Solidarity Contribution
Texto da decisão
REF TMS 11871
Decision of the
Dispute Resolution Chamber
passed on 17 May 2023
regarding solidarity contribution for the transfer of the player Christian
Frederick Bayoi MAKOUN REYES
COMPOSITION:
Frans de Weger (The Netherlands), Chairperson
Mario Flores Chemor (Mexico), member
Johan van Gaalen (South Africa), member
CLAIMANT:
ZAMORA F.C., Venezuela
RESPONDENT:
New England Revolution, USA
Page 2 of 11
REF TMS 11871
I. FACTS OF THE CASE
Player:
Christian Frederick Bayoi MAKOUN REYES
Date of birth:
5 March 2000
Player passport:
issued by the Venezuelan Football Federation (FVF) on 24 January 2022:
Name of club
Registration period
Player’s
Registration type
status
Zamora F.C.
From 26.07.2019 to
Professional
Permanent
Professional
Permanent
Professional
Permanent
Amateur
Permanent
Amateur
Permanent
Amateur
Permanent
Amateur
Permanent
Amateur
Permanent
31.12.2019
Zamora F.C.
From 30.01.2017 to
30.07.2018
Zamora F.C.
From 01.07.2016 to
31.12.2016
Seca Sports
From 16.02.2016 to
01.07.2016
Seca Sports
From 18.09.2015 to
11.02.2016
Seca Sports
From 23.09.2014 to
10.09.2015
Seca Sports
From 01.11.2013 to
31.05.2014
Hermandad
From 01.6.2012 to
Gallega Valencia
30.09.2013
Sporting season:
From January to December
Date of transfer:
04 August 2022, from Charlotte MLS (USA) to New England Revolution
(USA) as professional:
Financial conditions of the transfer:
According to the information provided by the Respondent, Charlotte MLS
(USA) and New England Revolution agreed upon the transfer of the
player in exchange of USD 400,000 of General Allocation Money (GAM).
Page 3 of 11
REF TMS 11871
Claimant club:
ZAMORA F.C. (Venezuela)
Respondent club:
New England Revolution (USA)
Claim and Response:
1.
On 22 November 2022, the Claimant lodged a claim against the Respondent requesting
the payment of “24.36% of the total solidarity contribution, plus 5% p.a. interest as of the
due date, until the date of effective payment”.
2.
The Claimant stated that according to information provided by the Major League Soccer
(MLS), the player was transferred from Charlotte MLS (Former club) to the Respondent
for a transfer compensation. In this respect, the Claimant referred to art. 1 of Annexe 5
of the Regulations on the Status and Transfer of Players (RSTP) to inform that solidarity
contribution is due over any compensation involved in the transfer of the player.
3.
On 7 March 2023, the Major League Soccer (MLS), on behalf of the Respondent, informed
that no transfer agreement was signed between the parties and no compensation
payment was agreed upon for the transfer of the player.
4.
The MLS pointed out that all MLS player contracts are agreed between MLS and the
player and governed by a Collective Bargaining Agreement between MLS and the Major
League Soccer Players Association (CBA). In this respect, a player may be re-assigned to
different MLS clubs without signing a transfer agreement, maintaining the same
employment contract with the league.
5.
The MLS stated that on 4 August 2022, the player was re-assigned from Charlotte MLS
to the Respondent without signing a transfer agreement. Consequently, there is no
transfer agreement to be disclosed to FIFA.
6.
The MLS indicated that the MLS Roster & Budget Guidelines (hereinafter MLS Rules)
‘’prohibit payments from one MLS team to another MLS team in consideration for trade of a
player’’ and foresee specific cases in which a player may be exchanged, none of which
with monetary value.
7.
The MLS informed that the transfer of the player from Charlotte MLS to the Respondent
occurred in compliance with the MLS Rules, and the above-mentioned clubs agreed on
the transfer of the player in exchange for USD 400,000 as General Allocation Money
(GAM). In this respect, the MLS explained that GAM ‘’is a mechanism governed by the CBA
that allows teams to shift a portion of their Salary Budged (commonly referred to as a ‘’salary
cap’’) to another MLS team’’ and ‘’it can be used only within an MLS team’s Salary Budged’’.
Page 4 of 11
REF TMS 11871
8.
Finally, the MLS stated that since no payment was made for the transfer of the player,
the Claimant is not entitled to solidarity contribution.
9.
On 23 March 2023, the Claimant provided its comments to the Respondent’s reply and
rejected the Respondent’s allegation that the player was transferred without payment
of compensation.
