Solidarity Payments in Soccer

When it comes to international soccer transfers, the main thing reported in the press is the transfer amount. Soccer fans have likely heard how Gareth Bale transferred from Tottenham Hotspur to Real Madrid for a transfer fee of $105.56M. Or how Neymar transferred from Barcelona to Paris Saint-German for $270M.

Related to transfer fees are “solidarity” payments, which are not frequently reported on. Under FIFA’s Regulations on the Status and Transfer of Players (FIFA’s RSTP), FIFA provides for a “solidarity mechanism” designed to encourage “solidarity in football.” The Solidarity Mechanism provision is contained in Article 21 of FIFA’s RSTP and provides:

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 contributions).

Solidarity payments have been characterized as the brother or sister of training compensation, which we discuss in another blog. Unlike training compensation, payable only at once and in relation to a specific player, if the solidarity mechanism applies, it will apply to all the clubs that have trained and educated the individual player concerned. According to FIFA, the key feature of the solidarity contribution is that, in principle, it is payable in connection with every international transfer compensation over the course of a player’s career.

There are notable differences between training compensation and solidarity payments. First, a philosophical difference – training compensation is designed to reimburse the investment made by clubs in training and developing young players. On the other hand, the solidarity mechanism is designed to strengthen the notion of solidarity in football.

Second, the right to claim a solidarity payment is not linked to a specific age, unlike training compensation; even if a professional player is transferred at the age of 34, for example, the clubs that trained that player will be entitled to a solidarity contribution provided all the associated conditions are met.

Third, clubs are entitled to solidarity payments for the player’s entire training and education between the ages of 12 and 23.

Fourth, the way that solidarity payments are calculated differs from how training compensation is calculated. Training compensation is calculated based on pre-set estimated training costs. However, solidarity payments are calculated as a percentage of the agreed transfer fee.

The last difference is that solidarity payments only apply if a professional player moves before their contract expires, while a training compensation payment can be payable if a professional player moves at the end of his contract.

How much is a solidarity payment? Under Article I, Annexe 5 of FIFA’s RSTP, if a professional moves during the course of a contract, 5% of any compensation paid within the scope of the transfer (not including training compensation) is deducted from the total amount of the transfer. This 5% is then distributed by the new club to the club(s) involved in the player’s training and education over the years.

The amount each training club would receive would depend on when they trained a player. Here is how FIFA breaks it down:

The club that trained a player during the calendar year of the player’s 12th birthday receives 5% of the 5%.

The club that trained a player during the calendar year of the player’s 13th birthday receives 5% of the 5%.

The club that trained a player during the calendar year of the player’s 14th birthday receives 5% of the 5%.

The club that trained a player during the calendar year of the player’s 15th birthday receives 5% of the 5%.

The club that trained a player during the calendar year of the player’s 16th birthday receives 10% of the 5%.

The club that trained a player during the calendar year of the player’s 17th birthday receives 10% of the 5%.

The club that trained a player during the calendar year of the player’s 18th birthday receives 10% of the 5%.

The club that trained a player during the calendar year of the player’s 19th birthday receives 10% of the 5%.

The club that trained a player during the calendar year of the player’s 20th birthday receives 10% of the 5%.

The club that trained a player during the calendar year of the player’s 21st birthday receives 10% of the 5%.

The club that trained a player during the calendar year of the player’s 22nd birthday receives 10% of the 5%.

The club that trained a player during the calendar year of the player’s 23rd birthday receives 10% of the 5%.

There are a couple of things to note with solidarity payments. First, training clubs are only entitled to solidarity payments if: (1) the professional is transferred between clubs of different national associations; or (2) a professional is transferred between clubs affiliated with the same association, but the training club is affiliated to a different association.

Next, the solidarity mechanism does not impose any additional financial burden on the new club. The solidarity payment is deducted from the transfer fee and then distributed to the training clubs that are entitled to solidarity payments.

In addition, it is the new club’s responsibility to make the solidarity payment. It is not the responsibility of the player or the transferring club.

This is only a general idea of how the solidarity mechanism works. 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.

 

 

Recent Posts

FIFA’s New Regulations in Dealing with Minors

On April 1, 2015, FIFA's Regulations on Working with Intermediaries became effective. The 2015 Regulations essentially de-regulated the football agent industry. For instance, the Regulations no longer required agents to be licensed, pass an exam or provide insurance....

How Much do Soccer Players Make?

I often get asked the question, "How much do soccer players make in MLS?" Some people are just curious because they have no idea what type of salaries soccer players make, especially in the USA. Some people want to compare Major League Soccer salaries to European...

Play College Soccer or Turn Pro?

As a soccer agent, I am frequently asked by parents whether their son or daughter should player soccer in college or try to turn professional right away. As someone who played Division I college soccer at Yale University, I can honestly say that playing soccer was...

Attorney Iveljic on Essential Elements of a Valid Contract

DocPro.com: Mag Mile Law Attorney Mario Iveljic gives insight into essential elements of a valid contract. Contracts form the backbone of society by establishing trust and minimizing risks between parties. A contract is the exchange of an act or promise between two or...

Loss Payees, Lenders and Mortgagee

Imagine the following scenario: You are a senior secured lender on equipment damaged in a fire. The owner of the property where the equipment is located files a claim against his insurance company for the loss. You, as the secured lender, are a loss payee on the...

Call Now to Get a Free Case Evaluation