U.S. Soccer, Relevent Sports and the Legal Battle Over Staging Matches on USA Soil
Is the U.S. Soccer Federation illegally “closing the doors of the United States to international soccer” by preventing what would be the first foreign league soccer match played on U.S. soil? Or is the beleaguered governing body of soccer faithfully applying its rules in reaching its decision?
According to a petition filed by Relevent Sports in a New York trial court on Monday, U.S. Soccer and its secretary general and CEO, Dan Flynn, are breaking the law. The claim centers on U.S. Soccer’s apparent unwillingness to approve Relevent’s application to host an official league match between two professional Ecuadorian soccer teams that play in the LigaPro Serie A. The case has been assigned to Judge W. Franc Perry.
Relevent is a soccer promotion company owned by Stephen Ross, the billionaire owner of the Miami Dolphins. It has organized and promoted more than 100 soccer events in the U.S., including the International Champions Cup and other exhibition matches between the world’s top teams. It also tried, unsuccessfully, to stage a January La Liga match between Barcleona and Girona in Miami as part of a 15-year partnership with the Spanish league, despite staunch opposition from FIFA, UEFA the Spanish federation and Spanish players union. Perhaps, with an Ecuadorian league match used as a precedent, Relevent was looking to pave the way to a smoother attempt at staging a Spanish league match in the USA next season.
As for the match in question in this case, Relevent was planning to host a May 5th game between Barcelona Sporting Club—a 15-time champion in the LigaPro Serie A—and its hometown rival, Guayaquil City FC, in Miami’s Hard Rock Stadium. Relevent needed U.S. Soccer to authorize the match, though, and according to Relevent, U.S. Soccer has refused to grant approval, allegedly on grounds that Relevent submitted a faulty application.
Relevent disputes the truthfulness of U.S. Soccer’s explanation. Relevent insists that its application is complete and that it has cured any possible defects. Relevent further argues that U.S. Soccer has manufactured a pretextual explanation to disguise U.S. Soccer’s alleged conflict of interest with Major League Soccer. Along those lines, Relevent suspects that U.S. Soccer and MLS are narrow-mindedly fearful “that high-quality international soccer matches played on U.S. soil may have the potential to direct American viewership and American dollars away from the MLS and towards a different soccer product.”
Here's a closer look at the latest lawsuit on U.S. Soccer's hands:
Relevent’s application and U.S. Soccer’s problematic response
As retold in Relevent’s court petition, the company submitted its application to U.S. Soccer on March 29. The application procedure involves a multi-step process, with the first step requiring (among other things) details about the match and venue as well as contact information for the FIFA match agent, who is a licensed representative on behalf of FIFA.
Relevent describes U.S. Soccer’s role in evaluating applications as “ministerial” in that so long as basic requirements are met by the applicant, U.S. Soccer ought to grant approval. Stated differently, U.S. Soccer should not rely on other grounds to determine whether to sanction a match. To that point, U.S. Soccer’s policy manual instructs that its secretary general (Flynn) must promptly review requests to hold international soccer matches in the U.S. and that the secretary general “shall grant such sanction unless it is decided by clear and convincing evidence that holding or sponsoring the international soccer competition would be detrimental to the best interest of the sport.” This language suggests a fairly permissive application process and one that should not lead to rejections absent extraordinary circumstances.
In addition, U.S. Soccer’s application rules stipulate that so long as U.S. Soccer does not disapprove an application within seven days, then the application will be conditionally approved. Final approval occurs following the applicant providing insurance forms and various other materials. The applicant must also sign a match agreement with U.S. Soccer. Relevent asserts that it has furnished all of the necessary documentation for approval while depicting U.S. Soccer as largely unresponsive.
Now, 25 days after Relevent’s application—and with the proposed match less than three weeks away—U.S. Soccer has neither formally denied the application nor accepted it. On April 8, U.S. Soccer notified Relevent that its application was incomplete because Charlie Stillitano, the FIFA match agent who had signed Relevent’s application, was not listed by FIFA as a match agent. FIFA also contended that Stillitano, who is also co-founder and executive chairman of Relevent, had not yet completed his renewal of his match agent insurance.
Relevent insists that U.S. Soccer has the facts wrong. Relevent maintains that Stillitano remains a FIFA match agent in good standing despite being omitted—incorrectly, Relevent says—on FIFA’s website. To support that position, Relevent obtained an email from FIFA confirming that Stillianto’s insurance was in order and that FIFA intended to update its listing. Relevent also provided documentation showing that Stillitano’s existing insurance had not expired and is valid through June 10, a date that is more than a month after the May 5 match.
