Talks have continued among concerned parties over the role of training compensation and solidarity payments in American soccer since a meeting at U.S. Soccer headquarters on Oct. 16, 2015. As key FIFA decisions loom, several parties have commented publicly on the matter, including Major League Soccer and its players union.
At the meeting, attendees were provided with a stipulation from the landmark Fraser v. MLS antitrust case that the federation says prevents the United States from following the typical global protocol on training compensation and solidarity. However, American youth clubs are continuing to push back in the hopes of receiving these payments for their development efforts.
“The Fraser stipulation does not clearly apply to training compensation and solidarity fees authorized by the FIFA RSTP [Regulations on the Status and Transfer of Players],” reads a written statement obtained by SI.com, submitted to U.S. Soccer on behalf of a group of elite youth clubs. “If the Fraser stipulation did apply to training compensation and solidarity, it only prevents USSF from taking any action with respect thereto. … USSF indicated at the Oct. 16 meeting that this was their interpretation.”
In other words, the federation would have no problem with clubs receiving these payments or drawing up substitute agreements with foreign clubs, as long as it wouldn’t have to facilitate them. U.S. Soccer counsel did not respond to multiple requests for an interview made through a federation spokesman.
Articles 20 and 21 of the FIFA RSTP lay out training compensation, designed to reimburse clubs for the expense of training players who go on to be professionals, and solidarity, which rewards the effort and incentivizes further development.
MLS has never paid these fees, either to American clubs or players signing from abroad.
In September 2015, U.S. youth clubs filed multiple claims with the FIFA Dispute Resolution Chamber for unpaid solidarity, naming the Seattle Sounders (twice) and Toronto FC as offending parties in three of the cases.
FIFA’s decisions should come at any time, as it is well past the typical 60-day window for DRC cases to be resolved. Interestingly, the case that caused the recent reinvigoration of solidarity issues, on DeAndre Yedlin’s transfer to Tottenham Hotspur, would ostensibly result in solidarity money being paid to the Sounders, as he played in their academy.
In his State of the League conference call with reporters in December 2015, MLS commissioner Don Garber acknowledged that his league could benefit from these payments if it were allowed to receive them.
“We are a member of U.S. Soccer, CONCACAF and FIFA, but we are also governed by U.S. law, and there are aspects of U.S. law as it relates to how we act in this space,” Garber said. “The best that I can say is, MLS will be a major beneficiary of solidarity payments going forward because of the number of academy players that we have, and yet we want to be very mindful and very careful about how we go forward here. I’m confident that Sunil [Gulati, U.S. Soccer president] and [MLS president and deputy commissioner] Mark Abbott and the respective attorneys will find a way to have an agreement and to move forward successfully.”
As Garber alluded to, MLS could benefit from these fees flowing into the league as its academy players sign abroad with increasing frequency.
If Jordan Morris had signed with Werder Bremen after his recent trial, for example, MLS and the Sounders would have been eligible to receive €90,000 in training compensation for his one season in the academy.
(Eastside FC would have been in line for €280,000, while Stanford University would have been due €270,000, according to a strict interpretation of FIFA’s guidelines.)
North American Soccer League commissioner Bill Peterson said an ideal solution could be a uniquely American compensation system. Dallas Texans SC president Paul Stewart had also previously posited the idea.
“Anything that would help stimulate more development at the younger levels of the sport would be a good thing for this country right now,” Peterson told SI.com. “At some point, we have to introduce more than just participating—but also excelling. If that means helping compensate them, and that stimulates more interest, that’s probably a good thing to do. Having said that, it’s probably not verbatim the FIFA model.”
In some nations abroad, including Germany and England, where television money from domestic and continental competitions is plentiful, two methods of compensating youth clubs exist side-by-side. The FIFA model is recognized, but clubs also receive money based on a domestic scale as well.
Enforcing only a U.S. system and not the international would be a tricky proposition when signing players who have foreign youth clubs in their history, though, unless they are willing to agree to whatever compensation the American clubs offer.
Many of the non-MLS youth clubs involved in the current discussions domestically also play in the U.S. Soccer Development Academy. Their participation involves heavy annual travel and participation costs that normally fall to players’ families to pay unless, like every MLS team, those costs are paid by the respective clubs.
