By Amanpreet Arora
The North American Soccer League (NASL) has alleged that the US Soccer Federation’s proposed changes to Division I qualification rules violate antitrust law.
Under these suggested revisions, to qualify for Division I status, a league must: (1) have 16 teams (as opposed to 12 under the current rules); (2) have 75 percent of its teams in cities with populations greater than 2 million people (up from the current requirement of 1 million); and (3) have team stadiums with a minimum of 15,000 seats. While the NASL may have been able to qualify for Division I status under the old rules, it almost certainly cannot qualify under these proposed changes, particularly the population and stadium capacity requirements.
The NASL is unhappy with these rules because it believes they are an attempt to block its advancement to Division I status and to protect Major League Soccer (MLS) from losing its status as the sole Division I league in the country. The NASL alleges that US Soccer is keeping MLS in its position of power because of the many joint business transactions entered into between the league and federation. For example, US Soccer and MLS agreed to an eight-year, $720 million broadcasting deal with Fox Sports, ESPN, and Univision. US Soccer also has a marketing agreement with a group owned by the MLS, from which US Soccer reported revenues of $15.4 million.
As a result of not having Division I status, the NASL claims that it has suffered significant financial harm from being unable to make deals with potential advertisers, broadcasters, and other business partners that would only be willing to work with the NASL if it was a Division I league. The league also claims that its current status makes it more difficult to access certain world tournaments or attract better players, owners, and referees. In contrast, in addition to signing the aforementioned broadcasting deal, MLS has been able to attract big international stars to both play for MLS teams and become team owners of existing or new expansion teams, which has generated growing interests amongst soccer fans, rising match attendances, and stronger television ratings and viewership.
The NASL was founded in 2009 and began play in 2011 with eight teams. Today, the NASL has grown to eleven teams with two more set to join in 2016 (Miami FC in the spring and Puerto Rico FC in the fall). The NASL is currently the Division II league, between the MLS in Division I and the United Soccer League (USL) in Division III. There is no system of “promotion and relegation” for teams between the three divisions, unlike many other European and South American national soccer league systems. However, there are protocols in place that allow teams to voluntarily switch from one league to the other. For example, Minnesota United FC is planning on making a switch from the NASL to MLS in either 2017 or 2018.
Legal Expert Weighs In
Earlier this year, the NASL applied for Division I status, but its application was placed on hold prior to the proposal of these rule changes.
MLS, the NASL, and the USL are sanctioned by US Soccer, which serves as an overarching body that defines the rules that govern the three-division structure. According to Dr. Daniel Rascher, President of SportsEconomics, LLC and partner at OSKR, LLC, this structure is unlike any other major professional sports league systems in the United States. In general, says Dr. Rascher, competition in the market determined which league would have top-tier status for a given sport. Whether it was the Pacific Coast League and Major League Baseball, the American Football League and the National Football League, or the National Basketball Association and the American Basketball Association, the decision for which league would be at the top rested completely with the market. There was no overarching organization that blessed a league with Division I status, as US Soccer is attempting to do here.
However, Dr. Rasher says, we almost always end up with one top league. “Fans want to see the best playing against and with each other on the same field, not separately across town. The fans want one major league for each sport.”
It seems that US Soccer, MLS, and the NASL understand this and that NASL will fight for its opportunity to be that top-tier league.
Arora is a 2L at the University of Texas School of Law
