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No more Cosmos? NASL under threat after losing case against USSF to keep D2 status

By Paul Nicholson

November 6 – The North American Soccer League (NASL) has lost its court bid to retain its Division II status, putting the future of the league in doubt. The NASL has said it will appeal the decision.

Federal judge Margo K. Brodie ruled against the league’s request for a mandatory injunction against the U.S. Soccer Federation (USSF) to remain as a Division II league alongside the USL.

In September the USSF had ruled that the NASL would not be granted Division II status as it said that it failed to meet the Professional League Standards (PLS) criteria set out by the national governing body.

The NASL argued that this decision was made as a result of a conspiracy between the MLS, the USSF and the marketing agency that serves both bodies, Soccer United Marketing (SUM), with the aim of closing down their operations. The league argued that being denied D2 status caused it “irreparable harm” and that it would effectively be put out of business, and hence brought an antitrust case against the USSF.

At the centre of the case is the NASL argument that the USSF financial interest in SUM are a major conflict of interest, and that USSF is so reliant on that agreement that they will only ever favour the MLS (SUM’s major client) over other parties – a powerful argument on the face of it and one that has lurked in the shadows of USSF president Sunil Gulati’s regime for some time.

Certainly there is very little transparency in the relationship between the USSF and SUM, and the shareholding structures. The court actually sealed the SUM contract with the USSF though the NASL argued USSF gets 30% of SUM revenue while the USSF says it is less than 20%.

The judge said in her summing up: “A plaintiff must prove that the common scheme designed by the conspirators ‘constituted an unreasonable restraint of trade either per se or under the rule of reason.’ At the very least, Plaintiff must provide evidence that there was an agreement to agree to vote a particular way, compromising each individual Board member’s independence.

“While there is ample evidence of a conflict of interest between Defendant and MLS, Plaintiff fails to present sufficient evidence of undue influence in the actual standard-setting process, i.e., the process pursuant to which the PLS is revised.”

The USSF said in a statement that its “responsibility is to ensure the long-term stability and sustainability of all professional leagues operating in the United States, as well as the teams that compete within those leagues,” and that their decision “was made in the best interest of soccer in the United States. Today’s decision confirms it was the correct decision.”

The USSF said that it was committed to continue working with the NASL as it decides its future, though that does communicate as more of a sneer than a promise of assistance. The immediate future for the NASL and its leading clubs (that include the iconic New York Cosmos) is the appeal against the court ruling.

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