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Know Your Worth: The Value of Valuating Football Players

By
Dr. Erkut Sogut , Jamie Khan
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Introduction

In episode three of this series, I focused upon the growing use of data analytics in, how agents can use this data and the prospects for a future of purely data-driven football. In this episode I will be looking at how data is also used, in increasingly complex and intricate ways, to determine the value of an individual player and client.

In 2000, a German agency founded, what is now the most complete hub for football statistics and news, Transfermarkt. It began as a forum to track and monitor players and transfer targets. It is now the first point of call for agents, scouts, players, coaches and football fans when researching and investigating players, clubs and football news or rumours.

More recently, other platforms have emerged, such as Transferforum, which now claims to have developed the most accurate ‘expected transfer value’ (xTv) system. The system creates a predictive model for a player’s transfer value using a vast array of parameters and tries to determine the value of the player in the most objective way possible. Rather than subjective opinions on the estimated worth of a player and discussions of how much they should be transferred for, these systems provide concerned parties with a useful benchmark to work around that is not based upon personal opinion. The system also increases the transparency of the football market, making this information readily available to fans across the world.

How to Determine the Value of a Player

            In football, players are essentially commodities, bought, sold and traded between clubs. They become assets at the club that purchases them and their value rises and falls the same as any other asset in business. This new way of valuating players allows the world of football and particularly interested clubs and agents to monitor the worth of any player.

            The process looks at an enormous variety of parameters in order to provide the most accurate valuation. According to the leading platforms in the valuation systems, whilst footballing ability and performance are significant contributors, there are far more specific and intricate details that influence the expected transfer value of an individual player. Below are the most important parameters that are looked out but this is far from an exhaustive list:

  1. Skill, performance and ability: Of course, this is a major factor in determining how much a player is worth to a buying club. Clubs are willing to pay large amounts for the best players on the planet!
  2. Age: Almost everyone would agree that Jack Grealish is not as good of a footballer as Cristiano Ronaldo. However, Grealish was just bought for £75million more than him. Grealish’s transfer value will be a lot higher than Ronaldo’s as he is only 26, is continuing to get better and has plenty of years left in his career if he remains uninjured. Ronaldo, on the other hand, is now 36 and may not be sold on from United until he finishes his career. Therefore, his expected transfer value will be far lower, despite his superiority in ability.
  3. Contract length: As a player nears the latter stages of their existing contract, their transfer value will decrease. This is because the selling club are less likely to demand a large transfer fee as this will risk no willing buyers coming forward and the player may leave on a free at the end of their contract instead.
  4. Selling club circumstances: The selling club may be in a position where they are financially secure and doing well so will not have any intention of selling the player unless a large sum is offered. This will increase the expected transfer value of a player. This is also the case if the player is a prized asset of the club such as with Harry Kane at Tottenham. There is also the other side of this, where a club may be performing poorly or is financially struggling. In order to raise funds to improve this situation or too have enough money to bring in another player, they are more willing to sell players and so the transfer value may be lower.
  5. Position on the pitch: It is well known that forward players are usually always valued higher than defensive players. This is because they are the most sought-after assets for a football club.
  6. Resale value: As mentioned with the Cristiano Ronaldo case, Manchester United are unlikely to be able to sell him on for a healthy fee. His resale value is minimal and therefore his original transfer value is lower.
  7. Cashflow generation and off-field value: This may be a surprising factor in assessing the value of a transfer target but it plays an increasingly significant role. When clubs bring in superstars, they are willing to pay a premium on the transfer as bringing in a player of such stature will benefit them financially off the field through attracting major sponsors and boosting shirt sales. This correlates with a boost in the player’s expected transfer value.

There are many more minute details and analytics that influence and altar a player’s expected transfer value. It is also important to consider the situation of world football when making player valuations. For example, during the COVID-19 pandemic and the aftermath, expected transfer value for every player will have lowered as football has been impacted financially.

It is important to note that whilst this aims to be a predictive valuation and considers the future of the players, it is not entirely accurate. For example, it cannot consider future injuries or drops in performances and therefore, the expectations and judgements made around age, ability and performance may not come to fruition. However, for many parties in football, this is still the most accurate and valuable data statistic for assessing players and their value.

The Benefit for Agents

            For agents, accurate player valuations are an important tool to aid them in negotiations. Forums, such as Transfermarkt, that provide information on player contracts, statistics and other pieces of information are useful, but a set figure on how much a player is worth is a crucial advantage for the agent in negotiations.

            Agents use the estimated value of their clients or target clients as a benchmark which they can negotiate around. The value is used by the agent to inform themselves of the kind of transfer fee that they can expect for their client. Knowing the expected transfer value of a client leverages the agent’s ability to either achieve a higher valued new contract with the player’s current club, or to know which clubs are suitable to pursue and the minimum transfer fee that would be expected.

            Expected transfer value allows the agents to improve in their roles as matchmakers. Knowing the worth of a player enables them to narrow down the list of potential buying clubs and match the player to a suitable customer and for the right amount of money that reflects the value of the asset.

            An agent marketing their client is able to present the value of their client to buying clubs and to prospective brand endorsements. It is important for an agent to be able to effectively market their players to negotiate the most lucrative deals for the client themselves. The data point of expected transfer value is the simplest way of unbiasedly demonstrating the worth of their client in the football world.

Conclusion

            In this blog I have shown that, through the power of data analytics, platforms are able to estimate the expected transfer value of a player with increasing accuracy. It is a meticulous process that considers a large amount of data sets that influence the value of a player.

            Providing an estimate for the expected value of an asset helps clubs, agents and other parties in their negotiations and seeking of suitable candidates. It sets a benchmark for agents that can be worked around and aids their negotiations in securing lucrative deals and transfers.

Family Affairs: The Problem of Nepotism in Football

By
Dr. Erkut Sogut , Jamie Khan
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What is Nepotism and Favouritism?

            The Oxford Dictionary defines nepotism as a noun referring to the practice of giving unfair advantages to your own family if you are in a position of power, especially by giving them jobs.

            Nepotism has been a widely recognised and problematic aspect of society since the beginning of humankind. Whilst it is seen as an issue, it remains visible and pertinent throughout almost every industry, from banking to education to the army. Favouritism is a similar concept but involves friends being placed into positions or benefitting in a different way, rather than family.

Importantly, both concepts are common within football. Many significant figures in the world of football, from sporting directors, agents, coaching staff, scouts and even players are able to benefit from relatives and are placed into roles as a result of their family’s influence over clubs. In this blog I will first present a brief outline of nepotism and favouritism that occurs within football before exploring the motivations, legality and ethical implications of the concepts.

Examples

            There are many examples of Nepotism and Favouritism in modern football. From Zinedine Zidane signing his son as a player to Carlo Ancelotti employing his son as his assistant coach at Everton, Real Madrid and Bayern Munich to former Arsenal chairman, David Dein, helping his son sign players like Thierry Henry and Cesc Fabregas!

            One notable serial-offender of nepotism is the all-time great, legendary Manchester United manager, Sir Alex Ferguson. He begun by signing his son, Darren, for four years at United. He then placed his brother, Martin, into the role of Chief European Scout for the club, despite having no previous scouting experience. Despite Sir Alex’s public dislike of agents, labelling them the biggest problem in football, he then helped Darren’s twin Jason in sports media before becoming an agent and, at one time, managing 13 Manchester United clients. Darren then benefitted again from his father’s power as manager of Preston and Peterborough as his father loaned him many young talents and boosted his financial prospects.

            Nepotism happens across the world of football, regardless of the country or the league. At Bayern Munich, the President, Karl Heinz Rummenigge’s brother and son both operate as agents. Uli Hoeness, another club official at Bayern has also helped his brother, Dieter, as an agent and Dieter’s son, Sebastian, become a Bayern Munich youth coach and Hoffenheim manager.

            Roberto Mancini epitomised nepotism when he signed his sons, Andrea and Filippo, for Manchester City and neither of them played a game whilst collecting their wages. The same with Tony Pulis, who signed his son, Anthony, at three of the clubs he managed, Portsmouth, Plymouth and Stoke. Again, Pulis’ son featured minimally for each team and twice in four years for Stoke!

