Antitrust lawsuit: NASL dug its own grave despite USSF-MLS collusion

(by Kartik Krishnaiyer worldsoccertalk.com 9-19-17)

What do investors in soccer do when they’ve made one bad business decision after another? And to make matters worse, when they’ve shifted from one rhetorical strategy to another? Sue their governing body, of course!

This is the path the North American Soccer League (NASL) has chosen to justify the league’s complete failure to create a stable and successful second division that works within the confines of US Soccer. After seven seasons as a sanctioned Division II league, NASL was informed on September 1, 2017 that they would not be approved as a D II league by the United States Soccer Federation (USSF) for 2018.

While the peculiar structure of soccer in the United States is something that should be reformed, NASL has fallen badly within a current system that they have willingly participated in and within which they have sought and received investment and protections in the marketplace. NASL’s goal to challenge first division MLS while perhaps noble was always doomed to failure whether or not the USSF put its thumbs on the scale or not. But it was perhaps unwise of the USSF to continue to overtly do business with MLS and its marketing arm, Soccer United Marketing (SUM), and allow SUM to negotiate TV and marketing deals on the USSF’s behalf that favor MLS. Regardless, NASL has dug its own grave and while an antitrust lawsuit against the USSF from another entity might have more standing, NASL is the wrong party to file such a suit as they have for seven years benefitted in one way or another from the USSF’s governance of the sport in this country.

The lawsuit filed on Tuesday alleges “that the USSF has selectively applied and waived its divisional criteria to suppress competition from the NASL, both against MLS and against United Soccer League (USL). For example, under the USSF’s divisional criteria, there are European clubs that have successfully operated for decades that would be considered ineligible for “Division I” or even “Division II” status due to arbitrary requirements like stadium capacity and market size.”

This is completely disingenuous. First, NASL has been granted Division II status for the last seven seasons and has required waivers in each of those seven years. These waivers have been granted by the USSF time and again and have included at various times, NASL not having the correct number of teams to be a sanctioned Division II league or enough US-based teams or being in the required three time zones with its US based teams. Second, European clubs are subjected to standards similar to the USSF’s divisional standards but ones that apply to those nations. For example, clubs in the English Championship and Premier League are required to have certain sized stadiums, and coaches are required to have UEFA Pro licenses.

The irony of all of this is that NASL had a strong hand in the crafting of the very D2 guidelines the league now falls short of meeting. USL could have filed a similar claim in 2010.

NASL’s leadership at the time worked closely with the USSF to craft D2 guidelines in 2010 that worked to displace USL who had been previously sanctioned as a Division 2 league from the early 2000’s until 2009. USL’s move was to consolidate its remaining clubs into a Division 3 league, working with new investors in previously underserved markets to recover its footing. In 2017, USL regained Division 2 status, albeit provisionally. As of this writing, USL per my sources remains under review from the USSF as to whether they will be granted Division 2 status for 2018.

The lawsuit filed by NASL claims that because USL has a business relationship with MLS and has accepted “minor league status” that the USSF is demonstrating favoritism toward USL. I wholeheartedly agree that MLS has been given favorable treatment by the USSF but would strongly argue USL has not and thus at least part of the NASL’s complaint is misguided. In fact, in January the USSF removed USL owner Alec Papadakis from its Board of Governors and replaced him with NASL owner Steve Malik of North Carolina FC.

A logical move for NASL would have been to do something similar to what USL did in 2010. Drop down to third division and patiently work to rebuild the league and eventually return to Division 2 status. But NASL’s current group of owners lack patience and perspective. Every NASL owner save one did not own a team in US professional ranks prior to 2014 and the league has often appeared to be in a race to get to Division 1 so they could retain the interest of the owners they have on board.
NASL dug its own grave by failing to properly vet new ownership and to aggressively move into markets like Cincinnati, Sacramento and others that lack an MLS team and were open for high-level professional soccer. NASL rhetorically at the time threw barbs at MLS when a far better strategy would have been to expand to markets that MLS would eventually want to grab and create a strong enough league framework to keep those markets in its league. But NASL lacked the patience and the discipline to carry this out and allowed USL to almost completely run the table of prospective strong markets without an MLS club.

Following those failures, the league began to get desperate and made several expansion errors. Out of NASL’s last five expansion teams, four have struggled mightily, changed owners or gone out of business entirely with Miami FC the only one that appears stable. The most recent expansion team, the San Francisco Deltas, has become somewhat of a running joke with the owner pleading for fans to bring friends to the matches among other things.

The San Francisco situation was, according to my sources, the final straw for many in the federation when it came to giving NASL chances. Last year at this time as NASL was battling to stay alive after the defection of the Tampa Bay Rowdies and Ottawa Fury FC to USL, NASL touted the new club in San Francisco as a star, a startup that would help redefine its league. Instead, the Deltas have become a noose around NASL’s neck.

The USSF and MLS should be held to account for its incestuous relationship and the continued favoritism with which this nation’s governing body provides MLS. But NASL is absolutely the wrong messenger in this fight and I personally believe US Soccer has to this point shown USL, the actual current rival of NASL, no favorable treatment. This having been stated, the USSF’s relationship with MLS creates a real problem from the standpoint of antitrust laws but the federation can easily argue, as I have above, that NASL has if anything been complicit in this peculiar and potentially illegal structure for the sport in this country.

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http://worldsoccertalk.com/2017/09/19/antitrust-lawsuit-nasl-dug-grave-despite-ussf-mls-collusion/