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Who controls American soccer? MLS-U.S. Open Cup saga reveals shifting power dynamics

In Sports
March 01, 2024
FORT LAUDERDALE, FL - SEPTEMBER 27: United States Soccer Federation CEO JT Baston and President of the United States Soccer Federation Cindy Parlow Cone pose for a photo with the U.S.Open Cup trophy during a game between Houston Dynamo FC and Inter Miami CF at DRV PNK Stadium on September 27, 2023 in Fort Lauderdale, Florida. (Photo by Jason Allen/ISI Photos/Getty Images)

U.S. Soccer CEO JT Batson and president Cindy Parlow Cone with the U.S. Open Cup trophy. (Photo by Jason Allen/ISI Photos/Getty Images)

Arthur Mattson’s frustration mounted as the U.S. Open Cup slipped from his grasp, and teetered on the brink of collapse.

It was early February; and for months, under pressure from MLS, the U.S. Soccer Federation had been charting a course for the future of the century-old tournament. Mattson chaired a U.S. Soccer committee overseeing the Open Cup. Naturally, he wanted all MLS teams to participate, as federation rules required.

But MLS had attempted to ditch the 2024 tournament; and U.S. Soccer leadership seemed willing to compromise. When Mattson, a longtime soccer administrator and former USSF board member, tried to negotiate a resolution, he says, higher-ups asked him to “stand down.”

So he resigned as Open Cup Committee chair in mid-February.

“I would never allow MLS to pick and choose the rules and policies that they follow while expecting other leagues to abide by the rules,” Mattson told Yahoo Sports.

But U.S. Soccer, led by CEO J.T. Batson, apparently felt it had to.

Batson and others brokered an agreement that U.S. Soccer announced Friday: MLS will send just eight of its 26 eligible teams to the 2024 Open Cup, the 109th edition of the country’s longest-running soccer competition. Eleven “MLS Next Pro” teams, nine of them MLS reserve teams, will also participate, alongside the tournament’s traditional smattering of lower-tier pro and amateur clubs.

The revamped-but-temporary format will keep the Open Cup alive, for now. But to sustain it, U.S. Soccer officials bent their Pro League Standards to accommodate one member’s dollar-driven desires.

They bent because they had no leverage, because the sport’s balance of power has shifted in recent years — toward the billionaires and commissioner who own and run Major League Soccer.

The existential question

The mid-December rebellion that rattled American soccer was something of an existential moment for the federation. MLS owners ratified a plan to send reserve teams to the 2024 Open Cup. U.S. Soccer had to respond — and implicitly answer a provocative question, the “ultimate question,” as two experienced stakeholders framed it at the time: Who controls the sport? The billionaires, or elected representatives?

Publicly, five days later, U.S. Soccer seemed to stand up to MLS. It released a statement that read, in part: “We have informed MLS that the U.S. Soccer staff recommendation, which was adopted by the Pro League Taskforce, is that the request [to send reserve teams] be denied.”

But privately, USSF officials committed to working with MLS and others to reshape the Open Cup.

They understood that MLS clubs lose money on the tournament. They heard the league’s gripes: that the Open Cup, for all its historical charm, doesn’t resonate with most fans; that it clogs schedules; and that MLS has been “supporting and subsidizing that tournament for a long time,” as commissioner Don Garber recently said.

So they acknowledged, as one source put it, that “the economics of the tournament need to change.” They proposed a new revenue sharing model. They committed to increasing travel stipends. They committed to investing in the Open Cup; to marketing it, and selling it to sponsors, and promoting it more aggressively than before.

They wanted MLS involved, of course. To sell David versus Goliath, they needed Goliath; they needed American soccer’s most popular brands. But could they require participation?

The federation’s Pro League Standards suggested they could. The second of many requirements for a Division I men’s league is that “U.S.-based teams must participate in all representative U.S. Soccer and CONCACAF competitions for which they are eligible.” If MLS teams refused, U.S. Soccer could, in theory, pull the league’s sanctioning.

But doing so would likely incite a legal battle with MLS. U.S. Soccer’s lawyers were unsure they could win it, one source familiar with the federation’s thinking said. The European Court of Justice’s ruling in the Super League case, which weakened the power of governing bodies to regulate players and clubs in their orbit, was also raised in discussions as ominous precedent.