The youth clubs’ statement to U.S. Soccer was written specifically on behalf of Crossfire Premier, Dallas Texans, Sockers FC Chicago and Real Colorado. Westside Timbers, Real So Cal, Fullerton Rangers and Nomads SC also endorsed it.
Among clubs listed above, all but Westside and Fullerton play in the Development Academy. According to the clubs currently seeking compensation, the players they have moved abroad played with them for free. Nomads, the San Diego club that produced U.S. internationals Steve Cherundolo, Carlos Bocanegra, Frankie Hejduk, Joe Corona and others, typically charges players only a paltry annual fee and receives the majority of its funding from donations and the highly successful elite tournaments it hosts each year.
However, regardless of a club’s standing or pay-to-play situation, the clubs say training fees would allow for larger spending in various areas that would improve a club’s ability to provide a better development environment.
Transfers such as Yedlin’s to Tottenham, Clint Dempsey’s to Seattle and Michael Bradley’s to Toronto—all awaiting adjudication in the FIFA DRC—could provide major support to their respective American clubs. In a couple recent high-profile transfers, Anthony Martial’s move to Manchester United and Pedro Rodríguez’s to Chelsea saw two small clubs receive a heavy, immediate influx of cash.
“The U.S. youth clubs will receive millions of dollars from training compensation and solidarity that can be used to benefit the deepest grassroots of America soccer—from youth fee scholarships to improved coaching and facilities,” the youth clubs’ statement reads. “Any risk of adverse effects are far outweighed by the potential benefit to the poor state of U.S. youth soccer player development.”
Still, Garber said that if MLS franchises had to pay training compensation and solidarity, they would have to account for this new cost when signing players. That, in turn, could reduce the amount they offer as a transfer fee or salary to bring them in.
“I don’t think it’s an issue for the league, but there is only so much money that can go to a player,” Garber said. “This might be a question for the [MLS Players] Union, as to whether they’d have an issue with it. It’s going to come from somebody, and it’s conceivable that it can come from the player because there’s only so much money that can be spent.”
MLS Players Union executive director Bob Foose told SI.com that the union vehemently opposes U.S. clubs accepting such payments because it would restrict the player movement among professional teams.
“Training compensation and solidarity payments unjustly inhibit the labor market for players,” Foose said. “They increase costs to the acquiring club, which is passed on to the player, reducing compensation or, in many cases, eliminating a player’s opportunity altogether.”
To pay solidarity, 5% of any transfer fee between clubs of different national associations is distributed among the clubs that held a player’s registration up to age 23, according to how long he played for them. Training compensation is based on a set scale that takes into account the location and league of the signing club, and is payable the first time a player signs professionally or transfers clubs until age 23. The transfer fee has no bearing on the amount of training compensation due.
“These costs are a severe restriction on the player’s right to work and, as such, have no place in our system,” Foose said. “If a determination is made within the industry that youth clubs are deserving of additional compensation for developing young players, such compensation should come from revenues generated by the game itself, not out of the pockets of young players trying to earn a living.”
However, the American youth clubs argue, these payments are seen as standard practice across the world and should not keep MLS from signing players and paying them their deserved salaries.
“This whole assumption is based upon a belief that … without this ‘subsidy’ of U.S. player cost acquisition, U.S. players would be passed over by foreign clubs,” their statement reads. “With respect to player salary harm, this position assumes a ‘zero-sum’ game where every dollar paid to a youth club from training compensation and solidarity is a dollar not paid in player salary. This ignores any money that goes to the MLS academies from training compensation and solidarity from their player signings and assumes that the MLS club will not put that money back into player salaries.”
In the end, the clubs believe that training compensation and solidarity would only benefit player development. They see it as an incentive for clubs to produce professional players as a way of covering costs and making profit.
For other clubs that cater to recreational or lower-level players, their operations would not be affected. In fact, if one of their players goes on to sign a pro deal, it would also benefit them and allow them to reduce costs for other players.
“Implementing training compensation and solidarity within the U.S. youth system will align the interests from the bottom to the top of the U.S. soccer pyramid to produce and promote players with the best potential to develop into a high-paid soccer star,” the youth clubs’ statement reads, “with training compensation and solidarity rewarding all those who assisted in the player’s development.”