Hundreds of millions of dollars in compensation payments to youth clubs go unpaid worldwide

ESPN's Jeffrey Carlisle reported on Wednesday that claims by two of the three American youth clubs for solidarity payments were rejected by FIFA's Dispute Resolution Chamber, and while no full explanation for the decisions were given, the attorney representing the clubs, attorney Lance Reich, believes it was because of the incomplete records of the player passports.

The cases involved:

-- Clint Dempsey, who was transferred from Tottenham to the Seattle Sounders in 2013 and played for Dallas Texans before going to Furman University; and
-- Michael Bradley, who was transferred from Roma to Toronto FC in 2014 and played for Sockers FC, a prominent Chicago club, before entering the U.S. U-17 residency program.

No decision has been made regarding a third U.S. international:

-- DeAndre Yedlin, who was transferred from the Sounders to Tottenham in 2014 and played for a four-year period for Seattle area club Crossfire before moving to the Sounders' academy program and then the University of Akron.

In the wake of the 1995 Bosman decision granting free agency to players at the end of their contracts, FIFA introduced solidarity payments and training compensation to compensate youth clubs for the cost of developing players.

Solidarity payments are awarded to clubs for players they trained from the age of 12-23. An amount of 5 percent of the transfer fee is awarded -- but it must involve the transfer of a player from a club in one country to another. The amount is calculated according to the years a player is at a club: 5 percent from ages 12-15 and 10 percent from ages 16-23 to total 100 percent.

Training compensation is awarded to clubs for training players from the age of 12-21 after they sign their first pro contract and each time they are transferred until their 23rd birthday. The amount is predetermined according to a formula published by FIFA.

The key is that the players are registered at the clubs and there is a record of a player's year-to-year movement on the player passport. That lack of a record is why Reich told ESPN he believes the claims in the Dempsey and Bradley cases were rejected. (Tottenham is disputing the years Yedlin was at Crossfire.)

Kimberly Morris, who heads the FIFA TMS integrity and compliance department that oversees the centralized system of international transfers, recently told FIFA's annual law conference that about $300 million in youth compensation claims are unpaid because training clubs don't have the proper records or don't file a claim.

“We know the system is too complicated, " she said. "We know there is a poor record of the history of many players."

In the case of American clubs, they have not been compensated because U.S. Soccer has not implemented the system on legal grounds.

According to FIFA's 2018 global transfer market report, clubs declared $7.03 billion in fixed transfer fees, but solidarity payments accounted for only 1.0 percent of the amount and training compensation payments were only 0.3 percent.

Only $3 million of the $67.7 million in payments for solidarity contributions were made by clubs outside UEFA, and just $300,000 of the $20.5 million in training compensation payments were made by clubs outside UEFA, suggesting non-UEFA clubs either ignored making payments or the clubs that were supposed to receive them lacked registration records, waived their rights to be paid or didn't file a claim.



Because the decisions in the Bradley and Dempsey cases have not been made public, it is not clear whether the lack of registration records was the sole reason for the rulings.

8 comments about "Hundreds of millions of dollars in compensation payments to youth clubs go unpaid worldwide".
  1. John Soares, March 14, 2019 at 7:23 a.m.

    These "pay to play" clubs get compensation, $.....great. Will the parents that actually paid also get money back??
    After all, the $ investment was made by the parents not the club.
    Just asking:)

  2. Wallace Wade, March 14, 2019 at 8:14 a.m.

    John, what about the millions of Club players in the US that don’t pay any $? I have Around 30 scholarship players at my Club. If one of those players gets signed by Fulham or Tottenham, I don’t get a solidarity payment? My Club pays thousands of dollars every season to allow these players to play and travel with the Club. 

  3. Chris Lipscomb replied, March 14, 2019 at 2:40 p.m.

    Pretty sure the other parents pay these "scholarships" when it comes right down to it.

  4. R2 Dad, March 14, 2019 at 11:13 a.m.

    Record-keeping at clubs would be more thorough if the clubs thought there was a snowball's chance they would receive any of this money. Record-keeping at clubs would be easier if parents didn't change clubs every year following a coaching change. Development would be better if clubs didn't churn coaches, and coaches didn't keep starting their own clubs to further water down the development process. It's a wonder this country has ANY good players--they all come from families that already play and know the sport.

  5. cony konstin, March 14, 2019 at 12:35 p.m.

    We started this grassroots initiative a few years ago and we aren’t done yet. We will continue to fight for what is right. Eventually we will win for Usonian youth soccer. 

  6. mark courtney, March 14, 2019 at 2:07 p.m.

    Millions playing at Pay-to-Play clubs ... playing for free on scholarship???
    No Way!
    Maybe hundreds, probably not thousands and no way millions.

  7. Wallace Wade, March 14, 2019 at 4:26 p.m.

    We have a Club consisting of 22 teams. We have around 30 players on scholarship. Do the math. We are not an exception in youth Club soccer! There’s a Club down the road twice our size. They have many more on scholarship than we have. It’s a real thing, it’s called “doing the right thing”. Sorry this is news to you Mark. 

  8. Nick Valenti, March 15, 2019 at 10:54 a.m.

    I'd like to know what FIFA Player Passport paperwork is missing from these US Clubs. In Missouri the state registrar (MYSA) sanctions the rosters for all teams. They are an affiliate of US Youth Soccer and US Soccer. If a player is on a MYSA "Sanctioned" team that is recorded. If the player is not playing for a Sanctioned team then that team can not participate in any US Soccer or US Youth Soccer events; thusly, there is no "Official" record. So, what are the State and US sanctioning bodies missing?

Next story loading loading..

Discover Our Publications