A Dutch court has ordered former Inter Milan agents Stefan de Vrij to pay the defender more than €5 million (£4.2 million, $5.4 million) in compensation after his unsuccessful appeal against an earlier ruling regarding the commission he earned during his 2018 transfer to the Serie A club.
The Amsterdam Court of Appeal ruled that sports agency SEG had effectively served as mediator for Inter and De Vrij and should have been transparent about mutual agreements. SEG was required to disclose its own financial participation in the deal between De Vrij and Inter, and the court found that it had failed to comply with this information obligation.
It was established by the court that as a result, De Vrij suffered a loss of income, with damages estimated at more than €5.2 million (£4.45 million, $5.6 million ). Initially, the court awarded the player €4.75 million (£4.07 million, $5.16 million).
SEG was founded in 2000 by Kees Vos and Alex Kroes.
Vos is one of football’s most high-profile agents and represents Manchester United manager Erik ten Hag, alongside United striker Rasmus Hojlund and Liverpool’s Cody Gakpo. Spanish football agent Pere Guardiola, brother of Manchester City boss Pep, is a shareholder in SEG.
Kroes, meanwhile, had recently started his new role as chief executive officer (CEO) of Ajax, but was suspended on April 2 after “probably engaging in insider trading” ahead of his appointment in August 2023 .
A statement said Kroes was suspended from his duties “with immediate effect and (the club) intends to permanently end the collaboration.”
Ajax said the decision was made on the basis of external legal advice, prompted by the revelation that the 49-year-old had acquired more than 17,000 shares in the club before taking up the role on August 2 2023.
Kroes said in a statement that “I bought every Ajax share myself” and added that their supervisory board was “already aware” of his share package and had provided “full disclosure” of all assets relevant, including his 42,500 shares in the club. He said he had “not yet accepted” his move to Ajax at that time, but admitted he had a “good feeling” about his appointment.
The De Vrij affair: a context
De Vrij’s trial began in May 2021. He claimed that SEG hid information from him, namely that the agency also represented Inter in contract negotiations, thus making money from the deal, which he said was a potential win that he missed out on because he felt poorly represented.
His argument was essentially that his own agent was actively acting against him, which meant he received a lower salary than he would have received and no registration fee, even though SEG claimed it was a good deal.
SEG agreed with Inter a commission of 9.5 million euros for his services and a resale fee of 7.5 percent if De Vrij was subsequently sold.
In April 2022, an Amsterdam court ruled that De Vrij had not been informed of the scale of the €9.5 million commission received by SEG when negotiating his contract with Inter, and awarded the footballer half of this sum (4.75 million euros) in damages.
SEG then appealed, insisting that it was only acting on behalf of Inter and that De Vrij was aware of it.
De Vrij’s relationship with SEG broke down following his move to Inter in 2018, for whom he played 230 times.
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Key questions about the case and why it matters for football
Carlos Hurtado, sports lawyer at Baker McKenzie Madrid, explains
What difference does it make for De Vrij to sign an employment contract?
The fact that De Vrij signed an employment contract with Inter is crucial to the outcome of the case, not least because, according to the decision, the agreement made it clear that SEG only represented the club in the transaction and not the player.
In this case, the decision found that SEG not only breached its duty of care to the player, but also neglected its duty to adequately inform the player of the financial implications of a transaction.
Therefore, the player was unable to make an informed assessment of his financial risks.
Therefore, according to the decision, signing the contract was the moment when the conflict of interest materialized, because if SEG had been transparent in the contract, negotiations could have taken place with different conditions in favor of the player.
Is it unusual that De Vrij did not receive a registration fee?
A player may not always receive a registration fee, as the buying club already provides money to pay the transfer fee.
On the other hand, when a player like De Vrij becomes a free agent, it is common for him to take advantage of the situation and profit from the deal by receiving a signing fee and sometimes agreeing to a percentage of a future sale. to another team.
This is because no transfer fee is paid by the new club, meaning more money is available for the deal.
In De Vrij’s case, when he became a free agent, it would have been reasonable to expect payment of an entry fee upon his move to Inter or a higher overall salary – this is the focal point of discussions in the ongoing legal dispute. .
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Why was De Vrij worried that SEG opened up a tax liability for him because they worked for the club?
In this case, De Vrij argues that the fact that the employment contract with Inter states SEG acted in the name of the club and not in the name of the player exposes him to the risk that the Italian tax authorities could impose contributions and/or fines due to the existence of a so-called social benefit.
Concretely, this means that if the Italian tax authorities consider that the intermediary has actually acted on behalf of the player, the commission paid by the club to the intermediary can be considered as an indirect salary of the player and can also be subject to taxation – with the income tax levied on the player.
To determine who is liable for tax in these situations, the Italian tax authorities do not only rely on what is stated on paper, but also take into account the actual circumstances.
Therefore, if in reality an agent acts on behalf of a player, but the contract states that he acted only on behalf of a club or generally acted on behalf of the player, but then changes sides for a specific transaction, a risk commission is paid to the intermediary of the club will be considered by the tax authorities as an indirect salary of the player, leading to taxation of the player, possibly retroactively and possibly accompanied by fines.
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What are the implications of this decision?
It is crucial to consider that a significant part of the arguments presented by both parties and by the court in the De Vrij case are based on the provisions of the Dutch Civil Code regarding conflicts of interest, as well as on tax rulings under the Italian tax administration.
Therefore, an important implication arises: in addition to adhering to the regulations established by sports governing bodies like FIFA, FIGC (Italian FA) and KNVB (Dutch FA), all parties involved in such transactions must seek legal counsel with a deep understanding of the industry and the international and national legislations that might apply to a specific actor’s situation.
Another immediate result is that the decision reinforces the importance and relevance of having rules of transparency between agents and their clients to avoid situations in which one party (normally the player) could be harmed by a conflict of interest undisclosed from his agent.
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(Top photo: Marco Luzzani/Getty Images)