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Youth clubs file for compensation, solidarity on USMNT stars' transfers

U.S. youth clubs are seeking more than $850,000 in training compensation and solidarity payments according to claims filed to FIFA's Dispute Resolution Chamber, reports Liviu Bird.

Multiple American youth soccer clubs filed official complaints with the FIFA Dispute Resolution Chamber this week, seeking unpaid training compensation and solidarity, according to documents obtained by Crossfire Premier, Dallas Texans SC and Sockers FC Chicago are opening proceedings to claim a combined $480,500, emanating from transfers involving U.S. men's national team regulars DeAndre Yedlin, Clint Dempsey and Michael Bradley.

In a couple of major recent transfers, namely Anthony Martial to Manchester United and Pedro Rodríguez to Chelsea, solidarity payments singlehandedly secured the foreseeable futures of two small clubs. Clubs stateside haven’t had that same opportunity, but as more Americans sign contracts with bigger clubs and garner bigger transfer fees when they move, the percentage that could kick back to their former youth teams to support and incentivize development is constantly growing.

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Crossfire started the process for the American clubs on June 29, sending a letter to the FIFA Executive Committee after interference from U.S. Soccer and Major League Soccer in receiving solidarity on Yedlin’s transfer to Tottenham. MLS took 100% of the transfer fee, including the portion meant for his youth clubs, and the federation said it could not intervene due to U.S. law, according to documents sent to FIFA.

In response to the club’s initial inquiry, FIFA legal counsel encouraged Crossfire to take its case to the DRC. This week, the Redmond, Washington-based club claimed it is due $60,000 from Spurs, based on a $4 million transfer fee from MLS and Yedlin’s four years playing at Crossfire from the season of his 14th birthday through the end of the season of his 17th birthday.

According to FIFA regulations, 5% of the total transfer fee should be set aside for solidarity payments. Clubs receive 5% of the solidarity money for each season between a player's 12th and 15th birthdays, which bumps up to 10% for each season between the player's 16th and 23rd birthdays.

Despite its relative cooperation in Crossfire’s efforts, Tottenham had to be named party to the dispute because the buying club holds responsibility for paying solidarity. The English club was initially willing to make the payment but balked after receiving assurances from MLS that it would “ensure the appropriate treatment of any and all onward payments.” Through Crossfire’s presentation of the case to FIFA, U.S. Soccer and MLS should be drawn into the proceedings.

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“In our view, [Spurs] have been very cooperative and supportive and helpful of us, and it’s unfortunate they are stuck in the middle,” Crossfire lawyer Ben Trust told in June. “I personally can’t believe it’s not on [FIFA’s] radar, but setting out the history of the exchanges we’ve had with U.S. Soccer and MLS, I think, will highlight the injustice that the academy and charity clubs are suffering.”

Articles 20 and 21 of the FIFA Regulations on the Status and Transfer of Players outline requirements for training compensation and solidarity payments. However, U.S. Soccer claims a confidential consent decree prohibits American clubs from taking solidarity payments. Crossfire’s lawyers requested a copy of the alleged agreement in May, which the federation would not provide. If it is not a public document and instead a settlement claim, then U.S. Soccer would not be required to provide it absent a court order.

In its petition to the DRC, Crossfire bullishly refutes U.S. Soccer’s argument.

“USSF’s claim that U.S. law bars application of the [FIFA] regulations appears to be unfounded and made in bad faith. The scope of USSF’s claims has expanded over time, and the language it uses has also changed,” the document reads. “The reason for USSF’s inconsistent representations is simple: the referenced court order never existed, nor is there any consent decree applicable here. … U.S. law in no way bars Crossfire from obtaining its due compensation under the [FIFA] regulations.”

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The Texans also filed a claim for solidarity on Dempsey’s transfer to the Seattle Sounders from Tottenham in August 2013. Based on a $9 million transfer fee and the fact that Dempsey played four seasons with the Texans, the club claims it is owed $157,500 by the Sounders and MLS.

U.S. Soccer previously blocked the Dallas club from receiving solidarity from Fulham when Dempsey transferred there in 2007, club president Paul Stewart told in July. 

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The club eventually withdrew its complaint with the FIFA DRC at U.S. Soccer’s urging, which is documented in the Texans’ latest complaint to FIFA.

