*Written by Anithram D.
Introduction
“Money and Agents have made football management harder than ever,” said Sir Alex Ferguson when asked about the current scenario in football. When one of the greatest managers ever in the sport of football comes up with such a claim, there has to be some truth in it. Football is the most popular game on Earth, but it has its share of problems to deal with and the foremost problem being the power exerted by agents in the lives of football players. The news of Silas Katompa Mvumpa being held as a hostage against his own wishes by his agent sent shock waves into the football community and exposed the dirty face of agents. No one could have imagined that such things could happen in European top-flight football.
Such incidents have left a bad taste in the mouth of people about agents, and they are hated everywhere. However, this paper recognizes the positive role played by the agents since the Bosman ruling, which eased the process of a transfer.
On the other hand, the agents claim that they are representing the best interests of their clients and are helping them in every possible way to get the best outcome. Most footballers don’t really get educated about their legal duties and responsibilities and agents help them in this aspect. This article analyses the power of agents and tries to portray them from a moral point of view.
A football agent is a person who represents a player in his contractual negotiations with his employer (I.e., a football club). We might think that agents are relatively new to football, but in reality, agents have been around since the beginning of professional football. Agents have always been controversial figures in the realm of football. Due to their role in player negotiations, agents basically hold the future of footballers in their hands. This results in too much power settling into the hands of agents, and this has made them enemies of the clubs.
Football is the most popular sport in the world[1] and in a commercial sense, it is the most profitable sport in the world. The sport of football has faced a lot of issues, but one of the foremost problems is the power that is in the hands of an agent. When a certain group of people hold power in deciding the future of the sport, it does question the integrity of the sport. This further creates an imbalance in the power structure of the sport, which leaves a lasting effect.
When one of the three players involved in player transfers becomes more powerful than the other two, then this would lead to the exploitation of the other two by the former. This had happened in the past when Clubs had more power in deciding transfers. Now the tables have turned, and agents are enjoying the lion’s share of power over football transfers. The football community claims that this would be detrimental to the sport. Let us look at the circumstances that have led to this occurrence and analyze it.
The Influx of Money into Football
Football has become a different breed these days. Due to technological and economic advancements, a lot of money has been put into the sport in the form of investments and revenue. Today the games are being live telecasted around the world and each league can negotiate deals for telecasting in different geographic locations. This brings in revenue in the form of telecasting/broadcasting rights into the sport.
Earlier, most football clubs were owned by fans. However, that is not the case today. Most modern football clubs are owned by private individuals and investment groups. This has further brought money into the sport in the form of investments. Today, we even have countries owning (indirectly) football clubs.
For example, Manchester City is owned by the City football group; a holding company which further owns a host of football clubs around the world owned by the United Arab Emirates. On the other hand, the French club Paris Saint Germain, for which Lionel Messi plays, is owned by Qatar Sports Investments, which is owned by Qatar. Recently, the English Premier League side Newcastle United was bought for a sum of over 300 million pounds by Saudi Arabia’s Public Investment Fund.
Other than state-owned clubs, there are other clubs which are owned by oligarchs like Chelsea FC, AS Monaco, Cercle Brugge, Vitesse Arnhem, and FC Krasnodar. From this, we can understand that today money is being pumped into the sport on a level that the sport has never seen. This huge influx of money in turn increases net spending on transfers, thus increasing the importance of an agent. In 1996, the record transfer was the transfer of Alan Shearer from Blackburn Rovers to Newcastle United for a fee of 15 million pounds. However, today the record transfer stands at 198 million pounds for the transfer of Neymar from Barcelona to Paris Saint Germain in 2017. Thus, in a span of 21 years, the record had a 13-fold increase.
According to a study by the world governing body FIFA[i][2], the spending on men’s international transfer fees over the last decade increased from $2.66 billion in 2012 to a peak of $7.35 billion in 2019 with $48.5 billion spent overall, in which $3.5 billion was spent in Agent commissions. While net transfer spending had experienced a 3-fold increase, Player agents’ commissions jumped from $131.1 million in 2011 to $641.5 million in 2019, almost a five-fold increase. This study signifies the increasing importance of agents in the sport of football and the role played by them. Increases in agent fees are detrimental to smaller clubs.
The Effect of the Bosman Ruling
As we had seen earlier, transfer spending in sports has been increasing for years. One of the main reasons for this is the Bosman Ruling. The Bosman Ruling is a 1995 European Court of Justice decision concerning the freedom of movement of workers. The case was a landmark event in the history of the sport which had a profound effect on footballers within the European Union.
In the earlier days, when a player’s contract ended and if the player wished to move to another club, the second club had to pay an amount as a transfer fee to the parent club. This was an unfair practice because the player had already fulfilled his contract with the parent club. This practice was challenged by a Belgian player named Jean-Marc Bosman.
