A Dutch court has ordered the former agents of Inter Milan’s Stefan de Vrij to pay the defender more than €5million (£4.2m, $5.4m) in compensation after its unsuccessful appeal against a previous ruling regarding the commission it earned during his 2018 move to the Serie A club.
The Amsterdam Court of Appeal ruled that sports agency SEG did indeed mediate for both Inter and De Vrij, and should have been transparent about the mutual agreements. SEG was obligated to disclose its own financial stake in the agreement between De Vrij and Inter, and the court found that it breached this obligation to inform.
It was established by the court that, as a result, De Vrij suffered a loss in income, with the estimated damages exceeding €5.2m (£4.45m, $5.6m). Initially, the court had awarded the player €4.75m (£4.07m, $5.16m).
SEG was founded in 2000 by Kees Vos and Alex Kroes.
Vos is one of football’s highest profile agents and represents Manchester United manager Erik ten Hag, alongside United striker Rasmus Hojlund and Cody Gakpo of Liverpool. Spanish football agent Pere Guardiola, brother of Manchester City boss Pep, is a shareholder in SEG.
Kroes, meanwhile, had recently begun his new role as chief executive officer (CEO) of Ajax, but was suspended on April 2 after he “likely engaged in insider trading” prior to his appointment in August 2023.
A statement said that Kroes has been suspended from his role “with immediate effect and (the club) intends to terminate the collaboration permanently”.
Ajax stated that the decision was made based on external legal counsel, prompted by the revelation that the 49-year-old had acquired more than 17,000 shares in the club before assuming the position on August 2, 2023.
Kroes said in a statement that “I bought every Ajax share myself” and added that their supervisory board were “already aware” of his share package and that he provided “full disclosure” about all relevant assets, including his 42,500 shares in the club. He said he had “not yet agreed” his move to Ajax at that time, but admitted to having a “good feeling” about his appointment.
The De Vrij case: A background
De Vrij’s legal case began in May 2021. He claimed SEG withheld information from him — namely, that the agency was also representing Inter in the contract negotiations — therefore making itself money from the deal, which he argues was potential earnings he missed out on as he felt misrepresented.
His argument essentially was that his own agent was actively acting against him, meaning he received a lower salary than he would have and no signing-on fee, whereas SEG maintained it was a good deal.
SEG arranged with Inter a €9.5m commission for its services and a sell-on fee of 7.5 per cent should De Vrij later be sold.
De Vrij won the Italian Supercup with Inter in Riyadh, Saudi Arabia earlier this year (Yasser Bakhsh/Getty Images)
In April 2022, an Amsterdam court ruled that De Vrij had not been made aware of the full scale of the €9.5m commission earned by SEG in negotiating his contract with Inter, and awarded the footballer half of that sum (€4.75m) in damages.
SEG then appealed, insisting it was only acting for Inter and that De Vrij was aware of this.
De Vrij’s relationship with SEG broke down after his 2018 move to Inter, for whom he has played 230 times.
Key questions about the case and why it matters for football
Carlos Hurtado, sports lawyer at Baker McKenzie Madrid, explains
What difference does De Vrij signing an employment contract make?
The fact De Vrij signed an employment contract with Inter is pivotal to the outcome of the case, particularly because, as per the ruling, the agreement clearly stated SEG was representing only the club in the deal and not the player.
In this case, the ruling found SEG not only failed in its duty of care towards the player but also neglected its duty to adequately inform the player of the financial implications of a transaction.
Consequently, the player was unable to make an informed assessment of his financial risks.
Therefore, according to the decision, the act of signing the contract was the point at which the conflict of interest materialised, because, if SEG had been transparent in the contract, negotiations might have taken place with different conditions in favour of the player.
Is it unusual De Vrij did not earn a signing-on fee?
A player may not always be paid a sign-on fee as the buying club is already providing money to pay the transfer fee.
On the other hand, when a player like De Vrij becomes a free agent, it is common for the player to take advantage of the situation and profit from the transaction by receiving a sign-on fee and sometimes agreeing to a percentage of a future sale to another team.
This is because there is no transfer fee being paid by the new club, which means more money is available for the transaction.
In De Vrij’s case, as he became a free agent, it would have been reasonable to expect the payment of a sign-on fee in his transfer to Inter or a greater overall salary – this is the central focus of discussions in the ongoing legal conflict.
Why was De Vrij worried about SEG opening a tax liability for him because they worked for the club?
In the case, De Vrij argues the fact the employment contract with Inter states SEG acted on behalf of the club and not on behalf of the player exposes him to the risk that the Italian tax authorities could impose assessments and/or fines on him because of the existence of a so-called fringe benefit.
In practical terms, this means that if the Italian tax authorities consider that the intermediary has indeed acted on behalf of the player, the commission paid by the club to the intermediary can be viewed as an indirect salary of the player and can also be subject to taxation — with income tax levied on the player.
When assessing who is liable for taxes in these situations, the Italian tax authorities do not solely rely on what is stated on paper, but also consider the actual circumstances.
Therefore, if in reality, an agent acts on behalf of a player, but the contract states he acted only for a club or has typically acted on behalf of the player but then switches sides for one specific transaction, there is a risk commission paid to the intermediary by the club will be regarded by the tax authorities as the player’s indirect salary, leading to taxation for the player, possibly retroactively and potentially accompanied by fines.
Manchester United manager Erik ten Hag is represented by Vos’ SEG agency (Ash Donelon/Manchester United via Getty Images)
What are the implications of this ruling?
A crucial consideration is that a significant portion of the arguments presented by both parties and the court in the De Vrij case rely on provisions within the Dutch Civil Code regarding conflicts of interest, alongside tax-related rulings relating to the Italian tax authority.
Consequently, an important implication arises: besides adhering to the regulations set by sports governing bodies like FIFA, the FIGC (Italian FA), and the KNVB (Dutch FA), all parties involved in such transactions must seek legal counsel with a deep understanding of the industry and both international and domestic legislation that could apply to a specific player’s circumstances.
Another immediate result is that the decision reinforces the importance and relevance of having rules regarding transparency between agents and their clients to prevent situations where a party (normally the player) could be damaged by an undisclosed conflict of interest on the part of their agent.
(Top photo: Marco Luzzani/Getty Images)
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