More U.S. youth clubs, including Dempsey's, join compensation fight
Crossfire Premier isn’t the only American youth soccer club chasing solidarity payments. After Crossfire sent an official complaint to FIFA in hopes of receiving money for DeAndre Yedlin’s transfer to Tottenham, others joined the quest, including Clint Dempsey’s former club in Texas.
“Crossfire has had an overwhelmingly positive response from its sister U.S. youth soccer clubs,” Crossfire lawyer Lance Reich told SI.com. “Many clubs are joining us, and soon, we intend to have a public list of all clubs in our class, both U.S. Development Academy clubs and not, so that no individual club will fear to be singled out.”
On June 29, Washington-based Crossfire petitioned FIFA for a ruling or permission to sue U.S. Soccer and Major League Soccer for interfering with its payment. In FIFA's Regulations on the Status and Transfer of Players, Article 20 dictates that training compensation must be paid to all clubs that had a hand in a player’s development up to age 21 for first-time professionals and transfers between clubs in different national associations until he turns 23. Article 21 states that solidarity is due for non-free player transfers to every club that held his registration until age 23.
Training compensation is designed to reimburse clubs for their expenses in a player's training, while solidarity is meant to reward clubs for that development, regardless of who paid the fees.
According to documents obtained by SI.com, MLS swiped Crossfire’s portion as part of the transfer agreement for Yedlin, and the federation told the club it could not intervene due to U.S. law.
Many clubs supporting Crossfire have not spoken publicly thus far, but Reich said 10 joined the class seeking compensation for player development in the past two weeks. One such group is Dallas Texans SC, which sought solidarity following Dempsey’s transfer to Fulham in 2007 for a reported $4 million.
Club president Paul Stewart said the Texans’ experience mirrored Crossfire’s. They contacted Fulham for payment and eventually took the case to FIFA, with U.S. Soccer strongly urging them to stand down.
“They told us similar things to Crossfire: that there had been some litigation, that consent decree that they felt bound by,” Stewart told SI.com. “We filed some process with the [FIFA] Dispute Resolution Committee and withdrew it after our discussion with the USSF, when they explained to us the reasons for their position.”
The consent decree arose in 2002 from the Fraser v. MLS case in which eight MLS players brought an antitrust lawsuit against U.S. Soccer and the league soon after its inception. The confidential decree remains the federation’s main point of defense against clubs seeking payments spelled out in FIFA regulations. If the consent decree is a settlement claim and thus not a public document, then U.S. Soccer is not legally obligated to share it, absent a court order.
“As you will imagine, having received a representation from MLS that U.S. law prohibited our paying training compensation or solidarity contributions, we agreed a package that would not involve the club in a breach of such law,” Fulham wrote to the Texans on Dec. 5, 2007. “In good faith, the club agreed the transfer compensation with MLS, all of which was to be paid to MLS.”
Similarly, Tottenham wrote to Crossfire on May 15 that “inclusive of assumed solidarity contributions … we have been advised by MLS to remit payment of the full transfer fee [for Yedlin] directly to MLS.”
Based on the letters, MLS pocketed the full transfer fee for both Dempsey and Yedlin, including the 5 percent normally set aside for solidarity contributions. MLS officials would not offer public comment on this story when contacted by SI.com.
The Texans were working to join the incipient U.S. Soccer Development Academy during their proceedings with Fulham, which put the club in a vulnerable position if it were to cross the federation. Beyond that, Stewart said, the club supports U.S. Soccer whenever possible.
“We got the indication that FIFA is not really happy with U.S. Soccer not following their training fees and solidarity contribution programs, but we’re supporters of U.S. Soccer, obviously, so we held back at that time,” he said. “There is, at the very least, an implicit [risk] for the clubs that if they take a contrary position to the USSF, that there could be ramifications.”
U.S. Soccer also took a dim view of Crossfire’s efforts. One Development Academy official wrote in an email to the club that its pursuit “could be harmful” to the relationship with the federation.
“After filing the complaint letter, we have learned of many unfortunate experiences other clubs have had in seeking training compensation and solidarity fees and have had USSF intimidate the club to drop the claim, sometimes to an extreme degree,” Reich said. “Quite a few clubs and well-known persons in the soccer world have sent us words of encouragement to not give up the fight and see this to the end.”
