Certain Legal Aspects of Sport Agents' Activity in Ukraine
Author: Oleksiy Kolchanov
Source: The Ukrainian Journal of Business Law. – 2012. – June. – p.21-22

It is hard to say when agents first appeared in sports. We do know, however, that at international level the profession of sports agents has existed for quite a long period of time. Inception of the sports agency can actually be traced back to the 1960s and it always accompanied sports as an essential part of them.

In the Soviet Union and later in the early years of independent Ukraine, the sports agency did not exist as a professional activity or as a business. Only gradual commercialization of the professional sports served as a catalyst for development of sports agency as a distinct type of business in Ukraine. When athletes, clubs and coaches got a chance to earn more and to have better opportunities for applying their talents, specialists came on stage offering assistance in reaching such goals. They also took over a lot of functions and concerns, thereby allowing athletes to concentrate on their primary activities, such as trainings, competitions and recovery.

Needless to say, the role of sports agents in the modern world of professional sport is significant. Typically, the functions of sports agents are focused on several major issues, including negotiating contracts, sport administration and various types of legal representation. They also coordinate general business, financial planning, public relations, marketing and sponsorship matters and the activities of athletes, coaches and teams. Traditionally the sports agents seek the best possible terms for his or her athlete both from financial and athletic perspectives and help with arranging successful transfers to ensure best possible career prospects. To put it more precisely, the sports agent acts as an intermediary between an athlete and a sport organization. This is the pivotal role of a sports agent. In legal terms, this may be defined as a private job placement activity carried out as a business activity for profit. It is worth mentioning that sports agents operate in several business spheres and markets, where sportsmen may have their interests, but the main one is the labor market. It defines the agent's legal status, rights and obligations.

Provisions regulating the activities of sports agents in Ukraine can be found in a number of domestic legal documents including soft law instruments, such as rules of the national and international sports federations. Ukraine has no specific piece of legislation regulating activities and legal status of the sports agents. The basic sports law does not contain any provisions dedicated to agents. Labor legislation is also silent on the subject. However, general regulations applicable to agents' activity can be found in the Civil Code of Ukraine and the Commercial Code of Ukraine. The provisions of the Civil Code on representation and mandates provide a legal framework for agency relationships. This is a rather typical situation for complex legal structures, such as activities of the sports agents. Thus, from a legal perspective, an agency agreement has a mixed nature combining elements of the contract of mandate and the service agreements.

The legal structure of such agreements provides for the flexibility in solving practical issues of the parties. Essential conditions of the agreement include type and nature of the services, objectives and scope of the assignment, performance procedure, rights and obligations of parties, terms and amount of the consideration, liability, term and territory of the agreement. The agreement may stipulate other conditions agreed by the parties, such as an exclusivity clause. As is well known, the Civil Code of Ukraine allows for exclusivity arrangements to be established between agents and principals. This means, first of all, the prohibition for the principal to authorize other persons to engage in an agent's work.

Agency contract can specify the time period and region limits for such exclusivity. Moreover, the rules of several sports federations (FIFA, FIBA) also allow agents and athletes to conclude exclusive representation contracts. Such exclusive representation contracts may even restrict the sportsman's ability to work with other agents or agencies.

When performing his/her duties, an agent collects and processes a variety of data about the athletes, including names, measurements, age, health records and other personal data. Under Ukrainian law (Article 32 of the Constitution of Ukraine and Article 302 of the Civil Code of Ukraine), collection, storage, use and dissemination of information about an individual without his/her consent is not permitted, except for those cases established by law.

Further specific requirements and regulation with respect to information about an individual, personal data and personal database are provided by the On Personal Data Protection Act of Ukraine (Personal Data Protection Act of 1 June 2010). Personal Data Protection Act contains a very broad definition of a database of personal information defining it as a named set of structured personal data in an electronic or paper form (Article 1 of the Act). Under one interpretation of the Act, a simple set of information about athletes (clients) may qualify as a database containing certain personal data (e.g., names, contact details, measurements, vital statistics, age and health data, etc) and, therefore, the relevant legal regime applicable to the treatment of personal data in databases should apply to it. In particular, disclosure (transfer) of such personal data to third parties generally requires obtaining consent from the relevant data owners (athletes). Accordingly, transfer of personal data of athletes to a third party formally falls under this requirement, especially in the cases when such personal data is intended to be disclosed to the public (e.g., to sport clubs, potential employer, at court hearings, etc). Thus, the athlete's consent for the disclosure of confidential information or personal data is required. Additional requirements will apply to the cross-border transfers of personal data (Directive 95/46/EC of 24 October 1995 On the Protection of Individuals with Regard to the Processing of Personal Data and on the Free Movement of such Data, OJ L 281, 23 November 1995, p. 31, Convention for the Protection of Individuals with Regard to Automatic Processing of Personal Data of 28 January 1981).

Many athletes order services from foreign agents or agencies. Such trans-border agency relations attract additional attention to certain legal aspects, in particular where tax, currency control regulations, personal data protection and other aspects are concerned. For example, crossborder payments for services provided within one calendar year in excess of EUR 100,000 may only be made on the basis of the price evaluation certificate issued by the State Information and Research Center for Monitoring International Commodity Markets. The fees and other payments under agency agreement may require such a price evaluation procedure to be completed.

As mentioned above, many aspects of sport agents' activities are currently regulated by the rules of professional sports federations. The Football Federation of Ukraine is the most advanced in this regard. It enacted a special set of rules governing activities of footballers' agents (as amended on 1 March 2003) setting certain specific legal regulations for sports agents activities in the Ukrainian professional football. Other Ukrainian professional sport federations, for instance basketball, hockey, and cycling federations have not developed their own regulations but do rely on the rules promulgated by the respective international federations.

Generally speaking, regulation of agents' activity by professional sport federations is focused on establishing certain transparent common rules for agents. This often involves the legal status of an agent (licensing conditions), rights and obligations of the agents and athletes vis-a-vis each other, form of agency contracts, dispute resolution mechanisms, issues of liability, liability insurance, etc.

Furthermore, while civil and administrative law aspects of sports agents' work are more or less clear, its labor law aspects raise a number of questions. It is clear that classic agent-principal relations, where agents act on behalf and in the interests of the principal (including signing of contracts, etc.), are not possible in the context of Ukrainian labor law. In this context we are dealing with private job placement services provided by the agent. Ukrainian legislation does not contain any special rules dealing with this problem although the concept of agency services constructed as a triangular employment relationship was accepted worldwide. The Private Employment Agencies Convention 19 June 1997 C181 defines a Private Employment Agency as any individual or legal entity, independent of the public authorities, which provides one or more of the following labor market services: (a) services for matching offers of and applications for employment; (b) services consisting of employing workers with a view to making them available to a third party; (c) other services relating to job seeking, such as the provision of information, that do not set out to match specific offers of and applications for employment.

In this context it would be pertinent to point out that Draft Employment Act of Ukraine approved in May by the Ukrainian Cabinet of Ministers and soon to be submitted to Parliament for consideration introduced the private employment agency defined as a business providing individual with free placement services and staffing services employers in Ukraine and abroad. The Act may have an impact on established relations between agents, athletes and sport clubs in Ukraine.

At the present time, the activities of an agent in professional sport is an integral part and, at times, indispensable part thereof. Globalization and the interpenetration of many processes in sport clearly identify certain general trends in the issues of regulating the agent's activities all over the world. Ukraine is not beyond the pale of such processes.

Finally, the main target of regulation is to establish transparent and clear relations based on basic sport values.

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