- Oct 7, 2023
- 12 min read

Sports Agencies in India: A Legal Overview

*Written by Diya Mukherjee

Introduction

India's growing significance in the world of sports has precipitated a burgeoning demand for professional sports management services. Sports agencies, acting as intermediaries between athletes and the intricate world of contracts, sponsorships, and endorsements, play a pivotal role. This essay provides a legal perspective on sports agencies in India, underscoring their significance and addressing pertinent challenges.

Functions of Sports Agencies

Contract Negotiations: Sports agencies engage in the negotiation of contracts for athletes with sports teams, clubs, or leagues. These contracts encompass critical aspects such as salary, duration, performance incentives, and termination clauses.

Legal Basis: The Indian Contract Act, 1872 governs the formation, validity, and enforceability of these contracts. Relevant articles include:

Section 2(e) of the Indian Contract Act defines an agreement as every promise and every set of promises forming consideration for each other.
Section 10 specifies that all agreements are contracts if they are made by the free consent of parties, for a lawful consideration and lawful object.
Section 23 of the act declares agreements that are opposed to public policy as void.
Section 24 mentions that any agreement, the meaning of which is uncertain or capable of leading to uncertainty, is void.
Section 27 talks about agreements in restraint of trade and profession, and it lays down certain conditions under which such agreements may be valid.

Case Study: The case of Mohd. Azharuddin v. BCCI (1993) highlighted the importance of contractual obligations in sports, as the dispute revolved around a cricketer's contract with the Board of Control for Cricket in India. The dispute encompassed various contractual terms, including matters related to compensation, sponsorship agreements, and breaches of the code of conduct. This case underscores the importance of legally binding agreements in the context of sports and the potential for disputes to arise when contractual terms are not adequately defined. It also underscores the need for comprehensive representation agreements and clear contractual provisions between athletes and sports agencies.

Endorsements and Sponsorships: Agencies secure lucrative endorsement deals and sponsorships for athletes, aligning them with brands that align with their image and marketability.

Legal Basis: These transactions are regulated by contract law, intellectual property laws, and taxation laws.

Case Study:The collaboration between Virat Kohli, a prominent Indian cricketer, and the global sportswear brand Puma stands as a compelling example of the success of endorsements in India's sports industry. Kohli's association with Puma illustrates the intersection of sports and commerce, where an athlete's marketability, image, and alignment with a brand's values can lead to highly lucrative endorsement deals. This case underscores the role of sports agencies in securing and managing such profitable partnerships and endorsements on behalf of athletes.

Legal and Financial Guidance: Athletes often require legal and financial advice, including taxation, image rights, and compliance with contractual obligations. Sports agencies provide essential support in these areas.

Legal Basis: Taxation laws, corporate law, and intellectual property rights are invoked in these services.

Case Study: The legal and financial advice rendered by agencies was crucial in Sachin Tendulkar's management of his brand and image rights.

Public Relations and Media Management: Maintaining a positive public image is imperative for athletes. Sports agencies aid athletes in managing media relations, social media, and public appearances.

Legal Basis: Media regulations, defamation laws, and privacy laws are invoked in managing the media presence of athletes.

Case Study: Shoaib Akhtar, a former Pakistani cricketer, and Harbhajan Singh, an Indian cricketer, were both involved in separate media controversies during their careers. Akhtar faced criticism for remarks made in his autobiography, raising questions about the potential consequences of athletes' statements on their careers and public image. Harbhajan Singh, on the other hand, was embroiled in a controversy involving a racial slur during a cricket match. These cases highlighted the critical role of media management for athletes. Sports agencies are instrumental in helping athletes navigate media relations, crisis communication, and damage control during such controversies to protect their reputation and career prospects.

Legal Framework

Sports agencies in India operate within a legal framework that comprises various laws and regulations:

Representation Agreements: Sports agencies usually enter into representation agreements with athletes, which delineate the scope of services, compensation, and terms of engagement.

Legal Basis: These agreements are governed by contract law principles under the Indian Contract Act, 1872.

Sports Regulations: National and international sports bodies, such as the BCCI and AIFF, possess rules and regulations governing player-agent relationships.

Legal Basis: These regulations are typically enshrined in the statutes and by-laws of sports governing bodies.