Why does it happen?

            Of course, a natural instinct for humans is to protect and help your family and friends. Lots of the motivation for acts of nepotism in football come from this. Many benefit from the power of relatives and friends and are able to be put into positions they would otherwise not have been able to obtain.

            Not all of it is about family love. A lot of nepotism is incentivised by financial reasons. Direct and indirect kickbacks are commonplace through nepotism. Club officials, such as Sporting Director’s may have family or friends in agency and will either give information to them about a certain player who the club may want to sign or sell and will involve the relative or friend in the deal. They will then be entitled to some of the remuneration that their friend or relative receives and benefit financially from the process.

            Sometimes, it is even more direct. A club official will point a player in the direction of a certain agent or connect the player’s agent with a family member or friend that will then off them a split in the deal, made attractive by the inside information the relative or friend may have been given to help involve themselves in the transaction. Once again, eventually, the club official ends up receiving kickbacks from the deal whilst also helping their family or friends.

What’s the problem and is it legal?

            In the UK and European countries, nepotism is currently not illegal under present legislation laws. However, in the US, it is a punishable criminal offence. Just because it is legal, does not mean that it is ethical.

The problem with nepotism lies in the immorality of gifting a person a role or financial benefit despite them not warranting it by their own merit. For example, if a manager signs his son instead of a more talented youth player, the opportunity is unfairly taken away, despite having better capability and potential than the son. There is never a fundamental issue with a family member or friend gaining employment for a significant role if they are qualified and successful enough to have earned the job based on merit. If a family member is given a job in a club, one must question whether they have deserved this employment through their own aptitude or whether they benefited from the power of a relative in being able to gift them the job.

It is clear that nepotism in general, and specifically in football, is an unethical practice. So, we can question why there has not been legislation created to prevent it. Football governing bodies should consider nepotism a significant enough problem in football that they should invest in policies of minimizing or eradicating it. Regardless of national legislation, football could have its own rules around investigating and monitoring the relationships between family members and friends at football clubs and in powerful roles.

Whilst it is certainly a difficult task to control as it could be subjective whether a family member or friend is good enough for the role they obtain within a club, it is important that others are not deprived of opportunities in football because of nepotism allowing underserving candidates to succeed ahead of them. It is a consideration that will improve the morality of the football world.

Conclusion

            I have shown in this blog that nepotism is a very relevant issue in the football world. At the highest level, from the Premier League to La Liga to the Bundesliga, nepotism is rife throughout even the top clubs.

            Nepotism allows individuals, families and friends to benefit financially and in their careers through the power of their close circle in being able to place them into important positions such as scouts, club officials, players, coaches and agents.

            I have also explained that nepotism and favouritism, whilst not illegal, is an unethical practice. It is difficult to legislate against and attempts to prevent it from occurring must be considered thoughtfully and cautiously. However, it is vital that, in order for football to become more morally endearing, nepotism should be minimized by football governing bodies and their own laws.

Women’s Football: The Next Big Thing

By
Dr. Erkut Sogut , Jamie Khan
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Introduction

            As is the case in many sports, the women’s game is on the rise. Since the establishment of fully professional leagues across the world, including the Women’s Super League in the UK in 2010 and the increasing popularity of the US national team, the game has changed dramatically.

            These changes have created an exciting opportunity for football agents to venture into a different world that demands a slightly different approach to men’s football. Some agencies have established themselves with the sole focus of embracing the women’s game and a handful of women have entered the currently male-dominated field of football agency.

In this blog I will firstly detail the extent of the expansion that the women’s game has endured before exploring the attractiveness of the industry to football agents. I will finish the blog by outlining the continuing disparity with the men’s game and the issues this might cause for agencies, particularly those that only work in women’s football.

The Growth

            One of the key drivers for the rise in popularity and financial growth in women’s football is the improvement in governing body recognition. This has enabled the establishment of properly managed and marketable leagues that began to attract a wider fanbase as well as appealing to sponsors and broadcasting services.

            An example that demonstrates how far women’s football has come is the Women’s Super League (WSL) in England which, since its establishment in 2010, has been fully professional and now includes 12 teams. The WSL now offer player salaries between £20,000-200,000 per year. Having an entirely professional league consequently improves the overall standard of football and improves the game in its entirety. Even the league below, the Women’s Championship, is mostly professional with only a handful of players at the lower end needing supplementary jobs for income.

            Part of the professionalism of the women’s game extends to the football clubs as well as the players. Teams now employ full-time and several coaching staff, medical teams and background staff as well as investing in better infrastructure and facilities. The improvement in the standard of women’s football is reflected by the increasing attendances at games and the growing number of sponsors investing into the sport.

            In 2019, the WSL signed a three-year sponsorship deal with the British bank Barclays that has been valued at around £10million, including a £500,000 prize money pool for the league champions. BT Sport and the BBC have also taken on broadcasting duties and have played a role in extending the reach of women’s football to wider, global audiences. Selected games are now shown in over 12 countries and BT Sport pledged to show games in over 1000 pubs in England. Wider external investment has boomed. Companies can see the growing popularity in women’s football and see an opportunity to boost their visibility to the market whilst identify a chance to improve the company’s claim of inclusivity, diversity and equality. Women’s football has become very appealing to the innovative brand marketing strategies used by big sports sponsors.

            The external and internal investment in marketing, sponsorship, commercialisation and promoting the women’s game has paid dividends. Since 2017, the average attendance of top-level women’s football games have tripled to around 3000 with the big names attracting far more. Atletico Madrid vs Barcelona attracted a crowd of 60,000 to set a new attendance record for the women’s game. The impact has also been seen on a global level with the 2019 Women’s world cup final recording global viewing figures of 11.7million – this is a monumental increase from the 1.7million who watched the 2011 version! FIFA also doubled the prize money for the competition to $60million in recognition of the increased financial viability of the game.

            Viewing and attendance figures are also an interesting reflection on how the women’s game has improved. The UK is different in that 60% of crowds are men at women’s game whilst in the US the gender split is even and in Europe it is mostly female. The growth of women’s football and the status and popularity of the players has had a profound ‘role-model’ impact on young girls and women globally. This can only benefit the sport in years to come as more and more females become involved in football and help grow the game further.

What All of This Means for Agents

            In 2020, the Danish forward, Pernille Harder, broke the world transfer record for a woman with her £200,000 transfer to Chelsea. Salaries are also ever-increasing and provides an exciting prospect for agents. Women’s football is still viewed as a growing and developing entity. It’s an industry that could offer lucrative rewards for football agents as it continues to expand. Beyond the money, it is also providing an exhilarating challenge to agents. The role of an agent in women’s football requires a slightly different skillset and application to the men’s game.

            Agents venturing into women’s football must provide a full 360°, holistic service to their clients. Their responsibilities go far beyond just negotiating a football contract. The branding and marketing of a client is absolutely imperative. The agent must be able to utilize their client’s commercial potential and help them create a marketable ‘identity’. This varies from finding a suitable sponsorship path such as with clothing brands or big boot deals. Most importantly, the agent needs to make their clients self-aware about their status as role models for young girls and women.

            The current generation of women’s footballers and the ones to come are technically and media-savvy. Social media has enabled them to directly access fans and brands to leverage themselves above purely being just a footballer. Agents have an important role to play in guiding their commercial success and properly utilizing the digital age. Any agents venturing into the women’s football market should have an effective understanding of the power of social media and how to grow the presence of their client to generate sponsorships, media publicity, revenue and to create a personal, globally-appealing identity.

            An example of how a female footballer can do this is epitomized by the US forward Alex Morgan. Alongside her agent, she has established partnerships and contracts with more than a dozen corporate business partners and sponsors including global industry powerhouses Coca-Cola, Nike and Volkswagen and amassing an annual income of several million dollars. It is important to note that her salary from football alone is a fraction of her overall income at $460,000. Agents must understand that their clients, whilst it is important that they are successful on the pitch, utilize this position to generate additional income streams as there is greater opportunity and money beyond just the football.

