Pro-Rel to CAS: The hurdles proponents face

Pro-rel is a subject that will not go away. The latest: the NASL's Miami FC and amateur Kingston Stockade FC of the NPSL are taking U.S. Soccer, Concacaf and FIFA to the Court of Arbitration for Sport, filing a claim to require promotion and relegation be adopted across all U.S. divisions.

The case comes a little more than a week after a report that international media company MP & Silva (whose founding partner is Miami FC owner Riccardo Silva) offered $4 billion for MLS's global media rights on the condition that MLS institute a system of promotion and relegation. With a binding television contract that prohibits it from negotiating with others, MLS did not consider the offer.

The case will face several hurdles.

1. Have the parties exhausted their legal remedies?

CAS could throw the case out, saying that the pro-rel proponents must exhaust their administrative remedies through FIFA first (or as FIFA states in Article 58 of the FIFA statutes, "internal channels").

2. Does FIFA require promotion and relegation?

Miami FC and the amateur Kingston Stockade hang their hat on Article 9 of the FIFA statutes, which states:

“A club's entitlement to take part in a domestic league championship shall depend principally on sporting merit. A Club shall qualify for domestic league championship by remaining in a certain division or by being promoted or relegated to another at the end of a season.”

FIFA goes on to state:

"In addition to qualification on sporting merit, a club’s participation in a domestic league championship may be subject to other criteria within the scope of the licensing procedure, whereby the emphasis is on sporting, infrastructural, administrative, legal and financial considerations. Licensing decisions must be able to be examined by the member association’s body of appeal."

The licensing requirements in countries like France and Germany are indeed quite rigorous for teams seeking to gain promotion. Indeed, the likely outcome of promotion and relegation in the United States, at least between D1 and D2, would be that the "licensing requirements" -- e.g. similar to U.S. Soccer's sanctioning requirements or MLS's requirement of expansion bidders -- would exclude most promoted teams as things exist now.

A key question is whether FIFA even requires leagues to operate pro-rel or whether those operating pro-rel must abide by the requirements it set out.

In March 2008, FIFA specifically mentioned "closed leagues" like those that operate in the United States and Australia when it stated the purpose of instituting new rules for other leagues -- those using promotion and relegation:

Concept: Results on the pitch decide whether a club goes up or down a level in every championship around the world except in the United States and Australia, where there are "closed" leagues. Recently it has been possible to achieve promotion artificially by buying or moving a club. FIFA wishes to make sure that this cannot happen again.
Objective: To protect the traditional promotion and relegation system for clubs based purely on sporting criteria - which is the very essence of football.

FIFA then used the example of a Spanish fourth division club buying a second division club to claim promotion. (The same thing has happened in Mexico where relegated clubs have bought other clubs to stay up.)

The legislative history of Article 9 suggests it covers leagues that use promotion and relegation, not that it requires promotion and relegation. Since 2008, India has adopted a "closed system," at least for the top-level Indian Super League.

In the long term, the only case a club like Miami FC might have is to take U.S. Soccer to U.S. Federal court on antitrust grounds to attack U.S. Soccer's sanctioning authority to classify a league like MLS as "Division I" and in effect create barriers for other competitive leagues to attract investment.

U.S. Soccer and MLS have won every legal battle up until now, though their antitrust protection has not been fully confirmed because of the peculiarities of the cases. In any event, such a new legal battle would be lengthy and costly, likely beyond the capacity of the plaintiffs to survive.
28 comments about "Pro-Rel to CAS: The hurdles proponents face".
  1. Footballer Forever, August 3, 2017 at 10:37 p.m.

    I am freaking tired of these pro/rel people. Some are naive, some are idealists and most of them are simply wanting to force themselves into without properly investing in it the way MLS did. Where were all of you when the league's franchise was at $5 million dollars? Nowhere! Now that the league has flourished, now you want to force yourself so you are allowed in by pro/rel. Soccer is not quite ingrained in American culture to even think about the pro/rel , if any. Stop all the pro/rel BS already.

  2. Paul Cox replied, August 4, 2017 at 8:32 a.m.

    There's absolutely nothing wrong with wanting pro/rel, and even if we accept that we're not quite ready for it yet (that's my belief, anyway) if we don't demand it and start asking for it, the conversation of "what will it take to get us there" won't start.

