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U.S. Soccer prevails in potentially ugly lawsuit

Aug 17, 2012, 5:39 PM EDT

us soccer

Circle this as a story that never became a big deal – but certainly could have been.

ChampionsWorld is a defunct promoter of a series of friendlies in the United States. In 2003 and 2004, the ChampionsWorld Series drew boffo crowds for matches involving several Euro heavyweights.

And yet, swimming in debt and facing increasing costs of staging the matches, the company filed for bankruptcy in 2005.

So ChampionsWorld LLC field suit in 2006 against U.S. Soccer, claiming essentially that the federation and MLS conspired to put the company out of business.

The case had been moving through the courts until today, when a U.S. district court issued summary judgment in favor of U.S. Soccer and MLS.

There’s plenty of background on the matter from Soccer America here. (The article is two years old but still germane.)

U.S. Soccer today issued a brief statement:

Earlier today, Judge Henry Leinenweber of the United States District Court for the Northern District of Illinois granted summary judgment in favor of U.S. Soccer and Major League Soccer (MLS) on each and every claim brought by ChampionsWorld, a former international games promoter.

The ruling enforced a decision in July 2011 by the Court of Arbitration of Sport that as a national association member of FIFA, U.S. Soccer has the authority to sanction and charge fees for international exhibition matches involving FIFA-affiliated clubs and teams.

Championsworld had claimed that U.S. Soccer conspired with MLS to use sanctioning policies to drive them out of business.

I am no legal expert, but the ChampionsWorld series always left me feeling a little conflicted. On the one hand, the promoters’ ability to sign up teams, secure a venue and then charge fans to watch is nothing more than free market capitalism at work. But …

Something always seemed askew. Major League Soccer investors were pouring millions of dollars to build the pro soccer market here. They were doing the daily nitty gritty in terms of grass roots awareness and daily media nourishment. So it seemed somehow improper that promoters with no real stake in the game’s overall growth were planting crops on the fields that others had so dutifully worked.

Besides, ChampionsWorld or any other promoter never had an obligation to be mindful of the MLS or U.S. Soccer properties, so conflicts were always a potential issue.

Not that U.S. Soccer nor Soccer United Marketing nor MLS needs to control everything in and around the sport domestically. But in this case, it seems only fair that U.S. Soccer or MLS have some control, or at least the ability to sanction.

The U.S. courts apparently believe so, too.

  1. joeyt360 - Aug 17, 2012 at 7:28 PM

    I remember this case. I am surprised that it ever went to court, figured it had been settled quietly for pennies on the dollar a long time ago.

    The logic seemed powerful on both sides. On CW’s side, Stillitano had long since left and joined CAA in an if-you-can’t-beat-them-join-them venture with SUM. As nothing but a group of creditors of bills Stillitano couldn’t pay, they had no reason to stand up for precedent.

    And on US Soccer/MLS’s side, they’d made a previous motion for summary judgement denied, and the language was very broad and pretty scary. Essentially, the judge in that one said (in remarks that do not have precedential value) that US Soccer had no statutory authority to ‘govern’ the sport in this country, that the Amateur Sports Act governed only Olympic team. Needless to say, an actual verdict like that would have been hugely damaging to US Soccer far beyond the case at hand.

    Now, such a verdict was always a long-shot. It’s awkward in the first place to sue a not-for-profit (which US Soccer is) for restraint of trade (because monopoly profits is usually the point of restraining trade), but it’s even worse if they can argue they have a charter whose remit is precisely to favor the domestic game over the foreign.

    Still, what does one usually do when there’s a longshot chance of a disastrous outcome? One buys insurance against it, and that’s what I thought a small-time settlement would have been.

    But I’m a lot happier to know that it’s not likely to be a nagging concern down the line for US Soccer. USSF is precisely the kind of ‘monopoly’ that could have kept boxing a relevant sport instead of what it is.

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