v.
Defendant.
Governors. I am also the principal owner of New York Cosmos, LLC (the Cosmos), one of the
clubs in the NASL. The Cosmos plays its home games in this District, in MCU Park on Coney
Island. I submit this declaration based upon personal knowledge or information and belief.
2. The United Stated Soccer Federation (the USSF) has asserted the exclusive
Football Association (FIFA), and thereby determine which leagues, clubs and players may
participate in competitions held by the USSF and other FIFA affiliates, such as the CONCACAF
Champions League and the Lamar Hunt U.S. Open Cup, as well as other matches against clubs in
other leagues sanctioned by FIFA affiliates. It also has asserted the authority to determine which
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leagues will be perceived by fans, players, sponsors and broadcasters as major or minor league, as
the FIFA imprimatur carries great influence with each of those constituencies worldwide.
3. The USSF has divided mens professional soccer leagues in the U.S. into three
tiersDivisions I through III, with Division I being the top or major league tier. The USSF
also has promulgated a changing set of Professional League Standards, a set of requirements
that leagues must satisfy to obtain USSF sanctioning in Divisions I through III, unless the USSF
decides, for its own reasons, to grant waivers from various aspects of the requirements.
view, are anticompetitive and have no legitimate relationship to such a sanctioning decision. For
example, it is my understanding that for a league to qualify for Division I, all of its clubs stadiums
must have a minimum seating capacity of 15,000, and a league must have clubs in a specified set
of time zones in the continental U.S. Moreover, the USSF has chosen to waive and not waive
some of these requirements for different leagues in a manner that is, upon information and belief,
5. Unlike almost every other FIFA federation in the rest of the world, the USSF
sanctioning framework also does not include any requirement of clubs being promoted and
demoted from league to league, and from one competitive level to another, at the end of each
annual playing season based upon the clubs performance on the soccer pitch, which is commonly
known as promotion and relegation. The USSF system is thus a closed league framework, with
a combination of the anticompetitive Professional League Standards and lack of promotion and
relegation shielding the one top-tier league sanctioned by the USSFMajor League Soccer
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important determinant of the teams success. Major league status confers enormous competitive
advantages in attracting the interest of fans, sponsors, and broadcasters as compared to teams that
are thought of as minor league. These advantages include increased ticket revenues, greater
outside investment and sponsorship, a greater ability to attract more talented coaches and players,
greater broadcasting opportunities and revenues, and more ease in securing larger stadiums,
7. I believe that the USSFs so-called Professional League Standards are a set of
purpose and have the effect of limiting output of mens professional soccer in the U.S. and Canada
in order to protect MLS. Nonetheless, the reality is that in the minds of club owners, fans,
sponsors, investors, management personnel, broadcasters, coaches, and players, whether a soccer
league is major or minor depends solely on where it stands within the USSFs divisional
classification. A Division I designation confers major league standing, while a league forced to
compete in Division II is viewed as being in a lower minor league status. A league faces an
even more significant drop in status in Division III. Membership in a Division II league at least
signifies to fans that the league is only one step away from being a major league. Division III
leagues, by contrast, are viewed as little more than player development leagues, and the negative
impact of a Division III instead of a Division II designation upon a leagues ability to attract
owners, investors, fans, sponsors, management personnel and quality players is much greater than
8. Moreover, for players and coaches, the ability to play in international matches
conducted under the auspices of FIFA is a major factor in evaluating competing employment
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opportunities. Under FIFA rules, playing or coaching for teams in any league not sanctioned by
USSF means disqualification from such international events. Thus, a professional league without
at least a Division III designation conferred by USSF is at a major disadvantage in recruiting top
players and coaches. Similarly, if a team and its players cannot participate in FIFA-sponsored
international matches and tournaments because of the lack of a USSF sanction, that causes the
team to suffer a huge loss of prestige in the eyes of potential ticket buyers, sponsors and
broadcasters. Moreover, the USSF has attached a number of additional negative consequences to
non-Division I status, including non-eligibility for certain slots in the CONCACAF Champions
League, a FIFA-affiliated tournament among the top soccer clubs in North America, and being
subject to lower limits on foreign players that clubs may include on their rosters compared to
Division I.