The Issues

            I have explained that the women’s game has experienced significant growth in popularity which is coupled with a rise in external investment, player wages, sponsorships and broadcasting. However, there is still an enormous gulf and disparity between women’s and men’s football. WSL players earning an average of £30,000 per year is an encouraging rise and now fully professional but is completely overawed by the £3million average wages for a Premier League footballer. Other statistics such as attendances and record transfer fees are also belittled by the men’s game. There is a long way to go in the women’s market being as attractive of an option to agents as the men’s game.

            Better player care, increased publicity, improved infrastructure and pioneering marketing will all help women’s football grow but a key aspect that agents might be able to influence is the contract system that is in place. Currently, one-year contracts are a popular approach amongst professional women’s squads. This is because there is a lot of, and regular, change in personnel at clubs and players are often moved season by season. This poses a problem. If a player is only contracted for a year, then there is no reason for a club to pay a large transfer fee to bring her to their club. Instead, they can wait until they are out of contract at the end of the season and sign them on a free.

            If this does not change then it is less likely that agents will be needed as much as they are in men’s football. It should be an aim to change this standard of contracts and make longer-term contracts more regularly used. This will mean there is greater financial security in women’s football and agents have a role to play in this. Once the football side of things is improved there will also be a greater scope to utilize the off-pitch business which offers such an attractive supplementary income for female footballers.

Conclusion

            In conclusion, women’s football is rapidly growing. It is a market that will continue to increase in popularity and attractiveness to football fans, sponsors, broadcasters, investors, media and on a global scale. For agents it’s an exciting industry for them to challenge themselves and their skillsets and apply them in a slightly different way to optimize the on and off-field potential of their clients.

            However, in the near future its seems that there will remain huge disparities in the financial positioning of the women’s and men’s game. This means that it will be a secondary option for agents that are already established in men’s football. For those agencies who venture into the market with the sole focus on women’s football, they may be challenged in generating enough revenue to make it a viable option.

Moneyfootball: The Importance of Data and Analytics for Agents

By
Dr. Erkut Sogut , Jamie Khan
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Data in Football

The iconic Moneyball film (2003) was a major contributor to the ‘data revolution’ that has been seen in sports across the world in the 21st century. It popularized the idea of collecting, analysing and using data to gain an advantage over opponents. Lots of books have also been written about the importance of the data concept and the place that it has within sport.

Football has adopted data analysis. Clubs, managers, scouts, players, financial departments and physios all use statistics to increase efficiency and performance within the football environment. In recent years, significant sums of money have been invested into the data sector of football clubs who employ an ever-increasing team of analysts.

One of the many ways in which data can be used in football is in player recruitment, Clubs such as Brentford and Leicester have reputations for ‘smart-scouting’; identifying players who’s underlying stats and performances are of considerably higher value than their cost. This kind of recruitment allows clubs to increase transfer returns, buying top class players cheaply before they fulfil their potential and then selling them for large profits. One of the best examples of this is Leicester’s acquisition and selling of Riyad Mahrez. Using data in this way and for digital scouting means that clubs that may not have the budget of some of the biggest clubs can still compete at the highest level through smart, data-driven business.

Football can produce almost an infinite number of data sets. Both in training and in games, a player can be scrutinized based on the data they produce such as distance covered, expected goals, threat, interceptions and anything else one might want to analyse. Data is objective and measurable which is why it is such a useful tool in football.

Whilst it is possible to explore the vast array of data usage in football, in this blog I will focus upon the ways in which data can be used by agents within their field of work and the future of data usage in transfers and contract negotiations.

How Can Data be Utilised by Agents

            The value of data analytics is not lost on football agents. Agents going into negotiations with a football club over a player would automatically be disadvantaged if they didn’t have access to the data that clubs have. Clubs assess and use data to recruit players, so an agent needs the same data to keep up. In order to give themselves an edge in negotiations they must have a detailed understanding of data and what it means. Raw data is pointless but once it is interpreted and analysed it becomes actionable and helps agents make better decisions.

There are four main ways in which data can be used by agents:

  1. Agents can use data to help them in scouting and recruiting new clients. By analysing statistics they can identify players with the potential to be a success in the highest level of football. Lots of agents use digital data and analytics in their recruitment processes.When working with their clients, agents also use data to improve the standard of the service they provide. They use data analytics to help improve their client on and off the field from match performance to social media outreach.
  2. In transfers, agents must use data to present a persuasive case around the value of their client to prospective clubs.
  3. For brokering deals for clubs, agents use available data to find the right fit for the buying or selling club. Analytics help agents make decisions on players and targets as well as evaluating the best monetary solutions for transfer fees and wages.

            The number of data platforms available for football agents has grown substantially in the 21st century. Wyscout, Instat, SciSports, Statsbomb, Analytics FC and other well-known platforms all offer a range of services for agents to subscribe to. They use this data to gain insights into the underlying statistics of their clients and other players or even potential new clients. By comparing and contrasting statistics with other players, agents are able to determine the ‘worth’ of their player. They use this knowledge in negotiations to leverage their client and demonstrate to the club the value that they will add to the team. This means they are at an advantage in seeking higher salaries, bonuses and other fees.

Data is now considered essential in a transfer or contract negotiation. Agents should have a sufficient understanding and knowledge of data in order to improve the work they do for their clients. The statistics allow agents to see if the objective data matches their general feelings about a player and helps a club understand what they are paying for. If the data does not match, then the agent can use other statistics to solve the discrepancies and present a powerful negotiation to a club.

The Future of Data for Football Agents

            The data revolution in football is set to continue. Digital scouting is become a preferable option over physical scouting, especially since the COVID-19 pandemic and as the quality and range of statistics available continues to improve, the use of data analytics will also rise.

            It is expected that the ongoing development of data collection and interpretation will include algorithms and tools to predict the future success of players and clubs with increasing accuracy. These predictive models also turn data into practical guidance for future decisions. Agents can use this to their advantage to project their client’s influence upon a club and the contributions they are expected to make to the future success of the team. This provides agents with even more leverage in negotiations, transfers and for finding new clients with big potential. It should also bridge the gap between agents, analysts and coaches as the understanding of data usage widens across the industry.

            The future of data will hopefully allow agents to make better and more informed decisions on behalf of their players.

But what if the need for agents is removed by data analysts?

Manchester City’s Kevin De Bruyne’s recent contract negotiation was well publicized as he didn’t use an agent to secure his £83million, 4-year deal. Instead, he employed data analysts to present to the club to show how vital he was to the future success of the team and compare his worth with other superstars in the Premier League. They also used data to then predict KDB’s value which allowed him to negotiate such a lucrative deal.

Conclusion

            It is clear that data plays a now-essential role in football and is continuing to grow. The expansion of data usage and increase in available platforms and data sets will be significant in the future of football agents.

            Agents must learn to work with and understand the invaluable insights that data can give them into their client’s performances and worth to a club. Statistics will benefit the quality of work that agents do for their players and assist them in dealings with clubs.

Mental Mentors: The Role of Football Agents in Mitigating Mental Health Issues

By
Dr. Erkut Sogut , Jamie Khan
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Mental Health & Football

In recent times, mental health has become a part of everyday discussion which has raised awareness of how mental illnesses such as depression can affect people from all walks of life. Whilst some may think that it is impossible for multi-millionaire, famous footballers to suffer from bad mental health; examples like Gary Speed, Gianluigi Buffon, Andres Iniesta and Michael Carrick show that this assumption is far from reality. A FIFPRO study estimated that approximately 43% of all professional footballers will experience mental illness at some stage in their career or after retirement. This is becoming a more recognised issue, demonstrated by Tottenham Hotspur becoming the first club to employ a dedicated mental health and emotional wellbeing manager, perhaps setting an example to other football clubs.

