MANHATTAN (CN) - A men’s soccer league that just lost its Division II sanction hit the president of the U.S. Soccer Federation with civil corruption claims Tuesday.
Just days away from a race to elect a successor to federation president Sunil Gulati, the North American Soccer League filed suit in Manhattan Supreme Court against the 58-year-old Gulati and 14 other federation officials.
Represented by the firm Mayer Brown, the league notes that it fell out of grace with the league in late 2017 after six years of stymied opportunities.
“The NASL has long sought to compete for marketing and other business opportunities against the ‘Division I’ Major League Soccer Inc., whose interests defendants have furthered at the expense of and to the detriment of the NASL,” the complaint states. “This overt favoritism towards MLS has directly harmed the NASL and contravened the defendants' duties to grow and promote soccer on behalf of the USSF membership in general.”
Claiming that the federation’s directors and officers have a conflict of interest, the desanctioned plaintiff league NASL says that the unfair promotion of Major League Soccer has enhanced their “political clout and influence.”
Profits from the for-profit marketing arm of Major League Soccer factor in, the NASL says. Abbreviations abound in the complaint, which shortens the name of Soccer United Marketing to SUM.
“Notably the board has allowed SUM to use the USSF’s most valuable assets — rights in the FIFA World Cup and U.S. national teams television broadcasts and ticket sales — to enrich and empower MLS to the competitive disadvantage of rival as well as depriving other USSF member groups of potential funding,” the complaint states. “To date, the board has caused billions of dollars in value (held largely by MLS team owners with equity stakes in SUM) to be created in SUM, while simultaneously taking action to destroy the ability of the NASL to attract sufficient sponsors, fans, players and other resources necessary to threaten the growth and enrichment of MLS.”
Adding insult to injury, the NASL says the federation opted just last month to grant Division II status to the United Soccer League, an entity that was not sanctioned before the 2017 season.
The NASL accuses Gulati of “orchestrat[ing] the hurried and contrived” Sept. 1, 2017, vote to take away its divisional sanction after an “unsuccessful attempt to bring down the NASL by enticing teams away from the league and towards its rivals.”
“As a result of the abuse of divisional sanctioning criteria to deprive the NASL of Division II status ahead of the 2018 season — the minimum necessary standing for NASL teams to retain existing sponsor agreements and player contracts — the NASL soon will be relegated to a sad chapter in U.S. soccer history unless it obtains swift relief,” the complaint states.
Tuesday’s lawsuit came three months after a federal judge denied the NASL injunctive relief in an antitrust action filed earlier that year in Brooklyn.
The Second Circuit is poised to rule on an appeal of that ruling, having held oral arguments on Dec. 15.
Tuesday’s lawsuit seeks $100 million in damages as well as injunctive relief. In a statement on its case, the NASL notes that the election for Gulati’s successor will take place on Feb. 10.
“While that election presents an opportunity for reform,” says the release, “it also threatens to perpetuate the conflicts at the heart of the NASL’s complaint.”
There are eight candidates running for the office, among them U.S. Women’s Soccer goalie and Olympic gold medalist Hope Solo.
Neither U.S. Soccer nor Mayer Brown attorney Jean-Marie Atamian have returned requests for comment on the suit.
Representatives for the North American Soccer League also did not return an email seeking comment.
Subscribe to Closing Arguments
Sign up for new weekly newsletter Closing Arguments to get the latest about ongoing trials, major litigation and hot cases and rulings in courthouses around the U.S. and the world.
