Youth club representatives left a meeting with U.S. Soccer on Friday feeling optimistic about their ability to procure at least some fees for their efforts in player development. The federation finally revealed the document that it says prevents American clubs from following the same FIFA protocol on training compensation and solidarity as the rest of the world, but the USSF said it would not stand in the way of youth clubs receiving those payments for players moving abroad.
Training compensation and solidarity are spelled out in Articles 20 and 21 of the FIFA Regulations on the Status and Transfer of Players. Training compensation is designed to reimburse clubs for the expense of training players who go on to be professionals, while solidarity rewards the effort and incentivizes further development.
However, Major League Soccer has never paid training fees or solidarity, either for American players or those signing from clubs abroad. The league would not budge on the matter during Friday’s meeting, either.
Attendees at the meeting included U.S. Soccer secretary general Dan Flynn, federation lawyer Lisa Levine, MLS president Mark Abbott, MLS Players Union executive director Bob Foose, NASL president Bill Peterson and NASL director of business development and legal affairs Rishi Sehgal, as well as multiple representatives from American youth clubs and the U.S. Soccer Development Academy. U.S. Soccer president and FIFA Executive Committee member Sunil Gulati was absent, despite previous indications that he would attend.
[Editor's note: An earlier version of this story indicated that LA Galaxy's Todd Dunivant also attended on behalf of the MLS Players Union, but SI.com has learned he did not. We regret the error.]
“We had a productive meeting and are committed to continuing the discussion,” U.S. Soccer told SI.com through a spokesman. The federation declined to comment on any specifics of the meeting. An MLS spokesman confirmed the league’s attendance at Friday’s meeting but also declined to provide any further details.
NASL did not overtly support the youth clubs’ cause, but one source said the second-division league appeared to be leaning that way. Reached via email, Peterson declined to comment on the proceedings. The MLS Players Union did not respond to requests for comment.
Here are the major takeaways SI.com has been able to glean from Friday's session:
U.S. Soccer presents vital document
U.S. Soccer organized Friday’s meeting in August, inviting representatives from around the country to discuss the issue of training compensation and solidarity. In September, multiple American youth clubs filed official complaints with the FIFA Dispute Resolution Chamber on the matter, including three regarding U.S. national team regulars DeAndre Yedlin, Clint Dempsey and Michael Bradley.
The recent inflammation of the dispute began in June, when Crossfire Premier appealed to FIFA after interference from MLS in receiving solidarity payments on Yedlin’s transfer to Tottenham Hotspur. MLS took 100% of the transfer fee, including the portion normally reserved for paying youth clubs, and U.S. Soccer said it could not intervene due to antitrust concerns.
On Friday, U.S. Soccer said it has no problem with clubs chasing training fees and solidarity from abroad, which could lead to more claims being filed for American players signed overseas. The only caveat the USSF provided was that it did not want to play a part in any transactions, due to those same legal concerns.
The federation’s reasoning for non-intervention rests in a document from the 1996 Fraser v. MLS antitrust case that does not allow it to “impose, implement or enforce, in any way, those rules, statutes or regulations adopted by [FIFA] relating to the payment of transfer fees or training and development fees.” However, the document is not listed on the case docket and had not been seen before Friday beyond the brief snippet that supports U.S. Soccer’s claim.
At its meeting, U.S. Soccer finally distributed the agreement, a stipulation and order dated July 28, 1997, and signed by judge George A. O’Toole, Jr. The four-page document, obtained by SI.com, goes beyond the discussion of training fees and seems to carve out exemptions for MLS that allow the league to sidestep FIFA rules on international player transfers. Details of the document can be read at the link below.
One part of the stipulation reads: “USSF will not directly or indirectly prevent an out-of-contract player from playing in MLS on the ground that such a player has not received an international transfer certificate from a foreign soccer association because the player’s previous team has demanded a transfer fee and MLS has declined to pay such a fees."
Based on interpretation of that language, the federation could not prevent MLS from signing a player from a foreign league when MLS does not receive the proper clearance to do so.
The agreement directly contradicts FIFA’s regulations regarding both international transfer certificates and the protection of minors. (MLS does acknowledge on all of its player signing announcements that players are eligible pending the receipt of a P-1 Visa–or Canadian work permit–and International Transfer Certificate.) Article 19 of the FIFA Regulations on the Status and Transfer of Players states that “international transfers of players are only permitted if the player is over the age of 18.”
