Minor League Hits US Soccer With Antitrust Action

BROOKLYN, N.Y. (CN) – The leading soccer organization in the United States has attempted to stifle competition from budding leagues looking to offer minor league soccer, according to a federal lawsuit.

The lawsuit, filed Tuesday in U.S. District Court in Brooklyn, claims U.S. Soccer Federation has refused to grant Division II status to the North American Soccer League for next year’s professional soccer season in an effort to protect another league.

According to the league, U.S. Soccer has used a changing portfolio of “professional league standards” to protect both the Major League Soccer and its reserve minor league – the United States League – as the only option for tier-two and tier-one soccer in an effort to stifle competition.

Those standards include a weighted voting system that combines the number of clubs and attendance, which favors Major League Soccer since the league controls more than 57 percent of the voting power on U.S. Soccer’s professional council, the lawsuit states.

A number of prominent Major League Soccer officials also are employed by the U.S. Soccer, the lawsuit notes.

The move is yet another effort by U.S. Soccer to drive a nail into the North American League’s coffin and protect the United States League, the North American Soccer League claims. It seeks an injunction to preserve its Division II status and to strike down the U.S. Soccer’s professional league standards.

“The scheme was originally put into place by addling the NASL with Division II status, but now the USF is seeking to deal a death blow to the NASL by denying it even Division II status for next season,” the lawsuit says.

North American Soccer League, which was founded in 2009, was first given the Division II designation in 2011.

Leagues in Europe and elsewhere use competitive systems, the North American league argues, such as relegating the bottom-three teams in a league to the second tier and keeping the more competitive, popular teams in the first tier.

Unlike federations that belong to the international Federation Internationale de Football Association, U.S. Soccer has its own hierarchy of divisions that it determines itself.

As a result, the system is “determined not by the free marketplace of consumer demand, or by clubs migrating up and down divisions through a system of promotion and relegation, but rather by a set of anticompetitive rules that serve no purpose other than to act as a barrier to competition and a restriction of output,” the lawsuit claims.

However, without a blessing from either FIFA or USFF, “no professional soccer league located in the U.S. and Canada would have sufficient credibility with fans, sponsors or broadcasters,” the North American league claims.

U.S. Soccer’s anticompetitive nature began in 1995, the lawsuit argues, when the federation shielded Major League Soccer from competition for its tier-one status. Major League Soccer has since acted as a “single-entity league,” in which it recruits players, negotiates their salaries, and in some cases determines where they will play, the lawsuit states.

After protecting Major League Soccer’s tier-one status, U.S. Soccer denied Division I status to the North American league based on a requirement that all Division I teams stadiums have at least 15,000 seats.

U.S. Soccer then conspired with the United States League to lock it in as the Division II league, giving it a month to meet U.S. Soccer standards, the lawsuit says.

The United States League had long stated that it was content in Division II soccer, and in 2014 its president Tim Holt reportedly said that it had no plans to try to overtake Major League Soccer in Division I. “There’s one major league of professional soccer in North America and it’s MLS,” Holt said according to an article on SBNation.

In addition, U.S. Soccer officials over the years have acknowledged having the same “economic objectives” as Major League Soccer, the lawsuit states, noting comments by U.S. Soccer president Sunil Gulati in 2013 that the “working relationship” between the two organizations “is extraordinary … We don’t have the sorts of conflicts you see between leagues and federations.”

The lawsuit also says U.S. Soccer has multimillion-dollar business arrangements with the Major League Soccer-related Soccer United Marketing.

The North American Soccer League is structured so that its clubs – located only in the United States, Canada, and U.S. territories – are separately owned and independently managed. Its season runs from April through early November, with a four-week break for most of July.

Rocco Commisso, chairman of the North American league’s board of governors, said in a statement that the lawsuit is intended to “protect not just the league, but also the game, fans, and everyone with a stake in the future success of professional soccer leagues based in this country.”

A U.S. Soccer representative said the organization does not comment on pending litigation.

The North American Soccer League seeks a finding that U.S. Soccer’s acts constitute antitrust violations and that it has a monopoly on men’s soccer. Additionally, the league wants U.S. Soccer permanently blocked from continued implementation of its standards so competition between the various leagues can be restored.

Attorney Jeffrey Kessler, of the New York firm Winston & Strawn, represents the North American Soccer League.

Follow @NickRummell

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