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NASL Lawsuit vs USSF

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NASL and Jeffrey Kessler Take on US Soccer

http://leastthing.blogspot.ca/2017/09/nasl-and-jeffrey-kessler-take-on-us.html

The NASL characterizes US Soccer, Major League Soccer, Soccer United Marketing and (to a lesser extent) the United Soccer League as inter-related parts of a "conspiracy" to protect the monopoly status of the MLS. The lawsuit explains:

"By promulgating a changing portfolio of so-called “Professional League Standards” and regulations to protect MLS, and now USL, from competition, the USSF enriches itself and protects MLS as the only top-tier Division I men’s professional soccer league located in the U.S. and Canada, immune from competition from new entrants and potential rival leagues even though the USSF is a private organization and has no legal authority to confer immunity from competition to anyone."

The basis for the lawsuit is NASL's interest in its survival as a league and ability to compete fairly against the MLS to provide professional soccer in the United States.

But more generally, what the NASL lawsuit describes is a money machine. US Soccer, MLS and SUM have created a highly opaque, financially interdependent set of institutions legitimized by FIFA that would appear to benefit not just the individual team investors in the MLS, but also other (largely unknown) owners of SUM and MLS. Some of these individuals may include USSF officials. As the lawsuit explains:

"Upon information and belief, SUM is controlled by MLS or by the owners of MLS. SUM has entered into commercial relationships with USSF that are designed to align the economic interests of the USSF to favor MLS and protect its monopoly position."
There is more. According to the NY Post, MLS president Garber has a conflict of interest when it comes to SUM:
According to US Soccer, Garber recused himself from voting on its financial arrangement with SUM, standard protocol for someone who has interests with both parties. 

It also appears that USSF president Sunil Gulati is a shareholder in SUM, because he reportedly also recuses himself from USSF discussions of SUM, based on what USSF told me 

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Sports Illustrated:Answers to 5 Key Questions in NASL's Lawsuit vs. U.S. Soccer

NASL’s complaint invokes federal antitrust law to argue that USSF is breaking the law. To that end, NASL contends that USSF and three alleged co-conspirators—Major League Soccer, Soccer United Marketing and United Soccer League—have unlawfully prevented NASL from competing with MLS as a Division I pro soccer league. Further, NASL asserts, USSF has sought to illegally strip NASL of its placement as a Division II league. It has done so, NASL maintains, so that MLS's favored minor league, USL, can become the sole Division II league.

By hiring Kessler, NASL sends a firm message to USSF that NASL intends to play the long game. Kessler certainly doesn’t need the work—he is a lawyer who can pick and choose his cases carefully. Kessler wouldn’t take on the NASL’s cause unless he genuinely believed in that cause and felt that NASL will give him an opportunity to prevail. To the extent USSF hopes to secure an early dismissal of the case, Kessler’s presence complicates that analysis.

https://www.si.com/soccer/2017/09/25/nasl-us-soccer-lawsuit-questions-fifa-kessler

 

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Basically they are saying they get their way or it is over for NASL now. 

And on the good news bad news front:

"Meanwhile,  Edmonton co-owner Tom Fath has confirmed he has been attending meetings of the start-up Canadian Premier League, an all-Canadian “Division 1A” which has an ambitious target start date of late July, 2018. But, CanPL president Paul Beirne has said that if everything isn’t perfect to go in July, the league — which at the moment has only two confirmed teams, in Winnipeg and Hamilton — will wait till 2019 to start."

So Edmonton might be okay with the CPL if the NASL folds but the CPL may not start until 2019. What is unsaid is that 2019 may also come and go with no action etc etc. 

Edited by TRM

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On 9/22/2017 at 10:01 PM, harrycoyster said:

The latest episode of The Inverted Triangle podcast is out and has 90 minutes of three lawyers breaking down the NASL v. USSF case.

Spoilers- It's basically dead on arrival.

Listened to this yesterday - didnt get the same vibe you did as Neil had a few guests on with different points and opinions. Last guest concluding there's a real problem for USSF with "SUM(MLS) tied to them in exclusion of other league's" and "USSF's model has always been under the gun and may be coming to heed now". Great listen though and good points on each sides possible arguments.