  3. R2 Dad replied, August 4, 2017 at 8:35 a.m.

    Or, you might look at it this way: MLS is the first soccer league to succeed in the US market because it benefited from the billions of dollars US parents have invested in soccer over the past 30 years. Convenient timing enabled the success of MLS. Yes it's a sunk cost, but think of Garber as someone who has been able to time the market properly. It's not magic, it's not manifest destiny. It's still possible Garber falls off the horse at some point, but it's been pretty smooth so far. And just because MLB and NFL operate as closed markets does not necessarily mean US Soccer should concede this is the only model that works in the US because we're "special". I understand and agree with your point--the battle is over. But losers in the US simply resort to more litigation--it's become the american way.

  4. don Lamb replied, August 4, 2017 at 3 p.m.

    R2 - The first decade of MLS' existence was pretty dire, and that was after a couple decades of investments from parents in their children's soccer experience that you describe AND World Cup '94. The last decade has been a different story, fortunately. The point is that the league needed a hell of a lot more going for it than "billions of dollars US parents have invested in soccer." The conclusion is not that "the battle [over pro/rel] is over." The conclusion is that the battle should not have been waged yet. Promotion and relegation should absolutely be a possibility, just not in this or any previous landscape. Let's have the league at full maturity with lower divisions also being robust, and then we can have logical discussions about implementing a system that includes promotion and relegation.

  5. Fire Paul Gardner Now replied, August 4, 2017 at 4:31 p.m.

    Right now, the lower divisions include a basketcase NASL that will be broke/defunct soon and a USL where half the league is MLS reserve teams. USL is growing and adding new markets but that process is still ongoing. Last year by far the best team in USL was the Red Bulls' reserve side.

  6. don Lamb replied, August 4, 2017 at 6:46 p.m.

    H - "Full maturity" is at a minimum when the league gets to it's stated goal in terms of size with 28 teams. The lower divisions need to have been around for more than a couple years and, more importantly, the structure of the lower divisions needs to shake out. USL 2 will play a big role in that as it will create a unified MLS>USL>USL2. Three divisions working in concert is exactly the type of infrastructure that we need in order for a system of promotion and relegation to supersede the current model.

  7. R2 Dad replied, August 4, 2017 at 7:31 p.m.

    "The conclusion is that the battle should not have been waged yet." Really? Do you think there is a future? I'd say it's all but wrapped up. US Soccer is in bed with MLS--can you really see Sunil running counter to Garber, regardless of what the courts decide? That would require huevos Sunil doesn't appear to possess. I hope you're correct. Pro/Rel doesn't appear to be in the cards any time soon--or even in our lifetimes.

  8. Footballer Forever replied, August 7, 2017 at 12:44 p.m.

    @Paul Cox, One thing is to want pro/rel and another is to demand it. NASL had the premier opportunity to grow the game in the 1970's and what did they do, they blew it. The structure of this country is different, not perfect, to others around the world and the sporting culture is not any different.

    Based on the sports ingrained culture, Baseball , Eggball and basketball have a better chance of copying the pro/rel , but they don't go for it. MLS which barely has over 20 years of existence, it is beginning to reap the benefits to solidify themselves, continued growth television ratings growth is the last frontier to conquer.

  9. Scott Johnson, August 3, 2017 at 11:23 p.m.

    Whatever the soccer merits of pro/rel, the legal argument being advanced here is fatuous. Do they suppose that FIFA has the power to compel MLS to relegate its member teams? FIFA hasn't been able to even compel training compensation in the US; about the only stick FIFA has is the threat to disassociate all or part of US soccer, and they aren't going to do that over these issues.

  10. Bob Ashpole replied, August 4, 2017 at 5:45 a.m.

    Worse than that--exclude MLS franchise holders from MLS competitions and allow other corporations to complete in MLS competitions. Obviously these plaintiffs think this will allow them to take the contractual rights away from MLS franchises by winning another leagues competition instead of winning the marketplace competition for entry into MLS. Usually arbitration resolves contract disputes. This is no contract dispute. In fact this is no dispute over any kind of legal right.

  11. Bob Ashpole, August 4, 2017 at 5:51 a.m.

    Good article. Thanks Paul.

