In recent times, the FA has introduced a number of important changes to its Regulations on Working with Intermediaries (the “Regulations”), which are now in force with immediate effect.
As such, it is imperative that intermediaries (and other personnel involved in an intermediary organisation) get to grips with the latest set of Regulations as soon as possible.
In this article, we take a look some of the key regulatory provisions that intermediaries ought to be aware of and we also assess what impact they will have on an intermediary’s contractual relationship with a player.
The FA Regulations on Working with Intermediaries
In the summer of 2019, The FA introduced a number of important changes to the Regulations which we previously analysed in a separate article which can be accessed here. The most notable changes are:
- Regulation A.8.1 – Notifying a Player of an “Offer”
- Regulation B.8 – Working with and approaching Minors (a Regulation that has been further amended in August 2020)
- Regulation C.12 – Annual Returns.
Notifying a Player of an “Offer”
The introduction of Regulation A.8.1 sees an obligation being placed on registered intermediaries to inform their player clients of any offer(s) that they receive. The Regulations state that intermediaries must provide their clients with the details of any offer, both orally and in writing, as soon as reasonably practicable and, in any event, within 24 hours of receipt of the relevant offer. The FA’s Guidance on the Regulations suggests that, any offer received by an intermediary from a club which sets out the proposed terms of employment (including remuneration and the length of term) shall constitute an “offer”. The FA’s Guidance further provides that written confirmation of an offer may be made by text message, WhatsApp message or even to a player’s email address.
In order to ensure compliance with the above, it would be prudent for intermediaries to confirm the form and manner in which a player wishes to receive notification of an offer. Such confirmation can then be documented and acknowledged between the parties.
Practical Steps:
- Intermediaries should approach players and discuss with them their preferences as to how they wish to receive written notification of an offer.
- Intermediaries should ensure that players are told and are notified in writing (for example by text message or WhatsApp) of any offer that an intermediary receives, within 24 hours of receipt of the relevant offer.
Working with and approaching Minors
Regulation B.8 has been updated for the 2020/2021 season effective immediately. Regulation B.8(a) now stipulates that registered intermediaries (including via their employee, contractor or agent) are prohibited from making an approach to (whether directly or indirectly), or entering into a representation contract with, a player before the 1st January of the year in which they turn 16 years of age.
Regulation B.8(b) further specifies that intermediaries are prevented from making an approach to (whether directly or indirectly), or entering into a representation contract with, a player without the prior written permission of the player’s parent or guardian, in the period of time between the 1st January of the year of a player’s 16th birthday and the date of their 18th birthday.
Intermediaries ought to bear in mind that an “approach” under the Regulations includes, but is not limited to, approaching a player via any means of electronic communication including text message, WhatsApp and even social media platforms. The Regulations also provide that an approach includes approaches by third parties, on an intermediary’s behalf, and approaches to those connected with the player through friendship and/or family. Intermediaries have previously attempted to circumvent this (arguably overly prohibitive) restriction via the use of ‘scouts’ or ‘consultants’, who are not themselves registered intermediaries. Registered intermediaries and their agencies can now be subject to disciplinary sanction for actions by non-registered third parties undertaken on their behalf in breach of the Regulations.
Given that there are severe penalties (often in the form of hefty fines and/or bans) for those intermediaries caught in violation of the Regulations relating to the approaching of minors, it is critical that intermediaries are up to speed with the latest requirements of Regulation B.8.
Practical Steps:
- Intermediaries should ensure that they are familiar with their regulatory responsibilities and obligations in relation to approaching minors.
- Employees, contractors or agents of intermediary organisations must also be aware of the importance of regulatory compliance.
- Intermediaries should obtain all appropriate consents (written or otherwise) from a player’s parent or guardian before approaching or entering into a representation contract with a minor.
- Written permission may be in hard copy or in electronic form (for example: email, text message, WhatsApp etc.) and should always be retained by the intermediary to whom permission has been given.
Annual Returns
The implementation of Regulation C.12 sees an obligation on intermediaries to provide, within 30 days of the end of each Reporting Period (defined in the Regulations as the period between 1st July of the previous calendar year and 30th June of the current calendar year) each of their player clients with an Annual Return.
The Annual Return must be completed by the intermediary for each player with whom they have, or have had, a representation contract during the Reporting Period. For completeness, this includes any representation contracts that have expired or that have been entered into during the Reporting Period. An Annual Return may be provided to a player in electronic form, so long as it has been signed and dated by the relevant intermediary (and that the intermediary can evidence that is has been received by the player).
