by JAKE NUTTING

NASL Beat Writer

Following a federal indictment of Traffic Sports USA president Aaron Davidson early Wednesday morning, the North American Soccer League has swiftly relieved Aaron Davidson of his duties as Chairman of the league’s Board of Governors and ceased all business dealings with Traffic Sports USA.

Davidson and Jose Hawilla, the owner of Traffic Group and Traffic USA, are caught up in FBI and Swiss investigations alleging wire fraud, racketeering and money laundering. According to the FBI, Hawilla has already pleaded guilty to conspiring to those charges, as well as obstruction of justice.

These developments are the most troubling to the fans of the Carolina RailHawks, the NASL team owned by Traffic Sports USA. At this time, the club has declined to make any comment beyond this short statement issued by the NASL.

In light of the ongoing investigation announced by the U.S. Department of Justice on Wednesday, the North American Soccer League’s Board of Governors has suspended Chairperson Aaron Davidson, along with all business activities between the league and Traffic Sports, effective immediately. Commissioner Bill Peterson will serve as acting Chairperson. The Carolina RailHawks, the sole NASL club owned by Traffic Sports, will continue to operate in the ordinary course of business. The club’s management team will continue to manage the day-to-day operations.

RailHawks supporters will likely need more assurances than those few words from the league front office. Is it still possible for Traffic to financially contribute to the club with a presumably lengthy legal battle ahead? The club was already operating on a shoestring budget compared to most other teams in the league and supporters were already clamoring for new local ownership to take over. Davidson did admit just last month that Traffic was in discussions to possibly sell the franchise as part of a package deal with another Traffic-owned team in Portugal. If those talks were still happening, it’s difficult to know how these legal issues will impact them or the market for the RailHawks in general.

The severing of ties with Traffic is a huge moment in the history of this young league. Traffic’s action was the very impetus for the NASL back in 2010, and the sport marketing company laid down serious financial investment to ensure the league’s sanctioning from the US Soccer Federation.

Traffic’s direct involvement in the NASL has been dwindling since the New York Cosmos entered the league for the 2013 season. At one time, the company owned three teams in the league. That number was reduced to one with the sale of the Atlanta Silverbacks at the end of 2013 and the Fort Lauderdale Strikers at the end of this past season. Some will reasonably wonder how much the looming legal troubles weighed in on Traffic’s recent efforts to pull back from the NASL table.

While the company had pulled back on its individual ownership ventures in the league, it was still a major financial contributor to the league and possessed heavy influence in certain issues where they could exercise veto rights. Those veto rights were limited to issues such as budgeting and expansion, although it is believed that the group rarely threatened to utilize the veto.

It would be unfair to say that the NASL has had the rug completely pulled out from under them, but they certainly need to be cautious of where they step next. Besides the capital investment, Traffic was also a huge marketing arm of the NASL. The league has often spoken of competing on the global stage, so how does the league continue to expand its image outside the US? Do they turn to newly announced owners of Miami FC, Riccardo Silva and his massive sport media rights company MP & Silva to pick up the slack? Seamus O’Brien and the Cosmos?

The more pressing matter, though, is expansion and club stability. Prospective ownership groups may be leery of jumping into bed with the NASL until the picture surrounding Traffic Sports and the investigation becomes clear. This potential hesitancy could be a blow for a league in desperate need of expansion on the West coast.

While more expansion is necessary in the near future, stabilizing existing clubs is still a major concern for the NASL. Carolina is now in the company of the league-owned Atlanta Silverbacks, a franchise that Peterson has said is need of outside investment at point this year if it is to survive. These questions of whether or not a club will exist year to year need to cease if the league wants to reach next level of maturation.