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NASL v USSF Lawsuit Gets a Hearing Date

Judge Brodie of the United States District Court for the Eastern District of New York, at 225 Cadman Plaza East, Brooklyn, New York, set the following briefing schedule:

October 16th, 2017:  The USSF shall file its opposition, if any.

October 23rd:  The NASL shall file its reply, if any.

October 31st:  The Court will hold a hearing, if necessary [spoiler; it will], on the NASL’s original motion for a preliminary injunction at 10:00 AM ET at the Theodore Roosevelt Federal Courthouse, in Courtroom 6F North.

http://firstteampod.com/nasl-v-ussf-lawsuit-gets-a-hearing-date/

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16 minutes ago, CDNFootballer said:

Listened to this yesterday - didnt get the same vibe you did as Neil had a few guests on with different points and opinions. Last guest concluding there's a real problem for USSF with "SUM(MLS) tied to them in exclusion of other league's" and "USSF's model has always been under the gun and may be coming to heed now". Great listen though and good points on each sides possible arguments.

The last guy is on for the purpose of finding a legal path to victory for the NASL (I believe he has his own NASL specific podcast) and all of his points are pretty easily dismissed earlier on, he even admitted to some of them. The USSF model under the Stevens Bill has been challenged in both baseball and hockey, both lawsuits went nowhere. The precedent is in favor of the USSF. The USSF, MLS, SUM monetary relationship isn't collusion unless he USSF is declared an illegal monopoly. As long as they are a legal monopoly and the Stevens Bill applies, they have every right to make financial partnerships with outside entities. 

The strongest argument they have is to prove that the USSF set Division 1 standards with the explicit intent to make MLS the only league that could achieve said standards. That's basically true...and we know that MLS had a direct hand in setting those standards. There are two huge issues with this argument, however. 1) The USSF let NASL set D2 standards, which the NASL took advantage of to keep USL from reaching D2 standards for three years. So the USSF helped out MLS and the NASL, but now that NASL can't reach the standards they set, they are crying foul. I bet there are a bunch of judges who would laugh the NASL out of court as soon as the USSF mentions that. 2) The D1 standards have no mention of MLS, MLS resources, or anything that is blatantly unachievable for another soccer league. If the judge makes Rocco point to the part of the D1 standards that proves the USSF conspired with MLS so that it could sit atop the pyramid forever, what does he say?  

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23 hours ago, harrycoyster said:

The strongest argument they have is to prove that the USSF set Division 1 standards with the explicit intent to make MLS the only league that could achieve said standards. That's basically true...and we know that MLS had a direct hand in setting those standards. There are two huge issues with this argument, however. 1) The USSF let NASL set D2 standards, which the NASL took advantage of to keep USL from reaching D2 standards for three years. So the USSF helped out MLS and the NASL, but now that NASL can't reach the standards they set,

USSF sets the standards and set the D2 standards in Aug 2010 not NASL. The federation took input from the league's and NASL had some input but in no way free reign to set these standards. Provide a link if you have official info to the contrary though.

The D2 standards were also revised a few years later by USSF and not in a way that favored the NASL but quite the opposite. 

 

The NASL's best outcome imho and likely the main reason they filed the suit is to retain D2 status for 2018 as the USSF's favoritism to USL seems quite obvious in the recent vote to deny NASL and give USL more time to meet standards.

Edited by CDNFootballer

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ESPN:What are the implications of NASL's antitrust lawsuit against the USSF?

But the NASL's attorney, Jeffrey Kessler, contends that longevity has nothing to do with standards and that there are no pro-competitive benefits to the standards. In particular, the requirement that a Division 1 league have teams operating in three different time zones in the continental U.S. rankles, since the NASL had teams in Edmonton and Puerto Rico which didn't apply to the standard. The USSF's Pro Council -- in which 57.1 percent of the votes are controlled by MLS -- has increased the thresholds over time, which the NASL contends has kept Division 1 status just beyond its reach.

Kessler will argue that the business relationship between MLS, SUM, and the USSF has given the league a protected status with the standards providing cover, a dynamic that the NASL can't equal.

