AMERICAN YOUTH SOCCER CLUBS ARE ABLE TO COLLECT TRAINING COMPENSATION AND SOLIDARITY CONTRIBUTIONS
Several months ago, I was hired to represent Westside Timbers in their pursuit of training compensation for training and developing Rubio Rubin, who signed his first professional contract with F.C. Utrecht. I spent months studying and becoming an expert on FIFA training compensation and solidarity contributions by reading the FIFA Regulations on the Status and Transfer of Players, and studying the relevant case law. In my pursuit if this money, an agent lied to me, US Soccer lied and presented nonexistent case law, and club members worried. Concerned board members worried about whether getting training compensation or solidarity fees would affect non-profit status, whether it would effect the eligibility of players to play college soccer, whether the money would be used to pay board members or trainers, whether getting paid training compensation or solidarity fees would violate child labor laws. The answer to all these questions is an emphatic NO! Once I hit a major roadblock in this matter, I decided to speak with the media. I was quoted in VICE Magazine and Sports Illustrated. Because I started this conversation, we have now seen monumental changes in US Soccer’s policy on this matter. FIFA has specifically told us that youth soccer clubs are entitled to training compensation and solidarity contributions. To say it loud and clear: you and your club have nothing to fear but fear itself.
If your youth soccer club trained a player who later became a professional, you are entitled to collect training compensation and, possibly, solidarity fees. Training compensation and solidarity fees are designed to reward youth soccer clubs for investing time, money, and effort into training and developing youth soccer players that become professionals. It does not matter whether the soccer player at issue paid to play, or was on scholarship: the training and solidarity rules apply the same — you are entitled to significant sums of money.
As you likely know, FIFA is the international governing body for the sport of soccer. In its capacity as the governing body, FIFA has established a series of rules and regulations, called the FIFA Regulations on the Status and Transfer of Players. The Regulations on the Status and Transfer of Players (FIFA RSTP) were designed, in part, to protect youth soccer players and youth soccer clubs from exploitation. FIFA RSTP regulations 20 and 21, in particular, establish a system designed to compensation youth soccer clubs that produce professional soccer players. These regulations are respectively called Training Compensation and Solidarity Mechanism.
FIFA Regulations on the Status and Transfer of Players, Article 20, Training Compensation, establishes a system where by youth soccer clubs who produce a professional soccer player must be paid a specific amount of money when the soccer player signs his first professional contract. Youth clubs must be compensated for all of the years the club trained a player from age twelve (12) through age eighteen (18). The amount to be paid is determined by a categorical scale that FIFA produces every year. FIFA Regulations on the Status and Transfer of Players, Article 20, Training Compensation, 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 provisions concerning training compensation are set out in Annexe 4 of these regulations. FIFA RSTP, Annexe 4 clarifies some of the ambiguities of Article 20: (1) A player’s training and education takes place between the ages of 12-23. (2) The obligation to pay training compensation is without prejudice to any obligation to pay compensation for breach of contract. (3) Training compensation is due when:
- A player is registered for the first time as a profession; or
- A professional is transferred between clubs of two different associations (whether during or at the end of his contract);
- Before the end of the season of his 23rd birthday.
- When training compensation is not due.
- That the club who signs and registers the player as a professional is responsible for paying training compensation to the youth club(s) a.k.a. training club, a.k.a. developing club that:
- The player was registered with, and
- That contributed to his training
- from age 12
- within 30 days of registering the player as a professional
- This is done by reviewing the player passport, which should have a list of every club the player played for.
- The amount payable is calculated on a pro rata basis according to when years the player trained with each youth club.
- The association (USSF, for example), is not entitled to receive the training compensation, unless the youth club has gone bankrupt or folded.
- FIFA divides clubs into four categories to determine how much is owed to the youth club.
- The amount owed is determined by determining which category the professional club falls into which is based on how much money the professional clubs spend on average to produce one professional player. In other words, the amount of training compensation owed is calculated by taking the training cost of the new club, as determined by the FIFA categories, multiplied by the number of years the player trained at each youth club.
- The amount paid for training a player between his 12th and 15th birthday (four seasons) is based on training compensation costs of category 4 clubs.
- This exception is not applicable if the player entered his first professional contract before the end of the season of his 18th birthday. In that case, the amount paid is based on the category of the signing club
- FIFA Regulation on the Status and Transfer of Players, Article 10, states that the Training Compensation rule applies to loans as well.