Exceptions are made if the player’s family moves to a new country for non-soccer reasons, if the player is at least 16 and the transfer takes place in Europe or the two clubs are within 50 kilometers of the same international border.
In April 2014, FIFA sanctioned FC Barcelona and the Spanish federation for violating Article 19, slapping them with massive fines and ultimatums to ensure player and club compliance. That led to an exodus of foreign players from Barcelona’s famous La Masia academy, including U.S. youth national team midfielder Ben Lederman.
One way FIFA ensures compliance includes the proper movement of a player’s international transfer certificate from one national association to the other, as spelled out in Article 9 of the regulations. In addition, the statutes require the player’s new national association, which would be U.S. Soccer in the case of a transfer to MLS, to “inform the association(s) of the club(s) that trained and educated the player between the ages of 12 and 23 in writing of the registration of the player as a professional after receipt of the ITC.”
In other words, U.S. Soccer also has a duty to tell any domestic youth club about professional signings in other national associations. Those youth clubs could then contact the proper authorities to receive the fees they are owed according to the FIFA regulations.
National law takes priority over FIFA regulations in a contradictory situation, leaving U.S. Soccer to juggle American legal precedent with its obligation to govern the sport as charged by FIFA. However, in agreeing not to intervene on MLS signings when they contradict international transfer statutes, the federation could itself be in violation of FIFA.
U.S. Soccer’s unwillingness to enforce training compensation and solidarity in any way also does not preclude MLS from taking money meant for youth clubs, as it did in Yedlin’s case.
On the other end, it ensures that MLS can continue not paying those fees to foreign clubs when players come stateside.
“The U.S. youth clubs completely support the FIFA rules on ITC transfer and their key use to prevent the illegal and unethical transfer of minors across borders to play soccer,” said Lance Reich, Crossfire’s lawyer in the Yedlin case.
Reich agreed that the revelation of the Fraser court order confirmed several allegations in the initial Crossfire letter to FIFA in June, which posited that MLS wants to prevent U.S. youth clubs from receiving training fees because that would open the door to the league having to pay those fees itself.
“To that end, USSF and MLS appear to behave in a conspiratorial manner, acting side-by-side to deny U.S. youth soccer clubs any training compensation and solidarity fees,” the letter to FIFA reads. “This conduct has demonstrably included the MLS actually taking solidarity fees that were owed U.S. youth soccer clubs, as is shown with Crossfire.”
In response to an email inquiry from SI.com, a FIFA spokesperson pointed out that transfer fees for out-of-contract players were eradicated in 2001. The Regulations on the Status and Transfer of Players were updated after the Bosman ruling in European court that said clubs couldn’t collect on player transfers when their contracts ran out.
Additionally, FIFA confirmed that U.S. Soccer and its clubs consistently comply with the regulations on international transfer certificates.
“All 209 member associations of FIFA are bound to the Regulations on the Status and Transfer of Players,” FIFA said. “In this respect, we can confirm that the U.S. Soccer Federation, as well as its affiliated clubs, are regularly using the Transfer Matching System for requesting, obtaining and creating international transfer certificates.”
What comes next
U.S. Soccer is set to respond within a month on the possible enactment of a unique U.S.-based system that would compensate youth clubs for their player development efforts. Youth club representatives have said they would be happy to follow different guidelines than those in FIFA’s regulations, as long as their clubs can be rewarded. Details of that potential system are still being ironed out.
The revelation of the Fraser v. MLS document leaves a number of questions unanswered, though. It’s unclear whether players have entered MLS in the past without regard to proper transfer protocol or whether compensation disputes with foreign clubs have been ignored given the legal loophole.
It’s also unclear how a stipulation involving foreign players arose during the case when none were implicated in the court proceedings.
Finally, abuse of the system moving the opposite way could also be possible. U.S. youth players continue to move abroad every year, and their signings are subject to the same international transfer certificate regulations as their senior counterparts. Revelation of the court order and its details could lead to further scrutiny of player transfers to and from the U.S.
At the very least, FIFA’s response to the document shows that a modernization of practices in the U.S. should be considered. Much has changed with regard to player movement since the ruling in the Fraser case, and American players move abroad more frequently and for higher fees now than ever before.
By holding its meeting with the youth clubs and considering their proposals for both foreign- and domestic-based compensation for their development efforts, the federation has taken the first steps in doing so. The next steps remain to be seen but could come as soon as a month from now, when U.S. Soccer follows up on Friday’s meeting.