As you may know, new rules come into place after the end of the current transfer window. The key changes are as follows:
Firstly, this is the last transfer window for agents to make a serious killing, so agent fees will be an issue on all major transfers this summer.
Secondly, the licencing scheme is likely to end the situation where parents are their kids’ agents. However, it probably won’t make a huge difference in practice. At present, most parents are unqualified to execute a deal, so they’ll be paying an agent / lawyer to do that and taking the rest of the fee for themselves. This relationship will just flip – the agent / lawyer will be singing the paperwork and take the 6% fee, but they won’t get appointed unless they agree to compensate the parents. In practice, this is likely to be more problematic as those payments will be made off the books, whereas at present the tax authorities can track the income parents earn more easily.
With regards to fees, the 6% cap (6% of the guaranteed wages under the player’s contract, not including performance bonuses) will be a reduction in the fees currently being paid. So clubs will end up sorting the agents out some other way.
For example, at present it is pretty rare to involve an agent on a sale; this will happen more often – the agents will get fees on sales they’ve had nothing to do with to compensate for the reduced fees on the purchases they were involved with. This is going to lead to tax issues in the UK - at present, if the agent gets 10%, 5% of that is taxable as a benefit to the player. Fees on sales are tax deductible. So if the agent gets 6% on a purchase and the extra 4% as a cut of a sale, only 3% would be taxed. The authorities will need to argue that half of the sale commission should be taxed too as it is disguised remuneration. That'll get messy.
On a contract renewal, the fee is normally calculated on the additional wages, but clubs and agents will argue to calculate on everything (e.g. if a deal has 2 years to run and a new 5-year deal is agreed, commission will be on all 5 years, not just the extra 3 as at present).
And just to clarify on sales, it is not unusual to pay a commission to an agent who goes out and finds a club for an unwanted player, but if a player in demand is sold there is rarely a commission payable. Commission on sales will become standard, and you may even see multiple agents getting a small cut of each big sale, essentially making up what they didn’t get paid when their players were signed to the selling club.
Alternatively / in addition, I'd expect to see wages go up more than they would have done. In practice, a lot of the agent’s fee gets spent on the player / his mates/family anyway. Girl needs paying off? Agent will sort it. Lavish birthday bash, send the bill to the agent. If the agent isn’t getting paid for that stuff he’ll negotiate a higher wage for the player to pay it himself. And, double bonus, the agent gets 6% of that extra wage. Result!
And will there be other “consultancy fees” paid to player agents for spurious services? Hell yeah. That happens already.
- Football agents must be licenced, and pass an entrance exam to register.
- Fees will be restricted – for major acquisitions, the commission is restricted to 3% of guaranteed wages from both the club and the player (or 6% combined for a dual-representation contract). For sales, the commission will be limited to 10% of the transfer fee received.
Firstly, this is the last transfer window for agents to make a serious killing, so agent fees will be an issue on all major transfers this summer.
Secondly, the licencing scheme is likely to end the situation where parents are their kids’ agents. However, it probably won’t make a huge difference in practice. At present, most parents are unqualified to execute a deal, so they’ll be paying an agent / lawyer to do that and taking the rest of the fee for themselves. This relationship will just flip – the agent / lawyer will be singing the paperwork and take the 6% fee, but they won’t get appointed unless they agree to compensate the parents. In practice, this is likely to be more problematic as those payments will be made off the books, whereas at present the tax authorities can track the income parents earn more easily.
With regards to fees, the 6% cap (6% of the guaranteed wages under the player’s contract, not including performance bonuses) will be a reduction in the fees currently being paid. So clubs will end up sorting the agents out some other way.
For example, at present it is pretty rare to involve an agent on a sale; this will happen more often – the agents will get fees on sales they’ve had nothing to do with to compensate for the reduced fees on the purchases they were involved with. This is going to lead to tax issues in the UK - at present, if the agent gets 10%, 5% of that is taxable as a benefit to the player. Fees on sales are tax deductible. So if the agent gets 6% on a purchase and the extra 4% as a cut of a sale, only 3% would be taxed. The authorities will need to argue that half of the sale commission should be taxed too as it is disguised remuneration. That'll get messy.
On a contract renewal, the fee is normally calculated on the additional wages, but clubs and agents will argue to calculate on everything (e.g. if a deal has 2 years to run and a new 5-year deal is agreed, commission will be on all 5 years, not just the extra 3 as at present).
And just to clarify on sales, it is not unusual to pay a commission to an agent who goes out and finds a club for an unwanted player, but if a player in demand is sold there is rarely a commission payable. Commission on sales will become standard, and you may even see multiple agents getting a small cut of each big sale, essentially making up what they didn’t get paid when their players were signed to the selling club.
Alternatively / in addition, I'd expect to see wages go up more than they would have done. In practice, a lot of the agent’s fee gets spent on the player / his mates/family anyway. Girl needs paying off? Agent will sort it. Lavish birthday bash, send the bill to the agent. If the agent isn’t getting paid for that stuff he’ll negotiate a higher wage for the player to pay it himself. And, double bonus, the agent gets 6% of that extra wage. Result!
And will there be other “consultancy fees” paid to player agents for spurious services? Hell yeah. That happens already.
