MLS: Loosening the Grip on Territorial Rules

Major League Soccer has implemented various rules with the hopes of encouraging parity in the league and encouraging investment in youth soccer. The Homegrown Player Rule, Discovery List and Territorial Rights all come to mind, and whether these initiatives have helped MLS achieve its objectives is open for debate, and not something that will we delve into here.

However, recently MLS has decided to loosen its rules on how and when youth soccer players can move from club to club. In the past, having Territorial Rights meant that an MLS team has rights to any player who lives in their area – which typically is between 75 and 100 miles from the team’s base location. The MLS team would have rights to the player even if the player has never played for the club or has no interest in playing for the club.

Now, however, MLS has approved of a new system which is centered around a “protected list” of players. MLS clubs will be allowed to place up to 54 players on their youth protected lists. 45 of these players may come from the MLS club’s academy, and 9 of these players may include players who are not in their academy but are nonetheless in their “homegrown territory.” Players on this protected list cannot sign a professional deal with another MLS club without the new club negotiating a trade for their rights.

Certain players may play for a MLS club academy team, but not be on the club’s protected list. These players can still move to another club’s academy and eventually sign a homegrown deal with that new club’s first team so long as the new club pays the old club a set amount of money (as determined by MLS). Note that a Homegrown Player is one that a club can sigh without subjecting the player to the MLS SuperDraft; however, that player must have been a member of that club’s youth academy for at least 1 year and meet certain minimum training requirements.

Certain players may live in a MLS homegrown territory but they do not play for a MLS academy club or on that club’s protected list. These players will be able to move freely to MLS clubs based outside of their territory, and the new club will not have to pay any compensation to the old club for that player.

There is more to the new set of rules.

Of the 54 protected players:

  • Teams must protect between 10 and 20 players from their respective U15 and U17 MLS Next Academy teams.
  • Teams must protect between 5 and 15 players from their U19 MLS Next Academy team. If a club does not have a U19 MLS Next Academy team, they can only protect a maximum of 40 registered academy players.
  • Of the 9 non-registered players on a MLS club’s protected list, a maximum of 5 can be protected from any specific age group.

It has been reported that MLS clubs can update their protected lists every few months and the next update will come in January of 2023.

These new rules are meant to achieve a compromise between the 2 opposite views on MLS’s territorial rules. Some believe that giving MLS teams complete control over a certain market will encourage them to discover players in that area, invest in them and develop talent without the threat of other clubs poaching players from that area. On the other hand, some believe that there is no way that one MLS club can truly develop the thousands of youth players in a given territory so the territorial system does not work as intended.

We’ll have to see how all this plays out, so stay tuned!

For more information, contact Mario Iveljic, who is a Partner and one of the Founders of Mag Mile Law. He is also a registered soccer agent (intermediary) with the U.S. Soccer Federation. He can be reached at [email protected], or (708) 576-1624.

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