MLS and its Players: Third Party Ownership? Player and Club Rights Non Existent?

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Major League Soccer owns the registration of all its players excluding DPs. This has allowed MLS to maintain an (ostensibly) level playing field for many years within the league. From a competitive standpoint, MLS, due largely to this practice has become in the eyes of this writer, more compelling than the English Premier League which typically boasts the same top four sides each season.

However, with FIFA moving to ban the third party ownership of players, it can be strongly argued every MLS player who is not a DP is wrongly registered. An obvious retort to this line of thought is that MLS is not agency but a league which is sanctioned by its Federation (the USSF) and FIFA itself, unlike some of the independent agencies in South America who own third party player contracts. In fairness to MLS, when the league was founded over a decade ago, third party ownership was permitted by FIFA and this was not an issue.

However, today third party ownership is an issue, and MLS must change its rules as other football leagues and federations have done to comply with FIFA’s new directives. This situation may not be as black and white as I am sure many an MLS fan would hope.  Let’s look at the status of players whose contracts are owned by MLS rather than the individual clubs within MLS.

  • The players can be traded at any time within the MLS Transfer window to another club in the league.
  • The players whose contracts are not guaranteed can not move freely to another club within MLS even when they are terminated by their former club, thus the league terminates their contract.
  • When a player’s contract expires with the league they are not free to move to another club within the league as the rights to the player are held by his former club.
  • Even if the player’s current club agrees to sell him outside of MLS, the league has the ultimate power of veto over this deal. Since they own the player contracts, they can cancel any deal at any time.
  • A player’s team receives only a portion of a transfer fee for the player, while the bulk remains with the league. In many cases players are asked to waive their 10% of the fee under FIFA guidelines, so that the league can collect that money as well. By this standard, the players should have the right to collect 10% of the MLS’  expansion fees. After all, the players are the ones responsible for MLS’ being in the position to attract new investors. (For the record, I  have made the expansion fee analogy just to demonstrate how proposterous MLS’ practice is- I do NOT advocate returning 10% of  expansion fees to the players)
  • Given what is outlined above, are MLS players in fact “on loan” to their respective clubs? This is getting very technical but in world football terms, MLS player X would be appear to be owned by Agency MLS on loan to Houston Dynamo, or something of the sort. When player X is traded by the outside agency (MLS), they are on loan to San Jose Earthquakes.

MLS is a professional football league that is properly sanctioned as a first division for the United States by the USSF and FIFA. However, in many areas of player contracts and transfers, MLS appears to be a third party agency, whose priorities at times can conflict with not only the players, but the individual club managements that develop and field the players in question.

American soccer supporters all want to see MLS thrive. Without a strong and prosperous Major League Soccer, America’s ascent in this sport will at some point be thwarted. But at the same time it is important MLS, after 14 years of survival mode begin integrating itself more properly into the world football community. A very small part of this would be to allow player registrations to be owned by individual clubs, and allow those clubs to determine if and when they want to transfer or terminate the contract.

MLS’ investors have grown savvier of the sport over the years, and some of the new investment groups bring sophistication to the league it had previously lacked. I am sure many of these investors want to see the changes that the players are seeking: nothing radical but a simple compliance with FIFA rules regarding players’ contracts and third party ownership.

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About Kartik Krishnaiyer

A lifelong lover of soccer, the beautiful game, he served from January 2010 until May 2013 as the Director of Communications and Public Relations for the North American Soccer League (NASL). Raised on the Fort Lauderdale Strikers of the old NASL, Krishnaiyer previously hosted the American Soccer Show on the Champions Soccer Radio Network, the Major League Soccer Talk podcast and the World Soccer Talk Podcast. His soccer writing has been featured by several media outlets including The Guardian and The Telegraph. He is the author of the books 'Blue With Envy' about Manchester City FC, and 'Soccerwarz' about the MLS, USL and NASL infighting.
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