            Mental highs and lows are inevitably a part of football. Losing in a cup final, not being picked for the national squad or missing a penalty can all be detrimental to the mental health of a player. More recently, the COVID-19 pandemic and lockdowns has also added a new dimension to the mental dangers for footballers. However, there are four major events or times in a footballer’s career during which they may be more susceptible to poor longer-term mental health. These are summarised below:

  1. The football academy system: Academies are high-pressured, intense, high-performance environments. Coupled with the expectations of families, this creates conducive conditions for mental illness. Youth players that are released may also find themselves with no option other than football and struggle to cope with the failure of not becoming a professional.
  2. Injury:  Studies have shown that severely injured players are more than twice as likely to succumb to mental illness.
  3. Relocation: With players being treated like commodities and traded between countries, cultures and language barriers at short notice, this can have a negative impact on their mental health.
  4. Retirement: The loss of routine, adrenaline rushes and dieting can have a huge impact.

It is possible to write an entire book on these issues so in this blog, I will view mental health issues through the lens of a football agent. I will focus on the four main areas that I have outlined here but it is vital that everyone is aware that mental illnesses can arise in anyone and any footballer, regardless of their circumstances.

In this, I will consider the importance of the roles and responsibilities that an agent has in protecting a client’s mental wellbeing and whether they can prevent it completely or at least help to mitigate its impact and the player’s mental vulnerability.

Youth Players

            Whilst the agent cannot be paid until the player is 18, often a relationship begins to build from an earlier age when the player is identified as having the potential to become a successful professional. The relationship between an agent and an aspiring academy player should take the format of a bridge between the player, his family and the club. The agent should be the trusted link between the three parties and someone who the player can confide in.

            The pressures on a youth player don’t only come from themselves but also from family expectation. It is not uncommon for players to be watched by numerous family members each weekend as they rise through the ranks of football. Consequently, they feel an overwhelming sense of responsibility to succeed as a professional footballer. Their family may desperately need the financial support that a professional football career would provide, or they may just long to see their child in the spotlight. Either way, it is the child who has to handle this weight of pressure, and, at a young age, this can be difficult to cope with in the face of failure.

            The role of the agent is to protect their client from this pressure. Although it may not be possible to eradicate it completely, especially if the player sets big goals and expectations of themselves, the agent should make sure they are aware of the dangers of reality in football and try to help them aim towards challenging but realistically achievable goals. Part of this service is preparing the player for failure. This begins by ensuring that the family and the player themselves are acutely aware of the likelihood of making it as a professional that earns the millions of pounds they may be hoping for.

            Agents regularly start to build a relationship with a promising player aged around 15 or 16 as they begin to develop physically and show real signs of potential. Often, they would have entered into an academy system at the age of 9. Even at the point where they are now succeeding at a higher level, the agent’s role is creating a less-pressurised environment by helping the player and family realise that a professional contract is far from guaranteed. In fact, only 0.5% of players that join academies aged 9 will go on to get a professional contract at any level. That’s one in every 200 kids. If their dream is of playing at the highest level, then the statistics are even more damning. Only 0.012% of youth footballers will ever play in the Premier League. The football industry is cruel. At any point they can experience an injury which they never recover from, or they are simply deemed not good enough to make it professionally.

            By working with the academy to make the family and the player aware of the reality of professional football, the agent can ease the expectations on the teenager. They should then use this realisation to encourage the player to continue to work hard and pursue an education route as another option. Rather than advertising an academic route as a ‘failure’ of making it as a professional footballer, it should be proposed as simply ‘another path’ that the player can choose to take. This remains a relevant responsibility of the agent throughout a footballer’s career as I will explain more.

            The concept of a second option can prevent tragedies such as the death of Jeremy Winsten in 2020, a former Manchester City academy player who never signed a professional contract. ITV estimates that 90% of academy players that are released after the age of 15 experience clinical depression. The agent may no longer benefit from their player once they have failed to make it as a professional footballer, but they should have encouraged their client throughout the relationship to put in the foundations of a good education or work experience. This may not completely eliminate the disappointment of not making it at football, but it can go a significant way in preventing mental illness as the player does not have a complete dependency on a football career. The agent has ensured they have a second option and can move forward with their lives in another career.

Injury and Retirement

             Those that do make it in football become accustomed to strict routines, high-performance environments, clean diets and rushes of adrenaline that are completely unique to the sport. Eventually, their career will finish. The worst-case scenario is when it is forced upon the player such as a career ending injury or being dropped from a team such as in the recent case of Jack Wilshere who has openly spoken about his mental health difficulties. For the rest it happens when they choose that it is the right time to retire.

            The sudden loss of this lifestyle can have a huge adverse impact on the mental health of an ex-professional. It can affect everything from financial problems to low self-esteem. It is often said that the feeling of scoring a goal in front of crowds of people and the highs of adrenaline that comes with playing professional football can’t ever be replicated by anything in the outside world. This can partly explain the worrying list of footballers that have turned to drugs, alcohol and other bad habits after their careers have ended in a search for a rush.

            Agents should take on the responsibility of mitigating this decline. Hugo Scheckter, founder of the player care group and the former head of player care at Southampton and West Ham, speaks of creating a ‘dual career’ for footballers. In other words, agents should provide a holistic service to their clients that incorporates creating a second career alongside football so that when the day comes where they have to hang their boots up, they are already set to continue another life. This is a similar but more advanced approach to encouraging education in academy players.

A starting point for footballers can be smartly investing the money they have earned into property or similar. The agent can also help them find the best career option for after football, encouraging them to upskill themselves and explore careers outside of the world of sport. In some cases, footballers can continue in the industry through punditry or coaching but many will have to find other options. Some may have earned enough money to be financially secure for life, but the sudden loss of adrenaline and routine can lead to boredom, isolation, divorces and mental illness. The agent should ensure their player has something to go to once they have exited football to look after their mental wellbeing.

Unfortunately, when it comes to replicating the rush and feelings of being a footballer, an agent cannot help. Players often long for the adrenaline they would experience during games, and it can be difficult for them to cope with this mentally, especially in the first few years after their career. The role of an agent in this is simply checking up on them and monitoring their mental state. This may lead to seeking professional help or can involve trying to find ways to keep the ex-professional busy and their mind occupied.

Relocation

            Last week saw the end of the 2021 summer transfer window. Every year, dozens of players are exchanged internationally during these windows. They are faced with the challenge of relocating to a completely new city that may have an entirely new culture or language, unknown to the player. Some of these players have families which creates difficulties and tension between wives and children who are either left behind or forced to relocate with the player. The added responsibilities of finding new schools, houses, cars, friends, language lessons and more is where the agent can step in to help. Part of the service provided by the agent to protect the mental wellbeing of the player should be to help with the relocation process.

            Agents can use their contacts and help with research to help the family and their player settle into the new environment. By working in partnership with the clubs and their player liaison officers, this can make the transition between clubs and countries far easier for a client. Without this help, they may experience loneliness and a struggle to cope with a new life, which is of detriment to their mental health. An agent should ensure that their client is able to focus on football; all other worries should be alleviated to be conducive for optimal performance. Added pressure, isolation and mental lows can cause long-term mental illness battles.

Conclusion

            Mental illness has a widespread presence throughout football. There are many stages and events during a player’s career where they are particularly susceptible to poor mental wellbeing.

            An agent can provide a holistic service that not only focusses on contract negotiations but also on protecting the mental wellbeing of their client. Their role is to be aware of the mental dangers that football can create and find methods of mitigating their impact.

            Agents have a part to play in reducing the problem of mental illnesses in academy players, injured players and retired players. They must also be aware that mental problems can affect anyone. Players that may seem absolutely fine on the surface, are playing at their peak, earning millions and aren’t injured can still be affected. The agent should continually check in with and assist their players in speaking about and protecting their mental health, particularly after low moments in their career.

When the Fun Stops, Stop Letting Betting Companies Sponsor Football

By
Dr. Erkut Sogut , Jamie Khan
-

The Presence of Betting

For anyone who has ever watched live football on Sky, you will be familiar with the slogans used in every betting advert that appears on your screen.

When the fun stops, stop.

&

Be Gamble Aware.

            This is aimed at raising awareness to the viewer of how sports betting and gambling can become an addiction, just like an illegal drug. So why are betting companies allowed to be so visible and prevalent across the footballing world? They can be seen from advertising hoarding in stadiums to front-of-shirt sponsors to TV commercials to the naming rights of the English Football Leagues, sponsored by Sky Bet.