They surely also considered that selective enforcement of the PLS might undercut their defense in a separate antitrust case, against the NASL, which is finally set for trial later this year. But there were broader considerations. A “Soccer War II” would be explosive and harmful to all involved. Starting one, by desanctioning MLS, was never seriously considered, two sources familiar with the talks said. MLS executive Nelson Rodriguez said Friday that the possibility “never came up.”

It never came up because U.S. Soccer’s relationship with MLS was, and is, too important. It’s fueling (and funding) some of U.S. Soccer’s grandest ambitions.

U.S. Soccer’s MLS dependencies

Scrutiny of that relationship, and accusations that USSF favors MLS over other leagues, once centered on Soccer United Marketing. SUM, a for-profit company owned by MLS, bought and sold U.S. Soccer’s commercial rights for 18 years. It saved MLS circa 2002, and gave USSF over $300 million in guaranteed revenue. For most of those 18 years, it was mutually beneficial. But it created apparent conflicts of interest; how, critics asked, could U.S. Soccer fairly govern a league that doubled as a key business partner?

The federation detached itself from SUM at the end of 2022, and brought management of commercial rights in-house. But the question is still being asked, because other ties have formed, and perhaps even morphed into dependencies. Take, for example, player development.

From 2007 through 2019, U.S. Soccer put tens of millions of dollars into the Development Academy, a regulated network of elite youth clubs, to reform a broken pipeline. The DA helped produce a majority of the current U.S. men’s national team. But in 2020, U.S. Soccer chose to shutter it — and essentially hand the reins to MLS.

MLS clubs and owners, meanwhile, had already spent over $100 million collectively on their academies. They have since upped their investment, and now, MLS runs a DA-style league, MLS NEXT, for its clubs and many former DA peers. They were once part of the USMNT pipeline; now, in many ways, they are the top of the youth pyramid. Or at least they fund it. The future of U.S. Soccer’s joint-most valuable property, the MNT, is now in MLS hands — and reliant on MLS wallets.

The USMNT also regularly trains at MLS facilities, and plays at MLS stadiums. It has benefited, and will continue to benefit, tangibly and intangibly, from the money poured into soccer by MLS owners. U.S. Soccer needs those owners and their dollars more than ever before, so they hold more sway than ever before.

The latest example is U.S. Soccer’s national training center. One MLS owner, Atlanta United’s Arthur Blank, is donating $50 million to it. Others have also been approached by USSF to solicit contributions to the roughly $250 million project, multiple sources told Yahoo Sports.

The MLS owners, therefore, have all the leverage. They have Lionel Messi and a growing audience. U.S. Soccer’s only upper hand in the Open Cup spat was public sentiment.

MLS, in a Friday statement, said it was “grateful to U.S. Soccer for their leadership on these efforts to evolve the Open Cup and increase their investment.” Other stakeholders, though, were less pleased.

“We’re really disappointed in the federation for not showing stronger leadership,” United Soccer League president Paul McDonough told Yahoo Sports last week.

The Richmond Kickers, a USL club, said in a statement that spoke for many lower-division clubs: “We are disappointed that U.S. Soccer has failed to hold other leagues to the basic Pro League Standards for participation in the U.S. Open Cup.”

There were also questions about who, exactly, at U.S. Soccer was calling the shots. Mattson and the Open Cup Committee, which typically handles more mundane tournament matters, were hardly consulted, sources said. Another member of the committee, former USMNT player Stu Holden, also stepped down last week.

U.S. Soccer had instead created a “task force” or “subcommittee” of a half-dozen board members to help navigate the situation. Two sources told Yahoo Sports that Michael Karon, the American Youth Soccer Organization (AYSO) president, and Richard Groff, a longtime adult soccer administrator, were among those involved. Multiple sources said, though, that Batson was the main negotiator. Rodriguez, the MLS exec, said he’d also worked with USSF chief commercial officer David Wright and other USSF staff. (A U.S. Soccer spokesman declined to say who was on the task force. Neither Batson nor USSF president Cindy Parlow Cone has been made available for an interview in months.)

So it’s unclear who, exactly, bent to MLS; who chose diplomacy over hard-line enforcement. But it’s pretty clear why. To preserve the Open Cup — whose future remains uncertain beyond 2024 — USSF officials will try to incentivize MLS participation rather than require it. American soccer’s shifting power dynamics have left them, in many ways, with no other option.

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