by Paul Kennedy @pkedit, Oct 24, 2017

Legal test.

Division 2 or bust.

The NASL responded to U.S. Soccer's response to the NASL's lawsuit in Federal district court -- NASL v. USSF -- seeking a preliminary injunction to allow it to keep its Division 2 status for 2018. The suit stems from the decision of U.S. Soccer's board of directors on Sept. 1 to not sanction the NASL as a Division 2 in 2018 after granting it provisional status in 2017.To succeed on a motion for a preliminary injunction -- the hearing is scheduled before U.S. District Court Judgeon Oct. 31 in Brooklyn -- the NASL must show four things:-- The NASL will suffer "irreparable injury" if it isn't allowed to continue as a Division 2 league;-- The NASL is likely to "succeed on the merits" of its case for a permanent injunction eliminating divisional sanctioning;-- The NASL will suffer "more hardships" than U.S. Soccer if the injunction isn't granted;-- It's in the "public interest" that the NASL doesn't fold.The NASL's response includes declarations from New York Cosmos owner, the chairman of the NASL's board of governors, and NASL interim commissioner





Their principal argument is that NASL teams won't want to continue if they aren't allowed to play as a Division 2 league, that revenues (ticket sales, sponsorships) will suffer and players will be less inclined to play in the league if they have to play as a Division 3 league.



NASL v. USSF: USSF's response



Commisso says in his declaration that NASL business models were "premised on the NASL being -- at a minimum -- a Division 2 league but seeking to compete at the top tier of professional soccer as part of Division 1."



Division 3 would be 'deathblow.' Sehgal says becoming a Division 3 league like the USL was for six years wasn't an option as "Division 3 sanctioning would likely amount to a deathblow to the NASL."



Commisso's declaration includes sealed team agreements from six teams -- believed to be currently amateur NPSL teams, including popular Detroit City FC -- to join the NASL in 2018 and two more for 2019 on the condition that the league has Division 2 sanctioning.



Sehgal says he expects the NASL will have "considerable success" in 2018 if it remains a Division 2 league. He says the six new teams "would bring the NASL 2018 club membership to 13."



In the NASL's application to U.S. Soccer for Division 2 sanctioning, it listed eight teams: six of its eight current teams -- all but the San Francisco Deltas and FC Edmonton -- plus new teams in Orange County and San Diego. That would mean one of the original eight teams it planned on having for 2018 won't be around.



That team is believed to be North Carolina FC though there has nothing from the NASL about the future of Puerto Rico FC in the aftermath of Hurricane Maria, which has forced the club to finish the 2017 season on the road.



In an email to Commisso and Sehgal on Oct. 6, U.S. Soccer president Sunil Gulati offered to go back to the board of directors if the NASL could show, among other things, it had eight "economically viable and separately-owned teams."



That latter condition is the catch: What is not known because the documents are sealed to the public is who will own the teams or if they meet U.S. Soccer's Division 2 standards, but Commisso and other current NASL owners are believed to be planning on funding most of if not all of the new teams.



SUM offer. Commisso's declaration includes an email from New York City FC president Jon Patricof in which he presented as offer from SUM, the firm with ties to MLS and U.S. Soccer, to buy the Cosmos, then on the brink of extinction, for $5 million.





To "avoid consumer confusion in the marketplace," the proposal required the Cosmos and its owners not own or operate a soccer team in the New York area under any name for 10 years.



Commisso's contention is that the offer to buy the Cosmos was intended to "eliminate the organization as a competitor." (U.S. Soccer will probably try to argue that the Cosmos were a "failing company" and therefore was not a competitive threat.)

SUM statement issued Tuesday:

"Yesterday, in litigation that NASL and Rocco Commisso (the new owner of NASL club the NY Cosmos) are pursuing against the United States Soccer Federation, Mr. Commisso placed in the public record a bid that Soccer United Marketing (SUM) made for certain intellectual property and related assets of the NY Cosmos in 2016, before his purchase of the team.

"The facts behind that bid are that SUM, the marketing, licensing and commercial affiliate of Major League Soccer, was informed that the Cosmos were going out of business and were trying to sell its commercial assets for as much money as possible to pay its creditors. Those assets included the Cosmos name, a film library, the use of Pele’s likeness in connection with Cosmos-related merchandise, etc. As one of the leading soccer commercial companies in the United States representing a wide variety of soccer properties, SUM placed a bid for these soccer-related commercial opportunities with the view that it could develop merchandise and other products for the public.



"As a part of its bid, SUM included common provisions that the seller–the prior owner of the Cosmos–would not devalue those assets and create consumer confusion by operating a new team in the New York metropolitan area for 10 years. SUM’s bid was not successful, and it made no further efforts to buy the assets. Any suggestion by Mr. Commisso that SUM’s conduct was in any way improper is without any merit."