         According to the investigation in Channel 4’s documentary, Gambling’s Football Addiction, they discovered that in most televised football games, the logos of gambling companies can appear more than 700 times in a match. That equates to 6 appearances per minute. 17 out of the 20 clubs in the Premier League and 17 out of the 24 teams in the Championship are linked with Official Betting Partners. In the 2020/21 season, only Chelsea, Liverpool and Sheffield United were not partnered with one.

            Betting companies can dominate football clubs. In the example of Stoke City, not only are they owned by Bet365, whose CEO sits as their vice-chairman, but their stadium is even named after the company.

            Sportsradar estimates that football accounts for 70% of the annual worth of sports match betting revenue which is estimated to be between $700bn to $1tn from legal and illegal activity. Bookmakers produce odds on a total of approximately 55,000 football games globally, every year.

Betting and gambling are extraordinarily and indisputably entrenched into football. In this blog I will assess why companies are at the forefront of so many sponsorship deals, the impact and wider consequences on football that this causes and finally, whether there is a solution to these issues.

Do Football Clubs Need Betting Companies?

            There is an important consideration to be made in this debate in identifying the considerable attraction of betting companies to football clubs, broadcasters and fans. These companies provide lucrative sponsorship deals and are often willing to pay more than most other industries with the sole exception of airlines perhaps.

            Betting companies contribute significant totals to the financial wellbeing of football. Clubs in the English Football League received approximately £100million annually. West Ham’s shirt sponsor, Betway, is the most lucrative deal between a betting company and a club and is worth an estimated £10million per year. Broadcasters receive a total of around £200million from companies such as William Hill, Paddy Power and Sky Bet, which explains why there are so many gambling adverts during the half time break and build up.

When I consider the issues and solutions below in this blog, it must be noted that it is important to justify any restrictions or ‘blanket bans’ upon gambling company sponsorship because of the obvious financial advantages and benefits to football that it provides.

The economic boosts that betting companies provide with their sponsorship are particularly welcomed since the difficulties that the Covid-19 pandemic created for the leagues and clubs. If the EFL lost their partnership with Sky Bet, this alone would cost the league £40million which, during times like these, is not financially viable. The influence of betting companies on football extends far beyond adding a bit of excitement for fans.

Match betting, in its simplest form, is designed to enhance the experience of the fan watching the game. Whether you support a team playing or not, the vast array of markets and odds to bet on create added excitement around all aspects of the game such as corners, throw ins, yellow cards, shots on target and even transfers. If used correctly and safely, it is possible that betting enriches football as a spectacle and increases the volume of interest into any football game, regardless of a fan’s team allegiance. However, this is often not the case and does not have the desired effect.

The Problems

            The issue with the prevalence of betting in football lies in its addictive nature and the immorality of financially exploiting vulnerable football fans. Whilst it may financially benefit football, it is ignorant of the wider negative impact it has on the wellbeing of the most important people, the fans.

Betting companies are very cleverly marketed. During football games, ‘odds boosts’ and ‘free bets’ for new customers are promoted everywhere. This entices fans to register and begin match-betting on a website. This is often the first step on the slippery slope which goes beyond football and can push them down the even more addictive hole of Casino gambling on the same platforms.

            With 9% of the UK population estimated as participating in sports betting, gambling addiction has been a significant problem with around 245,000 people in the UK now classed as ‘problem gamblers’. The EFL attempted to mount a defense against blanket bans of gambling company involvement in football and estimated that between 2010 and 2018, the percentage of problem gamblers has halved. Whether this investigation was subject to bias in an effort to defend sponsors or not, the research admitted that even after halving, problem gambling still stands at 3%. The relentless exposure of fans, clubs, children and even the players to betting company sponsorships and promotions during their experience of watching or attending a football game inevitably plays a part in this statistic.

            One of the most troubling statistics is from a Gambling Commission audit in 2018 that recorded 55,000 children aged between 11 and 18 that were classified in the ‘problem gambling’ category. More of these children admitted to betting than they did to drugs or alcohol. These child victims will have contributed to the £14.4billion that was lost through betting across the UK in 2019, imagine how many lives this would have ruined!

            For football players, betting is a minefield. In recent times, gambling has overtaken drugs and alcohol as the biggest addiction problem for professionals. They are lured by the hype and exposure to betting and fall victim to the trap.

            Match-fixing and inside information is a dreaded problem for the integrity of football. The most recent well-known scandal was in March of 2020 when the ex-Liverpool player, Daniel Sturridge, was banned for 4 months and fined £150,000 which resulted in a termination of his contract at the Turkish club, Trabzonspor. He was accused and found guilty of leaking inside information regarding transfers to friends and family though he maintained it was always spoken of in an innocent manner in normal conversation. He was unaware that some of the people he told would then place bets on that information.

            There have been many cases throughout the history of football documenting various match-fixing scandals and the involvement of gangs, officials, clubs and players in undermining the integrity of the sport. The issue became almost laughable in 2017 when the goalkeeper for Sutton United ate a pasty whilst filmed by the cameras during their David vs Goliath FA Cup tie with Arsenal. The whole event was done in jest of the fact that a bookmaker had offered odds of 8-1 on him to appear on camera, eating a pie. It was deemed that the goalkeeper had unfairly ‘influenced’ the betting market and he was banned for two months.

            In the most extreme cases of match fixing, those involved will receive lifetime bans from football. Football associations and organisations around the world have clear regulations regarding betting for individuals that are professional involved in football. The rules prohibit these people from indirectly or directly betting upon any footballing activity around the world. Even if betting companies were banned from being involved directly in football through sponsorship or otherwise, there will still be a demand for match betting and therefore a risk of match fixing or inside information damaging the integrity of football.

What Can Be Done?

            After 1986, FIFA banned the acceptance of sponsorship deals from the Tobacco industry. Throughout all sport this became the norm as several major players in the Tobacco industry who had previously had their names etched all over sports events, became invisible. This went a long way in showing that smoking and the addiction to the habit was condemned within the sporting world but did not eradicate smoking in its entirety.

            Dealing with gambling in football is a similar story. Wholly effective solutions to the problems that betting creates are almost impossible. However, mitigation is important and steps such as banning sponsorship would certainly decrease the exposure to and prominence of betting companies in the same way that banning Tobacco companies did. Globally, football governing bodies should consider a way of removing betting companies out of the spotlight in football.

            For example, the UK government has recently revisited the 2005 Gambling Act and considered introducing a blanket ban upon any sponsorship deals with betting companies in sport. There have been defiant objections from the EFL and the clubs themselves. As shown earlier, if this were to be implemented the game would suffer financial losses and would be forced into finding alternative sources of sponsorship revenue that are supposedly unlikely to be as highly valued as partnerships with betting companies. Especially during the pandemic, clubs are reliant upon lucrative deals and will inevitably oppose any proposals to prohibit the major source of income provided by betting companies.

            In my opinion, this is morally wrong. Clubs should prioritise the mental and financial wellbeing of their fans and aim to protect them from the dangers of betting by making it taboo. The football world has already half-accepted the wrongness of betting sponsorship by banning the logos from appearing on children’s football shirts. But the same children watch the adults play week in week out, bombarded with over 700 sightings of betting logos per game. Gambling becomes subconsciously ingrained into their naïve minds and increases the likelihood of them participating in betting in the future and potentially causing themselves psychological and monetary problems.

            Simply ending an advert with when the fun stops, stop, and telling fans to be ‘aware’ is not enough to overcome the problems that betting causes football and football fans. More must be done to minimize the exposure to betting companies that the football world is currently subject to. Governing bodies, clubs and broadcasters should implement restrictions on the involvement of betting companies in football. This could include limiting the number of gambling adverts seen during a game, minimizing the size of betting sponsors or making their presence more discrete.

            However, I would argue that as we emerge from the Covid-19 pandemic, clubs will be able to find suitable alternatives for sponsorship if they are forced to try hard enough. Betting companies are not the be-all and end-all for their sponsorship revenue. If rules are brought in banning sponsorship from betting companies, then the clubs will have no other choice but to replace them and I am confident they would be able to do so.