Jean-Marc Bosman played for RFC Liege in the Belgian first division and his contract with the club expired in 1990. He wished to move to a French club named Dunkerke. RFC Liege’s asking fee was high and Dunkerke refused to pay it, and thus Liege refused to release Bosman and reduced his wages by 70%[4]. Thus, Bosman took his case to the European Court of Justice and sued RFC Liege, the Belgian Football Association and UEFA for restraint of trade.
The court held that the existing system was violating the free movement of workers and that the players were given the right to free transfers at the expiration of their contracts. In a way, this ruling gave more power to the agents. When a club wishes to buy the services of a player employed by another club, the first club has to pay an amount as compensation for the parent club to buy the services of the player. This amount is usually large. However, if the player moves on a free transfer, the new club spends a smaller amount in the form of signing bonuses and agent fees and thus manages to save a lot of money. This is a win-win situation for all parties. On the other hand, the parent club loses the player for free. So, in order to avoid such a circumstance, the parent club would start contract extension negotiations with the player's agent as soon as the player’s contract nears expiry. The agent is influential here because he can advise the player to extend or exit. In both scenarios, the agent earns his share of the money.
Power of Agents
The success of the Bosman Ruling led to the increase in player wages and the development of modern super agents. The Bosman Ruling paired with the influx of money made the job of an agent rather profitable. This made a lot of people start their careers as football agents. In some ways, they have become very powerful in the sport. This is because they ultimately decide where the top players will end up.
The problem arises when the interests of the player and the agent or not aligned. The aim of any footballer is to perform better and move to a better club and earn more money. The more the number of transfers/extensions a player has, the more the agent could earn. A lot of kids dream of achieving big in football and moving to various academies. The agents sign these players at a young age and this gives them leverage over the player. When the player becomes famous and makes a move to a bigger club, the agent would earn a fortune.
The Story of Silas
The agent’s leverage over the player could lead to detrimental situations for the player. One such incident occurred to Silas Katompa Mvumpa. Two years ago, Silas broke into the footballing world as a talented youngster in Germany. He played as a winger for VfB Stuttgart and managed to grab the attention of football fans all over the world with his performances. However, Silas later revealed the tragic story behind his success. Silas is from the Democratic Republic of Congo and he had a trial with the Belgian Club Anderlecht. His agent then forced him to move to Paris. In Paris, his agent changed Silas’ identity to Silas Wamangituka and his date of birth. He made Silas stay with him and he pressured Silas to join Paris FC. Later Silas’ performances earned him a move to the then-German 2nd division team VfB Stuttgart. He played an important role in their promotion to the first division and later gained the confidence to move away from his agent and he came clean. The German Football Association i.e., the DFB suspended him for a period of 3 months and his agent was charged.
This is not the first incident where an agent exploited a young player. Kenyan international footballer Omolo said to DW[5], that a lot of agents have targeted hundreds of young footballers in Africa. Due to their lack of legal knowledge, they fall into this trap and are exploited. Omolo has established a foundation to assist African youth in becoming professional footballers.
Impact of agents in football
On the other hand, these agents are also responsible for the inflation in football transfers. Earlier we had seen that the commission fees for agents have increased five-fold. Other than commission fees, agents also earn a considerable amount of money for representing players. According to a report by CIES (Centre international d’etude du sport)[6], the yearly turnover of football agents is above 400 million Euros in Europe alone. The work of super agents like Jorge Mendes, Mino Raiola, and Pini Zahavi has contributed to inflation in football transfers. Before the transfer of Neymar from Barcelona to Paris Saint Germain in 2017, there were fewer transfers crossing the 100 million mark. However, transfer fees have skyrocketed since Neymar’s transfer and we have seen multiple 100 million+ transfers. It is worth noting that Pini Zahavi was responsible for the Neymar transfer.
Mino Raiola demanded 15 million pounds as an agent fee for Erling Haaland’s transfer.
This inflation is not sustainable by any means. We can see a glimpse of it during the pandemic when clubs were finding it difficult to stay afloat due to the loss of ticket sales. The pandemic stopped fan-owned clubs like Bayern München and Real Madrid from spending much on transfers, it was not able to prevent billionaire-owned clubs like Chelsea, Paris Saint Germain, Manchester City and Manchester United from splashing the cash on the transfer market.
If this inflation continues, then in the future, the top players would be traded only between the aforementioned rich clubs and the gap between them and the rest of the clubs would increase further. This would essentially monopolize the sport, thus destroying the competition in it.
The Positive Side of Agents
So, what can we do? Can we take them out of the game and conduct auctions/drafts like the IPL? Even though the agents are ruining the game, we can’t simply take them out of the game. That move would tilt the board in favour of the club and it would be detrimental to the players. As we have seen earlier, a lot of footballers join football clubs at a younger age and they don’t get quality education. They don’t have any legal knowledge and this makes them vulnerable against the clubs. One of the major examples of this is the English Premier League side Chelsea FC. Chelsea is known for their youth academy. However, unlike other clubs, Chelsea is known for having a ‘loan army’. The promising youngsters sign long-term contracts with the club, thus tying them with the club for a longer period. Then the club proceeds to send the players on a loan spell to various clubs. Most of these players would never make an appearance for Chelsea, however, they sign long-term contracts in hopes of doing so. The club also doesn’t allow a player to feature in a club for a longer span of time. When Michy Batshuayi was loaned to Dortmund, he became an instant success at Signal Iduna Park where he successfully replaced Pierre Emerick Aubameyang. However, this didn’t stop Chelsea from loaning him again to a different club.
