A Nasty Fight Is Brewing Over U.S. Soccer's Bizarre Policy on Training Fees
U.S. Soccer policy on training fees for youth players has long been at odds with FIFA guidelines. It looks like that may be about to change.
Image via John Geliebter-USA TODAY Sports
Despite FIFA guidelines, amateur and professional teams in the United States do not pay or receive training fees as a result of U.S. Soccer policies. These fees are designed to encourage player development and reward youth teams for having produced professional players. Some argue these fees play an important part of funding the logistics of player development such as the purchasing of team uniforms, field upkeep, scholarships, etc.
For obvious reasons, no U.S. team complains about not paying fees, but when an American youth club team inquires about receiving fees—to which FIFA says they are entitled—they receive a standard response from U.S. Soccer general counsel Lisa Levine:
"As discussed, please allow this email to confirm that by order of the United States District Court, U.S. Soccer cannot impose, implement, or enforce, in any way, those rules, statutes, or regulations adopted by FIFA relating to the payment of training and development fees. This includes training fees in connection with clubs which are members of leagues sanctioned by U.S. Soccer."
But in reality, a court didn't order U.S. Soccer to ignore FIFA-recommended training fee policies. U.S. Soccer entered into this situation voluntarily. Further, U.S. Soccer's failure to come up with an alternative solution for U.S. youth club teams to recoup some expenses during the player development process may have allowed a loophole in which those teams may pursue these fees in the future. And with U.S. players starting to command high salaries and transfer fees in the world market, youth club teams see the potential to earn hundreds of thousands of dollars through training fees, which are calculated on a specific sliding scale depending on how much time a player spent with a particular youth team.
Article VII, Section 20 of the FIFA Regulations on the Status and Transfer of Players states: "Training compensation shall be paid to a player's training club(s): (1) when a player signs his ﬁrst contract as a professional, and (2) each time a professional is transferred until the end of the season of his 23rd birthday. The obligation to pay training compensation arises whether the transfer takes place during or at the end of the player's contract."
The case Levine references in her disclaimer is the Fraser vs. MLS antitrust lawsuit that was filed by a group of eight players—including Iain Fraser, for whom the lawsuit is named—in 1996. If that case sounds familiar it's because it currently serves as the basis for MLS's single entity status that is being discussed in ongoing CBA discussions between the players and the league.
Count II of that case resulted in a request for summary judgment from both sides on the issue of team compensation for out-of-contract players. The players alleged that such compensation hindered a player's market value. MLS said they wouldn't seek compensation in these cases, but weren't willing to put that in writing.
The judge denied both motions, but revealed in the footnotes: "The players had originally asserted this claim against the United States Soccer Federation, Inc. (the 'USSF'), as well, but USSF has since entered into a stipulation that it never has and never will pay nor request a transfer fee payment for an out-of-contract player. As a result, the players have withdrawn Count II as against the USSF."
Jeffrey Kessler, attorney for the players in the Fraser case, summed up U.S. Soccer's intentions in an email: "It was a stipulation with the players to avoid being in the lawsuit."
As a result, teams that play in U.S. Soccer sanctioned leagues aren't allowed to collect or pay training fees—or so it appeared. But the hitch may be in the specification that this provision affects only "out-of-contract" players. In fact, many players sign some type of contract with youth teams. In some cases, scholarships can be considered contracts.
"If a player is under contract and is transferred or 'loaned' while under contract, the Fraser decision would not apply," Kessler wrote.
Kessler said that changes to this system could be collectively bargained between the players and U.S. Soccer. But it doesn't appear either side is interested in changing the rules. The players have little incentive to seek changes. Training fees could result in the loss of potential salary for MLS players, as training fees could dent a team's budget.
U.S. Soccer and MLS Players Union executive director Bob Foose did not return a request for comment.
No U.S. youth team has ever formally filed a complaint regarding training fees, according to a FIFA spokesman. One doing so would certainly be setting a precedent and would risk the ire of U.S. Soccer, which could move to have the team banned from participating in sanctioned leagues.
But the makings of a fight appear to be in place and it's not out of the question to think that a team looking to net a lot of money in training fees would challenge these exemptions at some point.