9. The USSF has sanctioned only MLS as a Division I league. It is well-known in the
soccer industry that the USSF has numerous financial ties to MLS, including contractual and
marketing arrangements through Soccer United Marketing (SUM). The USSF has also
conferred Division II status upon another mens professional soccer league, United Soccer League
(USL), which also has financial ties to MLS, as described in more detail below.
10. MLSs structure is unlike other top-tier soccer leagues worldwide, where clubs are
separately owned and managed on an entrepreneurial basis, with individual club owners having
the control over club decision-making on player rosters, sponsors and the like.
11. Unlike MLS, the NASL is structured as a club-centric league with individually
owned teams and most commercial rights held at the club level, and with player acquisition and
investment decisions left to individual club owners. I was drawn to invest in an NASL team due
to the leagues club-centric ownership structure that leaves clubs largely free to compete against
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one another as they see fit. I believed that the NASL could develop into a strong competitor to
MLS as a major league as long as the USSF treated the NASL fairly.
12. The USSF sanctioned the NASL as a Division II league each year from 2011
through the current 2017 season. This level of sanctioning was essential to my investment
decisions, as I believed it was the minimum sanctioning level necessary to develop the league as
we envisioned.
13. The NASL has for many years worked to obtain a Division I sanction, but the USSF
has rejected those efforts. Nonetheless, the NASL has been committed to developing into a major
14. USL has a reserve league relationship with MLS, under which MLS and the USL
have contractual commitments regarding the exchange of players between the two leagues, and
numerous MLS teams operate USL teams. The NASL does not have any such arrangements with
MLS. Unlike the NASL, USL has publicly stated that it is content to have a long-term status as a
15. After being denied Division I sanctioning by the USSF, the NASL applied for re-
sanctioning as a Division II league for the 2017 season. Upon information and belief, the USSF
seized on this opportunity and began to apply its ability to waive or not waive various portions of
16. Specifically, on or about January 6, 2017, the USSF refused to grant the NASL the
three waivers necessary for it to continue to have full Division II sanctioning for the 2017 season
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and instead granted it only provisional Division II sanctioning, asserting that the NASL did not
17. At the same time, the USSF took a different approach with USL, which had been
in Division III. The USSF suddenly granted USL provisional Division II sanctioning for the 2017
season, even though, as of 2017, the USL had at least eight clubs whose stadia had too few seats
to satisfy the Professional League Standards minimum seating requirement for Division II. For
18. When the NASL requested the USSFs approval for continued sanctioning as a
Division II league for 2018, it sought only two waivers, which was fewer than the NASL had
sought for 2017. First, the NASL sought a waiver from exactly the same twelve-team requirement
as in 2017. The NASL still had only eight clubs confirmed to play in 2018 at the time of its
application, but now had multiple other clubs in discussions to join soon, demonstrating its efforts
19. Specifically, the NASL stated in its 2018 sanction submission letter to the USSF
that an ownership group in New Orleans had entered into a letter of intent to bring a new club to
the NASL, and that the league was also in discussions with ownership groups in Detroit and
Atlanta, with the goal of finalizing admissions for all of these clubs for the 2018 season. The
NASL further advised the USSF that it was in discussions with ownership groups in additional
cities.
