Pro League vzw/asbl
Avenue Houba de Strooperlaan 145
For the attention of the Board of Directors
& the CEO
Brussels, 19 April 2019
Dear Members of the Board,
Dear Mr. François,
Request to withdraw draft regulations
Proposition to work together on a better solution
The BFFA’s vision
We write you on behalf of the Board of Directors of the vzw/asbl Belgian Federation of Football Agents (hereinafter “BFFA”).
In order to avoid any misunderstanding, we would like to stress that it is not BFFA’s intention to trigger further negative escalation of the situation. On the contrary, although this letter indeed is a legal notification and also has a legal purpose, it (mainly) aims to find a solution and a better procedure to work together on necessary regulations.
BFFA was rather astonished by the draft regulations (“reglement tussenpersonen” / “règlement intermédiaires” hereinafter referred to as “Draft Regulations”) which we received on 8 April 2019. We will explain this further below, but before getting into that, it is important to draw the timeline of this discussion around the Draft Regulations.
- On 11 December 2018, at the request of the BFFA, three representatives of the BFFA were invited to a “hearing” of the Pro League’s “Expert Panel”. During this meeting we explained the BFFA’s views on the required regulations in order to clean up the Belgian football industry
- On 17 December 2018, the Expert Panel’s recommendations were approved by the Pro League’s General Assembly and communicated in a press release
- Also on 17 December 2018, the BFFA has reacted in a press release which was also sent to the Pro League. In this press release we have tried to react in a very constructive way but we did point out that the Pro League’s recommendations were not in line with the law and therefore we proposed to work together: (quote) “The most efficient way forward would be to establish a Working Group between representatives of the Pro League, BFFA, the authorities and the Player’s Union in order to put the well-intended recommendations of each group into actual rules” (unquote)
- Since then the BFFA has kept on sending out the same signals in each press release, interview, seminar, public speaking engagement that one can imagine. However, there was never one invitation or action from the Pro League to involve us in the regulatory process, contrary to the Federal Government, all of the Regional Governments, countless members of the several parliaments in Belgium, the KBVB/URBSFA, the European Football Agents Association, the Player’s Union Sporta (with all of these organisations we have very constructive discussions and meetings and with some of the governments we have been actively working on draft wording for legislative initiatives). So the BFFA was surprised that the Pro League never really seemed to be in favor of such an exchange of know-how, apart from one formal meeting on 11 December.
- On 3 April 2019, the Pro League sent a press release about the Draft Regulations.
- On 5 April 2019, the CEO of the Pro League represented the Belgian Pro League at the General Assembly of European Leagues in Lisbon, with the officially communicated objective to present the Draft Regulations as an “international model” for all other leagues.
- At the BFFA’s explicit request, the Pro League sent us on 8 April 2019 a copy of the Draft Regulations, mentioning that these were only a sort of “pre-draft”.
- However, we were informed on the same day that the Pro League members would come together on 24 April 2019 to propose some (quote) “possible final changes” (unquote) and vote the regulation in a General Assembly on 6 May 2019.
- Therefore, the BFFA felt obliged to react in a press release dated 9 April 2019, in which we strongly disapproved the Draft Regulations
The fact (1) that the Pro League has communicated already to the press about these Draft Regulations, (2) that the Pro League’s ceo has presented them on an important European conference, (3) that the Pro League members will only briefly meet once on 24 April to discuss some “possible final changes” and (4) that the Pro League has already scheduled the final vote on 6 May 2019, all make it abundantly clear that – today – these Draft Regulations should be considered as quite a finalized text that is in fact ready to be formally voted within the next weeks.
- Legal evaluation of the Draft Regulations
Again, in order to avoid any misunderstanding, the BFFA still sincerely hopes that this matter will not further escalate. The BFFA remains interested to get around the table with the Pro League and work out a better solution for Belgian football. But the BFFA cannot remain blind for the many legal objections against the Draft Regulations. Because, after a thorough reading of the Draft Regulations, the BFFA is very disappointed about several legal liabilities that are created by the Draft Regulations. Almost none of the articles in the Draft Regulations seem to be fully in line with the (inter)national law, nor with current national football regulations:
- The Draft Regulations qualify as an agreement between undertakings and/or a decision by association of undertakings, which has/have as object or effect to appreciably prevent, restrict or distort competition on the Belgian football market or within a substantial part of it. Such restrictive practices are prohibited by article IV.1 of the Belgian Code of Economic Law (hereinafter “BCEL”), as well as by Article 101 of the Treaty on the Functioning of the European Union (hereinafter “TFEU”).
