Inter Miami gets MLS-record $2M fine, $2.2M cap hit over Designated Player dealings

The Inter Miami franchise was probably the biggest surprise of the MLS offseason, after the club’s 2018 expansion season began with a bang and a two-goal performance from Brazilian superstar David Mateos.

MLS clubs rarely get fined for breaking league rules, and the Inter Miami case is no exception. The MLS Disciplinary Committee handed down a record $2.2 million fine for the club’s dealings with designated player and one-time Colombian national team keeper Juan Pablo Angel. The Disciplinary Panel ruled that Inter had violated league and club rules by accepting an illegal loan from Angel and improperly using player-assistant coach Patricio Riffo as a coach for the team.

The City of Miami is the latest MLS side to be punished by MLS for exceeding the maximum number of Designated Players on their roster. The league announced the latest penalty on Wednesday, after an investigation into Inter Miami’s dealings over the summer.

Major League Soccer has fined Inter Miami CF $2 million – the largest fine in MLS history – for violating league rules regarding team salaries and budgets.

In addition to the $2 million fine, the MLS reduced the club’s allocation by $2,271,250, which will be split between the 2022 and 2023 seasons. With a total available expenditure of $19.155 million over these two campaigns, the allocation penalty represents 11.9% of Inter Miami’s salary budget over that period.

The league also imposed a personal fine of $250,000 on Inter Miami’s manager, owner Jorge Masa.

In March, the MLS announced that it would investigate the hiring of midfielder Blaise Matuidi for compliance with the league’s salary and roster regulations.

The investigation uncovered irregularities related to the classification of players Matuidi and former Miami defender Andres Reyes, as well as underpayment of salaries for players Leandro Gonzalez Pires, Nicolas Figal and Julian Carranza. None of Inter Miami’s players were investigated, committed fouls, or were aware of fouls.

While the penalties are significant, the award penalty is a blow to Inter Miami and should have a significant impact on the team’s ability to build a competitive team.

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The penalties surpass the previous record fine of $150,000 imposed in 2015 on Real Salt Lake owner Dell Loy Hansen for speaking out about ongoing collective bargaining.

In other news, former Miami athletic director/COO Paul McDonough, who held that role in 2020 before joining Atlanta United FC this season, has been suspended by the league through the 2022 season. As a result, he was released by Atlanta.

The integrity of our rules is sacred, and it is a fundamental principle of our league that our clubs are responsible for enforcing all league rules, said MLS commissioner Don Garber. Our rules are not broken. These sanctions reflect the seriousness of Inter Miami’s violations, should encourage all parties to fully cooperate with future investigations, and will serve as a deterrent to clubs that violate membership rules.

Inter Miami received a record $2 million fine, which the MLS reduced by $2.2 million. Photo: Marco Bello/Anadolu Agency via Getty Images

In a statement, Mas said: Inter Miami CF admits the club violated Major League Soccer team rules in its first season.

We have worked closely with the MLS to address these issues and have made significant changes to our governance structure. Following our first season, we undertook a thorough review of our football leadership team and made decisions that not only strengthened our internal team compliance measures, but also better positioned us to build a long-term sustainable competitive strategy with the recruitment of Chris Henderson as Chief Football Officer and Director of Sport in 2021.

Inter Miami is an ambitious club with big ambitions. We believe that our fan base, our market and our ownership group all contribute to us being one of the most popular football teams in North America. We are committed to supporting our team and building a team we are proud of.

A source familiar with the situation said the league is also demanding that Inter Miami come up with a plan to enforce the league’s salary-budget rules. This plan is due to be submitted to the MLS on Monday.

The MLS has long used salary budgets to reduce the cost of paying players. These amounts are subject to a collective agreement with the MLS Players Association. The total amount authorized for 2020 is $9.225 million, increasing to $9.325 million in 2022 and then to $9.83 million in 2023. Most salaries of designated players are not included in the salary budget, but teams are limited to three designated players per season.

The league announced its investigation into Inter Miami in March, saying Matuidis’ total compensation should have classified him as a designated player. The investigation revealed that this was due to Matuidi signing a marketing deal alongside his contract, which increased his total fee. Such deals are not uncommon, but MLS rules require that such deals be reported and approved by the MLS to ensure that the salary budget is respected. This report/approval was not prepared. When the club hired Gonzalo Higuain at the end of the season, it actually gave Miami four free games, one more than is allowed under the rules.

The investigation revealed that this was by no means the only violation. In addition, Reyes, who was on loan from Atletico Nacional de Colombia at the time, was placed in the category of designated players according to total compensation, meaning Miami was effectively playing with five DPs in 2020. Reyes now plays for the New York Red Bulls.

The League investigation also found that the salary write-offs of Gonzalez Pires, Figal and Carranza were understated, giving Miami another advantage over other teams in the League.

When the investigation began, a source familiar with the league’s thinking told ESPN that McDonough was not the target. The source indicated that the situation changed as more information became available. McDonough can start from day one. March 2022 submit an application for reinstatement to the Commissioner’s office.

Masa’s fine was imposed because he had final authority over the players’ contracts. MLS added that minority shareholders Masayoshi Son, Chief Executive Marcelo Claure and current president of soccer David Beckham were not sanctioned because an investigation found that they were not involved in an attempt to hide the true spending on the league’s salary budget.

As the owner of Inter Miami, Mas has approved all player-related deals and transactions, the league said in a statement. He was ultimately responsible for ensuring that Inter Miami had sufficient controls and protocols in place to ensure compliance with MLS rules. Although Mas cooperated with the league’s investigation and, more importantly, alerted league investigators to important information about undisclosed player-related agreements, investigators determined that he failed to disclose his knowledge of Matuidi’s violation in a timely manner, as required by MLS rules.

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