            Italy and Turkey have already taken the lead in banning shirt sponsors donning the logos of betting companies and La Liga is expected to continue the trend next season. Teams in these leagues are still able to survive financially and find alternative sponsorship options so I see no reason why these restrictions would not be feasible globally.

            Even the gambling companies themselves have acknowledged the deeply-ingrained problem and the parent company of Ladbrokes and Coral have taken it upon themselves to withdraw their sponsorship from football. Their chief executive publicly stated that the industry was threatening football and that the relationship between gambling and football needs to be looked at.

Summary

            In conclusion, the main argument for allowing betting companies to sponsor clubs and leagues is because of the revenue that it generates. For me, this is not a sufficient reason to negate the wellbeing of the fans of football. They are the victims in this as they are mercilessly exposed to enticing adverts for betting websites and drawn into a world that is dangerously addictive.

            There should be a ban placed upon the prominent involvement of betting companies in football in an effort to reduce the numbers of ‘problem gamblers’ and to mitigate the consequences that gambling has upon football.

 

Keeping the Money in the Family

By
Dr. Erkut Sogut , Jamie Khan
-

The Growing Popularity of Using Family Members as Agents

Unless you’ve been living under a rock in the last week, you’ll have heard that Lionel Messi is no longer a Barcelona player and has made the move to Paris Saint-Germain after 21 years at the Catalan club. The interesting part of this transfer that I will discuss in this week’s blog is Messi’s agent, Jorge Messi, is his father.

Employing family members as agents was first brought into the public spotlight in 1999 with Nicolas Anelka’s move from Arsenal to Real Madrid which was orchestrated by his brothers. In recent times, it is become increasingly common with players such as the now PSG trio Neymar, Mbappe and Messi all represented by their fathers.

In this blog I will discuss why using family members may be an attractive option for players but also the issues that may arise from doing so. I will then consider how family members should be treated compared to regular agents and how they might be regulated in order to ensure ethical and legal compliance.

Why Would a Player Prefer to Use a Family Member as Their Agent?

Football agents, whether applicable to each individual or not, carry the burden of a bad reputation that is associated with their profession. Players are cautious that the agent may not always act in their best interests but instead will be motivated by filling their own pockets.

The relationship and level of trust that a player places in an agent may never come close to what they have with their family members. A familial connection will mean that a player can be more confident that their agent wants the best for them. Particularly in young players who are wary of agents approaching them, using a family member is a more attractive option as the close, trusting relationship is already there, rather than having to develop a bond with an agent whose intentions may not be known or pure.

The obvious appeal of employing a family member as an agent is that any commission they receive for their services is kept within the family. For example, it is estimated that Neymar Sr has received £100million for Jr’s transfers whilst Jorge Messi has earned approximately £75million in contract commissions for his services. The success of sons and brothers also financially benefitting the rest of the family is a more attractive option than having to remunerate a stranger with a football agent license that may not have the player’s best interests at heart.

In a perfect world, the love and trust between a father and son or brothers would mean that each party is acting in a way that benefits each other as much as possible. Unfortunately, this is not always the case. There is a risk in mixing familial relationships with professional business. The combination may lead to big fall outs. Even family members can develop a hunger for money or power-grabbing from representing their relatives.

Can Family Members be Regulated as Agents

An additional risk that arises from using a family member as an agent is that they may not be qualified enough. Before the removal of an exam in FIFA’s regulations in 2015, family members were exempt from taking it. This made it easier for them to be registered as the representative of their son or brother.

In the case of Juan Mata, his father was a former player and obtained his agent license once he had retired. He now has a client list including players such as his son and Salomon Rondon. There are many other cases in which close relatives of the players are representing them. For example Eden Hazard’s agent is his father, the agent of Sergio Ramos is his brother René Ramos, agent of Mats Hummels is his father Hermann Hummels. We also have Mauro Icardi from PSG who’s agent is his wife Wanda Icardi or Dane Rashford as the brother and agent of Marcus Rashford. So are the brother of Liverpool defender Trent Alexander-Arnold and the father of Chelsea’s Christian Pulisic.

FIFA’s proposed changes to regulations coming into force next year will see family members treated in the same way as all other agents. The regulations contain a clause that prohibits family members from acting as agents unless they are fully licensed. Importantly, this includes the requirement of passing the agency exam. This is a step in the right direction as it will ensure that family members receive a level of education and qualification before they are able to represent their relatives. I expect that FIFA will emphasise that players should only use agents that have a proven level of aptitude in the industry and are qualified enough to serve them well.

Furthermore, a cap on commissions could minimize the ability of relatives to collect disproportionate fees for their services, reducing the risk that they will act on their own greedy interests rather than to seek what is best for the family member they are serving.

Transparency, once again, is vital. If a family member is representing a player, all transactions, commission fees and gifts should be recorded and accessible by FIFA. This will overcome the worry of many that an unnecessary amount of money leaves the game and cannot be accounted for through payments to agents.

Summary

Using family members as agents is becoming increasingly popular and will remain an attractive option for players. They may have a level of trust that can only be had with a family member and not the kind of relationship they could develop with a separate agent.

However, the risk of mixing family and business may not always lead to a beneficial outcome for both parties. Issues arise from greed and power and the lack of qualification that the family member representative may have. It is important that a system is in place that maintains the legal and ethical appropriateness of family members representing players.

FIFA’s proposals for agent regulations are certainly going to improve the dynamic and standard of family members acting as agents. By ensuring that they are sufficiently educated and qualified whilst also preventing them from receiving an unfair and extortionate level of remuneration, the standard of agents will rise and it will go some way in preventing the concerns that prevail from using brothers, fathers or wives as agents.

The Gatekeepers – “No deal without me”

By
Dr. Erkut Sogut , Jamie Khan
-

THE CURRENT SITUATION

As I have mentioned in previous blogs, the current situation allows agents to act on behalf of the player, signing club or releasing club or all three parties in a single deal. However, some agents specialise in acting for a single party. The majority of agents will act for a single party, but it is possible for certain agents to represent more than one, including the player and the clubs. In this episode I will discuss the difference between agents that only represent clubs (club agents), those that represent players (player agents) and why clubs would use agents for themselves. Furthermore, I will propose the argument that agents that only represent clubs should be regulated differently to player agents.

At the moment there are three types of agent. The kind that mainly represents players in deals, then others that represent mainly clubs and finally those that work under a dual or multiple representation contract for two or more parties. See my previous blogs for more details on this.

            There is a significant difference in the day-to-day work of a club agent and a player agent. Whilst they are both bracketed under the same license of the football association they are a part of, their actual responsibilities are far apart. Player agents take on the role of scouting young footballers, build a relationship with them and their families and support them through their career, on and off the pitch and beyond. They are tasked with protecting the interests of their client and maximizing their potential and earnings from their football career and their endeavours afterwards. A player agent often covers a 360° array of components of their client’s career: from marketing, media and PR, to holidays and house insurance, to charity work and business ventures. Not to mention the slightly important task of negotiating employment contracts, transfers and salaries!

            Ultimately, club agents are brokers. They do not have to take on the variety of tasks that a player agent has to as they do not have a duty of care or responsibility for a player. Instead, they are directly representing the club. A club that is looking to sign a player will often not go directly to the agent of the player. Instead, they will provide an agent with the information of the player they’re after and an offer that they can take to the player’s agent.

            It is a common strategy that is regularly seen in transfer deals in the world of football. It has become the norm for a club to have a specific relationship with one or, at most, a handful of agents that they will bring into every deal.

THE PROBLEM

Many of these ‘club agents’ are very experienced and used by the clubs after establishing themselves in the industry, developing strong relationships with clubs and creating a network that gives them the ability to benefit a football club. However, the issue lies with the fact that interestingly many of these club agents are friends or relatives of officials in the club. The sporting director, head of recruitment, board members, president and even the coach can influence which agent the club uses.

It seems an obvious solution for football clubs to minimize their expenditure on agency fees by going to the agent of the player directly with an offer. However, a club official can bring a friend or family member into the deal as well in order to benefit themselves from the fees.