Taxation Laws: Athletes' income from contracts, endorsements, and other sources are subject to taxation, and sports agencies often provide tax planning and compliance services.

Legal Basis: The Income Tax Act, 1961, prescribes the tax treatment of income derived from sports activities.

Intellectual Property: Image rights and trademarks associated with athletes are protected under intellectual property laws. Agencies may need to manage and protect these rights.

Legal Basis: The Trademarks Act, 1999, and Copyright Act, 1957, offer legal protection to the intellectual property associated with athletes.

Challenges and Concerns

Lack of Regulatory Framework: India lacks a comprehensive regulatory framework for sports agencies, leading to issues related to transparency, accountability, and dispute resolution.

Legal Basis: The absence of a dedicated regulatory framework is a challenge in itself.

Conflicts of Interest: Sports agencies often represent multiple athletes, raising concerns about potential conflicts of interest when negotiating with teams, brands, or sponsors.

Legal Basis: The Indian Contract Act's provisions on conflict of interest may be relevant in such cases.

Ethical Concerns: Ethical dilemmas may arise in the representation of athletes, especially concerning issues like performance-enhancing drugs, match-fixing, and personal conduct.

Legal Basis: The Sports Code of the Government of India and ethical standards in contractual agreements help address these concerns.

Litigation Risk: Disputes between athletes and sports agencies can result in litigation, necessitating a nuanced understanding of contract and sports law.

Legal Basis: Legal proceedings are governed by the Code of Civil Procedure, 1908, and the Arbitration and Conciliation Act, 1996.Evolving Landscape:

The sports agency landscape in India is evolving rapidly. Notable trends include:

Emerging Specializations: Agencies are diversifying into specialized areas like esports, which is gaining traction in India.

Legal Basis: These trends necessitate the adaptation of existing legal frameworks to new sports categories.

Globalization: Indian athletes are increasingly seeking representation in international markets, necessitating collaboration with foreign sports agencies and compliance with international sports laws and regulations.

Legal Basis: International sports regulations, such as those laid out by the International Olympic Committee (IOC) and international sports federations, play a significant role in governing cross-border sports representation.

Digital Transformation: The advent of digital platforms and social media has expanded the reach and influence of athletes, requiring sports agencies to adapt to the changing media landscape while complying with data protection and privacy laws.

Legal Basis: The Information Technology Act, 2000, and the Personal Data Protection Bill, when enacted, will be instrumental in regulating digital practices in sports representation.

FIFA Agent Guidelines and Why Does India Need It?

As said earlier, India does not have a solid framework for sports agencies, but is home to various sports federations, associations, leagues, and bodies that govern different sports disciplines. And sports agencies may have to follow the set of rules and regulations laid down by them. For example:

The Board of Control for Cricket in India (BCCI): The BCCI is the governing body for cricket in India. It is responsible for organizing domestic and international cricket matches, tournaments, and events involving Indian teams and players. The BCCI has a Code of Ethics and a Code of Conduct for its members, officials, players, coaches, support staff, umpires, referees, and agents. The BCCI also has an Anti-Corruption Unit (ACU) that monitors and investigates any cases of corruption or malpractice in cricket.
The All India Football Federation (AIFF): The AIFF is the governing body for football in India. It is responsible for organizing domestic and international football matches, tournaments, and events involving Indian teams and players. The AIFF has a Code of Ethics and a Code of Conduct for its members, officials, players, coaches, support staff, referees, and agents. The AIFF also has an Integrity Department that monitors and investigates any cases of match-fixing or betting in football.
The Badminton Association of India (BAI): The BAI is the governing body for badminton in India. It is responsible for organizing domestic and international badminton matches, tournaments, and events involving Indian teams and players. The BAI has a Code of Ethics and a Code of Conduct for its members, officials, players, coaches, support staff, umpires, referees, and agents. The BAI also has an Anti-Doping Committee that conducts tests and imposes sanctions on any players found guilty of doping.

But with respect to the evolving landscape of the sports sector India needs to upgrade itself a bit more. And in this case, India's pursuit of becoming a FIFA Agent and gaining entry into the global football landscape is a notable endeavor. However, this endeavor is subject to compliance with specific rules and regulations established by FIFA. Over time, there have been ongoing discussions and negotiations between FIFA and the Republic of India. India's commitment to this goal is evident.

