U.S. Soccer faces yet another antitrust suit in federal court

• by Paul Kennedy  @pkedit, Sep 9, 2019

The first day of U.S. Soccer's transition from CEO Dan Flynn, who is stepping down after 19 years as the federation's top executive, started off with a bang.

Another antitrust lawsuit filed in federal court. With a familiar issue. And involving a familiar plaintiff's attorney.

The Relevent Sports Group has sued U.S. Soccer in U.S district court in New York over the federation's policy for sanctioning international matches, arguing it violated federal antitrust law by conspiring with FIFA to prevent clubs from playing international matches in the United States if they have not been sanctioned by U.S. Soccer.

It argues the sanctioning fees the federation charges -- it states it paid the federation $20.5 million over the last six years -- amounted to a restraint on trade and its actions were intended to protect Soccer United Marketing, U.S. Soccer's marketing agency that is owned by MLS owners.

The issue at hand: Relevent's attempt to organize "official" matches in the United States and what it argues is U.S. Soccer's anti-competitive stance on the issue.

Relevent argues U.S. Soccer sanctioned the SuperCopa MX and Campeon de Campeones, SUM-promoted Mexican cup matches, but doesn't sanction other official matches.

It described the Campeon de Campeones as a "match, which crowned the champion of Liga MX," though it would be generally considered to be nothing more than a preseason "super cup" match commonly played by league champions. (What Relevent doesn't say is that U.S. Soccer has also sanctioned other super cup matches not involving SUM like the French Trophée des Champions and Italy's Supercoppa Italiana.)

SA Reading:
2010: Federal court ruling threat to U.S. Soccer's authority
2012: U.S. Soccer wins six-year antitrust suit
2019: U.S. Soccer hauled into court again, sued over sanctioning power

In 2012, U.S. District Judge Harry D. Leinenweber ruled for U.S. Soccer in the six-year antitrust case against ChampionsWorld, the organization formed by soccer executive Charlie Stillitano to promote international matches in North America. Stillitano is the executive chairman of Relevent Sports.

The plaintiff's attorney is Jeffrey Kessler, who also represents the NASL in an antitrust suit against U.S. Soccer and MLS and U.S. women's national team players in a gender discrimination suit against U.S. Soccer.

Relevent Sports Group, which promotes international friendly club games in the summer and national team matches throughout the year, has a partnership with La Liga and has been pushing to play in official league matches in the United States.

The issue came to a head when Relevent Sports Group tried to play an Ecuadoran league match -- Barcelona SC vs. Guayaquil City FC -- on May 5 at Miami's Hard Rock Stadium. When sanctioning was not forthcoming from U.S. Soccer, Relevent sued in New York state court to compel the federation to sanction the game.

In its defense, U.S. Soccer argued it did not receive approval letters from the Ecuadoran federation or Conmebol, the South American confederation, for the match -- in its current complaint Relevent states those written approvals were submitted to the federation -- and it was acting on the recommendation of FIFA. In October 2018, the FIFA Council issued a statement upholding "the sporting principle that official league matches must be played within the territory of the respective member association." (Relevent's position: the statement from FIFA Council conveyed no authority.)

Relevant has also tried to play Barcelona-Girona, an official La Liga match, and the second leg of the River Plate-Boca Juniors series in the 2018 Libertadores Cup final that had to be moved from Buenos Aires at Hard Rock Stadium, home of the Miami Dolphins, whose owner, Steven Ross, also owns Relevent.

The ChampionsWorld suit, initiated by the creditors of the bankrupt company, was by Judge Leinenweber's own admission a case of considerable size and complexity, and it was decided on legal technicalities.

Judge Leinenweber ruled that as a FIFA match agent, Stillitano was required to take any dispute to arbitration before the FIFA's player' status committee, which ruled the federation had the authority to require international matches be sanctioned and to impose fees for organizers to put on the matches.

Both the authority of the FIFA player' status committee to arbitrate the case and its decision were upheld by the Swiss-based Court of Arbitration for Sport (CAS). What CAS also noted -- and Relevent points out in its lawsuit -- is that FIFA had no authority to give U.S. Soccer antitrust exemption nor for FIFA to rule on U.S. antitrust law.

The antitrust aspect of the ChampionsWorld case was dismissed when Judge Leinenweber threw out the testimony of ChampionsWorld's expert witness as failing to define a relevant market. (The failure to show a product market and geographic market that could be conspired to be controlled -- an essential element of an antitrust case -- was also the successful defense in another soccer case Kessler filed -- Fraser v. MLS, the players' suit filed in 1998 to attack MLS's single-entity.)

Relevent's argument is that it is not bound by FIFA's arbitration rules because it's not the FIFA match agent in the games it is attempting to promote. In its case, Relevent defines the relevant market as "international soccer game events in the U.S."