EFL clear Mendes & Wolves – is that clear?

On Wednesday the EFL confirmed that “Discussions between the EFL and management of Wolverhampton Wanderers have now concluded in regard to the matter of the relationship between the club, majority shareholder Fosun and intermediary Jorge Mendes.”

 These discussions were prompted by concerns raised by a number of Championship clubs (notably Leeds United), that the strident involvement of super-agent Mendes was in breach of regulations and/or placing Wolves at an unfair advantage.

Issues of concern have included, for example, the fact that Wolves were able to sign Ruben Neves from Porto – despite the fact that the player was regarded as one of the hottest properties in European football and thought able to command a top Premier League salary. Wolves, on the other hand, were able to secure his transfer for a fee considerably less than what was thought to his market-value and for a salary reputed to be perfectly ordinary for a Championship club.

Other areas of concern surround the fact that players that Mendes and his agency Gestifute represent (and publically admit they represent) were represented by other agents when Wolves signed them (as recent FA agency transaction data proves).

The EFL have said At that meeting, a request for information was made by the EFL and following a comprehensive review of the detail subsequently provided by the club, it has been determined that Mr Mendes holds no role at the club and, as such should not be categorised as a ‘Relevant Person’ as defined by League regulations. On this basis there is no requirement for him to submit to the Owners’ and Directors’ Test.As part of the discussions the club has been reminded of its continuing obligation to keep under review the status of both existing Relevant Persons, but also any other individuals who may at some point acquire the status of Relevant Person, and advise the League (and, given the recent promotion, the Premier League) accordingly.  The EFL would like to place on record its appreciation to the management of Wolverhampton Wanderers for their help and assistance in resolving this matter within a sensible and appropriate timeframe.”

 So all is clear?  Not quite.  It is hard to know the extent to which the EFL were planting their tongue in their cheek when they released this statement.  Or whether they actually are unaware of the fact that they are spectacularly missing the point.

Whilst some may have suggested that Mendes was in reality a controlling force at Wolves and therefore ought to be subject to what is colloquially referred to as the ‘fit and proper’ test,   such a suggestion never had any legal merit at all.   Firstly, it did not require a meeting to conclude that Mendes’ role at the club does not see him fall to be considered as a ‘Relevant Person’.    Secondly, even if it did,  I doubt there is any serious suggestion that he would be any less ‘fit and proper’ that numerous other people that have passed that test with flying colours.

No, the EFL have either chosen to conveniently address the wrong questions or, rather cleverly,  asked only those questions that concern them and avoided those questions that properly fall for the FA to ask.   Since it is the FA that regulate the activities of Jorges Mendes (he is both individually registered with the FA as a registered intermediary and he has also registered his agency Gestifute) and there are serious issues to consider.

Regulation E4 of the FA Regulations on Working with Intermediaries 2017-2018 provides that:

“An Intermediary, any individual or legal person with an interest in an Intermediary’s Organisation or an Intermediary’s Organisation shall not have an interest in a Club.

Similarly, a Player, Club, Club Official, Manager or any individual or entity with an interest in a Club shall not have any interest in the business or affairs of an Intermediary or an Intermediary’s Organisation.

Such interest shall be defined as: (a) beneficial ownership of more than 5% of any entity, firm or company through which the activities of the Club or Intermediary (as applicable) are conducted and/or (b) being in a position or having any association that may enable the exercise of a material, financial, commercial, administrative, managerial or any other influence over the affairs of the Club or Intermediary (as applicable) whether directly or indirectly and whether formally or informally.

An interest for the purposes of clauses (a) and (b) above includes an interest of: (i) a spouse, child, stepchild, parent or sibling of the Intermediary, Player, Club Official or Manager (as applicable); and/or (ii) a company in which any legal or beneficial interest or any proportion or share is held by the Intermediary, Player, Club Official or Manager or any spouse, child, stepchild, parent or sibling of the Intermediary, Player, Club Official or Manager (as applicable) (save for a holding of less than 5% ); and/or (iii) a company over whose affairs financial, commercial, administrative, managerial or any other control or influence can be exercised by the individual or any spouse, child, stepchild, parent or sibling of the Intermediary, Player, Club Official or Manager (as applicable).”

It is widely reported that the company which owns Wolverhampton Wanderers also has a stake in Mendes’ agency.  That has not ever been denied by Mendes or Wolves, in fact.   So the real questions that need to be put to Wolves and Mendes are this:

  1. Does Mendes or Gestifute have an interest in Wolves or vice versa?   That interest can either be by way of beneficial ownership of more than 5% (of Wolves, in Mendes’ case,  or of his agency, in Wolves’ case) or by way of being in a position or having any association that may enable the exercise of control  (as defined in E4).
  2. If the answer is no to the above, why is that a number of players represented by Mendes and his agency were represented by alternative agents when they recently signed for Wolves?  Why, for example,  was Mendes happy to allow one of his flagship clients to not be represented by him on his significant (and for Wolves, club record transfer) move to England?
  3. Given all of the forms that clubs are agents (and players) sign at the point of transfer, are the FA satisfied that no misleading disclosures were made?  For example, the parties have to disclose the identity and role of all intermediaries that were involved in the transaction.   Are the FA content that Mendes/Gestifutre did not in fact represent either the player or Wolves when they signed (for example) Ruben Neves, Helder Costa and Neto?
  4.  Agents fight very hard to secure and maintain the representation of their clients.  Why has Mendes been so prepared to ‘lose’  top clients, coincidentally to the same club at which he admits a connection but at which the EFL are happy he is not a Relevant Person?   Or has he not lost this clients, in which case why are the FA transactions misrepresenting the true reality of who represents this players (and is being paid by Wolves) and what will be done about that?

If the EFL had have wanted to have had a meaningful ‘meeting’ with Wolves, those were the questions to ask.  The author makes it clear that there may well be legitimate and quite proper answers to all of these questions and is in no position to confirm that either Wolves or Mendes have breached Regulation E4.

But is plain to see that those are the questions which need asking.  If the EFL did not ask them,  will the FA now ask them? Place your bets.

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