HOW U.S. SOCCER WORKS

Solidarity Payments and Training Compensation in Soccer Explained

Player Compensation Series

This article is part of a guide explaining how player development payments work in soccer.

Trying to understand the nuances of training compensation fees and solidarity payments can feel like falling into a rabbit hole. The deeper you go, the more complicated it gets. The history behind these rules includes legal battles, global transfer markets, and very different national systems. Entire books have been written about the subject.

So this page will keep things as simple as possible.

The goal here is not to explain every legal detail. Instead, this article explains the core concepts, provides a few clear examples, and shows how the system works in most of the world compared to how it works in the United States.

By the end, the connection between these payments, youth development, and the structure of American soccer becomes much clearer.

How a Basic Player Transfer Works
What Are Training Compensation Fees?
What Are Solidarity Payments?
Solidarity Payments Explained for a 10 year old
Example: How Solidarity Payments Work
Training Compensation vs Solidarity Payments
The 1995 Bosman Ruling and the Birth of These Payments
Why Do These Payments Matter
How Youth Clubs Use Solidarity Payments
Real Example: Neymar
Why This Topic Matters in the United States

How a Basic Player Transfer Works

In most parts of the world, when a player moves from one club to another, it is called a transfer.

Every country has its own regulations, but a typical transfer usually includes several pieces.

A typical transfer includes

Transfer fee
The amount paid from one club to another to acquire the player.
Player salary
The contract the new club negotiates with the player.
Contract terms
Bonuses, performance clauses, promotion incentives, and other negotiated details.
Training compensation
Payments to clubs that trained the player earlier in his career.
Solidarity payments
A share of the transfer fee distributed to clubs that helped develop the player.

Most fans only hear about the first two. The last two are less visible, but they are a major part of how the global soccer development system works.

What Are Training Compensation Fees?

Training compensation fees are designed to reward clubs that develop young players.

They are typically triggered when:

A player signs their first professional contract
A player transfers between clubs in different countries before the season of their 23rd birthday

The idea is simple.

Clubs invest years developing young players. If that player later signs professionally somewhere else, the training club may receive compensation for the time and resources invested.

Key rule

Any club that trained the player between the calendar years of age 12 and 21 may be eligible for training compensation.

In most cases, the payment happens once, when the player signs their first professional contract or makes their first international move.

What Are Solidarity Payments?

Solidarity payments work differently.

Instead of compensating one training club at one key moment, solidarity payments reward all clubs that helped develop a player during the player’s youth career.

When a professional player is transferred for a fee before the end of their contract, a portion of that transfer fee is distributed to the clubs that trained the player between ages 12 and 23.

The basic rule

5% of every transfer fee is set aside for solidarity payments
That money is distributed to clubs that trained the player between ages 12–23

The amount each club receives depends on how long the player trained there.

Solidarity Payments Explained for a 10-year old

Think of solidarity payments as a thank you built into the transfer system.

When a young player becomes a professional and later moves for a transfer fee, part of that money flows back to the clubs that helped develop him.

For example:

A player trains at a small youth club from ages 12 to 15
He later joins a professional academy at age 16
Years later he transfers internationally for a large fee

Under FIFA rules, both clubs receive part of that transfer fee.

That money can then be reinvested into:

Coaching
Facilities
Youth Programs
Community Development

Example: How Solidarity Payments Work

Imagine the following scenario.

A player trains at California Athletic Soccer Club in Los Angeles from age 12 to 15.
At age 16 he moves to the Ajax Academy in Amsterdam and stays until age 20.
At age 21 he is transferred to Liverpool FC for $1,000,000 .

Step 1

5% of the transfer fee is set aside.
$1,000,000 × 5% = $50,000 solidarity pool

Step 2

The $50,000 is divided among the development clubs.

California Athletic Soccer Club (ages 12–15)

Each year between ages 12 and 15 receives 5% of the solidarity pool.
$2,500 per year
4 years = $10,000

Ajax Academy (ages 16–20)

Each year between ages 16 and 23 receives 10% of the solidarity pool.
$5,000 per year
4 years = $20,000

The remaining development years would go to any other clubs involved.

In smaller transfers the amounts may seem modest. But when transfers reach tens or hundreds of millions, solidarity payments can become extremely significant.

For several examples of how these payments have worked in practice, see Real Examples of Solidarity Payments in Soccer.

Training Compensation vs Solidarity Payments

These two systems often get confused, but they serve different purposes.

1. Training Compensation

Purpose:
Compensate the club that directly trained the player during early development

Triggered when a player signs their first professional contract
Also triggered for international transfers before age 23

2. Solidarity Payments

Purpose:
Reward all clubs involved in the player’s development

Triggered when a player is transferred for a fee before their contract expires

Special Situations

Loans

Loans can create confusion.

If a player is loaned to another club but remains under contract with the parent club, training compensation is usually not triggered at that moment.

However:

If a permanent transfer occurs later
Solidarity payments may still apply depending on the structure of the deal

Free Transfers

Free transfers work slightly differently.

Training compensation can still apply
Solidarity payments usually require a transfer fee

This is because solidarity payments are calculated as a percentage of the transfer fee.

