In a historic decision, which promises to have major impact on MLS clubs’ finances, on 12th of April 2019 MLS has announced its intention to start complying with FIFA Regulations relating to training compensation and solidarity payments. Consequently, this move means that MLS clubs will now be able to receive the amounts derived from those systems which were set up by FIFA to protect clubs that invest in the development of young players.
Although these systems are in force since 1996, when FIFA introduced them within its Regulations on the Status and Transfer of Players (RSTP) in the aftermath of the world famous Bosman decision, the fact is that MLS never took part of it due to an understanding from the United States Soccer Federation (“USSF”), the MLS Players’Association and the own MLS that the possibility to claim these amounts would lead to a limitation on the opportunities for young players from the MLS to play abroad because a potential interested club in a MLS player’s signing would have to pay an extra compensation to his training club/s, aspect that could refrain its interest.
As consequence, this could result in litigation on anti-trust grounds from various stakeholders opposed to training compensation and solidarity payments. Due to theabove, the USSF reached into an agreement with the MLS Players’ Association and the MLS not to adhere to the RSTP in these particular elements.
However, the fact is that MLS clubs have been increasing investments in youth development, and that investment has accelerated over the past few years. Because of this, and given that MLS intend on continuing to grow that investment, they believe that the clubs should be able to recoup the value of that investment if the player decides to sign overseas.1
Even though the reactions were not all positive, and that the USFF and the MLSPlayer’s Association have already expressly opposed to this decision, promising to explore their options to fight against it, the decision is, for now, enforced, meaning MLS clubs which invest on the training of young players will now be able to count with another source of revenue. Naturally, MLS clubs will not only benefit from it but also be obliged to pay compensation to other clubs regarding training and solidarity payments when applicable.
1 According to Todd Durbin, MLS executive vice-president of player relations and competitions.