U.S. Soccer calls meeting with youth clubs over compensation dispute

U.S. Soccer has called a meeting in Chicago on Oct. 16 in response to growing discontent among American youth clubs over the issue of training compensation and solidarity.

U.S. Soccer has called a meeting in Chicago on Oct. 16 in response to growing discontent among American youth clubs. SI.com has learned that several major clubs received invitations from the federation via email, memo or phone call to discuss the issue of training compensation and solidarity.

Article 20 of the FIFA Regulations on the Status and Transfer of Players states that training compensation must be paid to clubs that helped develop a player from ages 12 to 21 when that player signs his first professional contract and when he transfers between clubs in different countries. Article 21 states that a total of 5% of the fee for non-free transfers between clubs in different countries must be paid as solidarity to the player’s youth clubs.

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On June 29, Crossfire Premier sent a letter to the FIFA Executive Committee asking for intervention or permission to sue MLS and U.S. Soccer in the U.S. or United Kingdom for interference in receiving solidarity payments on DeAndre Yedlin’s transfer to Tottenham Hotspur.

MLS took 100% of the transfer fee for Yedlin, including the portion meant for Crossfire and his other youth clubs, and the federation told the club it could not intervene due to U.S. law, according to documents sent to FIFA.

In mid-July, Dallas Texans SC told SI.com that it had a similar experience trying to procure solidarity from Fulham when Clint Dempsey transferred in 2007. The club took its case to FIFA, but U.S. Soccer eventually convinced the Texans to withdraw their complaint.

In response to American clubs’ complaints, U.S. Soccer claimed a confidential consent decree arose from the Fraser v. MLS antitrust case in the U.S. District Court for the District of Massachusetts in 1996 that precludes American youth clubs from receiving solidarity payments. When requested by Crossfire’s lawyers in May, the federation would not provide a copy of the alleged agreement. Given that U.S. Soccer was not under court order to do so, it was not in violation of the law.

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Training compensation reimburses clubs for expenses incurred while training a player, while solidarity rewards clubs for that development and incentivizes further efforts, regardless of who paid for the player’s training.

So far, U.S. clubs have only sought solidarity for their players, but U.S. Soccer’s invitations to the meeting explicitly mention training compensation as well.

Another possible resolution the U.S. clubs have proposed includes negotiating a unique system that ostensibly follows the FIFA guidelines but provides concessions for the law-based restrictions U.S. Soccer claims it is under. That could include rewarding clubs for sending players to youth national teams, which would include girls’ clubs. Such an agreement could potentially be discussed in Chicago in October.

Crossfire lawyer Lance Reich confirmed to SI.com that Crossfire, Texans and other clubs have been invited to a meeting, and they have reached out to the federation to learn more details on the agenda. Since sending its letter to FIFA, Crossfire has led the charge for American clubs seeking compensation for developing players.

“The youth clubs are delighted to see that the USSF is re-evaluating its position on this issue,” Reich said. “[The clubs] are always willing to meet with them and MLS to meaningfully work on a solution that benefits everyone in U.S. soccer.”

U.S. Soccer officials did not return a request for comment.

While U.S. Soccer claims it cannot allow youth clubs to receive training compensation or solidarity payments, the federation north of the border has taken the opposite stance. In Canada, teams have received those kinds of payments in the past for developing players.

In its published rules, U.S. Soccer makes no reference to the sections of the FIFA Regulations for the Status and Transfer of Players in question. However, the Canada Soccer Association Rules and Regulations do include such provisions.

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“The status of players and the provisions for their transfer shall be regulated by the General Secretary of Canada Soccer in accordance with the current FIFA Regulations for the Status and Transfer of Players,” the CSA bylaws read. “Provincial/Territorial Associations shall distribute training compensation payments to the amateur club(s) involved in the development of the player in accordance with the FIFA Regulations on Status of Transfer of Players.”

So far, Crossfire and other U.S. clubs have sought solidarity for their players, only to be shut down. But in Canada, no laws or legal agreements prevent the distribution of such payments.

When Doneil Henry transferred to West Ham from Toronto FC in January, at least one of his former clubs in Canada received solidarity. North Mississauga SC president Trevor Bertrand told SI.com that his club has received two installments from West Ham and is awaiting a third in January 2016.

“A call came in to the club from West Ham United, the general manager, telling us that they’re going to give us some form of solidarity,” Bertrand said in a phone interview. “I can definitely verify that yes, we are in the process of receiving solidarity payments for Doneil Henry. That is true.”

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Bertrand said his club, a sizable nonprofit organization on the outskirts of Toronto, has not decided what to do with the influx of cash yet.