  12. frank schoon, August 4, 2017 at 8:28 a.m.

    Good grief...I sense a 1849 Gold Mine rush. Everybody is getting into the act wanting a soccer team. I think the Real Madrid vs Manchester United game held in Ann Arbor, Michigan, a college town, which drew almost 110,000 fans has spurred investors into the game of soccer. I'm afraid we're moving a little too fast. It reminded me of the NASL where after the dust was settled investors finally realized things moved a little foo fast. I love the dynamics of what is happening but we need to take a step back and first try to improve the quality of the game, and of the player development here. I would feel much better if all these were producing a world star in their midst but I'm afraid that is not the case. I think we need to sort things out and spend an inordinate more time in how to increase the quality of the player and the game itself, first and everything will follow from there on. We don't need 10,000 soccer teams here filled with players whose quality is comparable to English third division.

  13. frank schoon replied, August 4, 2017 at 9:55 a.m.

    H,You stated I thought the MLS teams have academies developing youth teams, or maybe I'm wrong. I stated we are moving a little too fast for all this. I didn't say that the Pro/Rel doesn't work no where else. You need to read a little history of how the Pro/Rel got started for example in Europe, take Holland for example. It wasn't that easy. As a matter of fact a lot of soccer divisions have disappeared because of economic issues. The European countries have a soccer history and where things moved on as needed in a step by step approach. All I"m saying is that we need to be very careful for we have no history to follow on, other than a lot of failures like the NASL and the previous professional league set up back in the late 60's, and there are a lot of other factors that are coming into play which are much different than in Europe. The statement that the MLS system produces mediocrity, it might, but I think it is more of a question of the overall lousy development of the youth here ,regardless of the MLS.
    To tie in the MLS style with Ajax in how they produce players is a bit naive and a non-sequiter for you have to understand the cultural aspects of how soccer players develop in Holland. Some of the suggestion you made like having a U16-U18 could have possibilities, or requiring teams to have a 2nd division , I can't argue with that for you might be right, I don't know. All I'm saying we have to be very careful in mapping things out.

  14. frank schoon replied, August 4, 2017 at 10:55 a.m.

    H to say< that we must be careful because of what happened 30 years ago is nonsensical because the overall interest in soccer is completely different from then to now> True ,there is much more interest in soccer as shown in the crowd at Ann Arbor. But it is also nonsensical to say that since we now have more interest in soccer we won't be making mistakes like we did in the past; everything is relative ,mistakes are made all the time. That is why we need to be careful in how to plan this out. I remember back in the 70's when the Cosmos drew crowd of over 60,000 and out drew the NY Giants football team. NASL Crowds participation was good in many cities, but certain things were overlooked and again we can't afford
    to overlook and not be vigilant for we are entering a whole new arena which can become very costly if we do it wrong

  15. Paul Berry replied, August 4, 2017 at 12:34 p.m.

    Every MLS club has an academy as do most USL teams. There are 104 home grown players in MLS, 54 of whom have signed professional terms in the last two years, the vast majority being academy products. Academy graduates include Bill Hamid, Kellyn Acosta, Gyasi Zardes, Tyler Adams, Andrew Carlton, Ian Harkes, Jesse Gonzalez, Justen Glad, Will Trapp and Alphonso Davies.
    DC United has the only academy that is still pay to play. Full list of USDA academies

  16. frank schoon replied, August 4, 2017 at 4:31 p.m.

    H, I'm not talking about the same mistakes for obviously we have moved beyond that point, but mistakes can and we always be made for are moving into a whole new and different direction where we likewise have history to fall back on. As far as Pele drawing a crowd, yes, that was in the beginning for he kickstarted things, but after that we had Beckenbauer, Gerd Muller, Rensenbrink, Cruyff, George Best, Rodney Marsh, and tons of other world stars. Can you imagine if they were playing today in the MLS

  17. Eric Piazzoni, August 4, 2017 at 8:53 a.m.

    The closed league structure is also being challenged in Australia.

  18. Paul Berry replied, August 4, 2017 at 12:38 p.m.

    CAS will refer them to FIFA who will refer them to CONCACAF which needs MLS until Silva puts his money where his mouth is and develop a competitive D1 to challenge MLS. I can't see how Kingston could qualify for D3 anyway, the nearest stadium with a sufficient capacity being 45 minutes drive.

