United Soccer Leagues at a Crossroads – Part Three: Negotiations Break Down

On Monday, Inside Minnesota Soccer, in conjunction with Kartik Krishnaiyer, released the first of a three part series on the United Soccer Leagues.  The series describes where the league has come from, where it might be going, and some of the behind-the-scenes events that have taken place over the last several years as the league and its USL-1 owners struggle for control and direction.

The series has been timely with multiple breaking news stories each day concerning USL and its teams. Yesterday, Simon Evans of Reuters confirmed  that the disaffected TOA clubs are seriously contemplating forming a breakaway league. We also learned of the Ottawa Fury’s application to move from the PDL to USL-1. Inside Minnesota Soccer and Major League Soccer Talk continue to provide the background that brought us to this point in time.

Part I

Part II

Today, we bring you the 3rd and final part of this 3-part series.

Part III – Negotiations Break Down

As the 2009 season approached, the Team Owners Association was very disappointed with the progress they were making with Nike and the league front office.  At the same time, MLS and FC Barcelona were talking about a Miami MLS expansion team. In the end, MLS decided the timing was wrong for expansion into South Florida.

As Traffic Sports struggled through those months, they tried to make South Florida aware that a USL team was a better fit than MLS for that market.  Also, Davidson and the Team Owners Association wanted to know why the league office was so quiet when MLS was looking into expanding into many USL-1 markets. Atlanta, Miami, Montreal, Portland and Vancouver were all markets being mulled about in MLS expansion talk.

“We recommitted to the league for 2009 and because of that we worked hard at educating the market that USL was a better fit for the So. Florida area,” said Davidson. “One of the questions that the League Owners Association (TOA) wanted asked was; where was the USL front office when Miami FC and Traffic were fighting off MLS expansion? So when the 2009 USL-1 schedule was published (privately to the USL teams) we told them (USL) we weren’t happy with the progress of the league restructuring and the lack of defending Miami FC against the MLS bid, and that Traffic was seriously reconsidering their commitment to the league for 2009,” said Davidson. “The league had not given our owner (Julio Mariz) the hope, expectation and confidence to continue with the league. So we notified them that we were considering withdrawing. Nevertheless, the league went ahead and announced the schedule.”

These actions set off a series of events that made the league, Miami FC and the Austin Aztex look bad. The USL front office was delayed in getting schedules out to teams. Once the schedules were out, the league gave teams a date to publicly distribute them for media and to the general public. However, with Traffic’s notification to the USL they were reconsidering pulling from the team, USL decided to put a halt on the release date. It should be noted that USL always has an alternative schedule drawn up should a team drop for unspecified circumstances. The teams were all notified to hold the schedule but the new franchise Austin Aztex had released their schedule to a TV station in the Austin area and told them to hold the release until the specified date. Unfortunately, the word didn’t get out in time and Austin TV station, KVUE released the team’s inaugural schedule long before any other team, making USL fans wonder what was happening.

Eventually, the league released the schedule and Miami FC got the green light from Traffic to play the 2009 season after a visit from Traffic president Mariz.

“You have to tip your hat to Francisco Marcos for his vision when NASL died,” said Davidson. “You have to have reservations about the way Francisco has handled the later stages of this league. It takes a real visionary to pull off a vision over 20 years and do it effectively without seeking outside help or working with its constituents.”

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Davidson said that the owners had new and creative ways of empowering the franchises themselves. One of those ideas was appointing a commissioner to USL-1 that would serve as a spokesman for the league and a liaison for the teams’ issues to the league. “At some point there has to be a league c0mmissioner,” stated Davidson.

Davidson went on to say the league might try to control the direction for the owners but he believes in the end the team owners will have more power. “They can try to control us at the top,” said Davidson. “But at the end of the day it’s the actors that decide what goes on with this show.  When there are enough owners, with enough common mindsets and enough common denominators sitting around the table it will break. I think we’re there.”

This drama came months after Boris Jerkunica had withdrawn the Atlanta Silverbacks from the 2009 season. The Silverbacks had long advocated a more aggressive marketing posture from the league and had in fact built their own soccer-specific stadium. Representing a top 10 national media market, Atlanta could have been the focal point of USL growth.

