Tackling more than just nap time: US soccer league sanctions women’s club for exceeding salary caps due to additional childcare costs

Angel City Football Club (“ACFC”), a women’s soccer team based in California, was recently hit with sanctions from the US National Women’s Soccer League (“NWSL”) following an investigation into a salary cap violation. The NSWL found that ACFC violated multiple league rules; most notably, exceeding the salary cap by $50,000 for four weeks during the 2024 season due, in part, to additional childcare provisions.

ACFC disputed this aspect of the sanctions based on its understanding that childcare payments do not count towards the salary cap, and so the cap was never exceeded; however, the NWSL confirmed that the sanctions would remain unchanged. The decision has left ACFC to consider how it will support players’ childcare needs to allow them to be both parents and players – helping them win both at home and on the pitch.

The sanction applied by the NWSL

In October 2024, the NWSL found that ACFC violated multiple rules of the league. These violations included failing to disclose certain “side letters” between the team and five players during 2023 which contained additional benefits outside the NWSL’s standard player agreements. As a result of these undisclosed benefits, the NWSL’s salary cap was exceeded. Whilst the exact details of the benefits contained within the side letters have not been disclosed, ACFC has confirmed that some of the discrepancy was due to childcare payments.

Consequently, the NWSL enforced a number of sanctions against ACFC:

• a fine of $200,000;

• a three-point deduction from ACFC’s 2024 standings, which effectively eliminated the Club from playoff contention; and

• immediate suspension of ACFC’s President and CEO and General Manager from all duties relating to any player transactions for the remainder of the 2024 calendar year.

The NWSL also committed to conducting annual investigations and audits of player spending across all League clubs to prevent future violations.

The NWSL salary cap rules

The NWSL’s salary cap rules set out the maximum total salary paid across rosters of between 22 and 26 first-team NWSL club players. The salary cap for 2024 sat at $2.75 million for each team, which is double the 2023 cap of $1.375 million. All players sign a standard contract directly with the NWSL.

ACFC’s dispute of the sanctions

Whilst the Club acknowledged its non-compliance in relation to the undisclosed benefits, it has disputed one aspect of the NWSL’s conclusions in relation to childcare provisions, arguing that these do not count against the salary cap, and expressed its disappointment at the competitive sanctions levied against the Club, specifically the 3-point deduction.

The statement released by ACFC following the sanctions stated that its understanding of the salary cap rules was that childcare payments did not count against the salary cap and that therefore ACFC had not exceeded the cap. According to the salary cap rules, both parental and dependent care expenses up to the US’ Internal Revenue Service (“IRS”) maximum (which is $5,000 for 2024), and parental and dependent care benefits provided by NWSL clubs, do not count against the salary cap but must still be reported to the league for tax purposes. ‘Dependent care benefits’ are tightly categorised as flights for children (and their childcare provider) to attend parents’ away matches, and hotel rooms for the children, parent and childcare provider. Per the salary cap rules, any amount in excess of the IRS annual maximum will count against the salary cap.

In its statement, the Club asked the league to reconsider the 3-point deduction. However, the league confirmed that the sanctions would remain unchanged based on the ‘totality’ of its findings. 

Considerations

The value of the undisclosed benefits wholly devoted to childcare payments (and so free from the salary cap) isn’t clear, however, it brings to light the broader issue of functional inclusivity in women’s sport.

Ensuring adequate policies and practices are in place, such as suitable childcare provisions, means professional players won’t have to choose between being a parent or a player, particularly in women’s sport. Since the introduction of FIFA’s regulations regarding maternity and motherhood in 2021, which among other benefits provided female players the right to 14 weeks of paid maternity leave, there have been promising developments in this space. FIFA incorporated further rules regarding the protection of female players and coaches (with an emphasis on maternity rights) in June this year, and certain leagues around the globe (including the NWSL) have implemented additional support policies that go beyond these regulations.

However, there is still a long way to go. With women’s sport currently experiencing an unprecedented surge in attention, attracting both fans and investors, there has never been a more critical time to make space for women to succeed in being both parent and player.

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