The FIFA Agent Guidelines, central to this process, hold significance not only for football but also for the broader sports spectrum in India. These guidelines, if adopted and implemented, can have a transformative impact. To understand their potential benefits, it is essential to delve into the essence of FIFA Agent Guidelines and how their application can positively influence not just football but also other sports in India.

The FIFA Agent Guidelines constitute a comprehensive framework of regulations governing the roles and operations of football agents. These guidelines, ratified by the FIFA Council in December 2022, officially took effect on January 9, 2023, with the overarching objective of fostering greater equity and transparency within the football transfer ecosystem. They provide a structured framework for the professional conduct of football agents, who act as representatives and managers for players, coaches, teams, and various other stakeholders in the football industry¹.

The guidelines introduce basic service standards for football agents and their clients, such as:

A mandatory licensing system, which requires agents to pass an exam, pay a fee, and register with FIFA before they can operate as football agents¹.
A prohibition of multiple representation, which prevents agents from representing more than one party in the same transaction, such as both the player and the club, to avoid conflicts of interest¹.
An agent fee cap sets a maximum limit of 10% on the commission agents can collect from their clients, based on the player's salary or transfer fee¹.

Additionally, the guidelines incorporate measures to enhance financial transparency and responsibility, including:

A requirement for agents to disclose all their transactions and fees to FIFA, which will publish them on its website¹.
A creation of a clearing house, which will act as a centralized payment system for all transfers involving agents, ensuring that all parties receive their due payments¹.
The formation of an agents chamber is mandated, serving as a forum for resolving disputes or grievances related to agents. This ensures equitable access to a streamlined and impartial resolution process for all involved parties¹.

These guidelines represent FIFA's commitment to modernizing the football regulatory framework and safeguarding the effective operation of the football transfer system. This system is integral to the global development and promotion of the sport¹.

India stands out as one of the world's most rapidly expanding sports markets, holding significant promise for talent cultivation and commercial prospects. Nevertheless, the Indian sports landscape including that of football, grapples with certain challenges and concerns, including:

A lack of regulation and professionalism in the sports agency business, which exposes players and clubs to exploitation, fraud, and corruption².
A lack of transparency and accountability in the transfer market, which leads to financial losses, contractual disputes, and legal complications².
A lack of education and awareness among players and clubs about their rights and responsibilities in the sports business².

Hence, it is imperative for India to promptly embrace and put into practice the FIFA Agent Guidelines, as they offer a means to tackle these challenges and concerns by:

Establishing essential professional and ethical benchmarks for sports agents in India, guaranteeing their possession of requisite knowledge, competencies, and qualifications to fulfill their roles¹.
Safeguarding the interests and well-being of players and clubs within India, guaranteeing they receive equitable representation, negotiation, and compensation for their services¹.
Elevating the credibility and standing of Indian football and other sports on the world stage, assuring adherence to international best practices and standards within the sports industry¹.

However, the FIFA Agent Guidelines may also face some challenges and issues in their implementation and enforcement in India, such as:

It might come in conflict with some existing laws and regulations in India, such as:

The Competition Act, 2002, which aims to prevent anti-competitive practices and promote fair competition in the market⁴. The cap on agent fees may be seen as a restriction or distortion of competition among agents.
The Consumer Protection Act, 2019, which provides protection and redressal to consumers against unfair trade practices, defective goods, and deficient services⁵. The prohibition of multiple representation may be seen as a limitation or denial of consumer choice and preference.
The Income Tax Act, 1961, which regulates the taxation of income and profits in India⁶. The disclosure of all transactions and fees to FIFA may be seen as a violation or evasion of tax laws and obligations.

It also might encounter some practical difficulties and obstacles in India, such as:

Limited awareness and understanding among players, clubs, and agents concerning the FIFA Agent Guidelines and their advantages². Enhanced education and communication may be necessary to inform and persuade stakeholders to adopt and adhere to the guidelines.
Insufficient cooperation and coordination among pertinent authorities and stakeholders in India, encompassing the central government, state governments, the All India Football Federation (AIFF), the Indian Super League (ISL), the I-League, and the clubs². Encouraging dialogue and collaboration may be essential to harmonize and implement the guidelines effectively.
The inadequacy of infrastructure and resources in India, including the agent platform, clearing house, and agents chamber¹. Increased investment and development may be required to establish and operate these vital systems.