10.
The Claimant stated that the MLS confirmed the exchange of the player for USD 400,000
of GAM.
11.
According to the Claimant, the GAM corresponds to additional money available annually
to MLS clubs, which can be provided to the clubs in specific cases, such as: Failure to
qualify for the MLS Cup Playoffs; The transfer of a club’s player to non-MLS club outside MLS;
Qualification for the CONCACAF. Champions League; Expansion Clubs; Expansion Dilution;
and Designated Player charge distribution.
12.
Additionally, the Claimant pointed out that GAM can be used on several occasions, such
as: (i) to "buy-down" a player's Salary Budget Charge as part of managing a club's roster,
including buying down a Salary Budget Charge below the League maximum of $612,500; (ii)
to sign players new to MLS (that is, a player who did not play in MLS during the previous
season); (iii) to re-sign an existing MLS player; (iv) to off-set acquisition costs (loan and transfer
fees); (v) in connection with the extension of a player's contract for the second year provided
the player was new to MLS in the immediately prior year; (vi) to reduce the Salary Budget
Charge of a Designated Player to a limit of $150,000; (vii) to reduce the Salary Budget Charge
of a Player whose Salary Budget Charge exceeds the Maximum Salary Budget Charge to a
limit of $150,000; and also that the GAM can be used to reduce 100% of a loan or transfer
fee.
13.
In this respect, the Claimant referred to art. 1 of Annexe 5 of the RSTP and the FIFA
Commentary on the RSTP, which foresee that any compensation paid within the scope
of the transfer of a player is subject to solidarity contribution, regardless of whether it is
described as part of the transfer fee or not.
14.
The Claimant added that the concept of “compensation” has been interpreted broadly
by the Dispute Resolution Chamber of the Football Tribunal (DRC) in cases such as the
swap of players or the triggering of a buy-out clause, and the only compensation which
is not subject to solidarity contribution is training compensation.
15.
Moreover, the Claimant stated that, according to CAS jurisprudence, (i) the term
“compensation” is not limited to the idea of “transfer fee” stricto sensu and must
encompass any amount paid by a club on the transfer of a player; (ii) all the elements
that should be considered on the transfer of a player for the purpose of solidarity
contribution are met in the present case since the Former club consented to release the
player, the Respondent consented to secure the player’s services, the player agreed with
the transfer, and compensation was paid in form of GAM; and (iii) the RSTP refers to
Page 5 of 11
REF TMS 11871
compensation without specifying its nature and the Swiss law foresees that the idea of
exchange of good involves two sales contracts, and in the present case the financial
compensation for the exchange of the player is the amount of 400,000 of GAM.
16.
Finally, the Claimant reiterated that the clubs agreed on the amount of USD 400,000 as
GAM for the transfer of the player, which was available to the Former club to use in
several ways, demonstrating the financial value agreed between the clubs and which
shall be subjected to solidarity contribution.
17.
The Respondent did not present an answer to the second round of submission.
II. LEGAL CONSIDERATIONS
Applicable law:
Regulations on the Status and Transfer of Players (RSTP): March 2022
edition
Procedural Rules Governing the Football Tribunal (Procedural Rules):
November 2022 edition
Jurisdiction:
yes, uncontested.
Admissible:
yes, uncontested.
Proposed Decision:
1.
The Claimant requested the payment of solidarity contribution resulting from the
transfer of the player from Charlotte MLS (USA) to the Respondent.
2.
According to the Claimant, the Respondent paid for the transfer of the player the amount
of USD 400,000 as GAM, which can be used in several situations according to the MLS
Rules. In this respect, the Claimant stated that this amount of GAM corresponds to
compensation paid for the transfer of the player and, therefore, shall be subject to
solidarity contribution.
3.
The Respondent argued that no payment was made for the transfer of the player and
no solidarity contribution is due to the Claimant.
4.
Art. 1 par. 1 of Annexe 5 RSTP stipulates that if a professional moves during the course
of a contract, 5% of any compensation, not including training compensation paid to his
former club, shall be deducted from the total amount of this compensation and
distributed by the new club as a solidarity contribution to the club(s) involved in his
training and education over the years. This solidarity contribution reflects the number
Page 6 of 11
REF TMS 11871
of years (calculated pro rata if less than one year) he was registered with the relevant
club(s) between the years of his 12th and 23rd birthdays.
5.
