How football Intermediaries are regulated in the Netherlands: The role of ProAgent

Published 11 October 2017 By: Roberto Carlos Branco Martins, Matthew Graham

Netherlands football fan

It is often quipped that two things in life are certain – death and taxes. But at the height of the summer transfer window, perhaps a third certainty could be nominated – consternation about the activity of player agents, or "intermediaries" as they have been deemed since 1 April 2015 pursuant to the expanded definition in FIFA’s Regulations on Working With Intermediaries (Regulations)1.

This concerns range from the predictable scrutiny over remuneration,2 to the more nascent question of how deep and pervasive intermediary influence can be at one particular club3. The fall out from the Neymar deal also seems likely to intensify scrutiny on issues intertwined with intermediary regulation, not the least of which is third party ownership.4 Despite being ostensibly banned questions persist about enforcement,5 and the increasingly inventive ways that are being devised to work around the rules.6

The debates on intermediary activity often disguise the bigger picture of how to address the regulatory problems posed by third party representation and what the manner and form of a good governance based approach to such regulation may be. Certainly, serious questions have been raised about the efficacy of the Regulations (aspects of which are revisited later in this article), particularly in terms of how FIFA’s controversial new regulatory approach dispensed with various quality control mechanisms7.

This article explains the recent developments in the Netherlands on Intermediary regulation, which have been arrived at as a product of collaboration between the league (KNVB), clubs (FBO), players’ unions (VVCS and ProProf), and an Intermediary association (ProAgent). It also addresses the wider potential benefits of such a model being implemented across Europe. Specifically, it examines:

  • The Dutch certification system for Intermediaries, and the role of “ProAgent”, the collective representative body;

  • How the certification system has been received: strengths and weaknesses;

  • European implications and the need for broader reform.

 

The Dutch certification system for Intermediaries and the role of “ProAgent”

This article will not recite all the intricacies of the KNVB’s implementation of the Regulations.8 However, it is useful to recall that the Regulations establish a minimum regulatory floor that leaves room for Member Associations to go further in terms of enhanced regulation should they desire (for more on which, please see: ‘A Guide to the FA’s Regulations on Working With Intermediaries9).

In the Netherlands, a system of certification overseen by KNVB has been developed as a product of “informal social dialogue” (collective bargaining) between the major stakeholders in Dutch professional football. Pursuant to the system, the KNVB endorsed ProAgent10 (a collective body for intermediaries) in late May 2017. 11 Having been certified, it is incumbent on ProAgent to make sure its members comply with certain criteria (discussed below). The key point to note is that it is ProAgent, as the collective organisation of intermediaries, receives certification through the label of endorsement from the KNVB, rather than intermediaries individually (although all intermediaries must still comply with minimum KNVB rules including registration of representation contracts and good standing and character tests12).

Via their membership with ProAgent, intermediaries may hold themselves out as being compliant with a set of professional criteria13 above the minimum standards required by the league.14

For ProAgent to receive, and continue to exploit, its certified status it must comply with the following conditions:

  • Ensuring its intermediary members attend one session of CPD (Continuing Professional Development) per year, with this session organised by ProAgent and formulated in consultation with the other stakeholders in Dutch professional football, with the aim of ensuring the appropriateness of the topics canvassed. Several workshops are hosted throughout the year to afford its members the opportunity to attend. 

  • Ensuring its members obtain professional liability insurance. 

  • Providing access to a level of legal support for its members in relation to regulatory and ethical questions.

  • Ensuring its members comply with the fundamental KNVB rules (registration, good fame and character). 

  • Opening itself to annual audit by the KNVB to ensure compliance with the foregoing.

Additionally, while disputes between intermediaries (such as those connected to representation contracts) remain subject to KNVB arbitral processes, ProAgent members must adhere to a code of conduct, pursuant to which a complaint by one ProAgent member against another in relation to, for example, inducing a player to terminate their existing representation contract (which would breach this code) will trigger an internal review by ProAgent. After the review, should ProAgent find that one of its member has violated the code, they can impose a range of sanctions depending on the severity of the offence (in the worst case, expulsion from the organisation), which would be additional to whatever penalties the KNVB may impose.

