Soccer in the United States

Soccer in the United States

No matter what you think about playing and/or watching soccer (football to the rest of the World), soccer has a structure and rules that seem strange to residents of the United States.

FIFA is the Fédération Internationale de Football Association is an association governed by Swiss law founded in 1904 and based in Zurich. It has 211 member associations and its goal, enshrined in its Statutes, is the constant improvement of football.  FIFA provides Laws of the Game which govern how soccer is played throughout the World.

Interestingly, in light of the many scandals that have hit FIFA in the recent past, FIFA claims that it “protects the integrity of football and is fighting corruption in football. We work with our member associations and confederations to improve and strengthen governance standards within the global football community to give football the solid foundation it needs to thrive everywhere.”

FIFA has a system that finances youth soccer throughout the World, other than the United States.  The FIFA rule provides that “”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).”  The system seems strange to the United States as accustomed as we are to college and minor league sports.  When a player receives a contract to play virtually anywhere other than in the United States, the youth soccer teams responsible for developing that player receive compensation.  That compensation is used to develop more players and to run youth soccer teams.  Strange as it may sound, the system works.

In the last few years, people associated with soccer, including attorneys located in the United States have attempted to convince the United States Soccer Federation and Major League Soccer to abide by the FIFA system to compensate youth teams.  If the system were implemented, youth teams would receive compensation if their players became professionals, and professional soccer teams in the United States would have to pay compensation when they contracted with players from other teams.

For years, the United States Soccer Federation has taken the questionable position that a consent decree in a 1998 antitrust lawsuit prevented United States youth soccer teams from accepting the payments and mandated that all United States professional teams refuse to make the payments.  Reportedly, United States Soccer has accepted the fact that the 1998 lawsuit does not prevent youth soccer from accepting payments or professional teams from making payments.  Major League Soccer indicated that it was open to finding a solution to the disagreement.

Progress is being made.  The first compensation claims by United States youth teams have been submitted to FIFA for decision.  The positions of many of the parties have changed over time, and a consensus seems to be possible.

The MLS Players Union has been the exception to the potential of a consensus. The Players Union threatened to file an antitrust lawsuit against the youth teams who received payments.  The principal United States antitrust statute provides that “Every contract, . . . or conspiracy, in restraint of trade or commerce . . . is declared illegal.”  Any person who is injured by a violation of this statute “shall recover threefold the damages by him sustained.”  The threat is an antitrust suit is significant.

On July 1, 2016, three youth soccer teams, Dallas Texans Soccer Club, Crossfire Foundation, Inc., based in Seattle, Washington, and Sockers FC Chicago, LLC filed suit against the Major League Soccer Players Union and three United States soccer stars, Clint Dempsey (currently playing for the Seattle Sounders FC), Deandre Yedlin (currently playing for Tottenham Hotspur Football Club) and Michael Bradley (currently playing for Toronto FC), as class defendants in the United States District Court for the Eastern District of Texas.

Unless the case is dismissed, this case will take a long time to resolve.  It is likely that Major League Soccer and the United States Soccer Federation will become involved as they, not the Players Union, are the persons who purportedly would be violating the antitrust laws if they abide by the FIFA rules.  The possible involvement of FIFA is more uncertain.  The alleged antitrust violation would arise from persons involved in soccer in the United States abiding by FIFA rules, FIFA rules that are accepted outside of the United States without question.

Attorneys associated with our firm have been working for years to find ways to assist youth soccer teams realize the benefit of the FIFA rule.  We strongly recommend that youth soccer teams closely monitor the progress of the lawsuit as rulings in that case could impact how youth teams are operated and financed.  It may become necessary for youth teams to consult with their attorneys to obtain advice about how to protect their interests in the face of the pending lawsuit.

2017-05-10T11:32:47+00:00 July 7th, 2016|Business Litigation, Contracts and Contract Disputes|