The 1995 Bosman Ruling and the Birth of These Payments

Training compensation and solidarity payments did not always exist.

Before 1995, clubs had much greater control over player movement. Even when a player’s contract expired, another club could still be required to pay a transfer fee.

That changed with the Bosman ruling in 1995.

The European Court of Justice ruled that players in the European Union could move freely to another club once their contract expired.

Major changes after Bosman

Players gained freedom of movement at contract expiration
Clubs could not charge fees for out-of-contract players within the EU
Players gained stronger negotiating power
Nationality quotas on EU players were reduced

From a player’s perspective, this expanded freedom.

From a club’s perspective, it created a new risk.

Clubs that invested in youth development could suddenly lose players without receiving compensation.

Sir Alex Ferguson famously described the reaction:

“Once the European Court of Justice ruled that clubs no longer had to pay transfer fees after the expiration of a player’s contract, all hell broke loose.” Suddenly it was a free-for-all.”

The FIFA Response

In response, clubs pushed FIFA to create protections for youth development.

FIFA introduced:

Training compensation
Solidarity payments

Both systems were designed to ensure clubs would still benefit financially when players they developed succeeded later in their careers.

How the Bosman Ruling Indirectly Affected the United States

The Bosman ruling did not impact the United States as directly as it did Europe.

But the global effects still mattered.

As transfer fees rose worldwide and European clubs searched for new talent, American players began attracting more attention.

European clubs increasingly scouted the United States.

This created new opportunities for American players to move abroad, but it also created new challenges for American clubs trying to retain talent.

European clubs could often offer:

• higher salaries
• stronger competition
• greater global visibility

American academies were developing players, but the system around them often failed to reward that development in the same way the global system did.

The Important Question: Why Do These Payments Matter

Solidarity payments and training compensation are not just technical rules buried inside FIFA documents. They shape incentives across the entire youth soccer ecosystem.

1. Incentive to develop players

Youth development is expensive.

Clubs invest in:

Coaching staff
Facilities
Travel
Equipment
Academy infrastructure

These payments create a financial incentive to continue developing young players.

If a player eventually signs professionally or is transferred for a large fee, the club that helped develop him may receive a return on that investment.

2. Fair distribution of transfer wealth

Player development rarely happens at one club.

A future professional might play for:

A local youth club
A regional academy
A professional academy

Solidarity payments recognize this shared development pathway.

Instead of all the money staying at the top of the transfer market, part of it flows back down to the clubs that helped develop the player.

3. Long-term sustainability

These payments can help keep youth programs alive.

Clubs can reinvest funds into:

Better coaching
Improved facilities
Travel support
Expanded youth programs

For many smaller clubs, even occasional solidarity payments can make a major difference.

How Youth Clubs Use Solidarity Payments

When a club receives solidarity payments, the money often goes directly back into development.

Common uses include:

Youth Development

Investing in coaching staff, training facilities, and equipment to further develop and nurture young talent within the club’s youth academy.

Infrastructure

Upgrading facilities such as training grounds, locker rooms, and academies to provide a better environment for player development.

Education and Player Support

Providing educational support and resources for young players, including academic tutoring and career development programs.

Community Engagement

Using the funds to organize soccer camps, clinics, and outreach programs to engage with the local community and promote grassroots soccer.

Operational Costs

Covering general operational expenses such as administrative costs, travel expenses for youth teams, and maintaining the overall infrastructure of the club.

In other words, solidarity payments are not just accounting mechanisms. They can directly strengthen the grassroots soccer ecosystem.

How Do We Know These Payments Support Development?

FIFA designed the system specifically to reward clubs that train and educate young players.

The principle is straightforward.

Clubs that contribute to player development should share in the financial rewards when those players succeed later in their careers.

This creates a system where developing talent is financially valuable, not just socially valuable.

A Real Example: Neymar

One of the most famous examples of solidarity payments came from the Neymar transfer in 2017.

When Neymar moved from Barcelona to PSG, the transfer fee exceeded €200 million.

The solidarity pool

5% of the transfer fee created a solidarity payment pool of roughly €9 million.
Most of that money went to Santos, the Brazilian club where Neymar developed between ages 12 and 23.

That is exactly how the system is intended to work.

A club that helped develop a world-class player shared in the financial reward when that player later moved for one of the largest transfer fees in history.

Why This Matters for Youth Soccer

Many non-MLS academies invest enormous resources into developing players.

Without development compensation, those clubs often rely heavily on player fees to survive.

That reality reinforces the pay-to-play system, which can limit access for talented players from lower-income families.

Training compensation and solidarity payments are not a complete solution.

But in much of the world they form part of a broader system that supports youth development without placing the entire burden on families.

You can read the full explanation in Why U.S. Youth Soccer Clubs Rarely Get Paid for Developing Players

Can This Model Work in the United States?

American soccer has grown dramatically over the past two decades.

There are more academies, more professional leagues, and more American players entering the global transfer market than ever before.

But the structure of the system still raises difficult questions.

• Can a development model built around pay-to-play support long-term player development?
• Can clubs realistically invest in youth development without sharing in the financial rewards when players succeed?
• Can a closed professional pyramid support a fully integrated development system?