FIFA's Dispute Resolution Chamber (DRC) has ruled against Redmond, Washington based youth club Crossfire Premier in its bid to receive solidarity payments related to the 2014 transfer of DeAndre Yedlin from the Seattle Sounders to Tottenham Hotspur, according to documents acquired by ESPN FC.
The five-person panel didn't specify a reason for ruling against Crossfire, but Lance Reich, the attorney representing Crossfire in the case, said he would immediately file a request with the DRC to receive a full report detailing the panel's decision.
In previous cases involving U.S.-based youth clubs, the DRC said a fee between $8,000 and $10,000 would be required to receive the full report, though in the document from the DRC announcing the Crossfire decision, no fee was specified.
"We're surprised and disappointed by the decision," said Reich via telephone. "By the same token, we'll have to wait and see what the formal opinion looks like, and the grounds for rejecting the claim. If necessary, Crossfire will take this all the way to the Court of Arbitration for Sport."
Crossfire had been seeking around $100,000 for its share of the fee based on the Yedlin's time with the youth club from 2006-10. This information was corroborated on his player passport compiled by the U.S. Soccer Federation.
However, Tottenham contested Crossfire's claim on three fronts. First, Spurs contended that the record-keeping by the USSF was incomplete, thus making it impossible to determine how much was owed.
Tottenham also alleged that Crossfire is not a "training club" since its business model -- that of a non-profit in which team fees of other players helped subsidize those who couldn't afford to pay like Yedlin -- doesn't involve investing its own resources and taking a financial risk in order to produce players. This is despite the fact that Crossfire has other sources of revenue including sponsorships and charitable donations.
The final prong of Tottenham's defense was that during the transfer negotiations, MLS told Tottenham that it was the position of the USSF that no claims for solidarity payments could be brought by U.S.-based youth clubs due to provisions in U.S. law. And for that reason, no money needed to be set aside for solidarity payments.
The ruling in the Crossfire case marks the third time in the last six weeks that the DRC has ruled against a U.S.-based youth club seeking solidarity payments. The Dallas Texans attempted to receive payment for Clint Dempsey's transfer from Tottenham Hotspur to the Seattle Sounders in 2013, while Sockers FC Chicago's filed a claim for payment related to Michael Bradley's transfer from AS Roma to Toronto FC in 2014.
FIFA's Regulations on the Status and Transfer of Players (RSTP) mandate that whenever a player is transferred to another club prior to the end of their contract, and that transfer involved moving to another country -- a "change of association" in FIFA parlance -- five percent of the transfer fee is paid to the youth clubs responsible for the player's development in what is called a "solidarity payment."
The rules also stipulate that when a player signs their first professional contract, the pro club is obligated to pay training and development compensation to the youth clubs that developed the player between the ages of 12 and 21. Training compensation is also due when a player is transferred to a club in another country up until the season of his 23rd birthday.
Yet until recently, the U.S. Soccer Federation has resisted the implementation of RSTP. Among the reasons cited are fears that RSTP violates child labor laws or would result in litigation on anti-trust grounds by various stakeholders, including the MLS Players Association. The USSF has also contended at times that a consent decree contained in the case Fraser vs. MLS -- which stipulated that MLS would not require a transfer fee to be paid for out-of-contract players -- prevented it from enforcing RSTP, though it was no longer using that argument.
The USSF contends that at a meeting of stakeholders in 2015, opposing viewpoints among youth clubs, professional leagues, and players' unions left it caught in the middle.
"Since that time, U.S. Soccer has maintained a position of neutrality on the issue of training compensation and solidarity payments and, accordingly, will not be a party to enforcement of those regulations," a USSF spokesperson told ESPN FC.
The spokesperson later added: "We will, however, continue to pass through any claims made by clubs as required by FIFA regulations. This position remains the same regardless of the affiliation of the club making the claim."
But recently, MLS announced that it would begin enforcing RSTP so that it could begin collecting training compensation and solidarity payments for its academy products who sign with foreign clubs.
In the wake of the Crossfire decision, it now appears that a double standard is being applied whereby MLS clubs can receive training compensation and solidarity payments while youth clubs outside the MLS sphere cannot, though the full opinion will shed more light.