The recent Daily Telegraph investigation that led to
Sam Allardyce stepping down as England manager has put the
spotlight back on the activities of football agents.
It is not just players that have agents, but managers as well.
And clubs have agents to negotiate with all the other agents. The
game appears to be awash with agents or – as the FIFA
regulations they are governed by call them –
The term intermediaries was also used by John Kay in his 2012
report on the UK equity market to describe the long chain between
savers and the companies in which their money is invested –
asset managers, investment consultants, proxy advisers and so
To that list can be added the various 'agents' employed
by companies to help them manage their affairs, such as executive
search firms and remuneration consultants.
Recently I was at a presentation by some remuneration
consultants who said that they regularly spoke to proxy advisers
about their clients' remuneration policies. And there are other
examples in equity markets where agents negotiate with agents,
rather than principals with principals, just as appears to happen
What is the reason for this proliferation of intermediaries?
To some extent it may reflect globalisation and greater
competition for resources – including talent and funding
– at the top end of football and the capital markets.
Leading clubs would say that in order to compete that they can
no longer just pop down to the local works team and pick out a
horny handed son of the soil to bolster the back four. And
companies can no longer just pop down to the Association of British
Insurers' offices to find out what the majority of their
shareholders think. So they need some assistance.
Whether all of these intermediaries are necessary is
another matter. Do football clubs really need to employ agents to
negotiate player contracts on their behalf, for example? And do
listed companies really need to employ consultants to tell them how
much to pay their own executives?
But even when intermediaries are needed, and even when they are
honest and professional as the majority of them are, there are
still potential problems. They do not come free. Maybe more
significantly, as John Kay pointed out, 'the imperatives of the
business model of the agents do not necessarily coincide with the
interests of the principals'.
The greater the number of intermediaries, the greater the costs
to companies and clubs, and indirectly to savers and supporters.
And the greater the potential for misaligned incentives that
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