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Global Feb 06, 2018

NASL sues USSF Board Members for breach of fiduciary duty

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New York, NY (Via NASL) – The North American Soccer League has filed a lawsuit in New York state court against members of the U.S. Soccer Federation Board of Directors. The NASL is a men’s professional soccer league that has operated as a Division II outdoor professional league since 2010.

The named Defendants are USSF President Sunil Gulati, USSF Vice President Carlos Cordeiro, CEO Daniel Flynn, and Board members Valerie Ackerman, Christopher Ahrens, Carlos Bocanegra, Lisa Carnoy, John Collins, Don Garber, Jesse Harrell, Angela Hucles, Stephen Malik, Richard Moeller, Donna Shalala, and Timothy Turney.

The NASL’s complaint alleges that Defendants – motivated by conflicts of interest and economic considerations which infect the operation of the Board – breached their fiduciary duties to the NASL. Most notably, Defendants arbitrarily refused to sanction the NASL as a Division II league for the 2018 season to protect controlling Board members’ self-interested positions in Major League Soccer (MLS) and its for-profit marketing conglomerate, Soccer United Marketing LLC (SUM).

Through SUM, the complaint alleges, Defendants have ‘enriched MLS while wasting USSF assets and freezing out MLS competitors, like the NASL. In particular, Defendants Gulati and Garber have dominated Board operations to advance MLS interests while enhancing their own clout and influence.’

As Defendant Cordeiro recently admitted, “the unique ownership of SUM creates conflicts that need to be addressed.”

The NASL’s complaint underscores critical issues facing USSF members in the upcoming February 10, 2018 USSF presidential election. While that election presents an opportunity for reform, the NASL it also threatens to perpetuate the conflicts at the heart of the NASL’s complaint. Notably, Kathy Carter, SUM’s CEO, campaigns with strong backing from Gulati and Garber. Meanwhile, Cordeiro, who is Gulati’s longtime protégé and confidante, pursues his own campaign for President. U.S. Soccer cannot elect another President who permits SUM and MLS interests to dominate U.S. Soccer’s governing body. The NASL’s complaint seeks changes to U.S. Soccer governance, in addition to relief which the league states is essential to the NASL’s survival.