MLS slaps Inter Miami with record $2 million fine for violating roster rules in 2020
On the eve of Inter Miami’s first game in a full home stadium, Major League Soccer slapped the club with a league-record $2 million fine and other costly sanctions for breaking salary and roster rules on five player contracts during the 2020 season.
The violations included under-reporting compensation and the incorrect roster categorization for Blaise Matuidi and Andrés Reyes, who should have occupied Designated Player slots. Reyes is no longer with the team.
The club also failed to disclose compensation agreements that resulted in the underreporting of salary amounts for Leandro González Pirez, Nicolás Figal and Julián Carranza.
Paul McDonough, Inter Miami’s COO and Sporting Director at the time of the infractions, has been suspended from any MLS-related activity through the end of the 2022 season. Inter Miami owners had put him in charge of handling contract negotiations because of his reputation as an expert in the league’s complex salary structure.
McDonough returned to Atlanta United after leaving Inter Miami last November. Atlanta announced Friday night that the club and McDonough had mutually agreed to part ways.
In addition to the $2 million fine to the club, managing owner Jorge Mas was fined $250,000 because he approved all player-related transactions.
Mas was ultimately responsible for making sure Inter Miami had sufficient controls and protocols in place to ensure compliance with MLS rules. While Mas was cooperative with the league’s investigation and alerted league investigators to critical information regarding undisclosed player-related agreements after a self-audit of the roster, investigators found that he failed to disclose his knowledge of the Matuidi violation at the appropriate time required under MLS rules.
MLS also imposed a reduction of $2,271,250 in roster allocation dollars for the 2022 and 2023 seasons, which will restrict their salary budget.
None of Inter Miami’s players were the subject of the investigation, committed any violation, nor were aware of the violations, according to the league. Their current contracts with MLS remain in effect.
The investigation found no wrongdoing on the part of Inter Miami co-owners Marcelo Claure, Masayoshi Son, Jose Mas and David Beckham.
Claure, once an avid public supporter of the team, has distanced himself from the club and refrained from any social media posts about the team over the past several months. Claure did not attend the season-opening game and a league source said he may be looking to leave the ownership group.
“The integrity of our rules is sacrosanct, and it is a fundamental principle of our league that our clubs are responsible for adhering to all league regulations,” MLS commissioner Don Garber said. “Our rules will not be compromised. These sanctions reflect the severity of Inter Miami’s violations, should encourage complete cooperation by all parties in future investigations, and will serve as a deterrent for clubs from violating roster rules.”
Jorge Mas responded to the sanctions with a statement:
“Inter Miami CF acknowledges that the Club violated Major League Soccer’s roster rules in our first season.
“We have worked closely with MLS to address these issues and have made significant changes in our management structure. Following our inaugural season, we took a deep look at our soccer operations leadership group and made decisions that not only strengthened our internal roster compliance measures, but also better positioned us to build a sustainable, long-term competition strategy with the hiring of Chris Henderson as Chief Soccer Officer and Sporting Director in 2021.
“Inter Miami is an ambitious Club with big aspirations. We believe our fan base, market and ownership group propel us to be one of North America’s most-followed fútbol teams in the world. We are committed to supporting our team and building a roster we are proud of.”
The investigation began with the contract of French midfielder Matuidi. After interviews and the review of over 1,400 pages of documents, the league discovered violations with the other player contracts.
Each club is allowed three DP slots, reserved for elite players whose salaries and acquisition costs exceed the league maximum, which this year is $612,500. A player of Matuidi’s stature — World Cup champion, four French Ligue 1 titles with Paris Saint Germain and three Serie A titles with Juventus — fits the profile of a DP.
Instead, Matuidi, who joined the club last August from Italian power Juventus, was signed on a free transfer and was paid using discretionary Targeted Allocation Money (TAM), a mechanism used to reduce the budget charge of players who are in a high salary range but not DPs. Each club can use up to $2.8 million in TAM to fund high-priced players without exceeding the team salary cap, which in 2021 is $4.9 million.
The maximum allowable salary for a TAM player was $1.61 million in 2020. By classifying Matuidi as a TAM player, it left open the third DP slot for his Juventus teammate Gonzalo Higuain, who was signed in September.
MLS investigators found that Matuidi and Reyes had compensation packages higher than the TAM limit, which means the club carried five players at the DP salary level, two more than MLS rules allow.
Reyes now plays for the New York Red Bulls. Despite having the league’s most expensive roster, Inter Miami lost in the opening round of the playoffs to fellow expansion team Nashville SC.
McDonough was replaced by Henderson, who came from the Seattle Sounders and has been tasked with cleaning up the situation.
Prior to the issuance of sanctions, under the direction of Mas, the team took significant, proactive reform efforts to ensure the club is fully compliant with MLS rules going forward, according to the league. Inter Miami is required to present its full compliance protocol to the league office on or before May 31, 2021.
Matuidi was redesignated as a DP for this season and according to the MLS Players Association, his guaranteed compensation this year is $1.5 million, which ranks third on the team behind Gonzalo Higuain ($5.793 million) and Rodolfo Pizarro ($3.35 million). Gonzalez Pirez is set to make $1.01 million, Carranza $750,000 and Figal $630,000.
To make room for Matuidi’s DP slot, the club bought out the contract of Matias Pellegrini, who was a DP last season with a guaranteed salary of $920,833. The young Argentine stayed with the organization and joined USL team Fort Lauderdale CF on loan but has not played any matches. He is expected to leave for a European or South American club during the summer transfer window.
This story was originally published May 28, 2021 at 6:29 PM.