LE: Explain how third-party player ownership works.

Wheeler: As a third party, when I approach a team I want to buy the transfer rights to that player. I take him from Team A and put him on Team B and register him with that team, so his international transfer certificate will say Team B. But I have an agreement with Team B saying any transfers - make sure you pay Michael Wheeler 80%, 90%, 100% of his transfer rights.

LE: The transfer rights stay with the club but theres an outside deal.

Wheeler: Exactly. In sports theres always a way to do it and people are being handed bags of cash to get things done, it tends to open doors.

LE: Up to 80, 90, 100% of the rights? Its really that much?

Wheeler: Yeah. Say I negotiate with a club in Martinique and say, I love that center midfielder, I want to buy him out of his contract, get his transfer rights and bring him up to a USL team.' So I go to Martinique and pay $50,000 for 100% of that kids pass. Then I go to a buddy of mine whos a coach in the USL with ties to Europe and tell him, 'Ive got this fantastic player, I want to place him with you. You get him playing, teach him better tactics and hell become a better pro and then youll get him exposure, get him on couple exhibition games to Europe then after a year of him playing under your tutelage, hell be a tremendous pro and well sell him on. In order to do this, I want 50% of any future transfer of what you guys can get from him.' Youre hoping that the kid gets sold for $100,000-$200,000 U.S. dollars and you just pocketed around $75,000 on a 50-50 split. Thats a very legitimate way of taking a kid whos down in Martinique without many options to get to Europe or a better team to taking him to place that will care for him, get him top-rate football education and he gets sold on and everyone profits. You can do that in the USL. Arguably you could do that with MLS, but it would be up to them negotiating.

For example, Ill give you South America and how *third-party ownership] can be structured in several ways. The tightest way to structure a third-party ownership and agreement in South America is if you have a player and you are an agent, a businessman or a company involved in recommending soccer players and negotiating deals. You buy that player out from whatever club hes signed to, now hes a free transfer. Then you register the player over at your club where you are in cahoots with the president of that club and you basically write up a deal where you loan that player to that club. And thats what happens in Brazil, Argentina, throughout clubs in South America. You loan him out and in that loan its

agreed with that club that the transfer rights are yours. As a third-party owner you may give 25% of that back to the club and take the other 75%, but that can all be negotiated. Thats the clearest way and the tightest way as a third-party owner to ensure that you have full legal rights and you have the player underneath you.

But it can also work out where you may represent the player, the player is out of contract with his team, hes looking for a new team. The player is talented, hes got multiple offers from multiple teams, hes a free agent, hes got his rights, no one else owns him and he wants a full team to come in and buy his rights. You can call it sign-on bonus, call it cash up-front, but he wants something from that team because hes coming as a free agent. Now that hes a free agent, a player in that situation will approach the team and say, Listen, I cost nothing to you guys, I want money up front. Theyre like, No, were not going to give you any money up front, but well give you a salary. Then, I tell the player, Tell them you want to retain a percentage of your transfer rights so that in a future sale youll also profit from the sale of your transfer to another team. Thats a valuable right that a player should negotiate and try to get.

The team will negotiate with whoever is managing the player and negotiate his rights and maybe give a certain percentage to the third party to keep, which is the sell-on. So that happens often.

Sometimes it happens when you dont get any money up-front and just place the player with the team and then the team will give some money to the person who placed the player with that team. [The third-party owner] is hoping that the player gets sold on and they benefit from the sell-on clause that they have with the team. Theres a lot of this.

LE: I spoke with MLS Vice President Player Relations Lino DiCuollo about third-party ownership when we discussed FIFAs new online transfer matching system (TMS). Whats your take on that?

Wheeler: I know Lino very well. Lino played at Scotch Plain and I played at Westfield High School in New Jersey, which are rival schools, and Westfield is the better school at soccer.

FIFA prefers the international system and that theres clear accountability and clear disclosure. It doesnt happen in reality. FIFA is an organization thats governed by Swiss law and they cant regulate every federation, in fact its up to the federations to regulate all the agents within their home country and if theres a conflict that cant be resolved within the federation then they can report it FIFA, but thats a long and complicated process.

LE: MLS players give up all transfer rights, correct?

Wheeler: But MLS does give 10% back. LE: Why doesnt MLS allow third party ownership?

Wheeler: I think MLS doesnt allow third party because its extremely complicated and convoluted. Some might walk out if it got out that someone had x percentage of their own transfer rights and they profited from the sale of that.

LE: But if its done everywhere else around the world, why wont they allow it?

