By Ben Nicholson
September 16 – Following the U.S. Senate Hearing on July 15, where the integrity of international governance took center stage, Senator Maria Cantwell (pictured) followed up with questions for the United States Soccer Federation (USSF) regarding training compensation to which USSF has now provided a written reply.
The controversy giving rise to the questions and response, which will be added to the formal senate record, surrounds USSF’s refusal to provide solidarity contribution and training compensation to U.S. youth soccer clubs who develop the talent that the USSF ultimately benefits from.
Last week, youth clubs Crossfire Premier, Dallas Texans SC and Sockers FC Chicago, filed a lawsuit complaining that the MLS took the entire transfer fee for the transfers of DeAndre Yedlin, Clint Dempsey and Michael Bradley. The combined amount at stake is $480,500.
FIFA Regulations on the Status and Transfer of Players provides a training compensation in Article 20, which reads:
“Training compensation shall be paid to a player’s training club(s): (1) when a player signs his first contract as a professional and (2) each time a professional is transferred until the end of the season of his 23rd birthday. The obligation to pay training compensation arises whether the transfer takes place during or at the end of the player’s contract. The provisions concerning training compensation are set out in Annexe 4 of these regulations.
The same regulations provide a solidarity mechanism in Article 21, which reads:
“If a professional is transferred before the expiry of his contract, any club that has contributed to his education and training shall receive a proportion of the compensation paid to his former club (solidarity contribution). The provisions concerning solidarity contributions are set out in Annexe 5 of these regulations.”
Although these regulations provide no exceptions to the rule, USSF, in the words of Senatory Cantwell, “both consents to and assists in MLS’ practice of taking solidarity fees owed to non-MLS youth soccer clubs in the United States, and also interferes with US youth clubs seeking training compensation from foreign soccer clubs.
“Furthermore, the USSF itself prevents foreign professional clubs from otherwise paying solidarity fees and training compensation to non-MLS American youth soccer clubs by claiming that receipt of these fees in the US by youth soccer clubs is illegal under US law.”
The Senator cites the transfers of DeAndre Yedlin, Clint Dempsey and Jozy Altidore as examples of the practice.
In response to why USSF does not follow FIFA regulations on solidarity rules, USSF answered that “solidarity payment mechanisms could be found to violate the antitrust laws of the United States given their potential impact on the mobility of players.”
USSF cites, in un-American fashion, to a foreign jurisdiction. In 1995 the European Court of Justice found that the Bosman rule, which required a transfer fee to be paid to a player’s former club if the player signed with another club after his contract expired, “negatively impacted the mobility of players and, therefore, violated the European Treaty,” which propels USSF’s self-proclaimed fears of legal liability.
One may find USSF’s apparent concern for player mobility a surprise given their major constituent association’s, the MLS, drafting methodology where many players are at the mercy of allocation without meaningful influence.
Thus, consistent with the Bosman ruling, USSF agreed, and answered, “that it would not enforce transfer fee or similar restrictions that FIFA might impose on the movement of players who were ‘out of contract.'”
The USSF answer goes on to postulate about what may happen if a solidarity mechanism were enforced. They concluded it would entail the MLS demanding higher transfer fees for players they sell and that given this there is no way of knowing whether the higher fee would have been agreeable to the buyer and thus whether the player would have actualized his currently possible mobility.
To put this claim in context, FIFA requires 5% of any transfer fee to be paid to the clubs involved in the transferred player’s training and education.
Presuming that the MLS would push this cost on to the buyer, DeAndre Yedlin’s transfer to Tottenham would have cost $4.2 million opposed to the reported $4 million. Clint Dempsey’s reported $4 million transfer to Fulham in 2006 would also tally up to $4.2million. Jozy Altidore’s transfer to Villarreal in 2008 for a reported $10million would cost $10.5million.
As rightly pointed out, it is speculative whether the transfers would have been agreeable with the additional cost included.
However, less speculative is that the European nations that do operate under this model of providing solidarity fees have not seen a chilling in player mobility. For example, the English Premier League and the Bundesliga both broke their spending record this summer.
In short, the evidence would seem to point towards clubs that buy MLS players being unlikely to be put off or directed elsewhere by virtue of a potential additional 5% charge. Nor have we seen the MLS become a go-to league for cheap transfers because they do not tack on the additional 5% charge.
Of course these general observations do not prove the case, but in line with the speculative suggestions the USSF offered, they provide an at least equally compelling counter narrative.
Whatever policy arguments are at play here, the USSF makes clear that they are couching their justifications in fear of legal liability if they were to follow FIFA’s regulations.
Foreseeing this possibility, Senator Cantwell goes on to ask why the USSF has not created some mechanism for compensating US youth clubs for their training roles.
The USSF refer back, in their answer, to their concerns of legal liability for any such mechanism. They also draw attention to the feature of US soccer whereby the cost of player training and development is “typically borne by the families of young players,” and, on occasion, by the USSF itself.
This is to ignore colleges, and their scholarship offerings to players, but perhaps not to a prejudicial degree since the development that takes place at such institutions is for a short period of time, if, in reality, existent at all.
The USSF goes on to recognise that development clubs are a growing concept in the US, and scholarships are being increasingly granted, “and that evolution will be one of the factors considered in the new legal analysis being conducted by US Soccer’s outside counsel.”
Contact the writer of this story at moc.l1738748783labto1738748783ofdlr1738748783owedi1738748783sni@n1738748783osloh1738748783cin.n1738748783eb1738748783