It is uncontested that in accordance with the player passport issued by the FVF on 24
January 2022, the player was registered with the Claimant as follows:
(i) from 01 July 2016 until 31 December 2016, corresponding to 184 days of the
calendar year of the player’s 16th birthday;
(ii) from 30 January 2017 until 31 December 2017, corresponding to 336 days of the
calendar year of the player’s 17th birthday;
(iii) from 01 January 2018 until 30 July 2018, corresponding to 211 days of the calendar
year of the player’s 18th birthday; and
(iv) from 26 July 2019 to 31 December 2019, corresponding to 159 days of the calendar
year of the player’s 19th birthday.
6.
It is uncontested that the player was transferred from Charlotte FC to the Respondent
on 04 August 2022 in exchange for USD 400,000 as GAM.
7.
In view of that, the DRC must decide if the amount of USD 400,000 as GAM provided by
the Respondent can be encompassed as compensation in the meaning of the RSTP and,
if so, what it is the amount of solidarity contribution due to the Claimant.
8.
Article 21 and Annexe 5, article 1, of FIFA RSTP, set forth that any compensation paid
within the scope of the transfer of the player, except for training compensation, shall be
subjected to solidarity contribution. Additionally, the FIFA Commentary on the
Regulations for the Status and Transfer of Players (hereinafter the “FIFA Commentary”)
states that solidarity contribution is subject to any compensation paid for the transfer of
the player, ‘’regardless of whether it is described as part of the transfer fee or not”.
9.
According to the DRC and CAS jurisprudence, the concept of “compensation” cannot be
considered as a narrow interpretation and therefore shall not be strict to the monetary
nature paid for the transfer of the player, but it includes any financial benefit which may
derive from the transfer of a player. This approach has been applied by CAS and the DRC
in cases of entitlement of solidarity contribution triggered by the activation of a buy-out
clause or the swap of players. In fact, the DRC concluded several times that the exchange
of players indirectly implied a financial agreement, i.e. an agreement with a monetary
component, due to the fact that the relevant qualities of the players have an economic
value in the football employment market.
10.
Against the above framework, according to the MLS Rules, GAM corresponds to an
amount available to MLS clubs annually in addition to its salary budget, which can be
used in several circumstances such as the signing of new players to MLS, the re-assigning
of an existing MLS player, and to off-set loan and transfer fees.
11.
In other words, the increasing of the GAM of an MLS club corresponds to a financial
advantage to such club considering the different possibilities in which the club can spend
Page 7 of 11
REF TMS 11871
this resource. The higher the amount of GAM available to a club, the higher the amount
that can be spent on signing new players or on compensation of loan or transfer fees.
12.
The MLS Rules also foresee that an MLS club may reduce 100% of a loan or transfer fee
using the GAM.
13.
In this respect and according to the strict financial MLS rules on the amount that can be
spent by MLS clubs, it seems that any amount of GAM provided to an MLS club in
exchange of the registration of a player corresponds to a payment of compensation that
can be spend within the parameters established by the MLS Rules.
14.
Bearing in mind that the RSTP clearly establishes the entitlement of solidarity
contribution on any compensation paid within the scope of the transfer of the player,
regardless the nature of the compensation, the amount of GAM provided by the
Respondent shall be encompassed as a transfer compensation and the Claimant is
entitled to solidarity contribution for the transfer of the player.
15.
Finally, and again given the nature of the GAM as described above, the DRC held that
any other conclusion as regards the GAM would be to the detriment of uniformity,
equality and certainty on football at a global scale because it would enable USA (or
Canadian) clubs forming part of the MLS to have a financial advantage over the rest
simply because of the MLS’ internal organisation.
16.
Consequently, the amount to be taken into account to calculate the solidarity
contribution due to the Claimant is USD 400,000.
17.
According to art. 1 and 2 of Annexe 5 of the RSTP, the player’s new club, i.e. the
Respondent, is ordered to remit the relevant proportion(s) of the 5% solidarity
contribution to the club(s) involved in the player’s training.
18.
It remained undisputed that the Respondent did not pay the solidarity contribution to
the Claimant in relation to the amount agreed for the transfer of the player, i.e. USD
400,000.
19.
According to art. 21 and art. 1 par. 1 of Annexe 5 of the RSTP, 5% of the above
compensation shall be deducted as solidarity contribution.
20.
As per art. 1 par. 1 of Annexe 5 of the RSTP, solidarity contribution for the calendar year
of a player’s 16th to 23rd birthday amounts to 10% of the total solidarity contribution and
it is to be calculated on a pro rata basis if a player is registered for less than a year (cfr.
Art. 1 par. 1 of Annexe 5 of the RSTP).