 

How the certification system has been received: strengths and weaknesses

The certification system operated in the Netherlands has been positively received. Louis Everard, the director of the players’ union - VVCS, remarked that:

“[translated from Dutch] Abolishing the exam has led to a sharp increase in the number of intermediaries. It seems logical that the average quality of intermediaries drops. This is an undesirable situation for the players, with the requirements for the quality mark, the quality of the product will be improved15.

Indeed, the process of extensive consultation – or "informal social dialogue" – between all stakeholders in developing this regulatory system has enhanced its legitimacy, and the KNVB has boasted about the collaborative processes resulting in the certification system being the first of its type in Europe16. The players have been involved as a direct partner by means of the Dutch players’ Union, the VVCS,. It is ultimately hoped that this system of certification will deliver a level of quality assurance reducing the scope for dubious practices whereby, among other things, parents have been approached to pay ‘intermediaries’ several thousands of Euros on the basis that their children will sign professional contracts, without there being any veracity behind such representations.17

In such a scenario, the parents are now able to check with both the KNVB and ProAgent that the Intermediary is registered, complies with the minimum set of criteria as stipulated by league rules; and complies with the enhanced criteria of ProAgent (listed above). If they are not, this may serve to raise serious doubts about the credibility of those purporting to offer the service, given that they have decided not to opt in to the additional quality criteria that being a member of that association guarantees (by way of compliance with the code of conduct, holding insurance, CPD etc).

While this a positive first step, it would be naïve to pretend that such a system offers all the answers to the multi-faceted problems posed by intermediary regulation. It must be reiterated that ProAgent can neither compel, nor seek jurisdiction over, Intermediaries who are not members of the organisation. This may unfortunately mean many Intermediaries registered with the KNVB in the Netherlands will simply continue to conform to the minimum standards established by the League, which as was done elsewhere with the implementation of the Regulations, seriously rolled back existing quality control criteria. Worse still, many dubious "Intermediaries" (or those purporting to be Intermediaries), as was the case in the quoted example with the parents, may continue to evade regulatory oversight altogether.

Thus, from an integrity standpoint, as "soft" as this form of regulation may be, it is incumbent on all stakeholders – who often have competing interests – to continue to collaborate in terms of promoting the visibility and desirability of the certification system. It is hoped that the involvement of all stakeholders in the process will help to deliver upon the initial objective of restoring a much-needed level of quality assurance to the industry.

In turn, the challenge for ProAgent will be ensuring that it is properly organised and resourced to deliver upon its certification status – this will require vigilant compliance with the criteria listed above and transparency in dealing with intermediary related complaints pursuant to the code of conduct, with the objective of ensuring that its members maintain the necessary levels of professionalism and are sanctioned appropriately if they fail to live up to these standards. The KNVB carries out a yearly audit in order to assess whether the criteria are still met.

 

European Implications: The Requirement for Reform

Just as it would be naïve to pretend that the germinal system of Dutch certification offers all the answers to the problems posed by intermediary activity, it must be emphasised that Intermediary regulations are of limited effect if operating purely at a national level. Indeed, FIFA’s dispensation of responsibility to Member Associations at national level has been one of the fundamental problems with the Regulations, and has led reporters to make observations such as:

Agents and regulation – or the lack of it – is a major issue in the game… Fifa washed its hands of agents a little more than two years ago, deregulating an industry that it had little interest in policing in the first place... What has followed, though, is an absolute mess – as many predicted it would be – with each national association tasked with supervising a multimillion-pound business in which the number of people trying to get a slice of the cake has gone through the roof.”18

To the above effect, it has also been said:

The transfer of the bulk of the administrative burden from FIFA to the national associations raises problems in terms of governance due to the variable capacity of each national association to handle the regulations’ implementation and monitoring challenges.”19

It is worth recalling certain fundamentals pertaining to agent regulation at EU level; what this means in terms of the requirement for reform; and the broader significance of developments in the Netherlands in this context.

