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Case 1:17-cv-05495-MKB-ST Document 3-2 Filed 09/20/17 Page 1 of 9 PageID #: 110

UNITED STATES DISTRICT COURT


EASTERN DISTRICT OF NEW YORK

NORTH AMERICAN SOCCER LEAGUE,


LLC,

Civil Action No. 1:17-cv-05495


Plaintiff,

v.

UNITED STATES SOCCER FEDERATION,


INC.

Defendant.

DECLARATION OF ROCCO B. COMMISSO

I, Rocco B. Commisso, hereby declare as follows:

1. I am the Chairman of the North American Soccer League (NASL) Board of

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.

The USSFs Separation of Mens Professional Soccer Leagues into


Closed Divisions Through Its Professional League Standards

2. The United Stated Soccer Federation (the USSF) has asserted the exclusive

power to sanction U.S.-based professional leagues on behalf of Fdration Internationale de

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.

4. The Professional League Standards include a number of requirements that, in my

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,

discriminatory and bears no relationship to any proper sanctioning determination.

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

(MLS)from the positive forces of competition.

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6. In the U.S., whether a team is thought of as major league or minor league is an

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,

including the necessary government funding and permits.

7. I believe that the USSFs so-called Professional League Standards are a set of

ever-changing and discriminatorily applied criteria that serve no legitimate procompetitive

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

in the case of a Division II rather than Division I certification.

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

league rival to MLS.

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

Division II league in a role secondary and subordinate to MLS.

The USSFs Recent Anticompetitive Application of its Professional


League Standards and Sanctioning Determinations as to the NASL

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

its Professional League Standards in a discriminatory manner, in what is now transparently a

scheme to eventually replace the NASL in Division II with USL.

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

meet all the standards set forth by U.S. Soccer.

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

USL, these requirements were waived.

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

and progress toward satisfying the twelve-team Division II requirement.

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

Indiana which partly occupies the Central Time Zone.

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

Federations professional league standards.

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.

23. In my view, by making its decision withholding continued Division II sanctioning

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

force the NASL to cease operations.

The Irreparable Harm Inflicted by the USSF Disrupting the


Status Quo and Denying Division II Certification to the NASL

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

NASL beingat a minimuma Division II league.

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

be successful in accordance with our competitive plans.

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

the league if it cannot maintain at least its Division II status.

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

least Division II sanctioning.

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

stadiums to play in.

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

foregoing is true and correct.

Executed on Septembell~ 2017.