- The Draft Regulations qualify as abusive exploitation practices of undertakings in dominant positions, which is prohibited by Article IV.2 of the BCEL and by Article 102 of the TFEU.
- The Draft Regulations contain several infractions on the Belgian Civil Code, namely the articles related to contract law. By approving the Draft Regulation, the Pro League would for instance qualify as a third-party accomplice regarding a breach of contract (“derde medeplichtige aan contractbreuk” / “tierce complicité à la rupture d’un contrat”)
- The Draft Regulations violate Social Law, by disrespecting the current Regional Decrees (and Ordonnances) on Private Employment Intermediaries. Even worse, the Draft Regulation imposes rules on the football intermediaries which – if respected – would actually result in the (unwanted) violation of these Decrees by such intermediaries…
- The Draft Regulations create a clear conflict of interest at the level of the envisaged Clearing House
- The Draft Regulations impose rules on players with severe negative fiscal consequences for the players, without even the approval of the Players’ Union
- The Draft Regulations are not in line with the current regulations of the Belgian KBVB / URBSFA and do not take into account the fact that these regulations are currently undergoing a significant redraft
- The Draft Regulations create an unjustified discrimination between Belgian established intermediaries and foreign established intermediaries by allowing an unclear “correction period” for players that signed a representation agreement abroad before signing with a Belgian club
- The Draft Regulations are incomplete as regards the distinction between, on the one hand intermediaries who act as a physical person, and on the other hand, intermediaries who act through a company. Just as an example we mention the fact that the Pro League’s Expert Panel seems to have forgotten that widely used company forms like a GCV / SCS (“Gewone Commanditaire Vennootschap” / “Société Commandite Simple”) are subject to different administrative obligations and accounting obligations than company forms like for instance a BVBA / SPRL. Another example: the Draft Regulations confuse the concept of “Company Seat” with the concept of “Domicile”. But the list is much longer.
- The Draft Regulations create a possible discrimination between coaches and players and might even force intermediaries to break the contract with existing clients for reasons that are not related to such an individual client.
We are therefore of the opinion that if the Draft Regulations would be approved, there is a major risk that any party involved (which might be a player, coach, club, agent in Belgium or even abroad) would be successful whenever such party would challenge the Draft Regulations in front of a court or tribunal.
Further we are absolutely convinced that the lack of respect for Belgian competition law in the Draft Regulations, exposes the Pro League and its member clubs to severe penalties which could be imposed by the Belgian Competition Authority (i.e. “Belgische Mededingingsautoriteit” / “Autorité belge de la Concurrence”, hereinafter “BCA”).
The BFFA is convinced that Belgian football would suffer unacceptable image damage if such litigation would ever take place. If the long-awaited rules to clean up Belgian football would turn out to be illegal shortly after their introduction, the entire Belgian football industry would lose its credibility even further and also the financial damage would be catastrophic. History would repeat itself and Belgium would once again – since the Bosman-case – be seen as the country that does not seem to be able to put its football regulations in line with law without severe legal battles. Therefore the BFFA calls the Pro League to avoid such legal disaster and get around the table to work out a better solution, which is in line with the law… and therefore enforceable.
However, if the Pro League choses to continue on the pathway of the Draft Regulations, it will be clear for BFFA that the Pro League is not interested in a serious debate, nor in creating a level playing field. In such case the BFFA will be obliged to undertake legal steps and protect the Belgian football industry against such a legal mistake by the Pro League. We are very hopeful however that these legal steps will not be necessary and therefore we provide you once again with some of our general ideas on a better way forward, as we explain further below.
- The BFFA’s view on the way forward
A one-sided or individual regulatory initiative (regardless whether it is from the Pro League, from the KBVB/URBSFA, from the Federal Government or from the Regional Government) does not have the slightest chance to actually solve the current transparency, governance and ethical issues in the Belgian football industry. On the contrary, it will offer a possibility for people with bad intentions (regardless whether they are agents, club officials, players or any other third party) to further weaken the regulatory landscape and increase bad practices.
A real solution can only be reached with a sort of holistic approach:
- We need a global streamlined plan for regulatory changes on all levels (federal, regional and regulatory). Designing such a plan if far less complicated than some parties are trying to create an impression. After all, this is just sports law and basic sports economy, not rocket science. At BFFA we consider it even rather simple…
- The goal of such a plan should be (1) transparency, (2) compliance, (3) legal certainty for all parties involved
We identify 3 important elements in order to successfully implement such an approach: (1) project-management, (2) establishment of a national “Beroepsorde”, (3) creation of a solid legal framework with a harmonized approach on all relevant levels (Federal, Regional, Regulatory). We provide you with a summary explanation on all of this 3 points below.
