The Commisso proposal: A look at the issues the parties are dancing around

• by Paul Kennedy  @pkedit, Apr 30, 2018

New York Cosmos owner Rocco Commisso has been backing or connected to multiple lawsuits regarding the NASL's relationship with U.S. Soccer and the latter's ties to MLS and SUM, but he remains willing to deal with U.S. Soccer.

Those lawsuits -- which include suits in Federal court and New York state court and before the USOC -- remain the elephants in the room as Commisso seeks to open talks with U.S. Soccer's new president, Carlos Cordeiro, on his plan to relaunch a pro league for the Cosmos and other existing or new teams.

The letters:
Commisso to Cordeiro: April 13
Cordeiro to Commisso: April 19
Commisso to Cordeiro: April 23
Flynn to Commisso: April 29

In his initial letter to Cordeiro, Commisso offered ...

-- To invest $250 million of his own money as part of an investment package of $500 million to allow 10 teams to start play in 2019 and receive financial backing to get stadiums ready for the new venture. (Commisso says that, if successful, he expects subsequent rounds of financing "could see the initial funding amount double.")

-- To buy, directly or through a consortium, the same national team rights for a higher price than SUM currently pays U.S. Soccer.

The essence of what Commisso wants ...

Ten-year runway. He wants assurances from U.S. Soccer that the new league will get a 10-year runway to meet U.S. Soccer's divisional standards -- time to attract new investors and build sustainable, independently owned teams.

Commisso compares his situation to that of MLS in its early years when a few wealthy owners (Philip Anschutz and the Hunt and Kraft families) were given time for the league to stabilize and attract new ownership. (He requests a waiver on investors on owning multiple teams, citing Mexico's Liga MX as an example of a league where investors currently have interests in more than one team.)

Commisso's conditions:
-- End to conflicts arising from U.S. Soccer's relationship with SUM (or proper management of conflicts);
-- Equal representation and voting power on U.S. Soccer's board for each pro league;
-- Rules established to address what Cordeiro describes as “poaching” strategies utilized by both MLS and USL to destabilize competing leagues;
-- Ban on board members with ties to pro leagues or business partners (e.g., MLS commissioner and SUM CEO Don Garber) from playing any role in the selection of the board's independent directors or Athlete Council members);
-- An open and competitive bidding process for the licensing of the U.S. national team rights currently held by SUM.

Promotion/relegation? While not a condition of his Commisso's proposal, he says the current divisional structure created by the Pro League Standards "is meaningless absent a system of promotion/relegation" and he "strongly" believes they should be revised so that all pro leagues under U.S. Soccer must participate in an open system that includes promotion/relegation by no later than the 2020 season.

Cordeiro's response: In a nutshell, Cordeiro says he's ready to "re-open a dialogue and to determine whether there is a mutually agreeable path forward that does not involve a multiplicity of legal proceedings."

Dancing around the issues ... For any talks to begin, the parties will need to agree to several pre-conditions for talks that get at the essence of how seriously they want to negotiate -- or how serious they believe the other parties are ...

1. Cordeiro wants a better idea of what Commisso proposes -- a “detailed” written proposal -- to determine how serious Commisso is. Commisso response: his investment plan is predicated on an agreement on the 10-year runway and his conditions for restructuring.

U.S. Soccer is likely skeptical of Commisso's proposal, given how talks went last fall on a settlement of the antitrust suit.

More specifically, some of Commisso's conditions might be beyond Cordeiro or his board to approve themselves: U.S. Soccer membership would need to approve a restructuring of the board's pro representation; U.S. Soccer's contract with SUM will likely grant the latter some form of first rights to negotiate; and U.S. Soccer's ability to regulate some areas of league expansion might face additional legal scrutiny.

2. Commisso says "time is of the essence" -- plans for 2019 need to be finalized soon -- while Cordeiro, knee deep in the work of the United 2026 bid committee for which he is now a co-chairman, says he's preoccupied for the "next the month or more." (A decision on the 2026 World Cup host is slated to be made on June 13 at the FIFA Congress in Moscow.)

Cordeiro wants others in the federation -- U.S. Soccer CEO and secretary general Dan Flynn and board representatives -- to initially meet with Commisso.

Left unsaid, any negotiations, if they got serious, would require both parties to address those elephants in the room and seek a settlement of the lawsuits.