U.S. Soccer deemed Relevent’s attempt to cure its application as insufficient. It demanded that Stillianto’s name appear on FIFA’s online list of match agents. Relevent argues this requirement is unwarranted since there is no U.S. Soccer rule stating that a match agent must be listed on FIFA’s website. It’s unclear why FIFA has not updated its website to correct the apparent omission, but Relevent cites an email from FIFA in which it attributed “technical difficulties” in updating the list (it appears Stillitano’s name has since been added the list).
U.S. Soccer has threatened Relevent with penalties if it advertises the match without approval. Those penalties include fines and withholding of approval for other matches. U.S. Soccer also warns that FIFA could impose other punishments.
Ira L. Black/Corbis/Getty Images
Relevent’s legal claims
Relevent contends that U.S. Soccer and Flynn are in violation of Article 78 of New York’s Civil Practice Act. Among other purposes, Article 78 is a litigation device used to contest decisions that stem from administrative agencies, not-for-profits and other organizations’ internal review processes. Relevent demands that Judge Perry annul U.S. Soccer’s apparent refusal to sanction the May 5 match. Relevent insists that U.S. Soccer has acted in an arbitrary and capricious way by failing to offer a rational factual basis for ignoring or denying Relevent’s application. In addition, Relevent asserts that U.S. Soccer has engaged in a “willful disservice to American soccer in the name of profit.”
This isn’t the first dispute between Relevent and U.S. Soccer in which Relevent believes it was wronged. In addition to the Spanish league match in Miami that never materialized, according to Relevent’s court petition, Ross contacted U.S. Soccer and its president, Carlos Cordeiro, toward the end of 2018. At that time, Ross offered the Hard Rock Stadium as a venue for the second leg of the Copa Libertadores final. The match was supposed to be held at River Plate but was forced into relocation due to fan violence. Cordeiro, the petition contends, “effectively refused to engage” with Ross, and the match was instead played in Madrid.
Relevent insists Cordeiro’s frosty reaction “was patently contrary to USSF’s stated purpose of promoting soccer, including international games, in the U.S.” To that point, Bylaw 102 of U.S. Soccer’s bylaws expresses that the chief purpose of the not-for-profit is “to promote, govern, coordinate, and administer the growth and development of soccer in all its recognized forms in the United States for all persons of all ages and abilities, including national teams and international games and tournaments.” U.S. Soccer also invites applications to host international games.
As the country’s official governing body of soccer, U.S. Soccer plays an instrumental role in the sport, with respect to growing the international reputation of American soccer. U.S. Soccer has oversight authority over Major League Soccer and the National Women’s Soccer League. It also negotiates collective bargaining agreements with both the U.S. men’s and women’s national teams that compete in international competitions.
The Ted Stevens Olympic and Amateur Sports Act of 1978 is ultimately responsible for U.S. Soccer having these and other powers. The law entrusted the U.S. Olympic Committee with the authority to designate a national governing body for each Olympic sport. The U.S. Olympic Committee selected U.S. Soccer as the national governing body for soccer. This means that U.S. Soccer is the country’s official representative to FIFA. It also ensures that U.S. Soccer has the legal authority to sanction or prohibit the scheduling of professional soccer matches on U.S. soil.
U.S. Soccer has encountered several legal controversies in how it has carried out duties. In this instance, the controversy surrounds Relevent’s efforts to procure permission to host a foreign league soccer match. U.S. Soccer is also mired in legal disputes with USWNT players and Hope Solo over alleged gender-based employment discrimination, particularly with respect to glaring wage disparities between USWNT players and their male counterparts. U.S. Soccer has also battled with the U.S. Soccer Federation Foundation in a trademark dispute over ownership of the name “U.S. Soccer Foundation” and has faced multiple legal challenges from NASL.
Relevent contends that “the only possible explanation” for U.S. Soccer’s alleged “blatant disregard of its own charter” is U.S. Soccer “abusing its authority in order to protect MLS, a for-profit entity with which USSF has extremely close financial and personal ties.” In an attempt to evidence this charge, Relevent details a “closely intertwined” U.S. Soccer and MLS. The petition notes that MLS commissioner Don Garber sits on the U.S. Soccer Board of Directors and serves as CEO of Soccer United Marketing, a for-profit entity owned by MLS. Soccer United Marketing also acts as U.S. Soccer’s marketing vendor. In January 2018, SI's Grant Wahl wrote extensively on Soccer United Marketing and noted how “questions have been raised over whether the relationship between U.S. Soccer, Soccer United Marketing and MLS is too cozy and has conflicts of interest.” Wahl also quotes Garber, who told Wahl in 2014 that U.S. Soccer and MLS are “joined at the hip.”