Wheeler: They have the bargaining power, the MLS. Everything is centrally owned. If you got into a situation where all these teams were individually owned you might have an owner that really wants the player, but if hes going to sign this player hes going to have to negotiate with his management or a group of businessmen whove bought the players transfer rights or found some agreement with the talent Well get a great professional contract, well make sure that they pay us for your transfer rights. It would be competition, but right now MLS wouldnt do that, theyd be setting themselves up for bad business.

LE: Was the decision to not deal with third-party owners made to maintain a level playing field or is it the economies of scale by cutting out administrative deals?

Wheeler: One, it cuts down the cost yes, administratively they reduce that, its more efficient. Whenever you have a third-party involved it just makes it more complicated.

But, third-party is not essentially a bad concept. Take the example of someone who takes a player and buys his rights and puts him in a better market - thats something where its actually for the good of the player. Third-party ownership is not necessarily evil. There can be conflicts between the players best interests and the best interests of someone who bought the players transfer rights thats when it could be a negative for the player.

There have been third-party contracts with MLS players from outside of the US.

LE: Who are those players?

Wheeler: I dont want to say, but MLS wouldnt be able to get those players if they werent able to negotiate. What it is, is some of these players already have third-party ownership at their home club and what they do is they negotiate with MLS to take the player on as a loan. And then when they buy the rights of the player - where's that money is going? It might be going to x, but its definitely going to y and z.

It depends on how it works and how the situation arrives with the MLS. Basically, a good player, his rights are owned by his home team but cant come to an agreement for buying him out on loan with option to buy. When they exercise the option to buy, that money will go to that home club that hes registered with and that home club has an agreement with the third party and thats how the money goes. There are two or three players I know in the League that had that type of situation.

LE: MLS Vice-President Player Personnel Lino DiCuollo said that third-parties ... can actually decide when, where, and how *the player is+ playing. What does that mean?

Wheeler: How hes playing is whether or not he wants to change his play at certain clubs. Whether to force the club either to let him go and go back to his home country, and that way maybe someone can help the player. But certainly third-party conflicts arise with the classic example [Carlos] Tevez and Kia Joorabchian where Tevez certainly has rights held by Joorabchian. There are other offers and he can tell Tevez theres something he cares about at Man City, Well get you out of here, just dont try to force their hand. Either the player can walk free at the end of the season or he has to sell him now and get something for him, at least in the winter transfer window.

LE: So do the players just play poorly or not get off the bench, or how does that work?

Wheeler: They can offer a written request to the president Im unhappy here at the club for family reasons or just homesick, etc. I want a transfer. And they put in a transfer request. Youre dealing with

talent and if talent is unhappy then theyre not going to be producing and its probably in your best interest to discontinue them when the contract is going to expire and run its natural course. You want to get some value for the player if only six months is remaining on the players contract and the player wants to get sold. The time to sell him? Sell him now or he can just walk away free at the end of his contract.

Maybe theres an outside party interested, theres another team interested in buying the player. It would be in the best interest of the team if they could afford to replace the player for six months and sell that player. The team gets money for the player, the third-party who has ownership in the player he gets paid and then hell probably pay the player as well, so everyone gets paid. If the contract expires after six months, now the team - they dont get anything, now the player is free, that third party now who owns 100% his rights arguably brings him up to another team and they can negotiate Ive got a talented player on a free transfer, for his transfer rights we want money up front. The team can say, All right, well give you x amount of money, well keep 50% and youll keep the other 50%. LE: How does FIFAs transfer matching system (TMS) account for development clubs?

Wheeler: The purpose of TMS was to ensure that teams that are well-funded like Manchester United cant go down to Nigeria and raid some little teams players. Because once they put in the pass at the FA, the Federation will put it on the system that will immediately notify that Nigeria federation that x player has been signed in England and hes only 17-18 years old, is this okay with the Nigerian federation? The Nigerian federation will then contact the club where the player was playing and find out from solidarity mechanisms, has that been accounted for? Has training compensation been provided for? Its basically clear disclosure.

LE: Is there a scheduled fee for training compensation?

Wheeler: Its a complicated system in the FIFA rules in the Status and Transfer of Players. It all depends what training level the team is. They break it down into four different levels and its also broken down into the different regions. A team that trained in the U.S. or the CONCACAF region, the training that goes into producing a professional player is less than the training cost that goes into a professional player in Europe.

LE: Is there a rate for North America yet?

Wheeler: Yeah. In CONCACAF region, for a team thats in its lowest tier, its $2,000 per year. So every time that kid trained at a club as an amateur and another club wants to sign him to a pro contract, for every year that kid was an amateur training at that pro club in Category 4 - thats here in the U.S. it would be $2,000. And it goes up to $10,000, then it goes up to $30,000 and then up to $60,000.