“We could use it for a number of things: to assist with scholarships, to offer scholarships further down, a little portion maybe for development,” he said. “Giving it back to the kids is the priority. … Now, it’s up to the club to use it in the way that it should be used, and I think that’s to the benefit of the players.”

Bertrand said that initially, he didn’t know what to make of West Ham’s phone call, as he was unfamiliar with the appropriate FIFA regulations. Others whose academies are attached to professional teams are aware of them, though, and have taken steps to ensure they can collect when the time comes.

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As part of players’ participation in the Vancouver Whitecaps academy, parents must sign a memorandum of understanding that should players move abroad, the Whitecaps will collect solidarity payments. Canada Soccer has also agreed to help enforce receipt of such payments, one club official told SI.com.

“It’s something that we talked specifically to the CSA about, and they’ve confirmed that if a player leaves our Residency Program and goes to a club overseas somewhere that they would claim training compensation on our behalf,” Greg Anderson, Vancouver’s vice president of soccer operations, said. “The rationale for it is that we’re investing a lot of money in the development of players, and we needed some kind of protection mechanism, and it’s obviously one that’s supported by FIFA.”

Through a spokesperson, the CSA confirmed that it supports the Whitecaps’ desire to receive fair value for its players.

“The Canadian MLS clubs are investing heavily in the development of our next generation of soccer players and are an important part of our Canada Soccer pathway,” the spokesperson said. “As such, we understand their desire to entice their young talents to remain in Canada and North America and be compensated should it not be the case. Our focus is with the three Canadian MLS clubs and their academy components and making sure we work with them to protect their interests.”

As it is in the U.S., the issue of training compensation and solidarity is relatively new to the Canadian footballing landscape. Few players have garnered big enough transfer fees to make pursuing solidarity worthwhile, and clubs are generally unaware of these regulations in both countries.

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“The CSA has for sure not stood in the way of these solidarity payments in the past,” Colin Elmes, who runs the TSS Player Development Academy outside Vancouver, B.C., said. “The reality is that we’re very infant-like when it comes to that type of thing. So I don’t think, over the years when this stuff has happened, there’s been anything malicious that’s gone on. I think it’s just been naïve club environments that don’t understand, don’t follow through on this type of stuff.”

The obvious exceptions are Henry and Owen Hargreaves, who grew up playing for Calgary Foothills SC before moving on to Bayern Munich, Manchester United and Manchester City as well as playing for his parents’ native England. Multiple sources said the Calgary club likely received some sort of payment whenever Hargreaves moved clubs, although Foothills officials would not comment, citing a confidentiality agreement.

However, as with U.S. clubs, MLS has not paid training compensation or solidarity to any Canadian youth clubs when players sign with league franchises. By Canada Soccer regulations, MLS is a domestic league domiciled in the U.S., so it cannot enforce the FIFA regulations on MLS clubs, the CSA spokesperson said.

MLS did not return requests for comment, and Anderson also declined to comment on the matter. In the past, Whitecaps president Bob Lenarduzzi has said he would be in favor of passing on training fees, but only to certain youth clubs.

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“It comes down to the quality of the program that you’re running,” Lenarduzzi said in 2009. “If you’re running a program and you happen to have a good kid there that gets signed by a pro club, should you really benefit from that? Probably not. But if you’re a club that’s invested in player development and you’re turning out player after player, then I have no problem working out an arrangement with a club like that.”

That would mean certain clubs from which the Whitecaps draw heavily for their residential academy, including Coquitlam Metro-Ford and Surrey United, could receive major pay if their players go on to sign professionally. Others that have sent a smaller number of players would not.

“That’s silly, right? So now, the Whitecaps get to decide if the clubs below them are actually efficient player developers?” Elmes said. “A rule’s a rule, really. If there are solidarity payments that need to go down [per FIFA regulations], I would think that they just need to go down. They shouldn’t be somebody’s judgment on whether or not you’re actually doing a good job.”

The Whitecaps have eight active players signed to Homegrown Player contracts, the most in MLS. That number is set to rise across the league with the partnership between MLS and the USL.

For example, Montreal Impact affiliate FC Montreal recently signed eight academy players to professional deals, including three that joined the club from CS Longueuil. By FIFA regulations, every club that had a hand in those players’ development should be paid for their efforts.

“It would certainly crack a big nut, I think, and motivate people in different ways to produce players rather than chase trophies and league championships with youth kids,” Elmes said, “which I think goes on far too extensively.”

U.S. Soccer’s willingness to meet with American youth clubs at the federation’s headquarters could be a step toward adherence to the FIFA regulations on training compensation and solidarity throughout North America. What remains to be seen is whether the federations will also require MLS to pay youth clubs when they sign players, as the league has thus far avoided making those contributions.