"[The standards] are irrational, anticompetitive, and the reason they're applied this way is because the USSF has basically joined itself with MLS through SUM," said Kessler, in an exclusive interview with ESPN FC. "They all share in their joint revenues. Therefore, the whole interest of the USSF economically is to favor MLS, which has been the story of these rules which is why we don't think they can stand."

What are the NASL's goals here?

Short term, the NASL seeks an injunction to allow it to continue operating with the Division 2 designation as the case goes to trial. That will allow the league to make plans with sponsors, players, and coaches for 2018.

Long term, the goal is much more ambitious. The suit wants the current set of standards to be thrown out and allow leagues to compete directly against one another.

http://www.espnfc.com/major-league-soccer/19/blog/post/3215943/what-are-the-implications-of-the-north-american-soccer-leagues-antitrust-lawsuit-against-the-united-states-soccer-federation

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54 minutes ago, CDNFootballer said:

USSF sets the standards and set the D2 standards in Aug 2010 not NASL.

I didn't mean that NASL literally set the D2 standards, just that they had the same amount of involvement in setting the D2 standards as MLS had in setting the D1 standards. Which is a major aspect of the "conspiracy" case they are trying to build.

"The USSF let MLS do this thing and it worked for them, but when the USSF let us do it we still failed because we've made bad decision after bad decision. So yeah, USSF allowing division holder help set standards is wrong" is a pretty weak argument.

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NASL Discusses Lawsuit in Media Conference Call

The conference call outlined major points:

  • Statements as they pertain to the future plans of specific clubs for 2018 will not be discussed until after the preliminary injunction hearing
  • Without the benefit of a favorable preliminary injunction enjoining the USSF’s decision to de-sanction the league’s provisional Division Two sanctioning, the NASL in its current form is unlikely to continue
  • A favorable ruling on the preliminary injunction is necessary to start planning for the 2018 season
  • The purpose of the lawsuit is not to bring about promotion and relegation
  • The greater lawsuit, addressing the USSF’s antitrust exemption in setting divisional standards, would continue regardless of the outcome of the preliminary injunction
  • The financial and governance interrelationships between USSF and MLS are the driver for the USSF’s failure to fulfill its role of fostering all of American soccer, and for its motivation to shield the MLS from risk of competition

Rocco B Commisso:

“With the belief that the provisional D2 designation was going to be extended as needed the NASL went about recruiting new team owners. Although we received absolutely no support, financial or other ways or even encouragement from Mr. Sunil and the USSF, we kept working to stablize our league despite obstacles that arose because of circumstances within the federations control rather than the NASL. Imagine our surprise when the NASL was summoned on short notice to a September 1st meeting at the federations Board and commanded us to justify our continued existence as a d2 league. We showed up at the federations offices at the appointed time but we were kept waiting for 6 hours without being given an explanation as to the delay or frankly extending to us simple curiosity feeding the people that came. When we were finally admitted to the room it quickly became clear to me and everyone from our side that the board was just going through the motions and had no real interest in what we had to say. One of the independent directors on the board fell asleep while I was talking.”

“The next time we heard from the federation was later that evening when we were told that the federation was denying D2 status beyond the end of the 2017 season. The board gave the USL until October 3rd to come up with a plan to eventually achieve compliance with the d2 requirements.”

Jeffrey Kessler:
“The basic claim of the lawsuit is that the United States Soccer Federation as a private organization without any government authority to regulate professional soccer is fully subject to the anti trust laws of the U.S. The professional league standards of the United States Soccer Federation not only restrict competition but they have successfully shielded MLS of any competition at the division at all conferring a monopoly upon it.”

http://firstteampod.com/nasl-discusses-lawsuit-on-call-p1a/

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NASL Discusses Lawsuit in Media Conference Call - Part Two