In terms of what information is to be provided, the Regulations state that the Annual Return must detail all of the payments (including but not limited to payments made by way of a net salary deduction and any lump sum payments) made by a player (or from a club on a player’s behalf as a benefit in kind) to an intermediary in the previous 12 months. It should be noted that the Annual Return does not need to include payments received by a registered intermediary from a club, in respect of services provided by the intermediary to the club as part of a transaction concerning the player.
The Annual Return must also detail all payments, fees and expenses received by the intermediary from the player (or a club, on a player’s behalf) that do not relate to the procurement of (or assistance in relation to) any contracts of employment, i.e. the provision of commercial services. This therefore includes image rights, commercial deals and personal endorsement deals. In addition, the FA’s guidance for intermediaries on the Annual Return states that any payments made on behalf of the player to the intermediary (for example direct from a commercial partner and/or from a player’s image rights company) will also need to be noted.
The report should capture only monies actually received by the intermediary during the Reporting Period – i.e. so, if a payment was due in the Reporting Period but has been paid outside of that applicable period, then it will be captured in the subsequent year’s report.
Subcontracted intermediaries will also be required to complete an Annual Return and, in the event that no remuneration has been received by an intermediary during the Reporting Period, an Annual Return must still be completed and submitted to the relevant player concerned.
The obligation to provide an Annual Return is a fundamental amendment to the Regulations and it is crucial that intermediaries are aware of, and familiar with, their regulatory responsibilities in this regard. The FA can request a copy of any Annual Return and any intermediaries who do not comply with Regulation C.12 may be subject to disciplinary action by The FA.
A copy of The FA’s prescribed form Annual Return, together with corresponding guidance, can be found on The FA’s website here.
Practical steps:
- Intermediaries should approach players and discuss with them their preferences as to how they wish to receive the Annual Return – i.e. in hard copy or electronic form.
- Intermediaries should familiarise themselves with the information and details that must be prescribed in the Annual Return:
- The Annual Return must include all direct payments received by the intermediary from the player, including but not limited to payments made by way of a net salary deduction and any lump sum payments.
- The Annual Return must include all payments received by the Intermediary from a club on behalf of the player.
- The Annual Return must include all payments, fees and expenses received by the Intermediary from the player or a club (on the player’s behalf) in respect of commercial services provided (i.e. image rights, commercial deals and sponsorship).
- If no remuneration has been received by the intermediary from the player, during the Reporting Period, an Annual Return must still be completed and submitted to the player.
- Intermediaries should keep clear and organised records of all remuneration received, as to enable efficient preparation of the Annual Return. In addition, intermediaries ought to keep an appropriate record of how the Annual Return was provided to the player (such as any relevant emails).
Other Points to Note
In an attempt to ensure that there is transparency within the sector, The FA has introduced an obligation on intermediaries to lodge any settlement agreements that they have entered into with another intermediary (or intermediary organisation) which purports to resolve any past, existing, or future dispute between the parties, regarding a player and/or club, in relation to any intermediary activity. This obligation appears at Regulation D.5 and any settlement agreement entered into must be lodged at The FA within 10 days of it being signed.
The FA’s Guidance states that if there is any doubt as to whether an agreement should be disclosed, then it is advised that the intermediary contacts The FA for further clarity or confirmation on the matter.
In the latest set of Regulations, The FA has clarified under Regulation G.2 that intermediaries (whether operating as an individual or through an organisation) may be held responsible for and, rather importantly, face possible sanction from The FA for any regulatory breach committed by an employee, contractor or consultant of that particular intermediary. Ultimately, Regulation G.2 stipulates that intermediaries are responsible for ensuring that any of their employees, contractors or agents, who are not registered as an intermediary, do not carry out any intermediary activity, do not make any approach to a player in respect of a representation contract and/or enter into a representation contract with a player on behalf of the relevant intermediary.
In order to mitigate against the risk of any potential regulatory breaches, intermediaries should now (where applicable) be communicating to their employees, contractors or agents and stressing the importance of the fact that they are prohibited from carrying out any activity that they are not authorised to do under the Regulations.
Brabners is here to help intermediaries navigate the challenges that lie ahead this football season and we would be happy to discuss any concerns regarding some or all of the issues set out above. For more information, please get in touch with Andrew McGregor, Matthew Lavelle or any member of our Sports’ Sector team.
