NASL 2.0, promotion and relegation, and a presidential showdown: US soccer braces for change

After falling short in its latest attempt to challenge the US soccer status quo, the embattled North American Soccer League (NASL) bears a growing resemblance to its much-hyped and highly flawed 1970s namesake.

NASL 2.0, promotion and relegation, and a presidential showdown: US soccer braces for change

Not for the first time, the future of the North American Soccer League (NASL) hangs in the balance.

Last Saturday, a federal judge denied the league’s request for a preliminary injunction against the US Soccer Federation’s (USSF) decision in September to withdraw its division two sanctioning from next year. The NASL had argued that it would suffer "irreparable harm” by not retaining its division two status, and would in effect go out of business.

In her ruling, judge Margo K. Brodie of the US District Court for the Eastern District of New York stated that the NASL had shown irreparable harm and “that the balance of hardships tips in its favour”. Yet she ultimately denied the league’s request for an injunction because the NASL had “not made made a clear showing of entitlement to relief”.

On Sunday, the NASL lodged an appeal with the US Court of Appeals for the Second Circuit. “We remain confident in the merits of our case and that our request for a preliminary injunction is supported by the law,” NASL interim commissioner Rishi Sehgal said in a statement. “We have asked for our appeal to be expedited to eliminate the uncertainty facing all of our clubs, players, coaches, fans, and other stakeholders.”

The background

Not surprisingly, the NASL versus USSF dispute is complex, but it essentially has two separate tracks. The first is the preliminary injunction issue ruled upon last week, and the second concerns the USSF’s power to sanction leagues by division at all.

With regards the second issue, which is unlikely to be resolved any time soon, the NASL alleges that the national governing body is violating federal antitrust laws by employing a divisional structure for US-based professional leagues. It claims the USSF is acting anti-competitively through its use of ‘arbitrary criteria’ that has been ‘manipulated to favour’ its ‘commercial business partner’, namely Major League Soccer (MLS), currently the top tier of North American soccer.

The NASL claims the national federation has ‘selectively applied and waived its divisional criteria to suppress competition from the NASL’, both against MLS and also the United Soccer League (USL), which is closely affiliated with MLS and was granted provisional division two status by the USSF earlier this year. It also claims that the USSF is engaged in a conspiracy along with MLS and its commercial arm, Soccer United Marketing (SUM), which also handles media and marketing rights to the USSF, to stifle the growth of the NASL.

The NASL’s argument is predicated on the fact that the USSF’s criteria for divisional sanctioning - known as its Professional League Standards (PLS) - includes certain requirements such as having a minimum number of teams spread over at least three different time zones. According to current rules, division two leagues must have at least 12 teams; this year, the NASL has just eight, having lost four of its participants in 2016. And despite its claim to have commitments from prospective ownership groups, the USSF expressed strong doubts over whether the league will have 12 teams in place for 2018.

The NASL also failed to convince Judge Brodie that there was evidence of conspiracy related to the sanctioning process. While the judge acknowledged that the USSF and MLS had conflicts of interest resulting from their aligned interests in SUM, she noted that the federation had the necessary safeguards in place to prevent business interests impacting upon the formation and implementation of league sanctioning criteria.

We remain confident in the merits of our case and that our request for a preliminary injunction is supported by the law.

The outlook

The ongoing legal battle is just the latest chapter in the NASL’s turbulent history. Despite investing millions in pursuit of its stated aim of usurping MLS as the top division in North America, the league bears a growing resemblance to its much-hyped and highly flawed 1970s namesake.

Since its relaunch in 2011, ‘NASL 2.0’ has seen a series of clubs and owners come and go. Last year, it nearly went out of business altogether amid mounting financial difficulties, with several teams unable to pay their players and staff.

Now, time is of the essence for the NASL, whose 2018 season is slated to begin in March. Having ruled out the possibility of playing as a division three league, the NASL insists its division two sanctioning its required if it is to bring on board six new semi-pro teams for next season plus already confirmed expansion franchises in 1904 FC, who will be based in San Diego, and California United FC, in northern Orange County.

Yet the USSF has questioned whether the league has the number of prospective teams it claims to have. During last week’s court hearing, the federation said the San Francisco Deltas will fold after this season due to spiralling debts, while another NASL side, North Carolina FC, plans to join the USL, as several other NASL teams have also done in recent years. The future of the Deltas has not been publicly confirmed.

Meanwhile another NASL team, FC Edmonton, is poised to join the Canadian Premier League (CPL), a new top-level national competition, next year. According to ESPN FC, sources say multiple NASL teams have also reached out to the National Independent Soccer Association (NISA), a new division three league set to begin play in 2018.

It could be, then, that the 1904 FC and California United projects are over before they’ve even begun - although it could be that they might yet find a home outside of the NASL. As for the league’s other teams, the outlook looks particularly uncertain, not least since their owners have hardly ingratiated themselves among the US soccer hierarchy in recent times.

