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Sports agency SEG has to pay former customer Stefan de Vrij more than 5 million euros: Why the case is important for football

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A Dutch court has ordered Inter Milan's Stefan de Vrij's former agents to pay the defender more than 5 million euros (£4.2 million, $5.4 million) in compensation after an appeal against an earlier ruling regarding The Serie A club was unsuccessful in the commission that the defender earned during his move to Inter Milan in 2018.

The Amsterdam Court of Appeal ruled that the sports agency SEG actually mediated for both Inter and De Vrij and should have been transparent about the mutual agreements. SEG was obliged to disclose its own financial involvement in the agreement between De Vrij and Inter and the court found that it had breached this obligation to provide information.

The court found that De Vrij suffered a loss of income as a result, with estimated damages exceeding €5.2 million (£4.45 million, $5.6 million). The court had originally 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 best-known agents, representing 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 coach Pep, is a shareholder in SEG.

Kroes, meanwhile, had recently started his new role as Ajax's chief executive officer (CEO), but was suspended on April 2 for “probably engaging in insider trading” before his appointment in August 2023.

A statement said that Kroes “has been suspended from his position with immediate effect and (the club) intends to permanently terminate the cooperation.”

Ajax said the decision was made based on external legal advice, triggered by the revelation that the 49-year-old had purchased more than 17,000 shares in the club before taking office on August 2, 2023.

Kroes said in a statement that “I bought every Ajax share myself,” adding that the board was “already informed about his share package” and that he would provide “full disclosure” of all relevant assets, including his 42,500 shares in the club. have given. He said he had “not yet agreed” to his move to Ajax at the time, but admitted he had a “good feeling” about his appointment.


The De Vrij Case: A Background

De Vrij's legal battle began in May 2021. He claimed SEG withheld information from him – namely that the agency also represented Inter in the contract negotiations – and thereby made money from the deal, which he claimed was potential revenue that he missed out on he felt misrepresented.

His argument was essentially that his own agent was actively trading against him, meaning he received a lower salary than expected and no signing fee, while 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 in the event that De Vrij is subsequently sold.

De Vrij won the Italian Super Cup with Inter in Riyadh, Saudi Arabia earlier this year (Yasser Bakhsh/Getty Images)


De Vrij won the Italian Super Cup 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 informed of the full amount of the €9.5 million commission that SEG had earned when negotiating his contract with Inter and awarded the footballer half of that sum (4.75 million euros) to damages.

SEG then appealed, insisting that it was only acting for Inter and that De Vrij was aware of this.

De Vrij's relationship with SEG collapsed after his move to Inter in 2018, for whom he has played 230 times.

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Important questions about the case and why it is important for football

Carlos Hurtado, sports lawyer at Baker McKenzie Madrid, explains

What difference does De Vrij's signing of an employment contract make?

The fact that De Vrij signed an employment contract with Inter is crucial to the outcome of the case, especially because, according to the ruling, the agreement clearly stated that SEG only represented the club and not the player in the deal.

In this case, the judgment found that 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.

According to the decision, the act of signing the contract was the moment at which the conflict of interest arose, because if SEG had been transparent in the contract, negotiations would have taken place on different terms in favor of the player.

Is it unusual that De Vrij didn't earn a signing fee?

A player may not always be paid a signing 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 the player to take advantage of the situation and profit from the transaction by receiving a signing fee and sometimes agreeing to a percentage of a future sale to another team.

This is because the new club does not pay a transfer fee and therefore more money is available for the transaction.

In De Vrij's case, when he became a free agent, he would have been expected to pay a signing fee upon his transfer to Inter or receive a higher overall salary – this is the central point of discussion in the ongoing legal conflict.

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Why was De Vrij worried that SEG could open a tax debt 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 on behalf of the club and not on behalf of the player exposes him to the risk that the Italian tax authorities could impose tax notices and/or fines on him for the existence a so-called additional service.

In practice, this means that if the Italian tax authorities consider that the agent actually acted on behalf of the player, the commission paid by the club to the agent may be considered as an indirect salary of the player and may also be subject to taxation – whereby from Player income tax is levied.

When assessing who is liable to pay tax in these cases, the Italian tax authorities rely not only on what appears on paper, but also take into account the actual circumstances.

So if in reality an agent acts on behalf of a player but the contract states that he only acted for one club or normally acted on behalf of the player but then switches sides for a particular transaction, he will be paid a risk commission Intermediation by the club will be considered by the tax authorities as an indirect salary of the player, which will result in taxation of the player, possibly retroactively and possibly with fines.

Manchester United manager Erik ten Hag is represented by Vos' SEG agency (Ash Donelon/Manchester United via Getty Images)


Manchester United manager Erik ten Hag is represented by Vos' SEG agency (Ash Donelon/Manchester United via Getty Images)
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What impact does this ruling have?

A crucial consideration is that a significant part of the arguments put forward by both parties and the court in the De Vrij case are based on provisions of the Dutch Civil Code on conflicts of interest as well as tax-related decisions of the Italian Tax Authority.

An important implication arises from this: in addition to complying with the regulations of sports associations such as FIFA, the FIGC (Italian Football Association) and the KNVB (Dutch Football Association), all parties involved in such transactions must seek legal advice with in-depth knowledge of the industry and both international and international also national laws that may apply to a particular player's circumstances.

Another immediate result is that the decision underlines the importance and relevance of rules on transparency between agents and their clients in order to prevent situations where one party (usually the player) could be harmed by an undisclosed conflict of interest on the part of their agent.

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(Top photo: Marco Luzzani/Getty Images)