New Sports Law: What Lies Ahead for Football Agents?
Note: This article was published in July 2022. For subsequent developments (repeal of the TFF agent regulations, suspension of FIFA’s rules and the position as of 2026), please see our updated article.
Introduction
Law No. 7405 on Sports Clubs and Sports Federations, known to the public as the “New Sports Law” and published in the Official Gazette on 26 April 2022, aims to increase accountability and transparency by paving the way for sports clubs to incorporate. Its stated purpose is to secure the future of Turkish sport by regulating the income and expenditure of financially troubled sports clubs according to the principles of certainty and auditability. In this context, it is not surprising that the Law regulates not only the structure and internal functioning of sports clubs but also their relations with third parties. The rules and restrictions introduced for agents, another important actor in the sports market alongside clubs and athletes, are therefore of great importance.
Previous Position
The status of agents working with clubs and leagues affiliated with the Turkish Football Federation (“TFF”) had already been determined by the TFF’s “Regulations on Working with Football Agents” of June 2015 (the “TFF Regulations”). The TFF Regulations are still in force, and the agency provisions of the New Sports Law also refer to them, making clear that the procedures and principles of agency activity, who may act as an agent, the legal status of agency companies and the agent register will continue to be governed by the TFF Regulations.
Changes Introduced by the New Sports Law
Article 54 of the New Sports Law, which governs agency, adds a provision entitled “Agency – Additional Article 2” to Law No. 5894 on the Establishment and Duties of the Turkish Football Federation (“Law No. 5894”). Therefore, although the changes were made by the New Sports Law, the agency provisions are in substance contained in Additional Article 2 of Law No. 5894.
The changes introduced by Additional Article 2 of Law No. 5894 can be listed under three headings:
1. Agency Contract
The following formal requirements and restrictions have been introduced for the validity of an agency contract:
- The agency contract must be executed before a notary;
- The agency contract may be concluded for a maximum of two years;
- The agency contract must contain the names of the parties, the date and term of the contract, the scope of the agency activity and the resulting fee, payment terms, the agent’s obligations, termination provisions and the signatures of the parties;
- The amount and payment terms of the agency fee to be paid by sports clubs and sports joint-stock companies must be set out in the contract signed between the club or company and the transferred player;
- If agency activities are carried out by a company, the details of the agency company and a trade registry certificate showing that the agent is authorised to represent the company must be attached to the contract; and
- Signed agency contracts must be sent by the notary to the Ministry of Youth and Sports and the TFF within 30 days.
2. Agency Fee
Maximum rates have been set for agency fees:
- The fee of an agent acting on behalf of a player is calculated on the player’s annual base gross income. Other benefits such as the free use or transfer of ownership of movable or immovable property, and non-guaranteed privileges such as success bonuses, are not included in the gross income calculation.
- The fee payable to the agent may be agreed at up to 10% of the gross income to be paid to the player during the contract where that income is less than TRY 2 million, and up to 5% where it exceeds TRY 2 million.
- An agent representing a sports club or sports joint-stock company that transfers its player to another club may agree a fee of up to 10% of the transfer fee obtained by the club or company.
3. Administrative and Criminal Sanctions
- Where any legal transaction other than the contract notified to the Ministry of Youth and Sports and the TFF is identified between sports clubs, sports joint-stock companies, professional players and agents that directly or indirectly benefits the parties or third parties, the agent’s activity is terminated and the player concerned is suspended from matches for three months to one year.
- In the same case, the chair, board members and executives of the sports club or sports joint-stock company that carried out the transaction are disqualified for two to three years.
- Chairs, board members and executives of sports clubs and sports joint-stock companies who fail to comply with the above fee caps face imprisonment of one to three years.
- Agents who fail to comply with the fee caps have their agent licences cancelled.
- Where the contract notification obligation is not complied with, the sanctions set out in the TFF regulations are applied to the sports club or sports joint-stock company concerned.
Conclusion
The New Sports Law aims to prevent clubs from borrowing in a way that would jeopardise their financial future. In this context, the executives of sports clubs that incorporate will bear responsibilities similar to those of executives of commercial companies. The provisions on agents aim to make agent payments transparent and auditable and to prevent clubs from circumventing their financial responsibilities. Although there are few examples of practice as of the date of this article, it is expected that the new rules will subject agents to stricter oversight. While stricter oversight may be viewed negatively by agents, in our view the new rules are to be welcomed for implementing the principles of certainty and transparency and for defining the limits of agents’ rights and obligations.