To accentuate its claim that U.S. Soccer intolerantly denies American soccer fans of opportunities to watch matches with superior talent, Relevent unfavorably compares U.S. Soccer with sports governing bodies and leagues found in other countries. Relevent notes that England has welcomed NBA games played in London even though NBA games feature more talented players than those in England’s National Basketball League. Similarly, China, which has the Chinese Basketball Association, has hosted NBA China Games. These games feature NBA teams playing one another in Chinese venues, for 15 years—and, perhaps not coincidentally, over that time more NBA players have signed with Chinese Basketball Association teams and thus ties between the U.S. and China on basketball have strengthened. Further, while U.S. Soccer is alleged to have “effectively closed the doors of the United States to international soccer,” Japan has welcomed Major League Baseball games, while Finland and Sweden have welcomed NHL games. As depicted by Relevent, U.S. Soccer “is damaging the reputation of the United States around the globe by fostering a perception of the U.S. as a nation willing to export our sports, yet not reciprocate.”
With these arguments, Relevent contends that U.S. Soccer has “elevated the economic interest of a select group of its members over its statutorily-mandated purpose.” Relevent maintains that U.S. Soccer will damage Relevent’s goodwill in the international soccer community and, unless the court requires that U.S. Soccer approve the application, interfere with its future revenues.
U.S. Soccer’s response and chances of a settlement
U.S. Soccer issued the following statement Tuesday, claiming that Relevent took legal action before the federation even reached an official decision regarding its request:
"U.S. Soccer’s process for approving international matches follows the FIFA statues established to govern the game across the globe, which is required of all Federations and Confederations. When Relevent Sports Group requested to host a competitive league match in Miami between two Ecuadorean clubs, their application went through our review process for international match approval, which we conduct on the more than a hundred applications we receive each year from dozens of promoters.
"As part of this review process, we reached out to the Ecuadorean Football Federation and CONMEBOL to confirm whether they were aware that the proposal involved a competitive league match. As of today, we have yet to receive a response to this inquiry. At the same time, we also reached out to FIFA and verified the FIFA Council’s October 2018 confirmation stating 'the sporting principle that official league matches must be played within the territory of the respective member association.'
"Due to this lack of clarity from Ecuador and CONMEBOL, U.S. Soccer was in direct discussions with Relevent about their application. Considering our conversations with Relevent were ongoing, we were surprised legal action was taken on this matter before we provided an official decision. In the end, due to the fact that we did not receive any additional information from the pertinent parties and the application sought to allow two Ecuadorean teams to play a competitive league match outside their country, which would go against the FIFA Council’s October 2018 confirmation, we informed Relevent on Monday that we would not approve the requested match."
In terms of other defenses, U.S. Soccer could opt for plenty of tactics.
First, U.S. Soccer will object to, and probably try to ridicule, Relevent’s claim that U.S. Soccer is engaged in an illegal conspiracy with MLS to deny American soccer fans of international matches. U.S. Soccer will be inclined to list the international matches and global initiatives it has approved. It will do so to diffuse Relevent’s depiction of U.S. Soccer as protectionist and exclusionary.
Second, U.S. Soccer will likely stress that its unwillingness to approve the May 5 match reflects what it will depict as serious defects and real trouble spots in Relevent’s application. U.S. Soccer will stress the importance of properly-licensed FIFA match agents. Such agents are deemed official representatives of FIFA in arranging matches, and given that important role, U.S. Soccer will assert it must be certain of the agent’s credentials. Along those lines, U.S. Soccer might contend that Relevent has not adequately cured questions about Stillitano’s status with FIFA (though, as explained above, it seems that Relevent has taken key steps to address such worries).
Third, U.S. Soccer will emphasize that the “arbitrary and capricious” standard under Article 78 is a high one for Relevent to meet. Relevent must establish that U.S. Soccer’s decision-making is not reasonably related to the facts. This is a fairly deferential standard to U.S. Soccer, since U.S. Soccer’s decision-making doesn’t necessarily need to be “correct” but only “reasonably related” to the information it possesses. While Relevent will argue that U.S. Soccer didn’t adhere to its own rules, U.S. Soccer will characterize its concerns as reflecting proper deliberation for an organization of U.S. Soccer’s significance. Along those lines, U.S. Soccer will detail its procedural steps in evaluating the application, including an attempt to contact Ecuador and COMMEBOL for additional information. U.S. Soccer might also argue that Relevent should have better reviewed Stillitano’s status before submitting the application. Likewise, if Relevent had applied earlier in 2019, there would have been more time to address U.S. Soccer’s concerns.
Michael McCann is SI’s legal analyst. He is also Associate Dean of the University of New Hampshire School of Law and editor and co-author of The Oxford Handbook of American Sports Law and Court Justice: The Inside Story of My Battle Against the NCAA.
