Ahead of the new season and in anticipation of the extended 2020 summer transfer window, we take a look at representation contracts between FA Registered Intermediaries (“Registered Intermediaries”) and Players (commonly referred to as “Rep Contracts”).
We consider the key regulatory and commercial considerations surrounding such contractual relationships and some potential additions to Rep Contracts that parties ought to consider, in order to safeguard their interests as much as possible, in what is an increasingly competitive marketplace. It goes without saying that Rep Contracts should be taken very seriously by both Registered Intermediaries (and their agencies) and Players as, ultimately, the Rep Contract sets out the terms which govern the contractual relationship between a Registered Intermediary (or agency) and the Player.
When drafted correctly and terms are adhered to, Rep Contracts can be a Registered Intermediary’s best friend. On the other hand, if a Rep Contract is insufficient in defining and safeguarding the rights of the parties, or if the terms are not adhered to, then they can be a Registered Intermediary’s ‘Achilles’ heel’ – particularly in a scenario where a Player may be looking to end the relationship with a Registered Intermediary.
The FA Standard Representation Contract
Under the FA Regulations on Working with Intermediaries (the “Regulations”), Registered Intermediaries are required to use Rep Contracts containing, as a minimum, all obligatory terms of the relevant FA Standard Representation Contracts (the “FA SRC”) when conducting Intermediary Activity on behalf of a Player (and essentially when conducting a Transaction as defined in the Regulations). The FA SRC can be found here.
Whilst the FA SRC contains the fundamental terms which govern a basic Registered Intermediary – Player relationship, there are some obvious omissions which the more sophisticated Registered Intermediaries and agencies will want to include. By way of example, the FA SRC does not address, or cover as comprehensively as it could, the following issues (which is not an exhaustive list):
- Wider express payment entitlements (e.g. connected to other unconditional payments due to the Player in addition to basic wage);
- Services provided and payment for activities relating to commercial services (e.g. procuring and negotiating, on behalf of the Player, a commercial contract with a boot manufacturer or sponsor);
- Relationships with a Player’s image rights company;
- Express obligations and duties on the Player concerning their performance under the Rep Contract (including the supporting of and assigning of claims against any third parties);
- Data protection including the General Data Protection Regulation and the Data Protection Act 2018 (including provision for use of a Player’s personal data and the appropriate consents);
- Enhanced warranties and obligations on the Player in respect of fees earned during the life of a relevant playing contract; and
- Wider express post termination rights and obligations (e.g. entitlement to remuneration crystallised during the currency of the Rep Contract but which does not fall due until after termination/expiry of the Rep Contract and protection against any third party occurrence which attempts to extinguish that entitlement (e.g. signing of a new playing contract which cuts across an existing agreement and/or tripartite agreement with a club)).
What should Registered Intermediaries and agencies consider adding to the FA SRC?
Recitals and Definitions: We recommend that a recitals and definitions section be inserted into the Rep Contract in order to clearly position the parties’ pre contractual status (including reference to any parent/guardian permissions that may need to be sought in accordance with Regulation B.8 (Registered Intermediaries should take note that Regulation B.8 has been updated for the 2020/2021 season effective immediately) and to ensure clarity throughout the agreements. Bearing in mind other amendments to the Regulations (most notably, notifying a Player of an “Offer” under Regulation A.8.1 and providing a Player with an Annual Return in accordance with Regulation C.12) and a Registered Intermediary’s obligations thereunder, a Recitals section provides an opportunity to clearly set out and acknowledge that the Player has confirmed the form and manner of communication in which they wish to receive all notices and information.
Remuneration/Payment: The FA SRC fails to provide a comprehensive platform upon which the parties can address this important issue. We recommend that the method under which remuneration for the agreed services (in respect of player and commercial related activities) shall be paid, should be specifically detailed in the Rep Contract. Furthermore, the terms of how the Rep Contract will align with a Player’s contract of employment and club, who in-turn may be responsible for discharging the Player’s liability to pay any commission owed, should be clearly specified.
Image Rights: Image Rights are not specifically addressed in the FA SRC and, in the event that a Player has incorporated a limited company through which to market and commercially exploit their brand, reputation and ‘image rights’ then, we recommend that a Registered Intermediary addresses the relationship between the Registered Intermediary and the limited company and the role that the Player should play in procuring that relationship. After all, if the Player has assigned commercial rights to a separate corporate entity then Registered Intermediaries need to ensure that they actually have authority to market such rights.