That groundbreaking team may be the Westside Timbers Soccer Club of Portland, Oregon.
Last summer, F.C. Utrecht of the Dutch Eredivisie announced they had signed 18-year-old former Westside forward Rubio Rubin, a star player for several U.S. national team youth squads. Westside held Rubin's International Transfer Certificate (ITC)—a FIFA document that establishes ownership of a player's rights—because they were Rubin's first official U.S. Soccer FIFA sanctioned team. Rubin trained with Westside for nearly five years.
Utrecht needed Westside to transfer Rubin's ITC to them so that he could be eligible to play in the Netherlands. But Westside decided they would try to seek training fees—which they determined could be worth up to $310,000, although likely less because Rubin spent two years at the IMG Academy in Bradenton, Florida—before they would hand over Rubin's ITC.
On August 8, Cory Roth, a Houston, Texas based attorney who was hired on a pro-bono basis to represent Westside, said he began conversations with Rubin's representative Leo Cullen of the James Grant Group agency regarding Rubin's status. The two went back and forth for about two days.
Roth described Cullen as "condescending" in those conversations and said the agent claimed Westside was possibly damaging Rubin's career by holding up his transfer. Essentially, Cullen, according to Roth, said that nobody in the United States pays or receives training fees and that it wasn't going to change with Rubin.
Cullen, according to Roth, emailed a document that he said Westside officials needed to sign:
"Rubio Rubin is not presently, nor has he ever been under a contractual relationship with Westside Timbers Soccer Club, a non-profit organization for amateur, youth players. Mr. Rubin was not offered a contract to play for FC Utrecht as an inducement to leave the amateur club, nor while he was an active member of the club."
One source close to the situation said that U.S. Soccer does not require such a letter.
Taking into account the specifics of the Fraser case, Cullen's intent with that letter seems obvious. He is trying to establish that Rubin is an "out-of-contract" player, and therefore not subject to training fees as established by U.S. Soccer.
But Westside disputes that assertion.
"Rubio did have a scholarship contract with the club that had certain obligations," Roth said. "He had played in a showcase and was still registered for Timbers."
Cullen declined to comment.
Ultimately Westside wanted to move on and resolve the situation. Team representatives feared the fallout from the situation could ultimately be detrimental. They hoped that perhaps Rubin in the future might donate money to the team that would help in the upkeep of fields and to provide more scholarships to underprivileged kids like Rubin was when he joined Westside. Also, Westside believes it has several other top players who could also end up in Europe and it didn't want to damage their chances of signing professional contracts.
Roth wrote an amended letter in which the Timbers allowed Rubin's ITC card to be transferred to Utrecht:
"Westside Timbers Soccer Club never offered Mr. Rubin a professional player contract, and Mr. Rubin never played professional soccer for Westside Timbers. Westside Timbers Soccer Club, however, does not waive the right to receive and demand "training compensation" and 'solidarity payments' from FC Utrecht in accordance with the FIFA Regulations on the Status and Transfer of Players."
Part of the agreement, Roth said, was that Cullen promised to broker a working relationship between Westside and Utrecht.
"We've never heard back from them," Roth said. "Last email I sent to him didn't get a response."
Roth said the team is still considering filing a complaint with FIFA. Westside has two years from the time of Rubin's signing to file a complaint.
"FIFA is only in a position to deal with claims for allegedly outstanding training compensation in case it receives a pertinent petition from a club in accordance with art. 9 par. 1 of the Rules Governing the Procedures of the Players' Status Committee and the Dispute Resolution Chamber," a FIFA spokesman wrote in an e-mail. "In case a claim is received, it is dealt with in accordance with the applicable procedural rules and regulations."
The argument over training fees can certainly become philosophical. Do teams deserve it?
Depending on with whom you speak, these fees either reward player development; or they are a bloated random monetary figure not assigned on merit. The truth lies probably somewhere between. There are teams that have certainly played a large part in developing a player and there are some who played little or no part and simple want to hold an ITC for ransom because they lucked into having a talented kid walk through their doors.
What is not in question is FIFA's guidelines toward training fees. Teams signing eligible players must pay. And youth teams are entitled to receive them. Perhaps someday soon they will be able to do so in the United States.