Operating a youth soccer club in the USA comes with all the complexities of running a business, including legal matters. For advice on the myriad issues club management faces, we checked inwith attorney Steve Gans, who advises and represents soccer players, coaches, owners, executives, professional clubs and youth clubs. Gans’ experiences developed while counselingpro clubs in strategic alliances with youth clubs (and vice-versa), and several youth clubs in emergent and/or day-to-day matters are the basis of the answers below, and were not derived from advisingany one club.
SOCCER AMERICA: How often do youth clubs need legal counseling and what issues come up most often?
STEVE GANS: In myexperience, legal or at least quasi-legal matters arise quite regularly for youth clubs of a certain size. There may be good reasons, such as opportunity and proper management, or bad reasons, such asconflict, mismanagement, or threat, for this.
On the positive side, here are matters which often arise for clubs:
1. Merger with or acquisition of another club.
2. Coaching andother Employment Agreements.
3. Strategic Relationship Agreements with pro clubs (international or domestic).
4. Affiliation Agreements with smaller youth clubs (in which the Clubprovides coaching services, entry into stronger leagues and/or other services).
5. Board of Directors policies and other corporate documents (so as to further ensure proper corporategovernance).
6. Team Sports Agreements with equipment manufacturers (i.e., Nike, adidas, etc.).
7. Corporate Sponsorship Agreements.
8. License Agreements with App companies(scheduling, team management software, etc.).
9. Club Player Agreements.
10. Player Scholarship Agreements.
11. Consulting Agreements.
12. Field Leases and/or DevelopmentAgreements.
13. Social Media Policies.
14. Compliance with relevant child protection, background check and/or data privacy laws.
15. Proper staff classifications: independentcontractor vs. employee analysis.
On the negative side, some of the matters which can arise include:
1. Merger unwinding or dissolution.
2. Employee/coach disciplineissues.
3. Player discipline issues.
4. Internal investigations.
5. Contract disputes.
6. Allegations by a club of non-competition and/or confidential information clauseviolations.
7. Violation of Social Media Policies.
8. Parent complaints or allegations.
9. Cross-club trademark infringement claims.
10. Lack of compliance with relevantchild protection, background check and/or data privacy laws.
11. Claim against the club by a relevant government authority of misclassification of staff (i.e., independent contractor vs.employee).
12. Fiduciary obligation issues.
SA: What are some of the main things youth clubs can do to defend themselves against lawsuits orlegal issues?
STEVE GANS: In an overarching sense, the most important thing club leaders can do is to ensure that theorganization is run as professionally as possible. In so many cases, youth clubs have started as modest grassroots organizations and they have had meteoric growth in connection with the sport’s(and related pay-to-play) boom, and often the sophistication of the club’s operation does not keep pace.
Make sure that the right people are in place. Coaches should coach andadministrators should administrate. It is essential to get an independent Board of Directors – not a rubber stamp Board – in place. Cover all the basics that any smart business ororganization would to protect itself, including:
– adequate liability and Director’s and Officer’s insurance.
– formation of a proper legal entity and maintenance ofcorporate records.
– financial controls.
– background checks on coaches and others who will have contact with kids.
– clear policies for coach comportment on the field, on road tripsfor away games and at meetings and conventions.
– well thought-out communication policies and standards for staff and for coaches while communicating with families – clear social mediapolicies.
– have Board members who bring sophisticated yet complementary skills to the club, including those with legal, financial, business, marketing and corporate governance (for-profitand/or non-profit) backgrounds. .
SA: I imagine that running a youth soccer club can be like running a large small business — because there are lotof “customers” involved, and a significant amount of costs and fees. Is there an optimal leadership structure that you recommend? For example, how the board and Director of Coaching (DOC)operate?
STEVE GANS: From a good corporate governance perspective, the DOC should not be on the Board; rather, as a key employee, he or she should report tothe Board. But that horse has left the barn in so many cases, as it has traditionally been common for DOC’s to sit on the Board.
Why is that an issue?
Because as the mostprominent employee (both from a day-to-day and an optics perspective), the DOC carries so much influence. There are reasons [examples below] why a Board member might reflexively not want to say no tothe desires of the DOC. It is therefore important that those who are selected to sit on the Board are truly able to act as independent directors, and have the comfort to do so. It would be awkward toask a DOC who sits on a Board to recuse him or herself from a vote or discussion every time a Board member felt unease because the issue being contemplated might not go the DOC’s way.
SA:The DOC position is the one most are familiar with when it comes to club leadership. How much power should a DOC have in how a club is run?
STEVE GANS: Thisis a great question. One of my good friends in the game hits the nail on the head when he says: “DOC’s of youth clubs are kings. They are kings of a very small kingdom (i.e., the club),but kings nonetheless.” One of the main reasons they are kings is that parents so often are extra deferential to them because they believe that the playing and playing future fate of their childis in the hands of the DOC.