TRAINING COMPENSATION EXAMPLE 1:
Player A played for Club A. Player A was registered to Club A, and trained with Club A from age 12 through age 18. After finishing the season of his 18th birthday, Player A signed his first professional contract with Manchester United of the English Premier League. Player A was registered to Club A for 7 full seasons, and because he signed his contract with a Category 1 club after finishing the season of his 18th birthday, Manchester United must pay Club A €310,000.00.
TRAINING COMPENSATION EXAMPLE 1A:
Same facts as Training Compensation Example 1, except Player A signed with Manchester United during the season of his 17th birthday. In this scenario, Manchester United must pay Club A €540,000.00 because the event giving rise to the duty to pay training compensation arose before the end of the season of his 18th birthday.
TRAINING COMPENSATION EXAMPLE 2:
Player A played for Club A from age 9 through age 13 (4 seasons). Player A then plays for Club B from the season of his 15th birthday through the season of his 17th birthday (3 seasons). Player A then plays for Club C through the season of his 18th birthday. Player A is then signed by Shalke in the German Bundesliga. Shalke must pay Club A €20,000.00, Club B €190,000.00, and Club C is owed €90,000.00. There are many more complex version of these hypotheticals, such as if Player A transferred from Shalke to Bayern Munich before his contract expires and during the season of his 22nd birthday. In this scenario, the youth club will be owed another training compensation payment and solidarity contributions.
The FIFA Regulations on the Status and Transfer of Players, Article 21, Solidarity Mechanism, is another regulation designed to protect youth soccer players, and compensate youth soccer clubs for training and developing professional soccer players. FIFA realized that it is unfair for professional clubs to reap the benefits of the hard work put into a player by a youth soccer club, and not compensate the youth soccer club. The FIFA Regulations on the Status and Transfer of Players, Article 21, Solidarity Mechanism, states: If a professional is transferred before the expiry of his contract, any club that contributed to his education and training shall receive a proportion of the compensation paid to his former club (solidarity contribution). The provisions concerning solidarity contributions are set out in Annexe 5 of these regulations. Annexe 5 goes more in depth. Annexe 5 states that: If a professional moves during the course of a contract, 5% 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 solidarity to the club(s) involved in the 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, as follows:
- Season of 12th birthday: 0.25% of total transfer fee
- Season of 13th birthday: 0.25% of total transfer fee
- Season of 14th birthday: 0.25% of total transfer fee
- Season of 15th birthday: 0.25% of total transfer fee
- Season of 16th birthday: 0.5% of total transfer fee
- Season of 17th birthday: 0.5% of total transfer fee
- Season of 18th birthday: 0.5% of total transfer fee
Solidarity payments must be paid by the new club to the training club(s) within 30 days of the player’s registration with the new professional club. It is the responsibility of the new club to calculate the amount of the solidarity contribution to be paid to the amateur clubs, but in reality this rarely happens, especially when American youth soccer clubs are involved. Finally, the FIFA Disciplinary Committee may impose disciplinary measure on clubs that do not pay solidarity fees in accordance with the regulations.
SOLIDARITY CONTRIBUTIONS EXAMPLE 1:
Player A played for Youth Club A located in the United States from age 12-18. Player A then signs with F.C. Nantes in France. Before his contract expires, he moves to Lyon for €1,000,000.00. Lyon must pay Youth Club A solidarity contribution worth €50,000.00. These are relatively complex rules and regulations that are only further muddied by the actual facts of the case, but an attorney with an expertise in training compensation matters can help you successfully secure training compensation and solidarity contributions to secure the future of your club.
IS MY YOUTH SOCCER CLUB ENTITLED TO TRAINING COMPENSATION? IF SO, HOW MUCH?
In order to determine whether your youth soccer club is entitled to training compensation someone is going to have to do a thorough evaluation of the player’s training history, when the event that technically triggered the obligation to pay training compensation, and the category of the professional club that is obliged to pay training compensation. In months and years past, getting training compensation for your club would have been near impossible in America. The USSF had been making legally incorrect arguments and alluding the nonexistent case law to scare youth soccer clubs from seeking training compensation. Having been involved and privy to high-level discussions, I can assure you that US Soccer will not threaten retribution against your club. US Soccer will not threaten or kick your club out of the US Developmental Academy League. US Soccer does not have a consent decree that prevents your club from seeking training compensation. FIFA WILL AWARD YOUR YOUTH SOCCER CLUB THE MONEY YOU RIGHTFULLY SEEK. I would be glad to offer a free consultation to discuss your case and determine whether you have a viable claim from training compensation or solidarity contribution. Please call me at 713 552 0693 or fill out the form below for a free consultation. I work these matters on a contingency basis, so you club will not spend anything out of pocket.