Minors: Notwithstanding the specific Regulations that apply when contracting with Minors (particularly those discussed above), we recommend that it is wise to expand upon The FA’s one-liner; “No remuneration will be due to the intermediary while the Player remains a Minor.” Whilst this is unquestionably clear, the pragmatic approach would involve including specific terms regarding what will happen when a Player is no longer a Minor, and when and how any payment can then be received by the Registered Intermediary.
Exclusivity: Is a fundamental commodity, highly sought after by Registered Intermediaries and one which the FA SRC deals with by way of a simplified tick-box. Needless to say, whilst this method is transparent in terms of ‘exclusive’ and ‘non-exclusive’ there are further defining elements to be considered and incorporated. Most notably, the terms themselves are undefined in respect of rights of and obligations on the parties.
Warranties: Are crucial in explicitly providing protection to both parties, including, confirming that the Registered Intermediary has the capacity to act and has obtained the necessary FA authorisation to do so (including any requisite authorisation to deal with minors). It may also be prudent to ensure that the Player confirms and warrants that they are free to enter into the Rep Contract and that there are no breaches of the Regulations by entering into such contract.
Obligations: Clearly outlining the obligations of the parties is key to a Rep Contract’s success. Obligations act to reaffirm warranties afforded under the Rep Contract. Looking at the interests of the Player, it is important to include a clause which specifies that the Registered Intermediary will act in the best interest of the Player. We also recommend that obligations take into account recent amendments to the Regulations (i.e. an obligation that Registered Intermediaries provide an Annual Return and notify players of an offer). However, if a party insists that an obligation is included in the Rep Contract, then that party (particularly the Registered Intermediary) should ensure that such obligation is discharged.
Termination: The FA SRC fails to address rights or liabilities, accrued during the currency of the Rep Contract, after it is terminated. It is therefore recommended that appropriate post termination rights and obligations are provided for under the Rep Contract.
Data Protection: We recommend that data protection is specifically addressed in Rep Contracts. One relevant area of data protection law is the General Data Protection Regulation (“GDPR”). The GDPR will apply to Registered Intermediaries, whether they are an individual or a company. Under the GDPR, Registered Intermediaries will be required to provide a privacy policy to a Player explaining (amongst other things) what personal data they collect and how and why it is used. Essentially, a data protection clause in a Rep Contract will state that the Registered Intermediary will process a Player’s personal data in accordance with applicable data protection laws.
Disputes: The FA SRC only prescribes one method for dispute resolution which is The FA’s own Rule K Arbitration. We recommend that the disputes clause is expanded in order to cover a scenario whereby the FA does not have jurisdiction to hear a particular dispute. In the event that the FA does not have jurisdiction, parties would want to ensure that the dispute is subsequently referred to the Court of Arbitration for Sport. In the further event that the FA and the Court of Arbitration for Sport have no jurisdiction to hear the dispute then, as a last resort, it is recommended that parties should submit to the exclusive jurisdiction of the courts of England and Wales. A comprehensive disputes clause provides for a clear step by step process which outlines to the parties what happens in the event of a dispute and, crucially, reduces the risks of any ambiguity. This can help remove further complications in the event that the Player is based and registered overseas when a dispute between the parties arises.
Ultimately, the above does not represent an exhaustive list of recommendations or solutions but merely provides an overview of the exposure that Registered Intermediaries face by merely relying upon the FA SRC. Alarm bells should be ringing if you have used or are contemplating using the FA SRC without incorporating the necessary additional detail and protections. The Rep Contract will be the first place to look in the event a Player wants to terminate the relationship with a Registered Intermediary early. We recommend to all of our football agency clients to develop their own bespoke template documents, that are appropriate to them, and to regularly review and refresh them in light of changes in the market and regulations.
Our Sports Team have a number of experts who are able to help ensure Registered Intermediary practices, procedures and standard contracts are compliant with the Regulations as well as affording as much protection and commercial flexibility as possible. We regularly advise all types and sizes of agency operations and can offer fixed fee bespoke contractual audit packages for Intermediaries and agencies wanting to review their standard precedent contracts and to better safeguard their interests in the marketplace.
For more information on the topic please contact Andrew McGregor or Matthew Lavelle.