 

European Implications: FIFA’s ‘De Facto’ Competence

The fundamental question of FIFA’s competency to regulate intermediary activity has previously been subject to European Court of Justice jurisprudence in the Piau20 case. The factual background will not be recounted, but suffice to say that it was born out of a complaint by a French agent who claimed various infringements of EU competition law in relation to an incarnation of FIFA’s Players’ Agents Regulations (PARs). Relevantly, the Court remarked:

The rule-making power claimed by a private organisation like FIFA, whose main statutory purpose is to promote football, is indeed open to question, in the light of the principles common to the Member States on which the European Union is founded. In principle, such regulation, which constitutes policing of an economic activity and touches on fundamental freedoms, falls within the competence of the public authorities...21

FIFA thus assumed a "de facto competence" over the activities of intermediaries, and of immediate relevance, one of the pillars upon which this competence was assumed was the absence of a collective association of players’ agents22. Moreover, it should be recalled in connection with Piau that another pillar upon which this competence was assumed was that the licensing system at issue in the PARs included qualitative measures aimed at encouraging the professionalism and integrity of players’ agents23 - measures that have now been dispensed with.

Beyond Piau, intermediary activity has been the subject of extensive policy consideration by the European Commission24, the essence of such is that regulation of intermediary activity must be informed by good governance principles including respect for EU law; that it shall be developed in dialogue with all representative stakeholders; and ultimately that it should entail accountability and be an "end to practices leading to the effective regulation of sport"25. Most recently, the Takkula Report of the European Parliament stated that it:

[R]epeats its call for the licensing and registration of sports agents, as well as the introduction of a minimum level of qualifications; calls on the Commission to follow-up on the conclusions of its "Study on sports agents in the European Union"26.

 

European implications and the need for broader reform

The key point above is that FIFA’s competence over the regulation of intermediaries has its limitations. Member States could regulate the space; or the EU could, for example, impose its own regulatory regime in order to harmonise the governance of intermediary activity across Member States.

Moreover, the role FIFA does play must still conform to good governance principles. This includes respect for EU law.27 This is not to say where FIFA is in default of its obligations, competence should revert to European and Member State institutions, as this too would prove unwieldy (every Member State would have to implement and enforce its own regulations, even on international transfers28). Nevertheless, in the author’s view it serves to emphasise that there is a part for all stakeholders to play in both the development and implementation of regulatory rules pertaining to intermediaries.

Turning to the role of Intermediaries’ associations in the regulatory process, it is worth noting that the decade post-Piau has seen much development. The principal representative body for Intermediaries in Europe, the European Football Agents Association (EFAA), was formed in 2008 and consists of 15 affiliates at national level, including affiliates in all of the major European leagues29. Whether the EFAA evolves to gain recognition as a sports body by the European Commission sufficient to dispense with FIFA’s regulatory competence by way of some form of self-regulation is another matter. However, with respect to the EU’s good governance principles of "representativeness" and "dialogue", it is argued that Intermediaries’ associations should play an important part of the conversation pertaining to the regulation of the profession30. Whilst Intermediaries were excluded from the process of developing the Regulations with FIFA, good governance principles have underpinned developments in the Netherlands via the inclusion of all relevant stakeholders in the development of the domestic regulatory regime.

Indeed, it was noted before that the Dutch process was arrived at by way of a type of ‘informal social dialogue’ (collective bargaining). In this regard, it is worth recalling that there is a formal structured social dialogue process in professional football at EU level.31 The author is of the view that, given the existing structure of this, whereby UEFA (a non traditional social partner) chairs the social dialogue committee, is sufficiently flexible to deal with the issue of intermediaries. Indeed, this has been specifically acknowledged in Commission documentation32, as has social dialogue’s broader importance in sporting good governance.33 Moreover, it has been opined that sporting regulatory processes arrived at through social dialogue may be more robust in withstanding any legal challenge.34

What is clear to the author is that something must be done to improve the current situation and to promote more consistency, and higher standards of integrity, to intermediary activity across Europe. As was aptly put recently:

“After twenty months [from a January 2017 publication] from the entry into force of the new regulations, there is growing consensus among the football stakeholders for further measures…[…] [L]egal issues should be more harmonised to give at least a minimum of overall consistency to the entire system for the sake of the players’ and clubs’ rights and expectations […].”35

Whilst the Dutch certification system is a positive and important starting point, in the authors’ view it would be desirable for other Member Associations to follow suit in implementing regulatory systems along the same or similar lines, which comply with the good governance principles discussed above.