The NASL’s lawsuit against the USSF, for instance, is being fronted by Rocco Commisso (right, in centre), the owner of New York Cosmos, the NASL’s marquee franchise that was rebooted in 2013. Having rescued the team from the brink of collapse at the turn of the year - a deal that was critical to the NASL’s survival for 2017 - Commisso has said he has no interest in continuing to operate the Cosmos without division two sanctioning. Notably, he has also claimed that SUM wanted to "terminate the franchise and eliminate the organisation as a competitor” when it entered a US$5 million bid for the Cosmos at the end of last year.

It is also unclear where last week’s ruling leaves Miami FC, who are owned by Italian media rights mogul Riccardo Silva, another figure who has waged something of a personal battle against MLS and the USSF, partly by seeking to engineer the introduction of a system of promotion and relegation within North American soccer.

Silva himself has commissioned a report into the matter, and this summer his MP & Silva agency went a step further when it offered the eye-popping sum of US$4 billion for the global media rights to MLS for ten years from 2023. The bold proposal stood on the proviso that MLS would agree to introduce a system of promotion and relegation at some point in future.

Elsewhere Robert Palmer, the owner of Jacksonville Armada FC since July, tweeted this weekend that his side would “be a team without a league” in seven days’ time, and that despite having “awesome fans” and seeing “big ROI”, it is now “time to find someone to play with”.

Who that might be remains to be seen. Short of forming an independent league, the most feasible option for the remaining NASL teams is to jump ship to other competitions. The 30-team USL appears to be the most likely destination in the short term, especially with that league expanding at pace and plotting the formation of a division three set-up in 2019.

The bigger picture

Soccer in North America has come a long way in the 23 years since the USA hosted the best-attended Fifa World Cup in history. Indeed, 21 years after the creation of MLS, demand for the sport has perhaps never been greater. Yet if one certainty of progress is heightened competition, another is that conflicting philosophies will invariably arise.

The ongoing NASL v USSF lawsuit demonstrates the differences of opinion that exist in the region, but it is also a side plot to a wider debate over the future of soccer in a growing, lucrative yet still largely untapped market. It is a debate that spans many battle lines, from the argument over who is best-placed to spearhead the national federation’s growth in future, to the underlying issues of promotion and relegation, the merits of ‘open’ and ‘closed’ business models, and fair pay for men and women.

When the USA failed to qualify for next year’s World Cup in Russia, their fate sealed after an embarrassing defeat to Trinidad & Tobago last month, calls for change grew louder. Inevitably, the fingers of blame pointed squarely at the top of the USSF and, specifically, its longstanding president Sunil Gulati.

Within the media and the game itself, Gulati (left) has been fiercely criticised for the US national team’s failure, even if he has presided over a period of impressive commercial development during his 11 years as USSF president. Gulati is currently the chair of a US-led bid to bring the World Cup back to North America in 2026, and his influence within Fifa circles is unquestioned. But while the USSF is said to have a financial surplus in excess of US$130 million, Gulati’s decisions on the playing side, especially his selection of national team coaches, have been strongly questioned.

With Gulati’s current four-year term set to expire next year, six candidates have so far entered the running to become his replacement, ensuring that, for the first time in over a decade, the election for the USSF presidency will be contested. That crowded field of candidates includes Gulati’s right-hand man, USSF vice president Carlos Cordeiro; Steve Gans, a Boston attorney and soccer administrator; three former US national team players in Paul Caligiuri, Kyle Martino and Eric Wynalda; New York-based attorney Mike Winograd; and Paul Lapointe, the Northeast Conference manager of the United Premier Soccer League (UPSL). Gulati himself has yet to confirm his intention to run, with the election due to take place in February at the USSF’s annual general meeting in Orlando.

As each of the candidates looks to curry support and secure the necessary nominations, one subject that is likely to be hotly debated is the contentious issue of promotion and relegation, which continues to polarise North American soccer fans and executives alike.

On the one hand, there are those - like the NASL and Silva - who believe deregulation and inter-division movement is the only way for professional soccer in North America to develop further, and to bring the ‘closed’ continent in line with other ‘open’ league systems around world soccer. On the other side of the argument sits the likes of MLS and the USSF, who remain staunchly opposed to the idea.

For them, introducing promotion and relegation is not only at odds with the business culture of North American sport, but would also create unnecessary financial risk for existing and future team investors supporting the game at all levels. In short, both parties remain unwilling to destabilise a system they have cultivated with some success for more than 20 years, not least at a time when MLS expansion fees have risen to upwards of US$150 million and interest from would-be investors is at an all-time high.

And therein lies the rub. Between its financial troubles and its outspoken, combative leadership, the NASL has come to be seen as something of a liability; a league deemed too unstable to be classified as division two, let alone a viable challenger to MLS. Now, with the establishment pulling in a different direction, its very existence hangs in the balance.