Sports agents take note – ‘companies’ cannot represent clients, players and clubs
Published 02 January 2013 By: Matthew Chantler
We have recently met with a number of sports agents who are disputing outstanding agency fees with players and clubs. In the majority of cases the problem has been rooted with the composition of the contract and in some cases the agents have named their company as party to the contract or have stated that they are signing “on behalf of the company”.
FIFA Players' Agents Regulations 2008
Before 2008 the FIFA Players' Agents Regulations allowed companies to bring proceedings before FIFA and the Court of Arbitration for Sport (CAS). However, the regulations were changed in 2008 and maintained that the procedures for resolving disputes involving players' agents were found in the FIFA Rules Governing the Procedures of the Players' Status Committee and the Dispute Resolution Chamber (the "Rules"). The Rules (edition 2008 and 2010) state, "Parties are members of FIFA, clubs, players, coaches or licensed match and players' agents". The rules provide a detailed list of those who can be considered a "party" and state that companies are not listed.
The Regulations also state that a company cannot be a "licensed players' agent" because "a licensed players' agent's activity may only be carried out by natural persons whose license is strictly personal and non-transferable."
What does this mean?
A company operated by a players' agent cannot look to FIFA or CAS for redress should an agency fee remain outstanding, as they would have no standing to bring a case before FIFA or CAS.
What should I do if I run my agency via a limited company?
Never enter into contracts "on behalf of the company". To maintain your opportunity to pursue a claim before FIFA or CAS it is essential that you personally enter into the contract with the player or club.
Can I recover unpaid fees if I have already signed contracts "on behalf of the company"?
If the company has entered into contracts and an agency fee remains outstanding then the company will be able to file its claim before the competent state or municipal court, just not via FIFA or CAS.
The key considerations to bear in mind when drafting contracts are:
- ensure that you are personally a party to the contract;
- avoid words such as "representative of" or "on behalf of" the company;
- use words such as "and" or "along with" so that both you and your company are parties to the contract;
- if you want invoices to go through the company, the remuneration section of the contract should state that the company receives the commission; and
- consider including an arbitral clause submitting any disputes directly to CAS – this clause would enable all the parties to the contract (including your company) to have their case heard in an expeditious manner, in a neutral forum and with the ability to choose at least one member of the decision making body. However, FIFA will not enforce any CAS award if you decide to go direct to the CAS.
FA Registered Agents must use the standard FA Representation Contract for it to be registered under the FA's jurisdiction. However points one to four in the above checklist should still be considered to ensure you do not jeopardise your right, in certain circumstances, to bring a claim at FIFA and/or CAS.
MPH Soccer Management Limited – a claim before the English Courts
In the above case where an agent entered into a contract with a club, the contract said his fee should be sent to the FA who would then forward it onto the agent. In the payment section of the contract, the agent gave his company's bank details for payment. Only part of the fee was transferred to the company's bank account.
The Court maintained that only a natural person could be involved in transfer negotiations under the FA Regulations. An issue therefore arose regarding whether the debt was owed to the agent or whether the agent had assigned the debt to the company.
In light of the FA Regulations the Court said the debt was owed to the agent, however, in providing his company's bank details, the agent had equitably assigned the debt to the company. This means that should the company go into administration, then the payment may need to be made to the company, depending on when payment was due. Further, should the agent leave the company then the fee should also be paid to the company.
This work was written for and first published on LawInSport.com (unless otherwise stated) and the copyright is owned by LawInSport Ltd. Permission is granted to make digital or hard copies of this work (or part, or abstracts, of it) for personal use provided copies are not made or distributed for profit or commercial advantage, and provided that all copies bear this notice and full citation on the first page (which should include the URL, company name (LawInSport), article title, author name, date of the publication and date of use) of any copies made. Copyright for components of this work owned by parties other than LawInSport must be honoured.
Matthew, a solicitor at Mills & Reeve LLP, specialises in Sports Law and is an FA and RFL Registered Lawyer. He advises players' associations including Professional Players Federation, Professional Footballers' Association, PFA Scotland, Rugby Players Association, 1eagu3 and their members, a number of professional football clubs, players and agents on regulatory and legal matters.