LE: What age groups does this pertain to?

Wheeler: When Im speaking about training compensation it begins when a player is 12. It has to be done with a professional team that has an academy and the professional team is registered with FIFA, accredited within the federation and theyll have a youth team theyre affiliated with. Now with players who play here on the youth teams, if the Orlando team had a kid who they moved over to Stoke City and they trained that kid since he was 15 and they gave him his first pro contract at 18. Well, for that training period between 15-18 they should be compensated with training compensation.

LE: I havent heard of training compensation being applied yet. However, Bob Lenarduzzi, president of Vancouver Whitecaps, told me he would advocate training compensation if a club was turning out players regularly.

It comes down to the quality of the program that youre running, said Lenarduzzi of transfer fees. If youre running a program and you happen to have a good kid there that gets signed by a pro club, should you really benefit from that? Probably not. But if youre a club thats invested in player development and youre turning out player after player, then I have no problem working out an arrangement with a club like that.

Then again, Greg Vanney, the director of the Real Salt residential academy, told me RSL is considering the prospect of being a selling club and that would indicate theyll expect compensation.

"Were looking into that, what that process is," said Vanney, "and what that means from an American soccer standpoint because of child labor laws and a number of issues in the U.S. FIFA has a limited governing role over MLS. We do things in MLS that arent necessarily under FIFA guidelines. So were continuing to size that up. We will be when we can."

Wheeler: I was at the USL conference and there were some guys in from England giving a lecture to all these USL franchise owners explaining this training compensation, how they could profit from training players that become pros. Every time theres a transfer of a player under 23 or 24 theres a solidarity mechanism that gets split up for all the teams that went into developing that young player up to that time. They all take a profit of that as well and theres a formula for the solidarity mechanism.

LE: That would encourage small clubs to develop younger players, but I understand U.S. laws may conflict with those fees.

Wheeler: Well, you have the NCAA and the MLS have always been careful in terms of their stance on amateur and professional. We do have this 800-pound gorilla in the room, which is the NCAA. It a part of our culture and encourages kids to take college scholarships and makes sure these kids dont jeopardize their college amateur eligibility.

All this is in the Transfer and Status of Players, the rules and regulations on the status and transfer of players and thats FIFA. Thats where training compensation solidarity mechanism are all broken down in the annexes. When you take the FIFA exam thats what you study and master those rules. It doesnt happen often. These clubs arent getting training compensation for their players because one, theres just not a lot of youth players making the jump to the pros.

LE: Boston College coach Ed Kelly witnessed the club compensation conflict emerge around Charlie Davies when he was transferred to Hammarby and it may have set a precedent in the United States.

Charlie Davis left Boston College to go to Hammarby, and Hammarby sent to papers to me and to *the club] to sign releases," said Kelly, "but the Bolts would not sign the release and they demanded that they get compensation, and Charlie had to give them $10,000 of his [own] money so he would sign the release. Tri-Valley and Delco signed off, but the Bolts did not sign off . . . their view on it was that he was a scholarship player, that they funded him when he was playing for them for a year or two.

Wheeler: On his transfer certificate it says [a player] played club ball for this team, club ball for that team, club ball for another team. Then probably when the ITC was requested from Sweden over to the US Soccer Federation they had to approve it. He shouldnt have had to pay that out of his own money, the club in Sweden should have paid that, which they might have done later on.

LE: What other US laws might have affected that?

Wheeler: The NCAA, youve got the Uniform Sports Agent Act as well, which over 40 states have passed. Its all about making sure that no benefits whatsoever are given to the player, family, or anyone who can influence the player. But the purpose of the training compensation is to ensure that a club thats producing professional players is not going to be raided by some other team that comes in and takes a player. It happens all the time in Europe. Here, its not the same. Maybe if you had more Mexican teams coming over and signing our kids from our youth club teams, maybe start stealing them Real Salt or FC Dallas, maybe thatll happen and theyll demand training compensation.

But training compensation really prevents a team from raiding the youth ranks of another team. Thats a lot of money for them - the buying team has to pay the selling team at the rate of the player in the buying teams home country. So thats why if you have a Euro club that comes down and raids CONCACAF or AFC they have to pay that team thats in the CONCACAF of AFC as if they had trained that player up in Manchester United. It can be costly. LE: Traffic Sports owns NASL Miami FC, recently bought into the Atlanta Silverbacks and may factor in the Carolina Railhawks and Minnesota Stars. Traffic is involved in player development and third-party player ownership in NASL, true?