“U.S. Soccer will be contacting the Dallas Texans directly asking that they withdraw the claim,” a federation lawyer wrote to FIFA in March 2008 in a fax attached to the Texans’ petition. “If the Dallas Texans are not willing to do so, U.S. Soccer will be exploring whether disciplinary action against the Dallas Texans might be necessary. However, regardless of those developments, we would ask that the Dispute Resolution Chamber recognize the futility of the claim at issue, and dismiss it immediately.”

The federation’s tune has changed slightly in the time since that dispute. The youth clubs went through with their filings this week despite U.S. Soccer calling a meeting in Chicago on Oct. 16 in response to their growing discontent. Several major clubs, including those that filed with FIFA this week, and other parties invested in the American game received invitations to discuss the issue of training compensation and solidarity.

The Sockers are filing two claims, including one on Bradley’s transfer from AS Roma to Toronto FC in January 2014. Calculating based on a $10 million transfer fee and Bradley’s five payable seasons with the Chicago club, Toronto should pay $150,000 to the Sockers.

The other Sockers claim is for training compensation on former Marquette University center back Eric Pothast, who signed his first professional contract with Ängelholms FF in Sweden’s second tier in January 2014. Based on Ängelholms’ Category III standing with FIFA and Pothast’s four years with the Sockers, the Sockers should be paid $113,000.

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Per FIFA bylaws, the DRC has 60 days from the date of receipt to rule on each case individually, which can then be appealed to the Court of Arbitration for Sport. When the committee reaches a decision on training compensation or solidarity, it is published on the organization’s website in a redacted format. Identifying characteristics of clubs, leagues, national associations and players are taken out, but the DRC judge’s decision-making process is explained in full.

So far, Crossfire and other U.S. clubs have been shut down in seeking solidarity for their players. Canadian clubs have had more luck, including North Mississauga SC, which is in the process of receiving payments from West Ham for Doneil Henry’s transfer from Toronto FC in January. The Canadian Soccer Association’s bylaws also specifically recognize the FIFA statutes on training compensation and solidarity.

Unlike solidarity, training compensation is paid according to a flat rate. Training compensation reimburses “costs that would have been incurred by the new club if it had trained the player itself,” according to FIFA regulations, while solidarity rewards clubs for developing the player and stimulates further efforts.

The cost in each category of clubs around the world represents “the amount needed to train one player for one year multiplied by an average ‘player factor,’ which is the ratio of players who need to be trained to produce one professional player.” Individual national federations are responsible for denoting annually which clubs fall into specific categories within a framework FIFA provides.

In response to past requests from FIFA to allocate its clubs accordingly, U.S. Soccer has responded by reaffirming its commitment to the “order of the United States District Court for the District of Massachusetts” that Crossfire’s lawyers deny exists.

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“At this time, USSF cannot implement or enforce FIFA’s rules pertaining to training compensation,” the federation wrote to FIFA in 2005 in a fax used as one of Crossfire’s exhibits in its DRC petition. “Thus, we feel it would be most appropriate to set the training compensations amounts for all U.S. clubs at zero.”

However, even if FIFA agreed that all American clubs’ training compensation amounts should be zero, that wouldn’t preclude foreign clubs from paying players’ former youth teams.

Training fees are calculated based on the categorization of the signing club, not the club that receives the payments.

As such, Nomads SC of La Jolla, California, is preparing letters to Nottingham Forest and Fulham to demand payment for Anthony Wright and U.S. Under-17 international Luca de la Torre, who just signed their first professional contracts, respectively. Letters will also be sent by Chicago Magic, Westside Timbers and Fullerton Rangers to collect on contracts signed by Abuchi Obinwa (Hannover 96), Andrija Novakovich (Reading), Rubio Rubín (Utrecht), and Andy Muñiz (Morelia).

Seven other clubs are also weighing up their options with regard to players that have signed abroad. The demand letters alone total more than $370,000 in training compensation.

American youth clubs are actively seeking $850,500 from clubs at home and abroad just in the demand letters and FIFA DRC petitions reported here. Lawyers for those clubs argue that, at the going rate, that money could fully fund hundreds of players’ participation in youth soccer for one year and make a dent in reducing reliance on the current pay-to-play model.