New Sports Law: What Is Expected For Agents?

Abstract

The Sports Clubs and Sports Federations Law No. 7405 (“the New Sports Law”), which was published in the Official Gazette on April 26, 2022 and known as the “the New Sports Law”, aims to increase accountability and transparency by paving the way for the incorporation of sports clubs. The aim is to guarantee the future of Turkish sports by regulating the income and expenses of the financially distressed sports clubs with the principle of certainty and auditability. In this context, it is not surprising that not only the structure and internal functioning of sports clubs, but also their relations with third parties are regulated. For this reason, regulations and restrictions regarding agents, another important actor in the sports market, as well as sports clubs and athletes, are of great importance.

Previous Situation

The status of agents working with clubs and leagues affiliated with the Turkish Football Federation (“TFF”) has already been determined by the “Instructions for Working with Football Agents” (“TFF Instruction”) dated June 2015, published by the TFF. The TFF Instruction is still in force, and by referring to the said Instruction in the provisions of the New Sports Law on agents, it has been clarified that the procedures and principles of the agents, requirements to fulfill in order to be an agent, the legal status of the agency companies and the agent registry will continue to be regulated by the TFF Instruction.

Innovations Coming with New Sports Law

Within the scope of the Article 54 of the New Sports Law, which regulates the provisions regarding agents, ADDITIONAL ARTICLE 2 (named “Agents”) has been added to the Law No. 5894 on the Establishment and Duties of the Turkish Football Federation (“Law No. 5894”). Therefore, even though the amendments made with the New Sports Law fall into the objective of this article, the provisions regarding agents are regulated by Law No. 5894, ADDITIONAL ARTICLE 2 shall be examined in details below.

We can list the alterations brought by Law No. 5894, ADDITIONAL ARTICLE 2, under three topics:

1. The Agent Contract:

For the agent contract to be valid, the following form requirements and limitations have been introduced:

The agent contract must be concluded before a notary public;
The duration of the agent contract may be determined as 2 years at the utmost;
The agent contract is required to contain; the names of the signing parties, contract date and duration, the scope of agent activities and consequent costs, terms of payment, obligations of the agent, termination provisions and signature of each party;
The amount of the agent’s fee to be paid by the Sport Clubs and sports joint stock companies and the terms of the payment, must be included in the contract signed between sports club and sports joint stock companies and the football player subject to transfer;
If the agent activities are managed by a company, the information of the agent company which carries out the activities and the certificate of trade registry showing that the agent is authorized to represent the company must be attached to the contract; and
Signed agent contracts must be issued by the notary public to the Ministry of Youth and Sports and TFF within 30 days.

2. Agent Fee:

Maximum amounts determined for the agent's fee are as follows:

The fee of an agent acting on behalf of the football player shall be calculated on the player’s annual base gross income. Other gains such as usufruct right, free of charge use of movable or immovable properties or transferring of their ownership and non-guaranteed privileges such as performance bonuses are not included.
If the gross income of the football player within the duration of the contract is less than two million Turkish Liras the maximum amount of the agent fee can be decided as the ten percent of the gross income of the football player. If the gross income of the football player within the duration of the contract is more than two million Turkish Liras, the agent fee can be determined as the five percent of the gross income of the football player at the utmost.
The fee of the agent who represents a sports club or a sports joint stock company, which transfers the football player to another club, can decided up to ten percent of the transfer fee obtained by the sports club or the sports joint stock company.

3. Administrative and Criminal Sanctions:

In case of detection of a legal transaction which provides direct or indirect benefits to the contractual parties or third parties, which is not included in the contract notified to the Ministry of Youth and Sports and TFF, the activities of the agent shall be terminated and the relevant football player shall banned from competitions for a period of three months to one year.
In the presence of another major legal transaction that provides direct or indirect interest to contractual parties or third parties outside the scope of the contract notified to the Ministry of Youth and Sports and TFF, the president, board members and the agents of the sports club or the sports joint stock company which takes part in the transaction are sentenced to two to three years of deprivation of rights.
If the president, board members or agents of the sports club or the sports joint stock company do not comply with the above-mentioned fee restrictions, they shall be sentenced to imprisonment from one to three years.
The license of agents who do not correspond with wage limits shall be revoked.
In the event of non-compliance with the obligation of notification of the contract, the sanctions determined in the TFF instruction shall be applied to the sports club or the sports joint stock company which do not comply with the duty of notification obligation.

Conclusion

With the New Sports Law, it is aimed to inhibit clubs from becoming indebted in a way that puts their financial future at risk. In this context, the responsibilities of the executives of the sports clubs which are subject to incorporation, shall be deemed as the responsibilities of the executives of other corporations. The main purpose of the provisions regarding agents is to ensure the transparency and the controllability of the agent payments and to prevent clubs from avoiding their financial responsibilities. Although there are not many examples of practice as of the writing date of this article, it is foreseen that agents will be subject to stricter control with the introduced regulations. Even though the stricter controls may be interpreted as an adverse event by the agents, we firmly believe that the new regulations may improve implementation the principles of certainty and transparency and establish the scope of the rights and obligations of the agents explicitly.