In this regard, there are some encouraging recent initiatives. The EFAA is working with its affiliates and other stakeholders in the EU to explore the possibility of transplanting the fundamentals of the Dutch certification process into other Member Associtations, and considering how this could effectively be coordinated across member states. More broadly, it is welcome news that the European Commission has made a grant under its Erasmus+ program to a team led by Professor Richard Parrish of the Centre for Sports Law Research to investigate the implementation of the Regulations across all EU Member States, with reference to good governance based solutions.36

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1FIFA, Regulations on Working With Intermediaries, 2015; See Definitions – an intermediary is “natural or legal person who, for a fee or free of charge, represents players and/or clubs in negotiations with a view to concluding an empLoyment contract or represents clubs in negotiations with a view to concluding a transfer agreement”.

2† ‘Marotta wants end to greedy agents’, Football Italia, 19 June 2017, last accessed 10 Oct 2017, https://www.football-italia.net/104375/marotta-wants-end-greedy-agents

3† R Smith, ‘The Owner Brought the Money. The Agent Delivered the Players. Now What’, The New York Times, 4 August 2017, last accessed 10 October 2017,- https://www.nytimes.com/2017/08/04/sports/soccer/wolverhampton-jorge-mendes.html

4† A Duff and T Panja , Football’s Secret Trade: How the Player Transfer Market Was Infiltrated, Bloomberg

5: UK, 2017, pg 137 – 151.† J Jackson, ‘Football insiders claim world game is ‘endemically corrupt’ in player transfers’, The Guardian, 9 October 2016, last accessed 10 Oct 2017, https://www.theguardian.com/football/2016/oct/09/world-football-endemically-corrupt-player-transfers-agents

6† ‘FIFA on third-party ownership: System more difficult to be abused’, ESPN, 30 September 2016 – available online at https://www.espnfc.com/blog/fifa/243/post/2962736/fifa-on-third-party-ownership-the-system-has-become-more-difficult-to-be-abused-because

7† Such as licensing, exams, and the dispensation of FIFA’s oversight of agent activity to Member Associations (MAs) with variable capacities to regulate this issue , see -N De Marco, ‘Corruption in football – player transfers, agents and the “privatisation of regulation”’, Sports Law Bulletin, 4 July 2017, last accessed 10 oct 2017 https://www.sportslawbulletin.org/corruption-football-player-transfers-agents-and-privatisation-regulation/

8† ‘Reglement Intermediairs’ - For a comprehensive overview see D Koolard, ‘The Implantation of the FIFA Regulations in the Netherlands’, p 357 – 380 in ‘The FIFA Regulations on Working With Intermediaries – Implementation at National Level (2 nd ed)’, International Sports Law and Policy Bulletin: Sports Law and Policy Centre, Salerno, 2016 .

9† D Lowen, ‘A Guide to the FA’s Regulations on Working With Intermediaries’, LawInSport, 17 February 2015, last accessed 10 Oct 2017, available online - https://www.lawinsport.com/articles/item/a-guide-to-the-fa-s-regulations-on-working-with-intermediaries

10† ProAgent hompage, https://www.pro-agent.nl/ (last accessed 10 Oct 2017)

11† ‘KNVB Launches approval mark for intermediaries’ https://www.knvb.nl/nieuws/organisatie/berichten/26580/knvb-lanceert-keurmerk-voor-intermediairs (The label also applies to Dutch players’ unions, but that is beyond the scope of this discussion.)

12† KNVB Good Standing and Character tests for Intermediaries, https://www.knvb.nl/themas/reglementen-en-besluiten/intermediairs (last accessed 10 Oct 2017)

13† For details of the Criterea, please see here: www.pro-agent.nl (last accessed 10 october 2017)

14† Note: there is the possibility for other organisations to be created if they meet the KNVB criteria for certification. Currently no other bodies are looking for certification. There has to be a minimum number of 25 connected agents, which is difficult to obtain in the market.

15† See Footnote 11

16† See Footnote 11

17† ‘[Translated from Dutch] KNVB warns against dubious player agents’, NOS, 19 September 2016 – available online at - https://nos.nl/nieuwsuur/artikel/2133190-knvb-waarschuwt-voor-dubieuze-spelersmakelaars.html

18† S James, ‘Tapping up remains rife in football with little appetite for change among clubs’, The Guardian, 28 June 2017, last accessed 10 October 2017, https://www.theguardian.com/football/2017/jun/28/tapping-up-part-of-game-stoke-chairman-peter-coates

19† M Colucci (ed), The FIFA Regulations on Working With Intermediaries – Implementation at National Level, (Sports Law and Policy Centre, Italy, 2 nd edition), 2016, pg 610.