Instead, Jerkunica’s repeated efforts to implement more owner control over the direction of USL were defeated. But Atlanta maintained an interest in USL by fielding a W-League side and making it known that they intended to return to USL-1 and PDL play in the future.

But Davidson and Jerkunica’s concerns that the league wasn’t doing enough to counter MLS expansion were not shared by Tim Holt, the league’s Chief Operating Officer and Executive VP.

“The owners of USL-1 teams who are pursuing Major League Soccer is not a desirable situation for us. It doesn’t help us in stability as a league,” Holt stated in an interview.

“We can either sit around and say, well, we can let this happen over time or we can continue to try to evolve the business model in USL-1 that it’s such a viable alternative to MLS that certain ownership groups would prefer to stay in USL-1 and be able to run their professional soccer franchise rather than be part of MLS. Our models are very different,” continued Holt.

Nonetheless, when Vancouver and Portland were announced as MLS expansion cities for 2011, USL looked like a clear second division with little prospect of keeping its best franchises and markets in the league.

Owners of both clubs had determined a league with an aggressive commissioner and a major television presence beats a league that had neither. Montreal’s Joey Saputo, who like Boris Jerkunica owned a big market team in a league that seemed more of a fit for small markets once again, renewed discussion about jumping to MLS in the spring.  Saputo had in the past been aligned with Jerkunica in an attempt to make USL’s structure more owner driven and big market friendly.

Tim Holt made it clear around the same time that markets like Atlanta, Montreal and Miami were not the ideal ones for the league. “A market like Austin, Texas is a perfect market for USL-1… somewhere between 20 through 50. That’s not a market that MLS is likely to expand into any time in the near future.”

Holt may very well be right in his approach, but given the experiences of Atlanta and Miami in trying to fend off bids from rival groups to bring MLS to those markets, these words did not sit well. Ironically, these disputes reached a boiling point at a time when USL-1’s Puerto Rico Islanders came within a penalty kick shootout of becoming the first team from a US-based league to advance to a Continental final this millennium.

As the 2009 USL-1 campaign was about to begin, USL-1 owners with these and other issues in mind told Nike they were not going to play another season under current conditions. When Nike agreed to sell the league, the TOA members paid their yearly competition dues, and USL-1’s 2009 season began without a hitch.

USL had unprecedented success in its PDL division in 2009. Former PDL player Charlie Davies, who never once appeared in an MLS match, became a superstar attacker for the US Men’s National Team. Two PDL players, Anton Peterlin of Ventura County and Cody Arnoux of the Carolina Dynamo were signed by English powerhouse Everton of the Premier League.  Jay DeMerit continued his “from PDL to Premier League” story with an outstanding Confederations Cup for the US Men’s Team.

But all of this success did not matter to those concerned about upgrading USL-1 to a “more professional” setup.  Nike’s decision to sell the league gave the owners the opening they had long sought. Teaming with the TOA, Traffic Sports submitted a bid. Additionally, NuRock group, headed by a former college classmate of Francisco Marcos, submitted a bid, as did St Louis United’s Jeff Cooper who was backed by Anheuser-Busch, a group from Europe, as well as Adidas, who were reportedly acting as a proxy for MLS.

When the dust settled, and the winning bidder was announced internally, it was Jeff Cooper’s group.

Cooper, a successful lawyer from St Louis, had twice attempted to bring MLS to a city whose history in the sport is second to none in this nation. As the owner of the St Louis Athletica, and a board member of English Football League club Brentford, Cooper had made an impact even without MLS.  Now, Cooper appeared to have bagged his biggest prize of all: a league that consisted of over 600 clubs, professionals, amateurs and youth.

The TOA began working with Cooper, who had outbid their own efforts and found him to be on the same wavelength.  With radical changes about to be made to the league under Cooper’s direction, a closing on the deal that appeared imminent was suddenly off.

Instead, Nike – who had formally recognized Cooper as the high bidder – shifted gears and awarded NuRock control of USL. This move, which was done legally but without properly notifying many owners, created a further rift with USL’s Tampa-based leadership, which could be irreparable.

USL is a twenty-three-year-old league built through the painstaking efforts of Francisco Marcos and others. It has been invaluable to the development of a soccer culture in the United States. But these issues will not go away, and with a rift now out in the open, both the TOA and USL leadership need to find a solution. Failure to do so could permanently damage the sport in North America.