On Tuesday, The Athletic published a write-up of a brief interview with NWSL Commissioner Jessica Berman where she disclosed how the existence of Angel City’s “side letters” were initially discovered. According to the article, “one of [ACFC’s] former players signed with another team and brought up the existence of a supplementary agreement”, presumably with the new team. While The Athletic article does not have much in the way of new details, it does have some illuminating quotes from Berman.
Previously: Angel City FC fined $200,000 and docked 3 points for violating salary cap and other league rules
Regarding the “annual investigations and audits of player spending across clubs” mentioned in last week’s press release, Berman added that the league is “now going to proactively investigate and audit clubs on a random basis”. According to the article, in the past “the league routinely ask[ed] teams about their salary-cap compliance”, which, although not specified in the article, appears to be a reference to a requirement that multiple representatives from each team, including the “President”, “General Manager”, and “Head Coach” complete an annual “NWSL Team Player Compensation Compliance Affidavit”.*
In the interview, Berman reiterated that all player agreements must be disclosed to the league: “We have very clear rules… Any agreements that are not disclosed are by definition a violation of our rules.”*
Berman did not reveal any details about the types of benefits or other forms of compensation that may have been specified in the side letters.
The article does discuss something I forgot to mention in the previous post: Under the NWSL’s single-entity structure, players are employees of the league and are paid by the league. The following is a direct quote from Commissioner Berman:
“The league pays the player. We have a system for submitting payments or requests to be paid and then the league processes it through our payroll. We then do a netting of all of that with the clubs to reimburse the league, but ultimately, as it relates to the players, the league is the party that pays the players. Clubs are not to be paying players directly. There should not be circumstances where players are under an agreement with a club without the league, not only just knowing about it, but being a party to it.”
*The 2023 NWSL Competition Manual (which is the most recent version available on the NWSL website) has the following section on disclosure of player compensation:
3.1.7. DISCLOSURE (Updated Feb 2023)
Teams may not provide any compensation to Players outside of their Standard Player Agreement other than payment for Additional Work as set forth in these NWSL Competition Guidelines. Any payment made to a Player must be reported to the League and may not be made without the prior written approval by the League. All compensation (salary, bonuses and Additional Work) paid by the Team must be paid to a Player through the League payroll process. As it relates to Additional Work, no Player may receive total gross payment(s) from a Team of more than Fifteen Thousand Dollars ($15,000.00) per calendar year.The NWSL Team Player Compensation Compliance Affidavit certifies Team owners and employees are not aware of any Team violations regarding NWSL Player compensation rules.
The NWSL Team Player Compensation Compliance Affidavit is to be completed each season by the following Team representatives, due to the League by the Roster Compliance Date: Controlling Owner, Team Governor and Alternate Governor, Team President / Chief Business Officer, CFO / Finance Manager, Chief Soccer Officer / General Manager, Assistant General manager, Head Coach. Additional employees may be added in League’s discretion.
Additionally, the disclosure rules are reflected in the language of the Standard Player Agreement, specifically paragraphs (c) and (d) of Section 3, which is titled “Compensation, Expenses and Other Benefits”:
(c) The Player shall not be entitled to receive any payments or other benefits from NWSL or the Team Operator, or a Related Entity of either of them, whether directly or indirectly, except those provided in this Agreement or in the CBA or as otherwise expressly approved in writing by NWSL.
(d) The Commissioner may suspend and/or fine the Player or terminate this Agreement if the Commissioner determines that the Player’s total compensation is not completely and accurately set forth in this Agreement and/or the Player accepts any compensation from NWSL or the Team Operator, or a Related Entity of either of them, other than as set forth in this Agreement or in accordance with the CBA.
The Standard Player Agreement that was in existence when the side letters were drawn up, the text of which, along with the text of the original collective bargaining agreement (approved in January 2022) can be downloaded from from the NWSLPA website as a combined PDF. The new CBA has not yet been publicly shared by the NWSLPA yet.
Miscellaneous Thoughts
Given that the Standard Player Agreement includes a specific clause that allows the NWSL Commissioner to terminate a player’s contract if that player accepts improper compensation, one has to question the actions of each player’s agent and attorney (if any) concerning the side letters.
Had the player in question either stayed at Angel City through the original term of their contract or the ACFC front office settled with the player before their departure (in other words, compensated the player for their silence), the existence of the side letters may have never come to light.
Regarding (creative) compensation methods, from a cursory (non-expert) reading through the Competition Manual and Standard Player Agreement, it seems that any player sponsorship facilitated by a team could fall under “indirect” compensation, based on the requirement to report such deals to the league. However, helping to arrange legitimate outside work, as long as the employer is not connected to the team (e.g. does not fall under the definition of a “Related Entity”) would not need to be reported. In these circumstances, “legitimate outside work” would be something such as house-sitting for high-income individuals or tutoring their children in soccer.
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