In modern world sports, football inter alia, is attracting millions of spectators and being an integral part of entertainment and media industries which involve an immense turn-over of capital. As a result commercialization of sport grows, increasing the risk of power abuse for the people who are involved in settling the mercantile part of it, therefore calling for proper regulation in terms of the rights and obligations of the parties involved. One of the burning issues in the modern football business is the relationship between football players and their agents, with the latter being prone to arrange profitable deals for themselves alongside with officially representing the player, and to keep back the information about the extra profit they get.
The aim of this essay is to review a legal case and to consider its impact on the modern business of football. The legal case selected is Imageview Management Ltd v Jack. This legal case is about the footballer’s agent making a secret deal with the club for himself in the course of negotiations on the behalf of his client (Conflict of interest in agent’s secret deal, 2009).
The issues analyzed would be: the concept of this action representing a breach deal or not; the destiny of paid fees depending on the result of considering a case; the obligations of the agent towards the football player; and the possible considerations of value of the work done (Conflict of interest in agent’s secret deal, 2009). The main participants of the legal case were the football player Kelvin Jack (defendant), and Imageview Management Ltd (claimant), represented by the agent Mr Berry, who agreed to act as Mr Jack’s agent and signed a two-year contract with him, where it was stated that Mr Jack undertook to pay Imageview 10% of his monthly salary if arrangements were successfully made by that company for him to sign with a UK club. Imageview, in its turn, undertook to advise and represent Mr Jack “in connection with any contract or renewal of contract which the Player might wish to enter into” and pledged to “use its reasonable endeavors to promote the Player and act in his best interests” (Imageview Management Ltd v Jack 2009, p. 2).
The negotiations with Dundee were successful and Mr Jack signed a two-year contract, without knowing that Imageback demanded a fee of £3,000 for getting Mr Jack a work permit. A year later, having played for Dundee and paid the 10% due under the agency contract with Imageview, Mr Jack found out about the side deal of Imageview’s and stopped the payments. As a result, Imageview claimed the unpaid agency fees from Mr Jack, and the latter defended that claim and himself claimed back the agency fees he had already paid. Moreover, the player also claimed the full £3,000 received by Imageview from Dundee.
Mr Jack’s claim was based on the statement that the undisclosed side deal constituted a breach of Imageview’s duty as an agent. In order to prove that case, several precedents were used, in which the agent’s duty of fidelity was clearly stipulated. Following the conventional notion, the agent bears a duty to represent his/her client’s interests to the fullest and to put them first to his own personal interests. According to Adams (2008, p. 216), “the agency relationship is fiduciary: the agent must account for any profits arising from his or her work for the principal and avoid any conflict of interests”. In order to avoid breaking his/her duty, the agent is expected to make full disclosure about any side-deals that may be involved in the arrangements.
In case of duty breach, it should not matter whether the agent is doing so consciously or not. Being a matter or morality, the agent’s duty should be to represent his/her principal honestly and thus only an honest agent has the right to claim any commission for his services. In case when the agent acts opposite to his principal’s interests, he is not entitled to any commission whatsoever. As stated by Scrutton (qtd. in Imageview Management Ltd v Jack 2009, p. 8),
“an agent must not take remuneration from the other side without both disclosure to and consent from his principal. If he does take such remuneration, he acts so adversely to this employer that he forfeits all remuneration from the employer, although the employer takes the benefit and has not suffered a loss by it”.
The way suggested by Lord Atkin (qtd. in Imageview Management Ltd v Jack 2009 p. 9) to settle the possible conflict concerning any side remunerations would be to disclose the matter to the principal and let the latter decide whether such additional payment is proper in a given case. As nothing of the kind had been done by Imageview, as represented by Mr Berry, a breach of the duty of fidelity can be claimed.
However, to the end of defining the propriety of the agent’s actions in similar cases, it is essential to estimate whether the arrangement made by the agent is collateral to the fiduciary duty to his/her principal. For this question to be answered properly, one must define whether there has been any conflict of interests in the case. While there could be instances of harmless collaterality, the Imageview Management Ltd v Jack case involved a clear conflict of interests; moreover, the profit was firstly greater than the work actually done, and secondly it was related to the very contract which was being negotiated for Mr Jack. Thus, there could be no question of collateral nature of Imageview’s actions.
The financial matters of the case under discussion were all settled on the grounds of established breach of fiduciary duty had been thus proved. The agency fees were assigned to Mr Jack in the full amount – both the volume of payment presupposed to be returned, but also the part of his money that pad already been paid to him. Likewise, as the side profit gained by Imageview was drawn contra legem, recovery by the principal is found possible. As for the issue of deduction from the secret profit to reflect the value of the work done to make it, the decision was that as the plaintiff had acted unlawfully and surreptitiously, there could be no discussion of any enrichment of his, which would otherwise be unjust.
In relation with the business of football, there are a number of points that can be reflected upon stemming from the case Imageview Management Ltd v Jack. Within the bounds of the present paper it appears worth discussing the ethical issue concerning the high standards of morality among the go-betweens who operate on modern sports arena. Striving for the highest financial remuneration, the agents are known to take the so-called bungs, or secret payments that may help to arrange football transfers easier; taking or giving one is against football rules but nevertheless they thrive under conditions of tough competition between football clubs. Nevertheless, in order to preserve high professional standards and moral values in football dealing, it is worth remembering the following notion of fiduciary duties as given by Millett: the actions of fiduciary have to be built on the principles of trust and confidence, loalty, he must “act in god faith”, “not make profit out of his trust” etc. (qtd. in O’Dell 2009). However, the main principle of actions of a fiduciary is to act without any considerations of personal benefit, which was violated in the case.
The greed of the agents operating on the football market violates the high standards of conduct and the instances of bunging constitute an alarm call for the society to focus on the moral criteria ruling the dealers’ behaviour. Therefore, the Court of Appeal applied the strictest rules to the plaintiff, which acted, following an apt expression from The Times (“Conflict of interest in agent’s secret deal” 2009), as a “real deterrent to betrayal” with the view to prevent similar misconduct and remind of the high duty of a fiduciary which must not be broken even there are personal interests involved.
All-in-all, the Imageview Management Ltd v Jack case constitutes an instructive example of the necessity for a firm position held with respect to ethical conduct of the parties involved in sports business, with all the legal consequences implied from the breaches of one’s obligations under the law.
References
Adams, A 2008, Law for business students, Pearson/Longman.
“Conflict of interest in agent’s secret deal” 2009, The Times.
Imageview Management Ltd v Jack [2009] EWCA Civ 63.
O’Dell, E 2009, “Football and fiduciaries”, blog entry.