Wheeler: Yes.

LE: How does that work in NASL and USL considering that MLS doesnt allow third-party ownership?

Wheeler: Each entity in USL, they can each negotiate their own contracts and thats a benefit, the advantage they have over MLS. MLS owns all contracts, all the players rights are owned by the MLS. They dont really negotiate in the U.S. with a third-party owner, they actually give up all those rights if theres any sell-on, but 10% of that sell-on goes back to the player. But with USL, the owners control the money and sign up new contracts how they please, they can negotiate with a third party. They can get a player in Brazil off the radar, they sign him up to their affiliate over in the USL and negotiate with whoever brought that player there. Theyre paying the person that draws the player there money upfront and sell-on, a percentage of the kids selling rights.

LE: Was third-party ownership a factor in the rift between USL and NASL?

Wheeler: Yeah, that was one of the divisions, but I dont know if third-party was the overall issue. There were a lot of control issues. I believe the NASL guys wanted more autonomy to market their own individual teams, and what goes along with that is also the rights and economics that they put in to generate revenue.

LE: When I caught up with you for this interview, you had just returned from South America.

Wheeler: I was doing business in Columbia and Ecuador with people in the Federation at Ecuador and friends who are coaches in Colombia. The challenge is trying to match up timeframes as to when talented players are free down in South America and trying to get them a secure offer over in Europe. The market over there is just heating up, the transfer market doesnt officially start till January 1. You try to match up the players availability when theyre a free agent and try to get them an offer in full so they can have a little bit of security, so they dont pass over a good offer in their home country waiting for something to come through the door in Europe. A lot of phone calls back and forth.

LE: You tweeted an interesting comment about your work when you were down there. "Love it when you have a deal and of course a third party jumps out of the woodwork bc player is not upfront from beginning...always happens!"

Wheeler: A lot of these players are attached to agents or runners to get them a deal in a geographical location where that runner or agent is from. So Id been working with a player and had offers for him in Europe and contacts for him in Mexico. My contact in Mexico was looking for a second team in Mexico and wanted to know if I had someone. I mentioned this player I was working with and we got to the point where we negotiated the deal with the club in Mexico and the contract was approved, the salary, and then the player tells me at the last minute that hed given the mandate to someone else in October and the mandate ran through January. So thats when the conflict popped up.

LE: What is this mandate?

Wheeler: A lot of these players in South America dont want to be signed to one agent. Theyre at a point in their career where they want freedom and mobility and the ability to negotiate for themselves

because theyve have been pretty much lied to by everyone under the sun. So what they do is sign mandates for geographic regions. That means they sign mandates or authorizations for x person to represent them in North America for one month, depending on the transfer period, or three months, June through September.

I had a mandate for the player over in Europe and I should have run it by if there was any conflict if I got them a deal in Mexico. But also, the player wasnt forthcoming because when I told him that the team in Mexico wanted to sign him he should have right then and there told me he gave a mandate to someone else. But he didnt, and I trusted this player because he was recommended to me by his former coach in Colombia. So then we went through the whole rigamarole to where the president of the team was going to sign the contract and present it to the player. It was a big problem, a big complication and it turned out that the guy who had the mandate then tried to close the deal and at this point the team in Mexico was just, We dont want to deal with you. It had to be done this way, not that way, so no deal for the player. Unfortunate player, he missed out on a great opportunity.

The problem is in Mexico its really tough to get into the door with teams over there. There are only eight FIFA agents in all of Mexico. The reason why is all the presidents of clubs in Mexico, they dont want to work with agents, they just work with their trusted circle of advisors and friends. To get a deal like that, what this kid had, itll be tough for him to ever get that deal again in Mexico.

LE: So what was his incentive not to tell you that he already gave a mandate?

Wheeler: His incentive, I guess, was that he wanted to see what the deal was and what he could get. So when he realized what the actual deal was and coming to fruition, thats when he realized that he had to come clean and give the whole story. The problem is, his guy over there thought he could do the deal himself and he couldnt, he had to go through a second gate-keeper, youve got to do it a certain way, certainly with teams in Mexico. So his deal fell through.

LE: How many languages do you speak?

Wheeler: I speak three - French, Spanish, and can get by with Portuguese. Certainly if youre an agent thats going to go into other markets and youre going to be dealing with third-party contract negotiations and really rolling up your sleeves and getting your elbows dirty you certainly have to speak

the language within that country. Lawyers cant assume the way things are done in Mexico is how things are done in Colombia, Ecuador, Caribbean and you have to be able to speak the language.