FIFA - Decisión disputa Makoun Reyes 17052023

REF TMS 11871

Decision of the Dispute Resolution Chamber passed on17May2023 regarding solidarity contribution for the transfer of the playerChristian 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 2of 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 VenezuelanFootball Federation(FVF)on 24 January2022: Name of club Registration period Player’s Registration type status

Zamora F.C. From 26.07.2019 to Professional Permanent 31.12.2019 Zamora F.C. From 30.01.2017 to Professional Permanent 30.07.2018 Zamora F.C. From 01.07.2016 to Professional Permanent 31.12.2016 Seca Sports From 16.02.2016 to Amateur Permanent 01.07.2016 Seca Sports From 18.09.2015 to Amateur Permanent 11.02.2016 Seca Sports From 23.09.2014 to Amateur Permanent 10.09.2015 Seca Sports From 01.11.2013 to Amateur Permanent 31.05.2014 Hermandad From 01.6.2012 to Amateur Permanent 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: Financialconditionsof 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 ofUSD 400,000 ofGeneral Allocation Money (GAM).

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REF TMS 11871

Claimant club: ZAMORA F.C.(Venezuela)

Respondent club: New England Revolution(USA)

Claim and Response:

1. On 22November2022, 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 4of 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 GAMcan 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 5of 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): November2022 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 6of 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 16thbirthday; (ii) from 30 January 2017 until 31 December 2017, corresponding to 336 days of the calendar year of the player’s 17thbirthday; (iii) from 01 January 2018 until 30 July 2018, corresponding to 211 days of the calendar year of the player’s 18thbirthday; and (iv) from 26 July 2019 to 31 December 2019, corresponding to 159 days of the calendar year of the player’s 19thbirthday.

6. It is uncontested that the player was transferred from Charlotte FC to the Respondent on 04 August 2022 in exchange for USD400,000asGAM.

7. In view of that, the DRC must decide if the amount of USD 400,000 asGAM 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 thatsolidarity 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

naturepaidfor 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 orthe swap of players. In fact, the DRC concluded several times thatthe 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 7of 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 compensationshall 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 16thto 23rdbirthday amounts to 10% of the total solidarity contributionand 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 8of 11 REF TMS 11871 solidarity contribution for the 336 days of the calendar year of the player’s 17thbirthday; 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 19thbirthday.

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.

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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 daysof notification of this decision, the following consequencesshall 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 Respondentto FIFA with reference to case no. TMS 11871(cf. note relating to the payment

of the procedural costs below). FFoorr tthheeFFoooottbbaallll TTrriibbuunnaall:: EEmmiilliioo GGarccíía SSiillvvero Chief Legal & Compliance Officer Page 10of 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 Sportwithin 21 days of notification.

NOTE RELATED TO PUBLICATION: FIFA may publish this decision. For reasonsof 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:

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