When asked why the NASL, aware of the USSF’s anticompetitive requirements, was unable to meet them, Commisso answered with a rhetorical analogy using an example of a patently impossible requirement; expressed that no professional league could meet USSF Division One requirements. He then points out that Major League Soccer (MLS) could not meet them either, and has required waivers for most of its time in existence. Commisso then questioned how the MLS can meet Division One requirements relating to ownership seeing as MLS is a single-entity franchise and has historically had periods of time where “three or four owners” ran all the teams in the league. Rocco Commisso then outlined his understanding of the financial dependencies and conflicts of interest between USSF and MLS as a means of explaining the USSF’s motivation in shielding the MLS from risk of competition. He then, at turns, entreated and cajoled the soccer media community to ‘do their jobs’ and shine more light onto this relationship in US soccer, and how the USSF promised to cooperate with the NASL to improve their role in US soccer but failed to do so.

http://firstteampod.com/nasl-discusses-lawsuit-on-call-p1b/

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NASL chairman - who is suing U.S. Soccer - calls for Gulati's resignation after World Cup failure

"The real causes of last night’s debacle, however, weren’t actually present on the field or on the sidelines in Trinidad," Commisso said as part of a sweeping statement issued by the Cosmos. "Instead, the result was a byproduct of larger, systemic problems within the sport in our country.

 

"The blame must be placed squarely at the feet of U.S. Soccer’s management, led by Sunil Gulati. The first step in ensuring that American soccer consistently performs at a level that spares all of us the kind of negative emotions generated by our National Team’s failure to qualify for the World Cup is for Mr. Gulati to resign. It is his only honorable path forward. The USSF Board members and senior management personnel appointed or nominated by Mr. Gulati should follow him out the door.

http://www.sportingnews.com/ca/soccer/news/new-york-cosmos-chairman-calls-for-gulatis-resignation/1km1qdnygkoc41gsnhtlfmfxhv

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The mistake MLS made was not purchasing the Cosmos rights from Pepe Pinton (worth checking out Once in a Lifetime if you have no idea of who he is and how he got the rights) before anybody attempted to use that branding to start up a rival would be D1 operation. Don't claim to be an expert on the US legal system but the SUM-MLS-USSF axis always looks a bit dubious to me in terms of collusion to create a monopoly, so I'll be very surprised if the NASL don't get their injunction and continue on their merry way next summer.

 

Edited by BringBackTheBlizzard

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"Wrong", "dirty"?  That's not how those words work. An upfront, honest offer to buy out a business competitor is neither of those things.

It is an admission they should have bought the rights to the, "brand" when they had a chance.

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11 minutes ago, ted said:

"Wrong", "dirty"?  That's not how those words work. An upfront, honest offer to buy out a business competitor is neither of those things.

It is an admission they should have bought the rights to the, "brand" when they had a chance.

From a purely business stand point, I agree with you. Standard business practice.

From a soccer perspective, I feel it is wrong and dirty. MLS pretends to be a flag bearer for US Soccer. How is trying to kill off another professional club, and in turn another league, beneficial for soccer in the country. It isn't. It was for their self interest, not for the good of the game. This is where any self respecting national governing body would step in. But given the ties between the USSF and MLS, it doesn't look like they do.

Not only is this business, its politics too, and its dirty.

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1 hour ago, ted said:

"Wrong", "dirty"?  That's not how those words work. An upfront, honest offer to buy out a business competitor is neither of those things.

It is an admission they should have bought the rights to the, "brand" when they had a chance.

It depends if you see football as s business or more than that. 

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From my understanding (and correct me if I'm wrong), but that offer from NYCFC (supposedly on behalf of SUM or SUM in the know) came after NY Cosmos suspended operation and before Rocco Commiso bought the Cosmos.

A 'rival' club went into liquidation sale, and you made an offer to buy. Perhaps against the 'spirit' of things, but NY Cosmos was for sale.

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2 hours ago, Yohan said:

From my understanding (and correct me if I'm wrong), but that offer from NYCFC (supposedly on behalf of SUM or SUM in the know) came after NY Cosmos suspended operation and before Rocco Commiso bought the Cosmos.

A 'rival' club went into liquidation sale, and you made an offer to buy. Perhaps against the 'spirit' of things, but NY Cosmos was for sale.

http://www.frontrowsoccer.com/2017/10/24/sum-makes-case-suggestion-mr-commisso-sums-conduct-way-improper-without-merit/

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