The NASL announced that it has filed an amended complaint in its antitrust lawsuit against the United States Soccer Federation, Inc. (“USSF”) pending in federal court in the Eastern District of New York, which adds Major League Soccer (“MLS”) as a defendant. The amended complaint now seeks to both strike down the anticompetitive “Professional League Standards” that USSF and MLS have used to shield MLS from competition and to recover the millions of dollars in damages caused by the anticompetitive practices of USSF and MLS.
On September 1, 2017, the USSF’s Board of Directors took a decision to revoke the NASL’s Division II status jeopardizing the future of the league and its member clubs. On September 19, NASL filed an antitrust suit in Federal Court in the Eastern District of New York seeking a preliminary injunction to preserve the NASL’s Division II status while the Court considered the underlying claims. While the NASL’s motion for the preliminary injunction was ultimately denied, the damage from USSF’s decision caused the NASL to cancel its 2018 Season.
MLS has been added as a defendant due to its actions, in concert with USSF, that have served to block competition for professional soccer in the United States and Canada. MLS’s dominance over USSF is readily apparent with the influence it has over USSF’s Board of Directors and USSF’s National Council and more cleverly disguised through the relationship of MLS-affiliate Soccer United Marketing (“SUM”) and USSF. As repeatedly stated by newly-elected USSF President Carlos Cordeiro, “the unique ownership of SUM creates conflicts that need to be addressed.”
NASL Interim Commissioner Rishi Sehgal issued the following statement:
The focus of the antitrust suit to date was obtaining a preliminary injunction to save the 2018 Season which ultimately was not possible. The harm to competition and damages caused by losing the 2018 Season are being felt far and wide as our business has been ground to a halt and fans, players, sponsors, vendors and all of the stakeholders who play a role in bringing the NASL to life are being negatively impacted.
In addition to compensation for the damages suffered by NASL, we are seeking a permanent injunction to strike down the shield of the Professional League Standards that have been designed and applied to protect MLS from competition. Competition ultimately brings out the best in industry and we are confident that opening the market for professional soccer will allow the U.S. to fully embrace its power as a soccer nation benefitting players, clubs and entire communities around the country. While the suit continues, we are committed to exploring all avenues to return to play in 2019.
In addition to forcing the cancellation of the 2018 Season, the impact of the USSF’s decision has also caused 1904 FC and California United to withdraw from the NASL. During the NASL’s hiatus, three NASL members, the Jacksonville Armada FC, Miami FC, and New York Cosmos, will be fielding teams in the National Premier Soccer League with play scheduled to begin on April 15, 2018.
In addition to the antitrust suit, the NASL is prosecuting a breach of fiduciary duty action against certain USSF Board members for conflicts of interest and derelictions of duty which have harmed the NASL and countless other constituents in U.S. Soccer.