law form an interesting couple. Because sports associations use their dominant position on many issues to set up certain rules. The European Court of Justice (ECJ) also declared this to be appropriate in a famous judgment (“Meca Medina”) – if the rules relate closely to sporting events. If Fifa decides that a penalty kick can be taken anywhere in the world from eleven meters, that’s okay under antitrust law. But this freedom ends when primarily economic activities are affected. And now the central question is how the courts classify the work of the players’ agents.
Legal processes are ongoing in various European countries, including Switzerland. A lawsuit is also pending in at least three German courts: in Mainz, Dortmund and Frankfurt. The first German court to make a decision on the subject after the introduction of the new regulations was the Mainz Regional Court. The influential player consultant Roger Wittmann, who represents Julian Draxler, among others, complains there. The Chamber referred the matter to the ECJ. On the one hand, this gives Fifa time, on the other hand, according to SZ information, the decision of the judges in Mainz shows a clear trend that the world association cannot please.
As can be seen from the decision, Fifa is trying to present the issue in such a way that the activities of players’ agents are directly related to sporting competition. But the LG Mainz can gain little from this argument. In his opinion, “it is more likely to be assumed that the activity of brokering players represents an economic activity,” says the decision. And when Fifa decides why there should be an exception to the Meca Medina approach for consultant regulations, the chamber contradicts almost all arguments. One can well imagine that the regional court in Frankfurt – where a player’s consultant is also suing, but the proceedings are being delayed precisely because of a personnel change in the court – takes a similar view and also turns to the ECJ.
The consulting market is in upheaval – the result: many smaller players could disappear
“As far as Fifa regulates the market for players’ agent services, it is an association of clubs that demand these services. If prices are set, it is nothing more than a prohibited purchasing cartel,” says Wittmann’s lawyer Alexander Fritzsche. “That has nothing to do with sporting rules, it only affects economic competition. An industry association is also not allowed to decide how much its members are allowed to pay for headhunter agency services.”
In terms of content, the attitude of the Mainz district court also fits another legal process. The Federal Court of Justice (BGH) in Karlsruhe is also currently dealing with the issue of player advisors. Another lawsuit from Wittmann landed there, which is still directed against the old regulations. Although the verdict will not be made until June 13, the Senate made it clear during the hearing that it was following the advisers’ presentation on a central point. The question is that, according to the statutes, the advisors are no longer allowed to benefit if a player they have transferred is resold by the new club soon afterwards. According to the Senate, it does not make sense why intermediaries are prohibited from participating in resale, while the clubs practice this as standard. If the BGH has already criticized such price interventions when reselling, how does it see a general price cap?
The BGH is still ruling on the old regulations, the ECJ will need its time, but a ruling on the new statutes will probably be issued soon. Because there is another procedure before the district court of Dortmund – a so-called urgent procedure, which means that a decision is required soon. Players’ agent Michael Frank, a former youth coach and until recently part of Manuel Neuer’s agent firm, is complaining there. The hearing is in early May. Frank’s attorney declined to comment. Fifa generally states that it does not comment on individual legal proceedings; she only generally defends the reform, which aims to “raise professional and ethical standards and avoid excessive and speculative practices”.
But there is still a sports-political note hidden in the legal thicket. Because Fifa has decided on the new statutes – but for the national level the member associations can adopt regulations that can differ from the text of the world association. The German Football Association has not created one yet, and some player advisors in Germany are hoping that modifications will be made.
When asked, the DFB did not deny the question of whether it was conceivable that it would deviate from FIFA’s upper commission limits. To what extent deviations “are required and permissible in the national regulations” is part of the examination that is currently being carried out in order to develop a draft “taking into account all legal and factual aspects”, the association announced. Fifa, on the other hand, states when asked by SZ that the member associations could set “stricter” rules; According to the world association, the DFB can only set upper limits for commissions that are below those of Fifa.
If the Fifa rules go through as a whole, this could change the player advisor industry. A fundamental concern is that it is likely to have an impact primarily on small and medium-sized companies. A recognizable reorganization has been taking place on the player advisor market for some time anyway, with some large players absorbing many smaller ones. “The consequence of the current regulations will be that many consultants will be pushed out of the market,” says DFVV lawyer Wehler.
The next 20-question exam is in September. If FIFA has its way, everyone who wants to be a mediator in the future must have passed at the latest. But the question is whether Fifa will have its way with this issue for a long time to come.