Football intermediaries – FIFA TMS Report
Much has been written in the media about ever increasing transfer fees and the role of intermediaries in football. An intermediary (or agent as they are more commonly referred to) is someone who works on behalf of a player or club to negotiate a transfer or employment contract for their client. They can act for a player, the buying club or selling club - sometimes even a combination of the three.
FIFA TMS recently published a report (“TMS Report”) regarding the use of intermediaries in international transfers between January 2013 to November 2017. Whilst it only provided statistics for international transfers, and not domestic ones, it nevertheless made for interesting reading.
Some of the more interesting points were as follows:
- Use of intermediaries (by numbers) - since 2013, there has been a total of 69,505 international transfers worldwide, and ‘only’ 19.7% of those transfers (i.e. 13,672) involved at least one intermediary. Given the (largely negative) media attention that intermediaries receive, it is perhaps surprising to note that only 1 in 5 worldwide international transfers involved the use of intermediaries.
- Use of intermediaries (by countries) - unsurprisingly, English clubs were the most frequent user of intermediaries in incoming transfers, with Italy being the second most – both using intermediaries in roughly a third of all incoming international transfers, and in two thirds of transfers involving a transfer fee. Italy was the most frequent user of selling intermediaries (15.1% of outgoing transfers), followed by Nigeria and Serbia. English selling clubs only used intermediaries 7.2% of the time.
- Transfer fees v. free transfers - whenever a transfer fee was involved (as opposed to a free transfer), the use of intermediaries increased as at least one intermediary was involved almost half the time (47.8%). Interestingly, even in the 3,077 free transfers that occurred since 2013 involving club intermediaries, a total of USD 276 million of commissions were paid to those intermediaries – so there didn’t need to be a transfer fee for an agent to be paid!
- Payments to intermediaries – since 2013, USD 1.59 billion was paid as commission to club intermediaries. 97.2% of that amount was paid by UEFA member affiliated clubs. Clubs from the 'Big 5' nations (England, Italy, Spain, Germany and France) and Portugal accounted for 83.4% of the global spend on commission paid to intermediaries. The TMS Report did not provide any data on commission paid to player intermediaries, or to any intermediaries in domestic transfers.
- Payments to club intermediaries – there were two clear trends which could be observed from payments to club intermediaries. Firstly, commissions paid by buying clubs tended to be higher than those paid by selling clubs. Secondly, when transfer fees were higher, commission (in percentage terms) tended to be lower with less variance. For transfers over USD 5 million, average commission paid by both buying and selling clubs was 7%, with the vast majority being below 10% and only a handful exceeding 20%. When the transfer fee involved was less than USD 1 million, the rate of commission fluctuated wildly – ranging from an average of 27.3% for buying clubs and 15% for selling clubs, to sometimes largely exceeding 100% of the transfer fee.
- The age of players – players under 18 used intermediaries in 17.6% of their international transfers, but that figure dropped to 15.2% for players aged 18 to 25, then 14.5% for players aged between 26 to 32 and finally 10.9% for players over the age of 33. It’s important to note that since the introduction of FIFA’s regulations on working with intermediaries in 2015 ("FIFA Regulations"), it is prohibited for intermediaries to be paid commission in relation to players under 18. Nonetheless, age appears to be one factor influencing the use of intermediaries by players.
- Use of intermediaries by all parties in a transfer - interestingly, only in 166 transfers did all three parties (i.e. the player, the buying club and the selling club) have an intermediary representing them.
The role of intermediaries in football is frequently in the spotlight. FIFA’s decision to deregulate the industry in 2015 was controversial to say the least. Whilst the pros and cons of FIFA’s decision is outside the scope of this blog post, it is interesting to note the recent development in Italy (the second highest user of intermediaries as noted above) in this area.
A series of legal challenges and a campaign to bring about a ‘proper’ regulatory and licensing system for agents/intermediaries lead to the establishment by the Italian National Olympic Committee of a national register of sports agents. This appears to go much further than the minimum required standards in the FIFA Regulations. For more on this development, read this update by Nick De Marco of Blackstone Chambers.
Given the broad discontent regarding the impact of FIFA’s deregulation of the industry, it remains to be seen whether The FA - and other major footballing nations for that matter – takes similar steps to increase regulation in this area.