By Charles Boehm – WASHINGTON, DC (Sep 10, 2020) US Soccer Players – The knotty topic of training compensation and solidarity payments in American soccer reared its head again this week. Almost a year and a half on from MLS announcing its intention to pursue such claims for products of its academy system, a new report from ESPN’s Jeff Carlisle delves into the state of flux around this issue. Notably, as much important information as the piece contains, it probably raises as many questions as it answers.
Often known by the more technical term of FIFA’s Regulations on the Status and Transfer of Players (RSTP), this mechanism is designed to recognize and reward clubs around the world, at all levels, who identify and nurture top soccer talent by earmarking for them a modest percentage of the often-incredible amounts of money involved in transfer sales. It’s intended to protect smaller clubs and incentivize effective player development, which many would see as useful in the United States and Canada.
When a player registers as a professional for the first time in a country other than the one where they grew up, the new club is responsible for paying Training Compensation to every club that contributed to their development from ages 12-21, and in a more limited format from 21-23. These payments are calculated on a sliding scale based on the region of the world and the caliber of the club involved.
For solidarity payments, any time a pro player is transferred from a club in one FIFA member federation to a club in another federation during the course of their contract, up to five percent of the transfer fee is to be withheld and paid by the club receiving the player to the club or clubs involved in that player’s training from ages 12-23. These are due for the duration of a player’s pro career regardless of age, any time there’s a transfer between federations while under contract and a transfer fee is paid.
If RSTP fully applied to Christian Pulisic’s reported $71 million transfer from Borussia Dortmund to Chelsea, for example, PA Classics, the Pennsylvania youth club where he trained for about seven years in his youth would be due a payment of more than $700,000. Just like agent fees, this is generally considered to be “baked in” to such transactions in most places.
The US Soccer Federation resisted the implementation of TC/SP in his country for decades, citing a range of reasons from child labor laws to the terms of the settlement of the Fraser vs MLS antitrust case at the turn of the century. MLS largely followed suit until 2019, when its leadership realized that many talented products of its rapidly-growing academy system were leaving for clubs abroad for free, and taking with them the league’s substantial investment in their development.
The MLS Players Union, like many of its counterparts overseas, is a strong critic of the RSTP system. It considers it an unfair tax on player movement that limits members’ freedom and imposes restrictions that are prone to abuse. Other skeptics point to the vastly different framework of sports, culture, and economics in this country, where connections to schooling have crafted a pro pathway that is a cumbersome fit for TC/SP. Perhaps, the thinking goes, it’s simply too alien to these shores, too complicated to enact fairly and effectively, too vulnerable to manipulation.
US Soccer has recently adopted a “neutral” stance, pledging to deliver TC/SP claims to FIFA but not promoting or advocating for them. That’s quickly become very awkward given that federations are explicitly responsible for maintaining and validating “player passports,” the documentation that contains the information buying clubs need to track which clubs played a role in a player’s development.
Earlier this summer Lance Reich, an attorney who has represented US youth clubs seeking their share of TC/SP for transfers like the one DeAndre Yedlin made from the Seattle Sounders to Tottenham Hotspur in 2014, told me that US Soccer has not maintained adequate records in this regard, thus disrupting the process. The ESPN report confirmed this as an issue. US Soccer is currently building an online player database to hopefully resolve this. It won’t do much to help older players who’ve already gotten most or all of the way through their youth soccer careers.
In asserting its right and resolve to pursue TC/SP, MLS did not attempt to offer a holistic solution encompassing those outside its membership. MLS’s academies comprise only 30 out of the hundreds of clubs teaching and guiding young players in the US and Canada. Under FIFA’s system, they too would be eligible to receive TC/SP funds, and would arguably benefit proportionately more from them. MLS is and will remain dependent on those youth clubs to help its academies spot talent and make the most of it.
Meanwhile, this topic has become something of an elephant in the room for MLS as it launches MLS Next, its new youth league and the successor to the US Soccer Development Academy. It has reached out to top youth clubs, or “elite academies” in the league’s parlance, with invitations to compete and be partners in development.
That’s generally gotten good reviews. Yet some wariness remains, and probably will linger in the absence of a more formal system of regulating player movements and recognizing those who develop standout prospects. Encouragingly, MLS Next has built a broad-based structure of working groups and committees to address this and other challenges.
“Nothing has been decided on player compensation. But it’s a topic that we plan on addressing together going forward, and they have agreed to try to address it,” Mickey Kydes, an MLS player in the league’s infancy who now leads Connecticut youth club Beachside SC said. “Now that doesn’t mean there will be compensation. That doesn’t mean there won’t be compensation. … That’s a topic that’s going to take some time to figure out.”
Already spending many millions per year on youth development, MLS is taking on an even bigger commitment by launching this project in the midst of a global viral pandemic. So it could be years before all of the league’s owners and investors, some of whom are not convinced that academies are a worthy investment in the first place, are ready to sign off on any sort of additional financial outlay for academy talent. That said, with so many non-MLS actors in the youth space suspicious or outright resentful of the league’s power, making more concrete gestures of partnership might be more important than those leaders realize.
“That is a big task,” said Kydes. “When they first started, we clearly told them that there’s a lack of trust and confidence in MLS [among] non-MLS clubs, and they understand that. And they also understand that that’s probably the one way to build more trust and confidence in working together.”
MLS’s EVP of Player Relations and Competition Dimitrios Efstathiou told Carlisle that only a few cases have led to TC/SP funds for MLS thus far, adding up to a total amount of under $1 million. Strikingly, it turns out that the league has elected to deny such funds to any of its academies who charge their players fees, probably to disincentivize a pay-to-play approach in MLS. That presently only applies to two clubs, DC United and Minnesota United. DC has apparently missed out on around $50,000 from Chris Durkin’s transfer to Belgian club St Truiden as a result.
So it’s not as if MLS has reaped a quick payday. The hope is that all sides will see that fairness, transparency, a collaborative mindset, and long-term vision holds mutual benefit.
“It has to be comprehensive,” MLS Technical Director of Youth Development Fred Lipka told me this week. “If everything is done for the sake of the player, individually, to direct him, we want to be in this symbiotic process to build with [elite academies], in being engaged, committed to have this conversation about compensation, potentially, mid- and long-term. I’m not the guy who is going to tell you we are going to pour money, because it’s the reality [that] our system is not for now sustainable in MLS, if we take everything. But I think it’s fair to say, if we create something which is good, we have to take into account this capacity to have a consistent and relevant way to funnel players, and to see how everyone can find something to win. It can be recognition, it can be communication, it can be money, it can be coaching education, it can be a lot of things.”
Charles Boehm is a Washington, DC-based writer and the editor of The Soccer Wire. Contact him at:firstname.lastname@example.org. Follow him on Twitter at:http://twitter.com/cboehm.
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