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Is it time for youth transfer fees in the US?

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US soccer has progressed to the level where like the rest of the world, MLS clubs should considering paying modest youth transfer fees to local clubs that develop the young players they select for their U16 and U18 academy teams.

Reimbursement in the form of scholarships would encourage local clubs to develop complete players instead of focusing on wins and also to invest in low-income players, further improving the vision of youth player development in the US. Ultimately, it could help turn out a better selection of youth products and somewhat limit MLS clubs’ need to invest in their own youth programs.

Bob Lenarduzzi, president of Vancouver Whitecaps FC, the 2011 MLS expansion team, agrees that youth transfer fees are feasible. The USL Champion Whitecaps already have a youth residency program in place and when they enter MLS in 2011 they will be the first club with that distinction.

“It comes down to the quality of the program that you’re running,” Lenarduzzi said of transfer fees. “If you’re running a program and you happen to have a good kid there that gets signed by a pro club, should you really benefit from that? Probably not. But if you’re a club that’s invested in player development and you’re turning out player after player, then I have no problem working out an arrangement with a club like that.”

Youth clubs are somewhat of a cottage industry, created by passionate professional players and coaches, operating on a non-profit tax status and competing for top players to win tournaments, through which they attract more players who pay seasonal fees. Some are quite tiny with only a few teams and some far more expansive, employing dozens of coaches mostly on a part-time basis. Some are run in offices, some in the home, and almost all the fields and gyms are rented or leased. It’s labor intensive and day-to-day, yet these clubs have launched most of the professional US talent.

MLS requires all its clubs to provide fully funded U16 and U18 teams to play in the US Soccer Development Academy League and encourages them to develop youth programs in their markets. Some clubs, including Chicago Fire, Colorado Rapids, DC United, and NY Red Bulls recently created extensive programs that bring boys and girls right through the ranks from pre-school to college, and the Fire has a U23 PDL team from which they gleaned Chris Rolfe, who makes the leap to Denmark this January.

Still, many of the MLS clubs’ academy players are selected from outside clubs that get no financial reimbursement for their investment in those players.

MLS homegrown player rule ups the ante for youth development

Now there’s more incentive for MLS clubs to recruit top youth players. The MLS Board of Governors recently allowed franchises to sign two homegrown players a year in addition to their 24-man roster to encourage clubs to develop their own talent. Homegrown players can be selected at a rate of two per year per age group (for possible total of 150) and placed on a “protected” list which enables the clubs to own their rights within MLS but places no restrictions on the players should they go abroad. Protected players must train with the club for at least two years or one year before their first college game, so typically the academies look to stock their U16 and U18 teams that play in the US Development League.

Still, due to geography and the prevalence of strong established youth clubs, many of the best prospects are cherry picked from other clubs that invested many man hours and sometimes scholarships in those players since they were young children. These clubs get no reimbursement, as they would in Europe under UEFA’s transfer fee schedule for youth players, which considers length of time with club among other factors.

The Colorado Rapids recognized this disparity and tried to equalize it by forming an alliance with local clubs and bringing coach training and curriculum to the participating clubs as compensation for the inevitable cherry picking of the clubs’ hottest prospects. While some clubs have fallen in line, Real Colorado, which also offers fully-funded Academy League teams and currently trains 5,000 players including national team players, abstained from the alliance.

Real Colorado General Manager and Director of Coaching Lorne Donaldson, former Jamaican national team player and former assistant coach at the Rapids, says that a two-tiered transfer fee is more appropriate.

Donaldson: We were approached [by the Rapids] and we said thanks for the offer, but we don’t think it’s something that would benefit our kids. We didn’t need it, we have a good product, a good organization. If a major league club wants a young player from an amateur team, like they do in Europe, the club should be rewarded for spending time in developing that player. It might not be a big sum of money, but there should be something given back to the club. Here, MLS wants everything for free, MLS has its own rules, that’s how the system is set up. It doesn’t benefit the youth clubs.

LE: If youth clubs have a non-profit tax status, how can MLS franchises compensate them for players? I was told it’s not possible.

Donaldson: Whoever said that doesn’t know the rules or they chose not to know the rules. You can make any kind of donation to non-profits by the way of scholarships. Most of us non-profits have scholarships that fund kids, especially talented players, so you could give that to a club from a profit to a non-profit through a scholarship fund. How it would be used would be up to the club. It’s legal to do that and there’s nothing wrong with that.

LE: You advocate a two-tier transfer fee. Can you explain that?

Donaldson: Take a player like Jozy Altidore who was playing in Florida and found there by a guy. If you take a player of that stature and he goes through major league, that’s one transfer fee for a youth club. But if he goes on to England and plays, then the Red Bulls are going to get money, but at least the youth club should get a little piece of the pie. Just two-tiered, from his first club to the next, it’s a final transaction. He might go to Everton, then Real Madrid, but no, once he gets to the second transaction it’s done, there’s no more money. But then the club can go back and start again with another player, because that money goes right back into scholarship.

Transfer fees would build relationship between MLS and local clubs

The MLS youth academies and youth programs direct the future of soccer development in the US. But given the dynamics of the current club structure and the geographical limitations in reaching across the country, the franchises will continue to depend on the youth products of these local clubs.

It’s in their best interest to develop relationships that will improve the quality coming from these local clubs and a traditional youth transfer fee in the form of scholarship is a reasonable approach.

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Comments (5)

  1. Yes I agree a good step forward for the MLS progress. It will definitely benefit in yout development,

  2. It will get there in the end. It is quite a young sport in the US still, but growing fast.

    Development in american football is great and I suspect that the same will become true in soccer.

  3. They should. Because I cannot get one playing opportunity or even get developed by a club simply because I didn’t play in grade school I couldn’t play in high school and cause I didn’t play in high school I can’t play in college. They need to develop players rather than just find players that can fit into the first team.

  4. Until US soccer takes on the full extent of the European system I can’t see this being that great a benefit for the youth players. In Europe, and other parts of the world, each team has it’s own acadamy where players not only go to learn the game but also get an education. Here in the US they play club and high school in preperation for college, and then get drafted to MLS club teams. This is where their career begins, much later than their European counterparts. If this system were to be put in place you would see the larger clubs grow by recruiting the better players and focus even more on the wins as they would have an obligation to supply players to their affiliated MLS club. You would see less development, and sadly the smaller clubs would be left in the dark to struggle filling roster spots. For this to work they would need to revamp the whole youth acadamy system in each of the MLS club teams and make this a route for college education.

  5. Vancouver Whitecaps and the Chicago Fire are developing more European-style academies and other clubs are likely to follow. The conflicts with the NCAA can’t be underestimated but can be resolved with creative planning. With or without that resolution, as important as the MLS academies and their satellites are, they can’t reach the vast majority of the youth players, so it benefits them to develop relationships with strong academies.