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American soccer academies look to be treated as all others are
BEN SHRADER
Law Bulletin columnist
Published: December 31, 2018
Soccer star DeAndre Yedlin has progressed to heights that few American players have ever reached. Now the case of whether his Seattle-area youth club will be compensated for its role in his development has become one of the most interesting, and potentially groundbreaking, stories in the business of American soccer and youth player development.
Growing up in the Seattle area, Yedlin started his youth career like many promising young Americans, playing for local clubs and in Washington’s Olympic Development Program. From 2006 to 2010, Yedlin played for Crossfire Premier, a U.S. soccer development academy club based in Redmond, Wash. In 2010, Yedlin moved to the youth academy of Major League Soccer club Seattle Sounders. After two years of intercollegiate play at the University of Akron in Ohio, Yedlin began his professional career with the Sounders.
After becoming an MLS All-Star as a rookie, Yedlin’s career took a major leap: He transferred to the English Premier League’s Tottenham Hotspur, joining the London giants in 2014 on a four-year contract. After a loan spell at fellow English outfit Sunderland AFC, Yedlin moved to Newcastle United, for which he currently plays as a defender in the Premier League.
In the meantime, Yedlin has been a mainstay for the United States Men’s National Team, appearing 57 times in various competitions, including the 2014 World Cup.
Soccer players change teams, or “clubs,” in a much different fashion than players in American professional sports. It is extremely unusual for “footballers,” particularly those at the highest level, to reach free agency; player for player trades are similarly unusual.
Instead, players are “transferred,” often with years remaining on their contracts, either to teams in the same league or even teams in different countries or on different continents. The buying club and the selling club agree to a transfer fee for the rights to the player that the buying club wants to acquire from the selling club.
Once the player signs off and agrees to a contract with the buying club, the transfer fee is paid. Transfer fees have rapidly increased over the years; it’s not uncommon for them to climb into the high eight figures, sometimes reaching nine figures for the world’s best players.
For example, in 2017, Brazilian superstar Neymar transferred from Spanish powerhouse FC Barcelona to the French club Paris Saint-Germain for a reported 222 million euros. Though it is the current world record transfer fee, it’s one of at least seven transfers in recent years to surpass 100 million euros in fees.
Yedlin’s transfer to Tottenham was comparatively modest — the English club paid MLS a reported $3.71 million for his services (at the time, MLS — rather than the individual teams — received all transfer fees for the league’s players). Thereafter, Crossfire Premier — the club where Yedlin spent part of his teenage years, before moving to the Sounders academy — sought compensation in the form of “solidarity” payments for helping develop Yedlin during his formative years.
FIFA — the Fédération Internationale de Football Association — is an international governing body that oversees competition between national associations, along with international tournaments, including the World Cup.
It also oversees player transfers between associations and federations of different countries. Solidarity payments are a creature of FIFA rules. According to Section VII, Article 21 of the FIFA’s Regulations on the Status and Transfer of Players, youth clubs that help develop young players who turn into professionals are entitled to compensation:
“If a professional is transferred before the expiry of his contract, any club that has contributed to his education and training shall receive a proportion of the compensation paid to his former club (solidarity contribution).”
Annex 5, Section 1 of the FIFA regulations on the same subject outlines the “solidarity mechanism” (before laying out the specific percentage breakdown by age):
“If a professional moves during the course of a contract, 5 [percent] of any compensation, not including training compensation paid to his former club, shall be deducted from the total amount of this compensation and distributed by the new club as a solidarity contribution to the club(s) involved in his training and education over the years. This solidarity contribution reflects the number of years (calculated pro rata if less than one year) he was registered with the relevant club(s) between the seasons of his 12th and 23rd birthdays.”
Additionally, the FIFA transfer regulations require the “registering association” (U.S. Soccer Federation, for example) to maintain a “player passport,” which shows every club that the player has been registered with since his 12th birthday.
When a player is transferred between different countries’ federations — from a team in the United States to one in England, for example — per Annex 5, Section 2 of the FIFA rules, solidarity compensation is due from the “new club” to the “training club(s) … no later than 30 days after the player’s registration.”
Unlike other teams, leagues and federations, MLS and the U.S. Soccer Federation have historically not made or demanded solidarity contributions. In Yedlin’s case, Crossfire Premier was never paid. In response, Crossfire Premier submitted a petition to FIFA’s Dispute Resolution Chamber seeking an estimated $100,000 for training Yedlin when he was between the ages of 13 to 17. The case was originally on the chamber’s docket in 2017, before being pushed to a hearing on Oct. 25, 2018, and then subsequently continued again.
Those following the case expected a ruling would be made by now. However, as reported in recent days by ESPN’s Jeff Carlisle, and subsequently covered in depth by The Athletic’s Miki Turner (a practicing attorney in Washington state), the decision has been held up due to a late push by Tottenham to avoid paying any solidarity contribution.
According to Turner, after a review of relevant documents and submissions, Tottenham raised three primary issues: (1) that MLS and U.S. Soccer told the club it wouldn’t have to pay solidarity contributions, so it didn’t set any money aside; (2) that record-keeping irregularities with Yedlin’s “player passport” would allow it to avoid the payments; and (3) since Crossfire Premier does not take financial risks (the players’ families pay for them to play with the club), it is not a “training club” under the regulations. Tottenham also broadly suggests that if solidarity contributions are appropriate, MLS should foot the bill.
Turner and Crossfire Premier’s attorneys seem dubious about Tottenham’s “defenses.” But one thing is certain: The Yedlin case could have major ramifications for how young American players are developed and how the academy system continues to evolve.
On that front, MLS — whose academy system for developing the league’s future stars has grown exponentially since the league came into being — seems to be less resistant to the solidarity payment system.
MLS Commissioner Don Garber was recently quoted as saying “we are not, as a country, participants in solidarity and training competition, I think that probably has to change.”
One has to believe that this is a response to the increasing number of young American players, many from MLS academies, moving to major clubs in Europe over the past several years, which puts MLS and its member teams in position to receive an increasing number of solidarity payments.
In addition to Yedlin, the dispute chamber has pending cases concerning American stars and U.S. National Team veterans Clint Dempsey and Michael Bradley, who spent time playing in England and Italy respectively, before returning to MLS.
All three cases are reportedly ripe for decision by the dispute chamber. No matter what happens, the American developmental system is likely to continue its evolution.
If the country joins the rest of the soccer-playing world in how it compensates youth clubs and those clubs are properly incentivized to develop the world’s next generation of stars, it could bring the U.S. one step closer to equal footing on the global stage.
Ben Shrader is an attorney at Hart McLaughlin & Eldridge in Chicago, where he handles a wide range of litigation matters. He can be reached at bshrader@hmelegal.com.