Commentary
MLS clubs change tune -- and will seek FIFA-mandated player development payments
- by Paul Kennedy @pkedit, Apr 19, 2019
As of Thursday, they will also pay foreign clubs who claim Training Compensation and seek Solidarity Payments.
"By enacting this policy," MLS executive vice president of player relations and competition Todd Durbin told Soccer America, "it is not only going to allow us to continue the investment but increase it and create more opportunities for young players."
Under the FIFA Regulations on the Status and Transfer of Players (RSTP), claims for Training Compensation and Solidarity Payments only cover transactions involving players moving from clubs between federations. It is left to federations to come up with their own program, if any, for domestic transactions. U.S. Soccer and the Canadian Soccer Association have no such domestic program in place.
FIFA: Regulations on the Status and Transfer of Players
MLS's change in tune is not unexpected and follows the heavy investment MLS owners have made in player development at the youth level and then the exodus of top young prospects from MLS academies on free transfers to countries in Europe when they turn 18. Durbin said league discussions about its new policy accelerated in the past year.
Weston McKennie left FC Dallas academy for German club Schalke 04 in 2016 and debuted for the first team by the next spring. More recent examples include U.S. U-20 stars Alex Mendez and Uly Llanez, who moved from the LA Galaxy to clubs in Germany, and Richie Ledezma, who signed with Dutch club PSV from the Real Salt Lake academy.
FC Dallas, the Galaxy and RSL were among the first MLS clubs to ramp up youth academies, but they aren't alone. MLS clubs invested a record-high of more than $70 million in youth development in 2018 and have spent or plan to spend hundreds of millions of dollars more in training facilities for their first and second teams, and youth programs.
Going forward, MLS clubs will be able to make claims for Training Compensation when a player signs his first pro contract with a foreign clubs. That claim can total upwards of $250,000 if they trained the player since the age of 12 and he signs his first pro contract with a top European club.
FIFA sets payment amounts according to the size of clubs (four categories) and the six confederations. A team can receive as much as $90,000 a year for a Category 1 UEFA team. (FIFA sets all amounts due for the years 12-15 at Category 4 levels, which are $10,000 a year for an UEFA team and $2,000 a year for teams for all other confederations.)
MLS clubs will keep all moneys they receive for Training
Compensation and Solidarity Payments. In the case of Training Compensation, the amounts involved may also have the effect of dissuading some European clubs from paying Solidarity Payments for players
who are otherwise free agents, reducing the competition MLS clubs face for retaining these young stars.
Solidarity Payments total five percent of the transfer fee and are also divided
proportionally among clubs involved in a player’s training. They only cover transactions between clubs in two different federations where a transfer fee is involved, so MLS clubs will only
occasionally be able to seek payments.
Dating back to a consent decree involving U.S. Soccer in the player lawsuit Fraser vs. MLS decided in 2002, MLS has not participated in FIFA's RSTP.
More recently, U.S. Soccer has change its position, taking a neutral position on RSTP transactions. The MLS Players Association has opposed the implementation of the system.
Statement on MLS announcement regarding training compensation and solidarity payments: https://t.co/C3SFxbeMUw pic.twitter.com/RY3wFafcqL
— MLSPA (@MLSPlayersUnion) April 19, 2019
U.S. youth clubs sought claims for solidarity payments in recent years in transactions involving Clint Dempsey's move to
the Seattle Sounders in 2013 and Michael Bradley's move to Toronto FC in 2014, but FIFA's Dispute Resolution Chamber recently turned them down. A claim by Crossfire Premier for solidarity
payments involving DeAndre Yedlin's transfer from the Sounders to Tottenham in 2015 has yet to be decided by the Dispute Resolution Chamber.
Going forward, MLS clubs will only seek
its own percentage of the transfer fee for years in which players were in their academies, clearing the way for youth clubs to make claims of their own.
Paying claims for Training Compensation
and Solidarity Payments is something relatively new for MLS clubs. Until recently, they did not sign many young players from foreign clubs, triggering a potential Training Compensation, and they
rarely paid transfer fees.
Paying claims for Training Compensation and Solidarity Payments will present a whole new set of issues based on the unique nature of MLS:
-- Teams
will have to include them in a player's salary budget charge on top of salary, bonuses and acquisition costs;
-- MLS will have to resolve issues related to moves from clubs in the United States
and Canada. That will likely mean a player trained at a club in Canada and signed by an MLS club (or vice versa) will require the MLS club to pay a claim for Training Compensation. It will not allow
MLS clubs to require clubs in the USL or new CPL to pay Training Compensation claims;
-- Foreign players -- which would include Americans draft by Canadian teams (and vice versa) -- signed
by MLS clubs in the SuperDraft could potentially trigger claims for Training Compensation and Solidarity Payments from the clubs they played for before entering college.
This is a step in the right direction assuming future growth of the professional sport in the US, but will not have a significant impact on player development in the US.
Agreed it’s a step fwd. The focus in academies will turn from rich silver spoon players vying for D1 scholarships (pay-to-play) to talented players vying for a 1st team spot worldwide (play-to-pay).
Agreed it’s a step fwd. The focus in academies will turn from rich silver spoon players vying for D1 scholarships (pay-to-play) to talented players vying for a 1st team spot worldwide (play-to-pay).
Agreed it’s a step fwd. The focus in academies will turn from rich silver spoon players vying for D1 scholarships (pay-to-play) to talented players vying for a 1st team spot worldwide (play-to-pay).
Hopefully they get what the independent Clubs received, zero dollars. MLS wants to have it both ways, sorry Donny.
Which independent clubs, or do you mean the academies that make a fortune charging middle-class families thousands of dollars in exchange for the possibility of a college scholarship?
Remember, Tottenham and Yedlin's family are both fighting TC.
Independent Clubs ie. non-MLS, non DA. Clubs that provide training to many players at no charge. You do know that they exist. It’s called grassroots soccer.
That is a little misleading, Wallace. Fields cost money. Officials cost money. While some coaches volunteer and don't charge, when they do charge that costs money too. These are all costs that are passed down to the players. I don't know any private clubs that run free programs.
I was a volunteer coach and think I was pretty good, but, with exceptions, volunteer coaches are generally not as good as licensed, experienced coaches. I suspect that in most big clubs, the coach's pay is not a significant portion of the fees that the clubs charge. Most coaches are not trying to get rich off their fees. A lot of them are just covering their costs.
I think what Wallace is refering to is the proliferation non-profit soccer clubs with little or no governance oversight or transparency. It seems in the PTP world of soccer USA the clubs with elected boards and transparent fiscal and operational oversight are the exception rather than the rule.