In most cases, parents of current players are those who serve on the Club Board. And thus, there is an inherent conflict of interest in that Board position. Thatconflict of interest is neither financial nor legal in nature. It is rather, a far more visceral and emotional conflict of interest – involving the love of and hopes for a child. A Board membervoting against the wishes of or disciplining a DOC does an internal gut check in such case – for he or she will be concerned that the DOC may react to such disappointment by restricting therelated child’s playing time or opportunities. Every Board member who is a current club parent has that thought in those situations, and it is not easy to find enough Board members who have thestrength to make the right call irrespective of the potential repercussions.
The DOC should have significant input and influence in many matters, but there should be real checks and balanceson his or her power and influence. That is achieved both by delineating the responsibilities and powers of the DOC in his or her Employment Agreement, and by choosing Board members who have thestrength at all times to act independently — irrespective of the fear that their child might suffer for the sins (i.e. a decision contrary to the DOC) of the parent.
SA: If I just got the job of DOC of a youth club, what’s the main advice you would give me?
STEVE GANS: The first thing I would say is havethe self-awareness and selflessness — in the best interest of the club — to stay in your lane. If you don’t have a business and operations background, don’t act like or try to be theCEO. Sure, you should be involved in strategic alliance deals with other clubs as well as deals with the equipment company sponsor, but leave much of the business to those with more expertise. Focuson your leadership skills as a coach to lead the club to success.
I would also say that, no matter how comfortable you become at the club over time, don’t slip in your customer servicestandards. If you established a coaching curriculum for all coaches to follow when you first joined the club, if you made it policy that each youth player received mid-year and end-of-year reviewsfrom their coach when you first joined the club, don’t let those good practices slip.
Do the work to make sure the college recruiting resources you present to your players and theirfamilies are robust and that they stay current. Importantly, make sure that your communications with families at important junctures in a player’s life cycle with the Club — coming, within anddeparting — are timely and appropriate.
SA: For sure, parents may often have dissatisfaction about their children’s experience at a youth club. Can you give an example of issuesin which the parents should bite their tongues — and issues in which they should take a complaint to the club leadership?
STEVE GANS: Parents ought not tocomplain to coaches simply because — absent something sinister behind the coach’s decision — their child is not receiving enough playing time in their opinion. When you think about it,it is a presupposition that about a third of the families on every team will be less than happy, because in a roster of 18-22 at least a third of the players will not be starting or receivingsignificant playing time. Given this inherent issue, the fact that you are paying tuition as a parent does not give you the right to complain or demand that your child should start.
I canthink of a few examples where parent complaints to club leadership are absolutely appropriate. One I know about involves a situation wherein the coach had his stepson on the team, and he unabashedlyfavored that son in an effort to have him recruited by a high Division 1 school. That favoritism in and of itself broke the cardinal rule that when you coach your child you should bend over backwardsto ensure that you do not favor him or her.
But also in this case the coach’s effort to showcase his stepson marginalized many of the other boys on the team, which had the effectof damaging the college recruiting experiences of a few of the boys. That was a situation for sure wherein parent complaints would have been appropriate.
SA: I imagine that poor communication can lead to situations in which parents would have a grievance. Do you have an example of that?
STEVE GANS:Every year I advise many parents regarding college recruiting and during the time of tryouts for the next club season. One particular scenario I have seen often that is regrettably common amongst manyclubs is the following: a player who has played several years for a club attends tryouts for the next season and does not thereafter receive any communication for a protracted period of time (thoughthey know that other players are receiving offers for the team). Parents understandably become frustrated and perplexed, and they wonder what is going on.
In my experience, this sudden silencefrom the familiar club means that the player is on the “bubble” of making the team, and the coach is waiting out the process to see how many extended offers will be accepted. The awkwardsituation develops as a result of less than ideal DOC communication skills or policies, and simply put, long-serving club players and their families deserve more straightforward communication aboutwhere they stand.
That is a situation in my opinion wherein it is absolutely appropriate for a parent to contact the DOC to ask for a timely explanation.
SA: Anything else you want to add or address?
STEVE GANS: Despite often humble beginnings, and relatively smaller size, youth soccer clubs arenonetheless complex organizations. Its “customers” – the parents — care deeply and viscerally about the services that the club provides, and are therefore hyper-focused on thoseservices.
Whether a non-profit or a for-profit organization, the club has to be aware of and compliant with the rules of government regulators (e.g., state Attorneys General and the IRS if anon-profit, and the IRS if a for-profit – for instance, regarding the employee-independent contractor classification).
The youth club market is an extremely competitive one, and thatleads to both transactions and conflict. It is therefore essential that the club selects experienced and sophisticated Board members and advisors to help guide and protect the club’sinterests.