4.1. Start with project-management: “who does what?” & “which problems need to be tackled at which level?”
Coordination of efforts and respect for the Belgian constitutional and regulatory environment will be of the utmost importance to ensure an efficient regulatory change. It is important for all parties involved to realize that the issues around transparency, good practices and corporate governance in Belgian football cannot be solved by one single regulation at one single level. Each legislative level (Federal & Regional) and regulatory level (KBVB/URBSFA & Pro League & Sporta & BFFA) needs to respect the boundaries of their respective competences. If not, the different sets of regulations will not be in line with each other and therefore become vulnerable in front of a court or tribunal.
Since its incorporation, the BFFA has actively tried to facilitate all different decision levels and help them communicate with each other. However, this is not the BFFA’s main task. The only way to do this in a structured way is by putting representatives from all relevant parties together around a table with a strict timeline and with a clear meeting agenda. The way forward starts with project management.
Since BFFA does not believe in mass meetings or marathon meetings, we think it would make sense to work in 2 phases:
- First phase: Working group with Pro League, KBVB, Sporta and BFFA to find a common ground of understanding on all of the general principles that should be reflected in the new regulations, regardless whether they are federal law, regional law or just regulatory KBVB/Pro League-level. These principles need to be summarized in a short white paper, which will be helpful in further discussions with the different Belgian governments. It will also allow all these parties to take some transitional measures while we await the result of the regional and federal elections (and the new governments that need to be put together).
- Second phase: this should include discussions with the respective governments (Federal & Regional).
However this phase needs further sub-management of the project and it would make sense to separate topics at this stage as follows:
- strictly club related issues (e.g. social security benefits, recovery of professional withholding tax) => FEDERAL LEVEL
- strictly agents/intermediaries (/players / coaches) related issues: who can be a football intermediary in Belgium and who cannot? It is the BFFA’s view that this question can NEVER be regulated, without the creation of a new federal law on the access to the profession for “sports agents” (we refer to heading 2 below for more details). Any other regulation (whether it is at a regional level or a Pro League or KBVB/URBSFA – level) would otherwise easily be circumvented by parties with bad intentions. => FEDERAL, REGIONAL AND REGULATORY LEVEL
- Issues related to agents/intermediaries and clubs (/ and players):
- representation contracts between players/intermediaries and clubs/intermediaries => REGIONAL LEVEL AND REGULATORY LEVEL
- taxation of commissions => FEDERAL LEVEL
4.2. Establishing a “Nationale Beroepsorde” / “Ordre National” for sports agents
This is as such not a matter where the Pro League necessarily would need to get involved, but the BFFA would appreciate your support if possible. Because, the BFFA is convinced of two basic principles regarding the profession of “sports agents” or “sports intermediaries”:
- This job goes in most cases much further and is much more sophisticated than merely negotiating a contract on behalf of a player or club. It involves a much wider variety of management and promotion services.
- The current lack of regulations regarding the access to this profession has resulted in an excessively liberal climate where too many agents are active without sufficient professional competences.
No matter how hard the KBVB/URBSFA, the Pro League and the BFFA would try, they would never be able to issue regulations that could effectively control this increase of “agents”. They would even less be able to control and sanction the several “rough agents” that are active under the radar. This is because it’s the task of the federal government, the justice department and the police to control such matters in the first place. These football organizations cannot perform this first legal supervision since they simply do not have sufficient legal powers to investigate and control such matters.
So what’s the BFFA’s view on how we should proceed?
Well, since its establishment, the BFFA has been meeting with the cabinet of the Federal Minister of Self-employment & Small and Medium-sized Enterprises. Unfortunately, the current political crisis has temporarily put this process on hold, but significant progress has been made and we are hopeful to finalize this after the elections of May 2019.
The BFFA – and with us, most of the politicians and the experts in constitutional law whom we have consulted – are absolutely convinced that it is possible to regulate the access to the profession of “sports agents” through a federal law.
We would like to warn you: a wrong reading of a recent advice by the Raad Van State / Conseil d’Etat might lead to another conclusion. However we invite you to discuss this matter with constitutional experts (like the BFFA did) who will confirm you that the Conseil d’Etat’s advice should be interpreted in such a way that there is indeed a legal way to install a “Nationale Beroepsorde voor sportagenten” / “Ordre National d’Agents Sportifs” as long as it does NOT interfere with the Regional Decrees on Private Employment Intermediation (which is as such not a problem at all and which is the case for so many topics and domains in Belgium: the Federal law can regulate some principles but other sub-fields are left to the competence of the Regions).
