Picking up on the widely reported High Court case involving Wilfred Bony (whereby an action was brought against his former representatives as a result of alleged receipts of secret commission payments - only for the action to be subjected to a dispute on jurisdiction - High Court vs FA Rule K Arbitration), it strikes us that, in a fast paced and constantly evolving market-place, there are a number of subtle contractual nuances that must be considered by Intermediaries (whether they be experienced operators or new to the relatively recently liberated market-place).
First, despite the majority of representation contracts between the Intermediary and the Player stating that there is a contractual obligation on the Player to make payment to the Intermediary for provision of services (normally a sum equivalent to 5% of the Player's annual salary), it is often the case that the Intermediary will never actually receive direct payment from the Player pursuant to that obligation. Often dual representation or tripartite agreements will be entered into between the Intermediary, Player and the Club (when concluding a new Contract) which will run parallel to the Intermediary - Player representation contract and allow the Club to make payment of the Intermediary's commission on behalf of the Player (against which the Player will pay the appropriate amount of tax as a benefit in kind provided by his employer - the Club). It is also common for Intermediaries, Players and Clubs to include dual representation clauses in the tripartite agreements which acknowledge the services which the Intermediary is providing to the Club during that particular contractual negotiation and the future management of the Player - Club relationship.
It is essential that Intermediaries appreciate the full extent of the legal, commercial and tax implications of these arrangements (not least how the full extent of the tripartite agreement clashes with the representation contract and the prospect of receiving what are often thought to be contractually secured future commission payments).
Exclusivity is another important factor to highlight, particularly in light of the recent changes to the FA Regulations on Intermediaries which now makes it a breach of the Regulations (for Players and Intermediaries) to enter into a representation contract whilst the Player is party to another exclusive representation contract with another Intermediary. Whilst this may seem obvious the previous regulatory regime arguably allowed Players to enter into multiple exclusive representation contracts with a number of agents with no fear of breaching the Regulations. This has now changed and it will be interesting to see how The FA enforces these new Regulations against Players.
The dispute resolution clauses within representation contracts are also vitally important. As highlighted in the Bony case, the courts will be reluctant to imply an agreement to arbitrate between the parties (particularly those parties who are not easily caught under the FA's 'Participants' definition - for example foreign based agents who are not registered in England with the FA but who wish to conduct business here and / or have a representation contract with a Player lodged in foreign jurisdiction).
Given that the FA Regulations on Working with Intermediaries completely changed the market-place (in terms of a huge relaxation of the registration process, with the removal of the exam and licensing system) it is essential that any Intermediaries new to the market place take the appropriate legal advice on the content of the contracts they enter into with agencies, Players and Clubs.
None of the written agreements Bony signed with the agents or their companies made reference to the FA's arbitration procedures and he was entitled to proceed with his case in the High Court, the judge ruled.