For example, club A wants to sign Player Z. An official at club A notifies his brother who is given the authority, under the umbrella of an agent’s license, to act on behalf of the club in the deal. The club gives a mandate to the agent for his services and may offer a commission as part of the mandate contract which would be classed as a club expense. Alternatively, they would offer no remuneration directly but encourage the agent to share the commission that is earned by the player’s agent.

The brother of the club official then approaches the player’s agent and explains that he would be able to help the agent move his client to club A. If the club was not giving the agent commission, he would then also negotiate with the player’s agent a percentage of the final agency fee paid which could be as much as a 50% share and would likely drive up the value of commission that would be negotiated with the club and player. In some cases, it is possible for the club agent to receive double payment from the player’s agent and the club, further increasing the attraction for a club official of bringing in a close associate. It is estimated that if a club did not use an agent and went to the player’s agent directly, commissions and agency fees would fall an average of more than 50%.

From this example, it is clear that the club would save money if they went to the player’s agent directly. However, by appointing an agent themselves, the club official sometimes benefits from the deal themselves. They are able to provide a payout to their friend or family member and may even take some of it for themself as part of the deal. This method of using a club agent facilitates for kickbacks and acts as a vehicle for the club official to make money for themselves.

How many fans knew that this was part of the money that their club spent on agents each year? How many fans knew that their club even had its own agent? Some clubs are fully owned and under control of these stakeholders who have the right to choose their agent. However, in clubs where the fans are majority stakeholders, such as Bayern Munich or Barcelona, it is not understandable that the clubs can choose to use an agent and waste money on their commissions. The numbers must be publicly documented for fans, especially in these clubs that are structured as a members’ association.

SOLUTIONS

In my opinion, the extent of the differences between club agents and player agents must be established and understood. The consequences of this would cause football authorities to create a new regulatory approach to club agents that is separate from the rules for player agents. The roles of each profession are different so why should the regulations be the same?

I believe that FIFA should only regulate agents that are representing the players. A club should use the agents that represent them in the same way as they lawyers, consultants and tax advisors. This happens in both the signing and releasing clubs. The agents are working on behalf of the club to pursue their interests just as these other parties would.

By changing these regulations, the football associations and authorities would be able to separate player and club agents. They would gain increased transparency into the market. This would give clubs the power to decide for themselves how club agents can be used and if they really need to use one. This also provides protection for the agents who represent the players.

If FIFA were to take it upon themselves to regulate club agents then they should consider implementing a completely separate set of regulations to that of player agents as they do entirely different things!

SUMMARY

            In conclusion, club agents and player agents are very different. The contrast lies in the extent and variety of their responsibilities and day-to-day work. Currently, both of these professions are regulated under the same umbrella, despite the differences.

            I believe that there is a problem in football with clubs, club officials and their relatives or friends. Officials are maneuvering their close ones into positions as club agents and hiding behind the agent umbrella in order for them to make monetary gains themselves.

            For this issue to be solved the differences between the two types of agent must be understood in order to create separate regulations to monitor and improve the standard.

 

Show me the Money: Who should pay the Football Agent and how is it taxed?

By
Dr. Erkut Sogut , Jamie Khan
-
key documents and a calculator used by a fifa footbal agent

The Current Situation

A player’s representation contract (a written agreement between player and agent) contains a clause that commits them to paying their agent a percentage of the gross salary in their employment contract. This seems an ordinary requirement as in most things in life it is the customer of the services that pays for them. However, it is commonplace for the signing football club to pay the agent’s commission on behalf of the player as negotiated by the agent. They can arrange for the club to cover the player’s agent’s commission cost and ensure that they receive the right remuneration for their service, this is known as a ‘benefit in kind’ payment. Some players may be under the impression that the club is paying for them and are shocked when they’re hit with the added fee on their tax return. They are required to pay income tax on their salary and then the ‘additional income’ of the benefit in kind paid by the signing club. This is still beneficial for the player as they only pay a percentage of tax on the amount that the club pays to their agent rather than having the personal responsibility of fully remunerating their agent.

Clubs and players can establish clauses in the employment contract that gives bonuses to compensate the player for this tax. For example, a ‘loyalty bonus’ is a set fee that is paid on a certain date to a player if they remain at the club for a specified period of time. This can be set at enough to cover the tax that the player has to pay from the ‘benefit in kind’ payment by the club. The intermediary may negotiate a loyalty bonus or other performance bonuses in order to ensure that their client makes a net gain. 

Tax authorities benefit hugely from football. For example, in the UK, the Premier League generates around €900million of tax returns per year with a large proportion coming from player salaries. Paying agents as a benefit in kind also creates a significant taxable pool of money. It is estimated that almost €600million is spent on agent fees by clubs globally, 80% of this happens in Italy, England, Germany, Portugal, Spain and France combined. Astonishingly, in Portugal, clubs spend more on agency commissions than they do on transfer fees. If these are paid on behalf of the player and is taxable under the country’s tax laws, then the government can generate a generous contribution of tax from football.

Why Would the Club Pay?

            There are several reasons why it has become the norm for clubs to pay on behalf of the player. The primary reason is that if the clubs did not pay the agent on the player’s behalf, they would lose money rather than the player. The market would adjust so as to raise the players’ asking wages high enough to safeguard their income, making an overall gain, even after tax. The clubs would have to spend more money on their players’ salaries to compensate for this. With a higher salary the player would be able to pay the agent as an ‘absolute cost’, which is not taxable whilst also not losing overall on what their wages would have been if the club paid the agent on their behalf instead. It is estimated that if the players were to pay their agents in the Premier League, this would cost clubs an additional €200million per year. So, despite the impression that the clubs have huge expenditure on paying agents on the player’s behalf under the current system, they would be hit with greater financial pressures if they had to pay the players more to be able to cover the fees themselves.

            A second reason why it is beneficial for agents for the clubs to pay on the players’ behalves is that it guarantees they are appropriately remunerated. The finance departments of football clubs are more qualified to handle commissions, expenses and taxes than the footballers themselves. Therefore, it is more common that the burden of payment to the agent lies with the club who are more likely to use the correct legal and payment procedures.

 In instances of dual representation in England, it is undoubtedly simpler for one party to pay the entire fee and incorporate this into negotiations. If the agent is representing both the player and the buying club, both parties will owe a certain percentage of commission to the agent. The club can pay on behalf of the player as well as themselves and will factor these payments into the employment contract and transfer of the player. This has the added benefit of lowering the amount of tax that is payable by the player as the benefit in kind is smaller. For example, if the club paid the 3% commission that they supposedly owed the agent themselves, plus the 3% that the player owed, the player would only be taxed on that 3%. The target of the agents’ services would be stipulated in the dual representation agreement which is agreed upon by all three parties as consent for the agent to act on behalf of the buying club and the player.

The Problems

            The issues that arise from this system of the signing clubs remunerating the agent on behalf of the player are centered around tax. In 2018, the British tax authority, HMRC, investigated 171 players over questionable tax payments. The doubt lies in how much a player owes as a result of the benefit in kinds paid by their clubs as often players and clubs try to find a way to minimise their tax demands.

            The FA estimate that the 80% of the 1400 agent negotiations between 2015 and 2018 in which the buying club and the player claimed to use the same agent is a false representation of reality. In most of these cases the agent was acting for just the player. However, when the transfer was recorded, the agent apparently provided his services to the club as well and therefore was owed a proportion of his commission from the club that the player could not be taxed upon.

In countries such as Germany, it is not uncommon for the player to deny that they used the agent at all. The clubs of the Bundesliga spent almost €200million on agency fees in the 2019/20 season but the tax authorities would have lost out on the correct value of tax that should have been paid by players who relied on the clubs’ benefits in kind to pay the agents on their behalf. If it is possible to show that the agent worked for the club and that his services benefitted them rather than the player then there would be no taxes due. The agent would be registered in the transfer as acting on behalf of the club rather than the player so their commission would be classed as a ‘club expense’ rather than a benefit in kind to the player. It may be difficult for the tax authorities to prove that the player owes the agent for his services rather than or as well as the club.