FIFA Agent Guidelines: An International Perspective and Lessons for India

The foundation of the FIFA Agent Guidelines rests upon globally recognized best practices and standards within the football industry. These norms have evolved and garnered acceptance in numerous countries and regions worldwide, including prominent examples such as:

The European Union (EU), which has enacted a series of directives and regulations pertaining to sports agents. These directives and regulations encompass aspects such as:

The Directive 2005/36/EC on the recognition of professional qualifications, which facilitates the free movement of sports agents within the EU by establishing a common framework for their recognition⁷.

The Regulation (EU) 2019/1150 on promoting fairness and transparency for business users of online intermediation services, which applies to online platforms that connect sports agents with players or clubs, such as Transfermarkt or Goal.com.

In the United Kingdom (UK), several legislative measures and regulations govern the activities of sports agents. These include:

The Bribery Act of 2010, which categorizes any acts of bribery or corruption involving sports agents, players, or clubs as criminal offenses. Breaches of this legislation carry substantial penalties, encompassing the possibility of imprisonment for a maximum of 10 years or the imposition of unrestricted fines.

The Football Association (FA) Regulations pertaining to Collaboration with Intermediaries, which provide a thorough framework delineating the protocols and practices governing football agents' activities within the jurisdiction of England. These regulations offer comprehensive guidance on agent registration, procedural rules, and operational norms. These regulations encompass crucial aspects such as agent registration, fee structures, conflict of interest management, and disciplinary measures.

In the United States of America (USA), a set of laws and regulations have been instituted to regulate sports agents, including:

The Uniform Athlete Agents Act (UAAA), which serves as a model law adopted by 43 states. This law is designed to safeguard student-athletes from unscrupulous or incompetent sports agents. It mandates agent registration, disclosure of information, obtaining informed consent, and educational requirements.

The Sports Agent Responsibility and Trust Act (SPARTA), a federal law that imposes restrictions on sports agents. SPARTA prohibits agents from making false or misleading statements or promises to student-athletes or their families. It also forbids agents from providing any benefits that could potentially jeopardize the eligibility of these student-athletes.

These measures collectively demonstrate the global recognition and adoption of regulations to ensure transparency, integrity, and ethical conduct within the sphere of sports agency, underscoring the international best practices and norms upon which the FIFA Agent Guidelines are built. India can derive valuable insights from these international instances through:

Adopting and adapting the FIFA Agent Guidelines to suit its national context and needs, taking into account its legal system, cultural diversity, and football development¹.
Benchmarking and collaborating with other countries and regions that have similar or advanced experiences and practices in regulating sports agents, such as the EU, the UK, or the USA².
Participating and contributing to the global dialogue and cooperation on sports agent issues, such as through FIFA's consultation process, workshops, seminars, or conferences¹.

Conclusion

Sports agencies in India play a vital role as intermediaries in navigating the complex realm of sports contracts, endorsements, and sponsorships. As India continues to gain prominence on the global sports stage, the significance of these agencies is poised to increase. Collaboration between legal experts, policymakers, and sports governing bodies is essential to address the evolving challenges and opportunities within the dynamic field of sports agency representation in India. This collaborative effort is crucial for ensuring the integrity and success of the nation's athletes on the international stage.

Simultaneously, the FIFA Agent Guidelines represent a pivotal set of rules and regulations governing the profession of football agents. Their primary objective is to infuse fairness and transparency into the football transfer system by establishing essential service standards for both agents and their clients. India's prompt adoption and implementation of these guidelines are imperative, as they have the potential to mitigate challenges within the country's sports industry including football. While these guidelines demonstrate alignment with various facets of the Indian Constitution, their effective application in India may encounter unique hurdles and intricacies.

To further enhance its standing in the global sports landscape, India can draw valuable lessons from international perspectives and examples. Other countries and regions have developed and adopted similar regulations for sports agents, offering a wealth of insights. By doing so, India can bolster its credibility and reputation on the international sports stage, ultimately benefiting its athletes and their sport disciplines as a whole.

*The author is a content writer from India