  19. Fire Paul Gardner Now, August 4, 2017 at 10:05 a.m.

    One thing I don't agree with is the last sentence of the article. Silva is a pretty wealthy guy. If he wants to, I'm sure he can afford the legal fees.

  20. Bob Ashpole, August 4, 2017 at 11:13 a.m.

    H, you are overgeneralizing. Some FIFA members don't even have a professional league, much less professional clubs with youth academies. The mature soccer market in cities like London is not a universal condition.

  21. frank schoon replied, August 4, 2017 at 11:26 a.m.

    Bob, good point.

  22. Bob Ashpole, August 4, 2017 at 11:26 a.m.

    By the way, FIFA by-laws only give FIFA jurisdiction over international disputes. The plantiffs are attempting to bypass the FIFA jurisdictional limitations by jumping straight to the appeal process and thus creating another jurisdictional issue. Miami FC is trying to manufacture an international dispute by combining their case with Kingston and including FIFA and CONCACAF in what is really a domestic dispute between USSF and a US club.

  23. Bob Ashpole replied, August 4, 2017 at 11:28 a.m.

    Ouch. Not FIFA bylaws--USSF bylaws. Sorry for any confusion.

  24. Bob Ashpole, August 4, 2017 at 11:44 a.m.

    The frustration with this forum's software is not simply that posters cannot edit their comments after posting, but also that the application edits the comments and the posters cannot see those edits before they become permanent and uncorrectable.

  25. Nick Daverese, August 4, 2017 at 6:53 p.m.

    Very rarely it might get a coach who is coaching second division to coaching first division. And that is only because the manager is willing to manage a team for very little money.

  26. Michael Neubauer, August 6, 2017 at 8 p.m.

    Proreg is the only way we will get great MLS and even the lower leagues are fore me retirement liegues where a lot of player how won't get playing in so they play to they are 40 here what's ok so long our Jung players get a chance but it won't make them more competitive if they can't make up to the top.

  27. Brian McLindsay, August 7, 2017 at 4:50 p.m.

    I see little to no chance in the near term for Pro/Rel. to be implemented. The founding MLS owners have taken significant risk to get the MLS to where it is, regardless of parents paying for player development, and because they had the insights and stomach for financial risk they have the right to set terms for league operations. If Silva, the NASL team owner wants to spend the money to locate a team in a targeted MLS expansion area along with the required infrastructure plus I believe $500MM in franchise fees, he would have a greater appreciation for limiting Pro/Rel. at this time. It is in fact a gold rush occurring in the U.S., we are seeing all top international teams opening offices, academies and developing alliances throughout the youth soccer system. I have little doubt that we will see some international MLS team ownership quite soon. That type of interest and decision making shouldn’t be surprising if you consider the amount of money that has recently been generated in the mature international soccer markets and that the U.S. is likely THE single largest under developed soccer market in the world having the highest spectator growth rates and burgeoning player development feedstock. It is a false choice to suggest top player development will only occur when you have Pro/Rel., there are a number of ways to improve the player development quality (just as we are now seeing it improve on a smaller scale). Would Pro/Rel. help expedite the player development…I don’t know, but our traing processes are improving, coaches and DOC’s are starting to look for the fastest thinkers rather than the fastest runners and the MLS Academies should help get the youth player selection process in order.

  28. Brian McLindsay, August 9, 2017 at 11:16 a.m.

    HS- I'm not sure what world you live in but it is not the same world most of us are living within. The answer is no, most of the money was not risked by the tax payer. The way you get cities to be involved in sports stadiums is usually through tax breaks and showing the additional business revenues the city will enjoy over time with a sports event. Each tax payer has a minuscule investment that is compensated in access to the sport. In no way is it reasonable to suggest an aggregate group of fans who have taken no tangible risk, should have any real input into its operations except as an expressed desire. In the real world, rarely is there one business entity that takes 100% of the risk in any venture, but usually the largest investor maintains the preeminent decision making position. Your idea is aiken to one shareholder of Apple standing on a street corner telling the Apple BOD how they should be selling the next version of the iPhone. You have offered a nonsensical argument.

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