Like Crossfire, the Texans regularly produce professional players. Some of their alumni include U.S. men's national team players Omar Gonzalez, Lee Nguyen, Greg Garza and Emerson Hyndman. Both clubs built their own field complexes and offer a number of scholarships for players outside their fee-free Development Academy teams. The Texans announced in June that pre-Academy teams would also be free beginning in 2015.
The majority of youth clubs in the U.S. maintain nonprofit status. Stewart said training and solidarity fees would help reduce the burden on players’ families and incentivize continued player development.
“It’s a matter of reward, but also giving them greater resources, particularly when we’re competing against an MLS club,” he said. “It’s not easy to get sponsorship for nonprofit youth clubs, so this would be something that I think would be great for American soccer in general. To the extent that the USSF wants a strong youth club program that’s outside of the MLS youth clubs, and I think they do and they’ve said that they do, then this would be a great way to help accomplish that.”
Not all of the feedback Crossfire received from its original complaint was positive, though. To underscore that the club isn’t trying to be greedy, Reich said it has agreed to donate any solidarity it receives in this particular case to the U.S. Soccer Foundation, the federation’s charitable arm.
“Crossfire would like everyone to know that it is standing on principle in seeking the solidarity fee from the Yedlin transfer and not just making a money grab,” Reich said. “Crossfire is only seeking fairness in the implementation of the solidiarity mechanisms of FIFA for U.S. youth soccer clubs.”
The growing number of U.S. clubs in Reich’s class of plaintiffs also seem prepared to negotiate with the federation a unique system outside FIFA that benefits all those involved. That could avoid any limitations created by the consent decree.
“I’m hopeful that is something that will come out of this process,” Stewart said. “We have sympathy, and we’re big supporters of the USSF obviously, so if they feel legally constrained with respect to following the FIFA system, that’s fine—but that shouldn’t keep us from coming up with an American system, which would help support U.S. youth soccer.”
Any new system could provide benefits beyond the FIFA statutes, including on the women’s side of the game. The federation pays its national team players’ salaries in the National Women’s Soccer League, but their former youth clubs receive no reward for developing those players, either.
“One thing I’d like to see as part of this system also is compensation not just for the things that FIFA compensates, but for clubs that provide players to the national team, which would also then include girls,” Stewart said. “That’s a way to involve them in the system as well and help put money into the girls’ side of youth soccer also.”
Reich shared with SI.com a potential settlement proposal, which included either adherence to FIFA’s guidelines or the creation of a “comparable system that adequately addresses the issue.” Reich said the important aspect of any final agreement would be in the hope for substantive change, not in the exact wording.
“These terms are not absolute, but they are pretty solid in the principles they embody,” Reich said. “Our complaint to FIFA is a large unknown for results. … Rather than have a potential chaotic imposition of a new paradigm in the U.S., a settlement is always better because we can control the outcome and purposely move the U.S. system on training compensation and solidarity fees to be in line with the rest of the world. There is no guarantee that USSF will agree to any proposal from the clubs, though, and the clock is ticking for FIFA to comment and possibly take action.”
Conversations are well underway between Crossfire and U.S. Soccer to find a solution. Now that several other clubs have come forward to demand reform, the momentum their unity creates could be too great to ignore.
“We need to change our system, and the clubs are willing to work with USSF and MLS on how to accomplish that,” Reich said. “We also need to make right what has been going wrong with the past treatment of U.S. youth clubs seeking training compensation and solidarity fees.”
U.S. Soccer president Sunil Gulati is a member of the FIFA Executive Committee, where Crossfire sent its initial grievance.
Neither U.S. Soccer nor FIFA responded to requests for comment.
Reich said he is confident the federation’s regulations would change in some way in the resolution of Crossfire’s case. For now, he said he just wants a serious indication that the federation and MLS are willing to discuss compromise.
“The U.S. clubs only have one immediate condition: that USSF stops interfering with foreign solidarity and training fees, and the U.S. clubs will otherwise stand down from FIFA and sit down with USSF and MLS and discuss the rest of the issues, with a representative from FIFA in the room,” Reich said. “We have our line in the sand, and I have to think USSF will acquiesce as this the only chance they are going to get at controlled change—or get God-knows-what from FIFA.”