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USL At A Crossroads Part III: Negotiations Breakdown

usl soccer field1 300x197 USL At A Crossroads Part III: Negotiations Breakdown

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.

—–

As the 2009 season approached, the League 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 League 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 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 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.”

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 commissioner,” 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 Jerunica’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 extensive interview with Kenn Tomasch.

“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 Jerunica 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 Jerunica 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 the 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 very 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 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 LOA and USL leadership need to find a solution. Failure to do so could permanently damage the sport in North America.

Analysis and further explanation from the Kartik Report here

This entry was posted in Leagues: Major League Soccer, USL. Bookmark the permalink.

About Kartik Krishnaiyer

A lifelong lover of soccer, the beautiful game, he served from January 2010 until May 2013 as the Director of Communications and Public Relations for the North American Soccer League (NASL). Raised on the Fort Lauderdale Strikers of the old NASL, Krishnaiyer previously hosted the American Soccer Show on the Champions Soccer Radio Network, the Major League Soccer Talk podcast and the EPL Talk Podcast. His soccer writing has been featured by several media outlets including The Guardian and The Telegraph. He is the author of the book Blue With Envy about Manchester City FC.
View all posts by Kartik Krishnaiyer →

28 Responses to USL At A Crossroads Part III: Negotiations Breakdown

  1. mukesh says:

    hi thats relly terafic about soccer

  2. JMB321 says:

    I don’t understand how a lawyer with a formalized notification of being the highest bidder could be undercut at the last minute. Normally after this type of notification by the Seller in this case Nike, you would require some kind of protection to forestall last minute outbidding. If this was fully legal, It looks like a lot of smart guys got snookered!!

  3. Bobby Brandon says:

    Maybe it’s time for the USSF to start acting like an FA and actually, *gasp*, be involved?

    Honestly, they need to step in as a mediator. This could cripple the game in this country, a lot of people don’t realize just how much the USL means.

  4. bq says:

    Bobby, you have to understand that #1, the USSF doesn’t have a great love for USL, particularly with USL-1.
    #2, They really don’t like Traffic and are not crazy about the TOA.

    There are so many layers to this story because USSF’s league is a sense is MLS. Garber, commissioner for MLS also sits on the board of USSF. While I don’t believe for a second that USSF doesn’t want to develop soccer in this country, what they don’t want is competition for MLS and like the structure of MLS where the League runs things and believe me, they do work hand-in-hand with the USSF on many facets of the league.

    Perhaps USL should have a representative on the USSF board as well?

    Also remember the SUM is the money making agent for MLS and Traffic does some of the same thing SUM does. Again there are conflicts.

  5. Erik says:

    I liked this series Kartik, very good work. BUT I am tired of hearing from you and others that St Louis is the center of soccer in America. Why does everyone always say that?

  6. ERT145 says:

    Gulati and the USSF have to be held accountable for this. Allowing the USL structure to collapse would set the sport back substantially in this country. But again, as has been said repeatedly here, Gulati doesn’t act as if he is the boss of US Soccer but an MLS employee whose conflicts of interest need to be exposed and talked about. Kartik, Brian, that is your next series.

  7. Vnice says:

    Historically speaking, St. Louis has been a cultural touchstone for soccer. That day, in my view, is now in the past. I would rather see St. Louis in USL first, because as a dying city, I’m just not sure that they can provide at least 15 thousand attendance per game. Maybe I’m wrong. After all, Kansas City shows signs of great potential support for a team in a bigger stadium.

    I don’t think that there is a soccer capital anymore. Regionally, the pacific northwest wields a lot of clout in soccer. Florida is a hotbed of player development. But, it seems like every region and city has something to offer. That’s what comes with having a country that’s so damn big.

  8. Johnny says:

    MLS fans and MLS “people” have proven over and over again that they don’t care about the overall growth of the game in this country or anything outside their self contained vacuum. The discourse on many of Kartik’s USL pieces from MLS fans has been downright disgraceful and filled with inexplicable anger and resentment. It seems to these people if you talk about anything not related to MLS, or if you somehow critique MLS you are hurting American soccer.

    If this new league starts, I for one hope they give MLS the kick in the rear end that league deserves for over selling the product, and fostering so much fear and hatred of other ideas or entities.

    As for Gulati, he’s a tool of Garber and Kraft’s anyway. The USSF is probably not even aware of what is transpiring.

  9. OL says:

    I personally think a break away league with the markets mentioned would be good. MLS does not have a national reach as evidenced by their horrible TV ratings and the lack of ink in major papers. These guys will probably have fewer fans and viewers but Atlanta, Miami, Montreal, are good markets to build from. They can eventually force a merger or force MLS to make some positive changes.

    As far as USL is concerned, let them focus on PDL and the good work they do there and quit the professional game.

  10. Kevin says:

    YES!

    Now MLS can divide and conquer and we can all be united.

    Kartik can shut down this site and dedicate a new site to the history of USL while the REAL LEAGUE continues the business of making this a soccer country.

    Kartik can also open a site to continue to LIE about MLS TV viewership and LIE about how many people watch the Premier League and La Liga. Any fool knows that games in primetime gets more viewers than early morning telecasts and the leagues in primetime are what matters. Those who support foreign league over their own like Kartik are really traitors who should move to those countries. Then he can use the insulting term football which he keeps using. Football is the Patriots versus the Giants, not what you claim it is, idiot.

    Kartik can also LIE about which stadiums opened when and LIE about fake world rankings from some organization no one has ever heard of which ranks MLS low. Maybe he made up the organization and the website.