21.
As established above in point II.5, the Claimant is entitled to receive 24.37% of the due
solidarity contribution, corresponding to: 50.27% of the 10% solidarity contribution for
the 184 days of the calendar year of the player’s 16th birthday; 92.05% of the 10%
Page 8 of 11
REF TMS 11871
solidarity contribution for the 336 days of the calendar year of the player’s 17th birthday;
57.81% of the 10% solidarity contribution for the 211 days of the calendar year of the
player’s 18th birthday; and 43.56% of the 10% solidarity contribution for the 159 days of
the calendar year of the player’s 19th birthday.
22.
Based on the above, the Respondent shall pay the Claimant solidarity contribution of
USD 4,873.96
23.
In addition, the Claimant requested the payment of interests over the claimed amount
at a rate of 5% p.a. as of the due date.
24.
Therefore, taking into account the Claimant’s claim and the well-established
jurisprudence of the DRC with regard to interest, the Claimant is entitled to receive
interest of 5% p.a. over the amount payable as solidarity contribution as of the 31st day
after the date of registration of the player on the permanent basis, i.e. 4 September 2022.
25.
In view of all the above, the claim of the Claimant is accepted, and the Claimant is entitled
to receive USD 4,873.96 as solidarity contribution, plus 5% interest p.a., as from 4
September 2022 until the date of effective payment.
26.
Art. 25 par. 2 of the Procedural Rules stipulates that costs in the maximum amount of
USD 25,000 are levied in connection with proceedings before the DRC of the Football
Tribunal relating to disputes regarding training compensation and the solidarity
mechanism. Costs are to be borne in consideration of the parties’ degree of success in
the proceedings (art. 25 par. 5 of the Procedural Rules).
27.
The amount claimed in the present dispute corresponds to an amount below USD
49,999. Therefore, procedural costs levied in this respect shall not exceed USD 5,000 (cf.
art. 2 of Annexe 1 of the Procedural Rules).
28.
In consideration of the amount claimed, the costs of the proceedings are set at USD
3,000.
29.
In view of the outcome of the claim and the conduct of the parties, said costs shall be
born entirely by the Respondent.
30.
Art. 24 of the RSTP applies.
Page 9 of 11
REF TMS 11871
III.
DECISION OF THE DISPUTE RESOLUTION CHAMBER
1. The claim of the Claimant, ZAMORA F.C, is accepted.
2. The Respondent, New England Revolution, shall pay to the Claimant USD 4,873.96 as
solidarity contribution plus 5% interest p.a. as from 4 September 2022 until the date of
effective payment.
3. Full payment (including all applicable interest) shall be made to the bank account
indicated in the enclosed Bank Account Registration Form.
4. Pursuant to article 24 of the Regulations on the Status and Transfer of Players if full
payment (including all applicable interest) is not paid within 45 days of notification of
this decision, the following consequences shall apply:
1. The Respondent shall be banned from registering any new players, either nationally
or internationally, up until the due amount is paid. The maximum duration of the
ban shall be of three entire and consecutive registration periods.
2. The present matter shall be submitted, upon request, to the FIFA Disciplinary
Committee in the event that full payment (including all applicable interest) is still
not paid by the end of the of the three entire and consecutive registration periods.
5. The consequences shall only be enforced at the request of the Claimant in
accordance with article 24 paragraphs 7 and 8 and article 25 of the Regulations on the
Status and Transfer of Players.
6. The final costs of the proceedings in the amount of USD 3,000 are to be paid by the
Respondent to FIFA with reference to case no. TMS 11871 (cf. note relating to the payment
of the procedural costs below).
For the Football Tribunal:
Emilio García
G cí Silv
Silvero
Chief Legal & Compliance Officer
Page 10 of 11
REF TMS 11871
NOTE RELATED TO THE APPEAL PROCEDURE:
Pursuant to article 57 paragraph 1 of the FIFA Statutes, this decision may be appealed before
the Court of Arbitration for Sport within 21 days of notification.
NOTE RELATED TO PUBLICATION:
FIFA may publish this decision. For reasons of confidentiality, FIFA may decide, at the request
of a party within five days of the notification of the motivated decision, to publish an
anonymised or a redacted version (cf. article 17 of the Procedural Rules).
CONTACT INFORMATION:
Fédération Internationale de Football Association
FIFA-Strasse 20 P.O. Box 8044 Zurich Switzerland
www.fifa.com | legal.fifa.com | [email protected] | T: +41 (0)43 222 7777
Page 11 of 11