The international supply of sports agent services.

• Author: Pinna, Andrea

1. Introduction

   For a long time, the profession of sports agent has not specifically been regulated. Only recently were particular rules concerning the access to the profession and the exercise of this activity enacted, both at the State level and at the level of sports' federations. Such rules were enacted in reaction to a certain drift of the profession, which resulted, these last years, in the perpetration of embezzlements and frauds in France and abroad. Among the numerous scandals, the one that affected the basketball player Kareem Adbul-Jabbar, the player who scored the biggest number of points in the history of the NBA, is the most famous. (1) In this case, not only had the agent violated his obligation of loyalty towards the player, but he had also commingled his personal funds with those of his client, made investments contrary to his client's instructions and even secured his personal debts with his client's funds. (2)

   The suspicion towards this profession largely resulted in discrediting it. In the United States, the suspicion is such that lawyers, who are subject to stricter rules of professional conduct, are substituting to sports agents in exercising the activity of intermediation between sportsmen, clubs and sponsors. (3) In most European countries such an evolution may not possibly occur, since lawyers' rules of conduct prevent them from exercising intermediation activities of that kind. Such prohibition may be either direct, as in French law, (4) or indirect as a result of the prohibition of contingency fees.

   The distrust towards the profession of sports agent also contributed to the development of specific rules governing sports agents. Such rules have a unique typology and are often much more demanding than those imposed on their counterparts in the artistic and literary fields. While some of the new rules emanate from state authorities, sport however remains an activity widely controlled and organized by sports federations. It is therefore not surprising to note that a large number of requirements applying to sports agents derives from the lex sportiva of national and international federations. Besides, regulatory efforts were initiated by associations of professional sportsmen having more or less of authority. The four main sportsmen's associations in the United States--which benefit from the status of trade unions--oblige their members to appoint only licensed agents. (5) Finally, efforts of self-regulation also appeared within the profession. Notably, the Association of Representative of Professional Athletes, adopted a Code of professional conduct, although the latter has no binding value since the membership to the association is voluntary and since the Association does not have the powers to enforce the principles it adopted. (6)

   A specific frame of the activity of sports agent was first established in the United States, with the adoption in 1981 of the Athlete Agents Act by the State of California. (7) In my knowledge, the first European legislation in that field is the French law no. 92-652 of July 13, 1992, which modified the law no. 84-610 of July 16, 1984 governing the organization and the promotion of physical and sports activities. Until 1992, the activity of sports agent was forbidden in France. Although such activity was employed in practice, notably in the field of professional football, courts that were referred disputes between agents and their principals ruled for the nullity of sports agent contract on the ground that the rules of the French Labour Code on labour procurement prohibit the exercise of any intermediary's activity between two persons called to be bound by an employment contract. (8) The activity of sports agent was authorized and regulated in France by the law no. 92-652 of July 13, 1992. (9) With this law, French law, contrary to most foreign legal systems and international federations regulations, introduced a restrictive regulation of the activity. (10) Article 15-2 of the law no. 84-610 of July 16, 1984 was recently modified and, in its last version, deriving from the law no. 2000-627 of July 6, 2000, it introduces two main rules. (11) On the first hand, the law requires that sports agents obtain a license in order to exercise their profession while under the regime of 1992, a mere preliminary declaration was sufficient. (12) On the other hand, the new provision of Article 15-2 provides that the payment of sports agent cannot exceed 10% of the amount of the contract which was concluded following to his intermediation and prohibits sports agents to act on behalf of both parties to a single contract. Only the party who is "represented" by the agent can therefore remunerate him. Article 15-3 adds to this regime a total ban for an agent to be remunerated when the contract relating to the exercise of the sports activity concerns a sportsman under the age of majority.

   At the federal level, the first rules of the International Federation of Football Associations (FIFA) were adopted in 1994. They have been deeply criticised notably because they required the deposit in the hands of the federation of an important sum of money as a guarantee. The Executive committee of the FIFA modified its regulation of the activity of sports agents on December 10, 2000. Nevertheless, at the level of international federations, FIFA is isolated. In sports other than football, international federations generally let national federations free to adopt rules or to allow whoever wishes so to exercise the profession of sports agent. This gave place to the development of a body of ill-assorted rules with different scopes of application, which conflict with each other.

   The recent intervention of sports movements and of national authorities in the regulation of the profession have not yet resulted in the expected improvement of the moral standards of the profession of sports agent. As a consequence, this profession, especially in the world of football, is still today under scrutiny. The introduction in France in 2000 of an authorisation procedure instead of a declaration for the access to the profession gave rise to serious difficulties, as evidenced in recent inquiries on the players' "false agents". (13) Regardless of the success of the undertaken efforts, it is indisputable that the activity of sports agent begins to be very much regulated. The superimposition of regulations having different origins leads to a great complication. The purpose of this article is, if not to establish the various solutions to the existing problems, to analyse the complex issues concerning the international exercise of the activity of sports agent.

   The activity of sports agent consists in putting in touch parties that are interested in the conclusion of a contract relating to the exercise of a remunerated sports activity. Such is the definition given by French law, which often corresponds to the common conception of the profession according to which an agent aims at helping an applicant for an employment to find an employer or conversely at helping an employer to find an employee presenting particular characteristics. The activity of sports agent is thus an activity of intermediation on the employment market, in the specific context of physical and sports activities. The qualification of mandate is often used by practitioners and by the law. However, if the activity of the agent sometimes consists in representing his client, in most cases, the agent merely acts as a broker, following the example of many artistic agents. (14)

   The sports agent is nevertheless called upon intervening in a very large variety of situations, which requires the establishment of a typology. In general, when evoking the activity of a sports agent, one assimilates such activity with that of the agent of the sportsman. The intermediary would thus be the person who represents the sportsman in his relations with employers, organizers of competitions, sponsors, etc. The activity of advising the sportsman is also important. It includes any kind of advice concerning the management of his career, as well as any kind of legal, financial or even tax advice. As a consequence of the variety of this activity, the program of the exam for accessing to the profession of sports agent often includes legal and tax tests. This is notably the case of the exam organized by the French sports federations. In this article, it will be mainly discussed about the intermediation activity of the agent. (15)

   However, if the contract of sports agency is generally the contract by which a sportsman requires an agent to represent and to advise him in the management of his career, the law also envisages other possibilities. In several hypotheses, intermediaries are appointed, not by the sportsmen, but by clubs and more generally by sports organizations endowed with legal personality. Such mandate can have different objects. The mandate to "scout" for a sportsman is very frequent, notably in case of transfer of players between clubs. In that case, the agent is appointed by a club to find a player having certain characteristics and to negotiate the conditions of his transfer. In this case, the agents appointed by the club can act in two different manners. Very often, they intervene for the negotiation of the contract of transfer concluded between the club of origin and the club of destination, their payment being fixed on the basis of the amount of the transfer. This is the most frequent situation. In less frequent cases, the agent appointed by the club is involved in the negotiation of the new employment contract to be concluded between the club and the player, but in the name and on behalf of the club and not of the player. In that case, the commission of the agent is often calculated on the basis of all wages to be paid to the player for the period of the concluded employment contract. Nevertheless, in practice, such a mandate to scout for a sportsman...