20. Second, the NASL requested a waiver from the Division II Standards requirement
for clubs in at least the Eastern, Central and Pacific time zones ( IV.b.i), because the NASL did
not presently have a club in the Central Time Zone. The USSF had granted the NASL Division II
sanctioning in years past when the NASL did not have a club in the Pacific Time Zone, and there
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was no legitimate basis for the USSF to deny a waiver now. After all, the NASL had clubs in the
Pacific, Eastern and Atlantic Time Zones, and one of its clubs (Indy Eleven) was in the state of
21. On September 3, 2017, the USSF responded by denying the NASL Division II
status outright, refusing to grant any waivers, and refusing to grant even provisional Division II
sanctioninga decision that threatens to destroy the NASL in the imminent future, absent
injunctive relief. The USSF based its decision on its assertion that the NASL was not able to
provide the Board with assurances it would have greater than eight teams for the 2018 season, a
team in the central time zone, or any plan as to how it would come into full compliance with the
22. In contrast, the USSF responded to the USLs letter requesting renewed Division II
status for 2018 with the opposite approachby advising the NASL that it was giving the USL a
month to provide a plan for bringing its teams into compliance with the Division II Professional
League Standards and, on information and belief, by provisionally granting USL a large number
of waivers (perhaps as many as twenty) so that it can become the sole Division II league.
from the NASL while giving the USL an additional period during which to achieve that status, the
USSF intended to pressure NASL teams to abandon the league and join the USL, with the hope
and expectation that the number of teams choosing that route would be sufficient to cause the
NASL to cease being a viable league, thereby eliminating it as a competitor or potential competitor
to the MLS.
24. As explained below, Division III status is not a viable option for the NASL.
Nonetheless, it is noteworthy that in the letter confirming its denial of continued Division II status
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for the NASL, the USSF stated that the NASL could file an application for a Division III sanction.
The USSF knew that the NASL already clearly met the requirements for Division III sanctioning,
but instead of immediately offering that designation for the NASLs acceptance or rejection, the
USSF required the NASL to go through the unnecessary and time-consuming process of filing an
application. Upon information and belief, the USSFs course of action further reflects its desire to
25. The decision by the USSF to remove the NASLs Division II status will, if not
stopped by the Court, have devastating and irreparable consequences to the NASL.
26. Division III status is simply not viable for the NASL. The revenue levels typically
associated with developmental leagues are not enough to sustain the NASL and its clubs in a
manner consistent with its plans. The NASLs and its clubs business models are premised on the
27. I have invested millions of dollars in the Cosmos on the premise that the NASL
would at least retain its Division II status. Should the NASL lose its current Division II status as
a result of the USSFs decision, the Cosmos, and I believe the other NASL clubs, will no longer
be able to achieve the ticket sales, sponsorships and other revenues needed to enable our league to
28. In addition, NASL clubs have invested significant sums in attracting and
developing top player talent to compete for our respective clubs in the NASL as a Division II
league. If the NASL were to lose its Division II status, many of our top players will leave as they
will not want to be in a Division III league. The same is true for some of our valuable non-player
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employees who are essential to our businesses. Further, existing NASL clubs are likely to leave
29. If the NASL is able to maintain its Division II status, I believe it will be able to be
quite successful next season. The NASL has received letters of intent signed by six additional
teams interested in joining the NASL in 2018. Even if the NASL were to lose one of its current
clubs, this would bring the NASL 2018 club membership to at least 13, significantly more than the
ten-club requirement the USSF is applying to deny the NASL Division II status for 2018. But
those new clubs have expressly conditioned their intent on joining the NASL on it maintaining at
30. Time is of the essence in obtaining judicial relief. Without a preliminary injunction
within one month (i.e., by mid-October 2017) to prevent the USSF from revoking the NASL's
Division II sanction for the 2018 season, NASL clubs, including the Cosmos, face a serious risk
of being unable to conduct necessary preparations for the 2018 season, such as renewing
sponsorship and season-ticket holders, retaining players, and securing or renewing leases of
31. In sum, if the USSF's decision to strip the NASL of its Division II status is not
reversed or enjoined by mid-October, the very existence of the NASL will be in jeopardy.
I hereby declare under penalty of perjury under the laws of the United States that the