Editorial (July 25, 2018) — Alphonso Davies provided a prideful moment for Canadian soccer on Wednesday.
The Vancouver Whitecaps completed a move that will see him join legendary German club Bayern Munich at the end of the 2018 MLS season. When combining the transfer fee and possible additional compensation, it could total $22 million which is by far the biggest such sum an MLS club has received from the transfer of a player.
In a press conference discussing Davies’ future plans, an issue came up that’s proven rather controversial for MLS in recent years. It involves the compensation of youth clubs that played a role in the development of a given player who ultimately completes a transfer to a more high-profile league. These “solidarity payments,” which comprise a small percentage of the transfer fee, are part of FIFA’s Regulations on the Status and Transfer of Players.
Alphonso Davies Transfer Highlights Need for Change in USSF’s Position Regarding Training Compensation
Whitecaps on Board With Solidarity Payments
And so it came as a fresh surprise when the Whitecaps indicated that they’re indeed compensating a club Davies played for in Edmonton before he joined Vancouver. Chief operating officer Rachel Lewis was rather candid in stating the club’s position on the matter.
“FIFA has very clear rules around solidarity payments for youth development clubs,” Lewis told Jonathan Tannenwald. “And both the Whitecaps and Bayern Munich fully support them.”
The tone of that statement suggests Lewis is well-aware of the current situation at 17 of MLS’ 20 clubs regarding this issue. Because the league’s American teams and the United States Soccer Federation as a whole continue to not comply with FIFA guidelines over solidarity payments. It’s recently created quite a few legal headaches for those responsible for the status quo.
U.S. Soccer, MLS Players Union Remain Diametrically Opposed
In July 2016, Crossfire Premier, the Dallas Texans, and Sockers FC filed a class-action lawsuit hoping to overturn the practice of youth clubs not receiving a cut of transfer fees. The defendants in the lawsuit included DeAndre Yedlin, Clint Dempsey, Michael Bradley (who played for those respective clubs as teens) as well as the MLS Players’ Union. The court ultimately dismissed the suit, citing issues with jurisdiction.
But the clubs then took their case to FIFA in August of last year. Soccer’s world governing body deals with such situations as part of its Dispute Resolution Chamber. As of this writing, there still has yet to be a ruling on the matter.
The various entities within American soccer that continue to contravene FIFA statutes have their reasons for doing so. U.S. Soccer claims that doling out a portion of a transfer fee to youth clubs could be construed as a “restraint of trade” and thus violate antitrust laws. They also argue that elements of the 1998 legal decision (Fraser vs. MLS) that upheld MLS’ single-entity structure precludes them from doing so. MLSPU executive director Bob Foose once made an analogy the gist of which was that business schools don’t get a cut of a former student’s salary when he joins an accounting firm.
The Case Against Those Who Continue to Break the Rules
But it’s fairly easy to refute all of these misgivings. First of all, how is providing a small percentage of a player’s transfer fee to a youth club anti-competitive, which is what antitrust law seeks to prevent? What it does is incentivize said club to continue producing competitive players good enough to realize a professional career. And the potential infrastructure advances made possible by such resources provide the opportunity for other players coming through the club to follow in the footsteps of those who came before them.
The business school analogy is even more spurious. For one thing, the money sloshing around world soccer that’s available to sign high school aged kids dwarfs that of firms who hire top college graduates. Davies joining Bayern is exhibit A. Get back to me when Goldman Sachs is willing to pay up to $22 million for the services of an entry-level investment banker, however gifted he or she is.
There’s no doubting that the union deserves credit for a multitude of breakthroughs beneficial to MLS players. The most recent collective bargaining agreement contained free agency for the first time in league history. Kids coming out of college with the requisite skills to play in MLS make a livable salary, even at the league minimum. That certainly wasn’t the case when the league began.
But on the issue of solidarity payments, the union obstinately adheres to a hard line based on a misguided understanding of players’ rights. It’s nothing but a shameful money grab. It showcases a rather condescending arrogance on the part of Foose and those who buy his narrative despite the rules abrogating its legitimacy. And in the grand scheme of things, it adheres to the Gordon Gekko golden rule of doing business.
Greed is good.