Thus, an agentless system would lead to the exploitation of players at the hands of the clubs. Even though the work of agents is ruining football, the agents are just performing their work i.e., to represent the best interests of the player. If a player wishes to move to a different club, he might not have the means to do it. An agent on the other hand has a lot of ties and networks. This allows the client to move to their desired location.
For example, players like Radamel Falcao and James Rodriguez were playing in the Colombian first division. It was Jorge Mendes who brought them to Europe and made their careers. Jorge even helped James to join Real Madrid of all clubs. Without Jorge, he would have not had this career.
From this, we can understand that agents are the necessary evils in the system of checks and balances that is required for the proper functioning of the game.
Solution
So, we can see that the system is rigged, and inflation would lead to the collapse of the game. We can’t remove agents from the equation. So, what can we do to save the beautiful game?
FIFA plans to do so by implementing stricter regulations over the profession of intermediaries. Earlier in 2008, FIFA introduced a licensing regime under which the agents were required to get registered. However, this was not successful as the majority of the agents continued to operate without registration. Thus, in 2015 FIFA introduced new regulations which abolished the earlier regime created by the 2008 regulations. The 2015 regulations set some minimum standards required for the job and delegated the job of implementing it to the national associations. However, this delegation proved to be a mistake since the standard of rules differed from association to association. While some associations had stricter norms and good quality, other associations had bare minimum standards and thus poor quality. This also resulted in divergent levels of commissions.
Thus, this made FIFA make a U-turn and in 2021, FIFA proposed to bring new reforms into the profession. These new regulations included caps on commissions earned by agents in player transfers. The new regulations intend to set caps where the agent can earn only a certain percentage of the transfer fee.
At first, this might seem like a good move, but it ignores the plight of the majority of agents. Under the proposed regulations, the super agents could still earn a hefty sum of money due to the astonishing sums earned by the players. However, not all agents earn such an amount of money. Most of these high-budget players are managed by a small group of agents. Outside this group, there are other agents who represent the players from 2nd and lower divisions, leagues outside the top 5, etc. If we implement this proportional system, then the revenue of these agents would become relatively small, and this would be bad for the sport.
Due to the differences in earnings of the agents, a universal cap as proposed by FIFA would be detrimental to the sport by pushing the smaller agents out of competition. This would leave the big ones in the sport which is contradictory to the aim of the regulations.
If FIFA plans to implement a licensing regime again, it should make sure that it overcomes the shortcomings of the 2008,2015 regulations. FIFA and UEFA must consider bringing in stricter FFP norms, which would prevent clubs like Paris Saint Germain, and Manchester City from monopolizing the transfer market through their financial might.
Another way of curbing inflation and the financial disparity is by implementing a wage cap system. This wage cap system must be in proportion to that the financial capacity of the club. If implemented universally, the system would essentially limit the net transfer spending of clubs, thus limiting the importance of agents.
The wage cap system curbs unaccountable spending by the clubs. For example, earlier Barcelona used to dish out lavish salaries to their players. Now with La Liga implementing a wage cap system, they’re forced to trim their budget and spend their money in a resourceful manner.
The point that needs to be stressed on is the ‘universal implementation’ of rules. This would also close the loopholes in the current system. One of the new regulations proposed by FIFA also promotes transparency in terms of transfer spending which is a welcome move.
Conclusion
In the end, we can conclude that the agents are ruining the beautiful game. However, they are the necessary evils required for the effective functioning of the game. However, this doesn’t mean that the governing bodies should refrain from acting upon agents. It is proven that the current system is rigged, thus the governing bodies must come together and bring forth a universal system which brings transparency and imposes regulations on agents in a uniform manner.
*The author is a law scholar from School of Excellence in Law, Chennai, India
(The image used here is for representative purposes only)
References:
[1] Most Popular Sports in the World – (1930/2020), statisticsanddata.org [2] International transfer spending triples in last decade, reaches $48.5 bn overall – FIFA, espn.com [3] Money and agents have made football management harder than ever, says Sir Alex, www.dailymail.co.uk
[4] Ask, Mathis (2 July 2014). “Bosman Still Struggling With Ruling That Rewards Soccer’s Free Agents”, The Wall Street Journal.
[5] Stuttgart striker Silas Wamangituka reveals true identity. (08/06/2021), dw.com
[6] Raffaele Poli and Giambattista Rossi, Football Agents in the Biggest Five European Football Markets: Am Empirical Research Report, www.football-observatory.com/IMG/pdf/report_agents_2012-2.pdf.