Therefore, we conclude that it would be an important (and revolutionary step) for the Belgian football industry to fully support the creation of such a national “Beroepsorde”, as this would put this profession at the same regulatory level as e.g. architects, attorneys, accountants, real estate agents, etc. (all to some comparable extent). The national “Beroepsorde” would become a first filter with very strict federal rules for people or companies who want to exercise these activities in Belgium.
It goes without saying that the creation of such “Beroepsorde” under the supervision of the federal authorities would make the Pro League’s task and the KBVB/URBSFA’s task much easier and allow them to focus on the more detailed regulations.
Further it would offer much more possibilities to sanction so-called “rough agents” who operate under the radar.
4.3. Create transparency and legal certainty for football transfers and football contracts
The BFAA wishes to cooperate with the Belgian and international football governing bodies and authorities in order to realize the following goals:
- Creation of a solid legal framework for the regulation of the activities of football agents, clubs and players concerning all issues related to transfers, player agreements and representation. Such legal framework should include (without limitation):
- strict rules on representation agreements between football agents and players & between agents and clubs
- a regulatory guarantee on the stability of such contracts
- a distinction between player representation and club representation agreements
- a transparent sanctioning and enforcement system, through an arbitration procedure, enabling to impose sanctions in case of infractions or other malpractices
- Ban on the activities of “unregistered football agents” and a better control on registered football agents working as a front for unregistered agents
- Better protection of youth players and minors.
- Harmonize, simplify and regulate the payments to football agents:
- Install an independent (!!) clearing house system for the payments of football agents’ fees
- Install a modern and efficient software driven registration system for contracts between football agents and players
- Compulsory permanent education for football agents, controlled by the Belgian FA and Pro League.
So what does this mean in practice? In a nutshell, the following basic principles should be included on a regulatory level / Regional level:
- All payments (commissions, transfer fees) need go through an independent clearing house, preferably based on the example of the English FA’s clearing house. For the avoidance of doubt: the format proposed by the Pro League in the Draft Regulations is NOT an independent clearing house
- The contracts between agents and their clients need to be clearly distinguished into two different categories: “player agents” and “club agents”. This will put an end to the current confusion in the Belgian market about the beneficiary of the agent’s services.
- Clubs may however pay a “player agents commission” on behalf of a player, if the player explicitly agrees so. If the club pays such commission, this will be treated as a taxable benefit in kind for the player, and the player will see this on his salary slip, which ensures further transparency.
- The contracts between agents and players should become enforceable: the current situation where players can appoint and fire as much and as many agents as they like without any consequence or motivation has been the cause of the major part of the Belgian malpractices. It has attracted people with bad intentions and allowed them to make “easy money” for poor quality work. The contract between a player and an agent should contain mutual rights and obligations, should not exceed 3 calendar years and should be enforceable by both parties. This is a normal level playing field for service providers and their clients and will lead to a better level of services. The enforceability of such contracts can be realized on 2 levels: (1) in the Regional Decrees, (2) in the Pro League’s / KBVB’s Regulations (by installing a system of joint liability for clubs, comparable to the joint liability system for player contracts in article 17.3 of the FIFA Regulations).
Once such rules are being put in place, the work should be further finalized by an enforceable code of conduct / ethics: 1 at the level of the national “Beroepsorde” for sports agents and 1 at the level of the clubs (Pro League).
We understand and share the Pro League’s concern to install more transparency and control in the football industry. However, the BFFA feels that the Draft Regulations are not able to create such a positive effect. On the contrary, the many legal liabilities which are included in the current Draft Regulations might hurt the Belgian football industry even more. Therefore, we need to rethink the procedure and the concept of new regulations.
The BFFA sincerely hopes that this notification will help avoid a further escalation of the current situation and will – at last – convince the Pro League of the obvious necessity to work together with relevant parties like BFFA, the KBVB / URBSFA and Sporta in order to establish valid and efficient regulations.
With this letter we have tried once again to make a constructive approach to the Pro League. Only the Pro League’s refusal to work together, would force BFFA to undertake legal steps in front of the BCA or Tribunal, but we hope to avoid such litigation.
We thank you very much in advance for your understanding and hope, to receive positive feedback from the Pro League.
Jesse De Preter
Patrick De Koster