Top-down, or bottom-up? US Soccer’s Tier Designations

The American pyramid is currently conceived of as having four Divisions, with professional Divisions I, II, and III at the top, and amateur leagues informally known as Division IV at the base. But unlike in other countries where leagues may be shuffled around or rebranded once in a decade, the United States Soccer Federation requires that leagues apply each year for a divisional designation, and monitors compliance with standards promulgated by the USSF, the Professional League Standards (PLS).

The tensions inherent in such an ad-hoc system of certification and standardization came to a head in 2017: after the North American Soccer League was denied sanctioning as a Division II league, it filed suit against the USSF. The NASL accused the USSF of anticompetitive practices, and requested an injunction that would require the USSF to recognize it as a Division II for the duration of the litigation. The request was denied: the United States District Court for the Eastern District of New York eventually ruled that even though NASL had demonstrated irreparable harm, that the balance of hardships tipped in its favor, and that an injunction was not against the public interest, NASL had not made a “clear showing” that it was entitled to an injunction. Perhaps the most shocking finding by the court was that “there is ample evidence of a conflict of interest between Defendant (the USSF) and MLS,” but this was not enough to meet the legal standard for a mandatory preliminary injunction. This decision was affirmed by the United States Court of Appeals for the Second Circuit in 2018, and remanded back to the Eastern District of New York for further proceedings. Discovery is apparently set to be completed by April 30th, 2019, followed potentially by a trial on the merits. MLS and WPSL went into the season as the only Division I-sanctioned leagues, and USL and WPSL as the only Division II-sanctioned leagues. (As an amateur league affiliated with the U.S. Adult Soccer Association, the United Premier Soccer League is nominally a Division IV league.)

That the dispute between NASL and the USSF boiled-over into litigation is shocking from a global point of view, but perhaps less so in the context of the United States in general and American sports in particular, with its franchise model of ownership. The main bone of contention for NASL seems to be that, from its point of view, the USSF was kicking it while it was down by denying Division II status. It also claimed that USSF’s most recent changes to the Professional League Standards were intended to entrench MLS as the country’s only Division I league. The USSF responded that it was concerned that the number of waivers being granted to NWSL, NASL, and USL were damaging the credibility of the PLS. It also claimed that the PLS were implemented to mitigate the risk of league and team failure, and to promote the growth of soccer at all levels. Indeed, USSF has the unenviable task of devising standards that both men’s and women’s professional leagues must adhere to in order to receive sanctioning; these standards must be both rigorous enough to avoid wholesale collapse, but not so restrictive as to suffocate the growth of new clubs. While the trial court looked at the USSF’s claims skeptically, it accepted that the USSF offered some evidence that the PLS’ restrictions had some procompetitive effects when it denied the request for an injunction, so the standards live to fight another day.

With the PLS, the devil is truly in the details. The standards remained the same from 1996 until 2008, when USSF began implementing certain changes. By 2010, the PLS were updated for Division II teams in response to “issues” created by NASL and USL-1 to require a performance bond to cover the cost of a team’s operations in case it folded mid-season. NASL was first granted sanctioning as an independent Division II league in 2011 (after previously holding “provisional” sanctioning), though it had to be granted various waivers to do so. In 2014, the PLS were revised to increase the minimum number of teams from 10 to 12, occupying at least three time zones (Eastern, Central, and Pacific), and with a “principal owner” with an individual net worth of at least $40 million (in addition to $70 million combined net worth and $1 million per team performance bonds). Concerned that the number of waivers being granted to NWSL, NASL, and the USL were damaging the credibility of the PLS, the USSF again looked to toughen the Standards in 2015, though these reforms were not implemented. Also in 2015, NASL applied for Division I sanctioning alongside MLS for the first time; this application was rejected on March 8, 2016.

NASL blames its subsequent difficulties on USSF’s refusal to sanction it as a Division I league, at least in part. Its issues came to a head in August of 2017, when both NASL and USL again applied for Division II sanctioning for the 2018 season. NASL sought two waivers for (1) the PLS requirements for minimum number of teams, and (2) teams in the three time zones, but did not specify for which teams it was seeking waivers; USL sought waivers but for specific teams. Already four teams short of the 12-team PLS requirement and apparently about to lose two more teams (and possibly a third), the USSF pulled the plug on September 1, 2017 and voted to deny NASL’s application for Division II sanctioning for 2018. The lawsuit between NASL and USSF followed.

One might well ask what a minimum number of teams, minimum time zone occupancy, and the net worth of team owners might have to do with supporting and growing the game in the United States; certainly the Eastern District of New York wondered the same thing when it chided USSF for “earlier misconduct” in regard to its deliberately limiting Division I to one league (MLS) until 1998. The answer might eventually be answered by a Brooklyn jury. The question raises broader issues regarding the USSF’s vision for the future of the game, which is clearly focused on attracting more and more rich investors who would (presumably) be willing to put up their cash when the chips are down. But the Columbus Crew débâcle amply demonstrates the limits (and even the folly) of building your sport’s foundations upon the capricious whims of the wealthy.

Thus the problem is stated, but what is the solution? The obvious answer is higher community and fan involvement in US soccer clubs. Community engagement is the norm in other countries in the world, but is almost an afterthought in the USSF’s current vision. For example, the Japanese J League was founded in 1992, one year before the MLS, but has now grown to include 55 clubs across three divisions. Financial support and infrastructure are of course emphasized in Japan also, but support from local governments, sponsors, and the community are now seen as crucial, particularly in the wake of the shocking forced merger that occurred in 1998 when the Yokohama Flügels’ main sponsor (a national airline) pulled-out; they live on as the “F” in rival team Yokohama F. Marinos. Other teams like Tokyo Verdy who have attempted to maintain corporate identity and control have floundered in comparison to teams like Kashima Antlers, a successful club from a small town in a rural prefecture who have embraced their regional and community identity while winning a record eight J1 titles.

Perhaps this future is already here: in 2016, the NPSL’s Detroit City announced it had raised $741,250 from 527 investors to refurbish Keyworth Stadium by adroitly making use of a Michigan law aimed at making it easier for businesses to “crowdsource” investment. And in 2019, NPSL’s Chattanooga FC announced that it would be the first soccer club in the US to allow fans to buy shares in the club; as of writing, this effort has raised $680,750. It is surely no accident that these innovative, community-focused clubs are forging their own path while free of the restrictions of leagues that insist on more centralized control. The USSF is therefore at a crucial juncture in the history of soccer in the US, and its choice is clear: will it modify the PLS requirements to truly encourage bottom-up growth, or will it continue to concentrate on MLS at the expense of everything else?