20† Case T-193/02 Piau v Commission of the European Communities [2005], https://publications.europa.eu/resource/cellar/1bca14b6-3058-4d2b-9525-ae2e15fb525b.0002.02/DOC_1

21† Case T-193/02 Piau v Commission of the European Communities [2005], para 78.

22† Ibid at para 102-105.

23† Ibid at para. 102-105.

24† See European Union White Paper on Sport (2007) – (Section 4.4); Study on Sports Agents in the European Union (A study commissioned by the European Commission Directorate General for Education and Culture) (2009); Communication on Sport - Developing the European Dimension in Sport (2011), (Sections 1.2, 4.4, and 4.6).; EU Work Plan for Sport – Expert Group “Good Governance” – Deliverable 2 – Principles of Good Governance in sport (2013), (Section 3(a)); EU Work Plan for Sport (2011-14) – Expert Group “Good Governance” – Deliverable 3 – Supervision of sports agents and transfers of players, notably young players (2013), (Numbers 1 –6); EU Work Plan for Sport (2014-17) – focus on ‘the integrity of sport, in particular… protection of minors, good governance…’ (para.11).

25† Expert Group “Good Governance” – Deliverable 3 – Supervision of sports agents and transfers of players, notably young players (2013).

26† European Parliament Report on an Integrated Approach to Sport Policy: Good Governance, Accessibility and Integrity (“Takkula Report), 12 December 2016,(2016/2143(INI), Number 42

27† On which point it should be noted that aspects of its implementation have been successfully challenged before courts in Germany. See: A Duval and K Mekenkamp, ‘De- or Re-regulating the middlemen? The DFB’s regulation of intermediaries under EU law scrutiny at the OLG Frankfurt’,Asser International Sports Law Blog, 6 October 2016 – available online at - https://www.asser.nl/SportsLaw/Blog/post/de-or-re- regulating-the-middlemen-the-dfb- s-regulation-of-ntermediaries-under-eu-law-scrutiny-at-the-olg-frankfurt-by-antoine-duval-andkestermekenkamp

28† A Duval and K Mekenkamp, above, note 24.

29† https://www.eufootballagents.com/members/

30† EU Work Plan for Sport – Expert Group “Good Governance” – Deliverable 2 – Principles of Good Governance in sport (2013), ‘Stakeholder Identification and Roles’, pg 7.

31† ‘ Sectoral social dialogue - Professional football’ , ec.europa.eu, last accessed 10 Oct 2017, https://ec.europa.eu/social/main.jsp?catId=480&intPageId=1848&langId=en

32† Expert Group “Good Governance” – Deliverable 3 – Supervision of sports agents and transfers of players, notably young players (2013), pg 3-4

33† European Parliament, “An integrated approach to Sport. Policy: good governance, accessibility and integrity (2016/2143(INI))”. Brussels 10/11/2016, para 41

34† L O’Leary, Employment and Labour Relations Law in the Premier League, NBA and International Rugby Union, Springer, Amsterdam: 2016, pg 147

35† M Colucci, above, p 612.

36† ‘Promoting and Supporting Good Governance in the European Football Agents Industry’, europa.eu, last accessed 10 Oct 2017, https://ec.europa.eu/programmes/erasmus-plus/projects/eplus-project-details/#project/fafc111f-ae4a-4660-9c74-47be482c43b2

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Author

Roberto Carlos Branco Martins

Roberto Carlos Branco Martins

Roberto is a Partner at Branco Martins Law & Consultancy. The firm has a track record of almost 20 years in the professional sports industry.

Matthew Graham

Matthew Graham

Matthew is an Amsterdam based, Australian sports law consultant. Holding a Master's of International Labour Law he focuses on industrial relations and regulatory issues in sport and has recently been engaged by the Centre for Sports Law Research, the University of Amsterdam, and a boutique sports law firm where he focuses on litigation and dispute resolution.