    Gulati’s only reaction should be to shut down USL and tell these owners to either submit proposals to join MLS or to invest in clubs abroad. We DO NOT NEED ANOTHER LEAGUE IN THIS COUNTRY. WE NEVER NEEDED USL AND EVERYONE SHOULD BE BEHIND MLS.

    RIP USL…… You couldn’t die soon enough for the real soccer fans in this country. You and your enablers like Kartik and some other bloggers should go down with you.

    • The Gaffer says:

      Kevin, you’re in complete denial.

      Your statement: “Any fool knows that games in primetime gets more viewers than early morning telecasts and the leagues in primetime are what matters.”

      The reality: Look at these numbers to see how the EPL have already surpassed the TV ratings for MLS just after a few games:
      http://www.bigsoccer.com/forum/showthread.php?t=1150370
      http://www.sportsbusinessjournal.com/article/60481

      If you have evidence to prove otherwise, please post it.

      Cheers,
      The Gaffer

    • Patrick Johnson says:

      Kevin, do the world a favor and quit watching the sport. You are obviously the leader of the ‘worlds largest morons’ club who cannot do his own research. Had you done said research, you would see that…oh my Kartik WAS RIGHT THE ENTIRE TIME.

      I know, that maybe just too much for your tiny little brain to take, but it’s okay to admit you were one hundred percent wrong on a subject. Actually, it makes you a stronger person.

      Fact is we needed USL then and we need a legit second and third division now. If that continues to be USL, so be it. However, I think we’re going to see this ‘breakaway’ league that was reported by Reuters happen and make MLS wish Cooper was given USL.

      Oh wait what am I saying, this guy is probably getting paid to say such nonsense from MLS directly.

  11. Kenn Tomasch says:

    Do you want to attribute those Tim Holt quotes, my man?

  12. chemik says:

    Hello nice blog, please visit my http://chemik1.blog.hr

  13. Joey Clams says:

    I really couldn’t care less about the future of the sport in North America. However, I remain concerned – just a little, mind you – about its future in the United States.

  14. Rhinosfan says:

    LIVE CHAT WITH CLARK AND DEVO
    September 2, 2009: Rochester Rhinos owner Rob Clark will sit down with Rhinos beat reporter with the Democrat and Chronicle, Jeff DiVeronica on Friday, September 4th at 12:00 noon to discuss the current state affairs of the USL First Division. The two will answer all your Rhinos and soccer questions live. To take part in the live chat log onto http://www.DemocratandChronicle.com

  15. eplnfl says:

    First let me say the coverage of the USL story merits an award. This is probably the finest piece of reporting we have seen so far on MLS Talk. Well done.

    Since, I reside in a MLS town I can sit back a bit and watch the discussion with a netural view. For those of us so situated the matter of the ownership of the USL is much more of an academic exercise. From this side of the hill the critical thing is a strong and active player development system to feed the big league teams and to bring soccer to the smaller venues in the US and CANADA , and in general promote the sport.

    Cooperation with MLS is essential for any new ownership for the good of all involved. I understand the feelings of many here to promote a league that brings pro soccer to their town. However, for the common good we must not mistake what must be the true role of the USL as the keeper of the soccer flame for so many American’s but a keeper who works for the big league in the final word.

    • Kartik says:

      I think it is important to note the then established relationship between USL and MLS broke down earlier this decade largely due to MLS. The affiliate agreement was not helping USL and was being violated by MLS per the comments of some club officials. To expect all the effort to renew this agreement to come on the USL end (ie USL must give in, MLS doesn’t have to) is simply not fair, and it will not happen. The previous affiliate agreement broke down because of MLS’ taking advantage of things. USL clubs have investors who must protect their investment and the previous agreement saw MLS clubs looking at USL clubs as feeder teams and completely disrespecting the value of players to USL clubs.

      MLS must make concessions if they want an new agreement either with USL or a potential breakaway league. The rest of the US soccer structure doesn’t exist just to serve their league.

      MLS took advantage of USL. USL teams spent their own money scouting, training and developing players and then got virtually nothing in return from their MLS affiliate teams.

      The USL TOA clubs that are discussing breaking off are all in medium sized to large markets. If they were to become a minor league affiliate to clubs in a league that most fans of the game in these towns don’t even respect (not because they love USL, but because they think MLS is substandard) each of the clubs save Montreal will fold within a year.

      Associating or affiliating with MLS is not an option for these clubs unless they become part of MLS itself.

  16. jack says:

    There are rumors that the new league created by the TOA will be called the NASL (North American Soccer League) with teams from the USA and Canada and Mexico. Traffic is very interested in getting some Mexican teams in the new league. In tradition of the old NASL they will bring back the shoot-out and the 35-yard offside line to make things more exciting. The main difference between this new NASL and the old NASL is that the new NASL will have revenue sharing amongst the teams so that the smaller teams can survive with the larger teams. If the old NASL had revenue sharing then it might have survived.

    • Kartik says:

      The Caribbean is also an option. Mexican teams would have no incentive to join such a league, with the FMF one of the top leagues in the world.

      Traffic is also much more relevant and respected in the Caribbean and Central America than Mexico. Hence, why you see Miami FC billboards at games in Trinidad, Costa Rica and El Salvador but not in Mexico.

  17. Jason says:

    (bullshit)

  18. Kenn Tomasch says:

    Last chance…Holt quotes? Attribution?

  19. Kenn, the quotes were from your blog, I believe. (or at least as I recall) I’ll double check with BQ and attribute accordingly.

  20. Change made, Kenn. Thanks for the heads up.

  21. Joe says:

    Kartik- Do you think any USL-1 teams will drop down to USL-2 after these teams bolt?

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