For some cases, agents may not even sign a representation agreement with the player. They are still able to have the player as a client but persuade them that a representation agreement is not necessary because the agent ‘trusts’ them. In theory there would still be a certain level of commission that is agreed upon despite a lack of a legally binding contract. This would actually benefit the agent and negotiations as it is likely that the buying club would pay on behalf of the player. However, the player would not be taxed as according to official records, the agent does not represent the player and his services were for the club. It is a system that troubles tax authorities as it is very difficult to monitor and accurately know the tax that they are entitled to claim from these transactions.

An additional issue with the clubs paying on the player’s behalf is that the player may be ‘kept in the dark’ about certain factors of the deal. The player may not know exactly what they are paying the agent for and how much. Are they getting good value for money? Do they even know what they are being taxed for? How much money is the agent taking?

Solutions

            Similarly, to the topics I have discussed over the last few weeks, the solutions to the question of who should pay the agent and the issues with taxation lie in the need for greater transparency.

            The United States have adopted a system that could help football and agents. Commissions and agency fees are open for the agent and the player to agree upon and is then payable by the player. This means that the agent has the responsibility to make sure that the player is aware of exactly what services they will provide to them and how much commission they are entitled to. The contracts also clearly stipulate how the player will be taxed and allows the player and agents to adjust the negotiations for this.

            For this to be successfully implemented into football, it would be expected that FIFA will devise a process that ensures the agents are remunerated. It would not be an effective solution if there was not a system in place that protects agents and guarantees they will not be taken advantage of and underpaid.

It would be imperative for clubs to attain a high level of transparency and work in conjunction with the relevant tax authorities. Providing formal documents, data and accurate records of intermediary interactions may be an arduous task but would heighten transparency and allow for the tax authorities to monitor tax returns from players and clubs accurately and effectively.

Summary

            In conclusion, the uncertainty and complexity of who pays the agents and the issue of tax evasion tactics through methods such as players denying the use of agent services creates a problem for football and for the tax authorities.

I would argue that football should adopt an ‘agent-remuneration’ system similar to that which is already in effect in the United States. This would create transparency within the industry whilst working with tax authorities to make the system simpler and more accurate. The players would be able to understand and control what they are paying for and the value of commission and this would be complimented by a protective mechanism for agents to prevent mispayments. 

There is a suggestion that the new FIFA regulations are considering prohibiting benefit in kind payments, even in dual representation contracts. The club will be required to pay the agency fee that they are contracted to whilst the player must pay their commission percentage directly to the agent. This would be a step towards the American model.

 

Back to School: FIFA’s Plans to Reintroduce a Football Agent Exam and Education

By
Dr. Erkut Sogut , Jamie Khan
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a classroom of fifa agent exam preparation

As part of FIFA’s deregulation of agents in 2015 they removed the compulsory agent exam. The exam lasted 75 minutes and consisted of 20 multiple choice questions based upon various case studies and scenarios. 15 of these questions came from FIFA directly and the other five were created by the national football association. The exam was available in the local language of the national football association. The aim was to test the candidate’s understanding of FIFA’s principles and to appropriately apply the regulations in different situations. In order for the candidate to be awarded an agent’s license, they were required to achieve 80% on the exam; a total of 16 correct answers out of a possible 20. It was a difficult exam that forced aspiring agents to vigorously examine and understand all of FIFA’s regulations, from player registration to transfers and status of players. The exam was not to be underestimated, reflected in just an 8-15% annual pass rate. Consequently, agent numbers were hardly booming. Prior to the deregulation in 2015, there was only around 500 licensed agents operating in the UK, according to The Independent.

            Then, from the April 2015, the exam was abolished as part of FIFA’s changes to agent regulations in an attempt to improve the industry and football as a whole. The motivation for deregulation was in the hope that transparency would increase as all agents would become licensed. Previously, those that could not or did not want to pass the exam resorted to operating without a license, making it difficult for FIFA to monitor. They decided it was best to leave the responsibility of deciding how to award an agency license to the independent national football associations. In some countries, such as France and Italy, an exam was still used, combining FIFA’s and the independent football associations’ regulations. However, in other countries such as the UK and Germany, the absence of an exam reduced the criteria for obtaining an agent license to a criminal record check and an affordable annual payment. 

            The Independent now estimates the number of licensed agents in the UK to be around 6000 individuals, a 1200% increase from the time when passing the FIFA exam was mandatory. This is an extraordinary rise in the number of agents under the umbrella of the FA. This was not exclusively seen in the UK; it had the same impact on the football industry worldwide. The table below shows the rising agency fees across the football world (Statista, FIFA). The table may give the false impression that because there are more agents, they create more commission. The reality is that the rising agent fees are what is attracting the large rise in numbers but many find that they are unable to make money. FIFA has recognised this and is planning on limiting the number of new agents to prevent a further increase.

Inevitably, with a wider range of individuals involved in the industry that have not proven a certain standard of knowledge and education, the average competency of agents has fallen. FIFA have decided to reevaluate their regulations for working with intermediaries (RWI) and are proposing to reintroduce an agent exam in order to combat this issue. According to FIFA’s Chief Legal and Compliance Officer (CLCO) they are in the final stages of consultation with all the relevant parties. The final proposal is set to be made in the near future, before the new regulations will come into effect in the summer of 2022.  The CLCO has made it very clear that this is not intended to be a project to oppose agents but to help them by improving the standard within the industry. FIFA are also determined to ensure that the new regulations comply with EU legislation and that the exam can be introduced globally.

From what is known so far, the exam will likely take a slightly altered appearance to the one that was scrapped in 2015. All of the multiple-choice questions will be universally applicable, based upon FIFA regulations. It will also change from being translated into any language to only being available in four languages, English, Spanish, French and German. The exam will be taken digitally rather than on paper. This allows FIFA to have more control and prevent cheating. The pass mark is yet to be officially stated but it is likely to be around 80%.

Reintroducing an exam will, first and foremost, decrease the number of licensed agents operating in football. However, there are many other advantages to the proposed system. By making candidates educate themselves and reach a certain level of knowledge and wisdom of the industry in order to become a part of it, the standard and expertise of agents will improve. With better educated agents should come more transparency, and with greater competency comes greater professionalism. It is hoped that the proposal will therefore benefit the agents themselves as well as the players and football in general.

I expect that FIFA will consider and attempt to overcome any issues that their new exam proposal may endure to ensure that it is a success. The exam was originally eradicated in 2015 on the (since falsified) belief that it would increase the transparency of the industry by reducing the number of unlicensed agents. Whilst it is not disputed that the standard of agents that pass the exam will increase, will there not just be a rise in unlicensed agents once again? It seems a vicious circle that poses a difficult solution. If the exam is to be reintroduced how can the risk of losing transparency or a level of control over the industry be minimised?

Furthermore, there is the unavoidable issue of the ‘unexamined agents’. Although those that passed the exam prior to 2015 will not have to retake the new exam, what is the best approach to have with the agents that obtained their license since 2015 by passing the fit person check and are paying their annual fee? If FIFA were to demand that these agents now pass an exam, there will be objections from this cohort. These agents may have worked for up to six years, developing their client base and operating within the industry. If they are then unable to pass the new exam their livelihood will be undermined. It makes sense that these agents should need to pass an exam, but it would be fair to individuals in this position to be allowed multiple retakes and extra access to formalised education in order to help them to pass it.

In my opinion, education should be paramount, and should be expanded and developed with a greater volume of content that is specific to the work of agents. For an agent to be successful and professional they must have a wider understanding of all regulations, case studies, cultures, systems, history, leagues, legislation and every facet and field of the industry. It is expected that an ongoing education system will be provided by FIFA that will inevitably produce a greater and constantly growing level of proficiency amongst agents.

In conclusion, I support the implementation and reintroduction of a formal, universally applicable FIFA exam. It sets a single standard of competency for agents to meet to obtain their license. FIFA will structure the exam in a manner that demands candidates to have an adequately detailed understanding of the industry and its regulations. This will place a distinct stress on agents educating themselves which will have a positive impact on the football world.

 

 

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