USL Drops Lawsuits Against NASL; Agrees to Arbitration – Rights Issue in St. Louis

Lawsuit Dropped
While not breaking news, I thought I should clarify the situation with the United Soccer League (USL) lawsuit against 3 teams who have stated they want to play with the North American Soccer League (NASL).

On December 8, 2009, the USL filed a lawsuit in Hillsborough County Court in Florida claiming breach of contract and indebtedness for three teams they claim had made either verbal or written agreements to play for the USL. The defendants are the Rochester Rhinos, Tampa Bay Rowdies and Crystal Palace FC USA.

As I wrote back on December 9th: The Tampa Bay Rowdies and Crystal Palace (CPFC) both made a decision several weeks ago to move to the newly proposed NASL. Inside sources told IMS that CPFC had a 500 thousand dollar bond placed with the USL. All USL teams have to secure a bond before the season starts to insure the league in case a team pulls out or folds. IMS was told the bond amount CPFC paid is consistent for a USL-1 team.  A few weeks prior to CPFC’s announcement, the USL suggested CPFC would be moving up to USL-1 from USL-2 where they had previously played.

IMS also believes that Tampa signed a 2-year agreement with the USL but Team Owners Association attorneys had consulted with Tampa and suggested they would have cause to break the agreement.

It was reported that Rochester, who has been wavering throughout the last year, was late in making a commitment to USL this season. They eventually gave the USL a verbal agreement that they would sign.  Its unknown whether the team owned by Rob Clark actually signed a 1-year agreement with the USL but parties close to the situation stated that Clark never did sign a deal with the league. Clark announced on the 30th of November he had switched allegiances and was now convinced the NASL had a better business plan and was moving forward with the organization.

IMS learned through partner site The Kartik Report that by filing the suit it was highly likely the United States Soccer Federation would have to report the suit to FIFA at the end of December in their monthly report to the organization. This was not a desirable situation as both the bylaws of the USSF and FIFA do not allow lawsuits. A similar situation had just happened in Chile. In that case FIFA acted swiftly and told the team to drop the suit or Chile would be removed from the 2010 World Cup. The suit was dropped within days.

It is possible this same sort of retribution was concerning to the USSF because on December 21, just 13 days later, USL dropped the suits against the three teams agreeing to binding arbitration. Although this information was known by the parties involved, it did not become public until the last several days when someone discovered it by reviewing the court docket filed in Florida. USSF could not have been happy with USL for filling that lawsuit and it did seem to rile up parties on both sides to a point that had not been seen during this whole debate. However, it was still within USL’s right to file the suits to protect their interest.

By dropping the suit it’s likely USSF will no longer need to officially report the situation to FIFA. It could also be seen as an attempt by both sides, NASL and USL, to find resolution without using the courts. Perhaps this is a beginning step toward a general resolution. While the arbitration is strictly between USL and NASL and is separate from the interim resolution that U.S. Soccer seems to be encouraging  both organizations to develop in the next 7-days, any solution they come up with for a provisional league would most likely be under some agreed upon umbrella while the legal differences between the two organizations are resolved through the pending arbitration process. The time period for that arbitration could drag out for 3 or 4 months. Of course this is too long to wait in order to create a compromise as the clock is ticking. Most likely the two sides will set up this provisional league in order to actually have a league up and running in the next several months and work out the details of the arbitration later unless the agreement solves those same issues.

Rights Issue in St. Louis
It has been learned the last few days and is now being reported by Dave Lange of the St. Louis Globe-Democrat.com, that there is yet another hurdle for the two sides to get through in order to make a compromise work. IMS reported several weeks ago on the teams that are most likely viable Division II teams for the 2010 season. It has been confirmed by several sources who did not want to go on record that the IMS list is accurate. One of those teams is AC St. Louis owned by Jeff Cooper and a group from St. Louis. The team was officially announced on the same day USL filed their lawsuit, December 8, 2009. But as Lange reports, Tony Glavin, a retired Scottish soccer player who spent most of his professional days playing in the US and owner of the successful Tony Glavin youth soccer club, has the rights to a USL-1 team in St. Louis. Worse yet, and according to the article, Glavin claims he was planning on starting the team in 2011. “we have been working on putting an investor group together for a USL-1 (Division II) team, to start play in 2011,” said Glavin.

With this news it’s quite apparent just how complicated from a legal and monetary aspect this resolution by NASL and USL really is. Both parties will have to work very hard and very quickly to agree to not only work with each other but fairly compensate each other to resolve the league issues for 2010.

Money Lost Each Day
One source told IMS that every day the teams mired in this dispute are delayed in having a designated league and schedule, dollars are lost for the ownership groups. That same source explained that by this time of year teams normally have schedules and are booking corporate sponsorships of particular home dates. With no official league and everything in limbo, teams may be losing sponsorships to other events or perhaps other minor league sports like baseball. They are also losing time in advertising season ticket sales and corporate ticket sales which will clearly hurt the overall yearly income of each team. It’s critical that a solution be found immediately.