Major League Soccer (MLS) is the top-flight soccer league in the United States. Unlike professional soccer leagues in other nations, MLS does not use a federation model. In a federation model, a governing association controls each level of the sport, from the amateur ranks that play on Saturday afternoons to the highly paid professionals. In this structure, any team is theoretically capable of reaching the highest level of the pyramid because teams are promoted and relegated up and down the ranks at the end of each season. Instead, the structure of MLS is more akin to other American leagues: private associations in which the owners dictate operation in strictly professional ranks.
Like the other American sports leagues, MLS has largely seen its structure challenged under antitrust law. In Fraser v. Major League Soccer, 284 F.3d 47, 61 (2002), a group of players argued MLS teams’ agreement not to compete for player services was in violation of the Sherman Act. The First Circuit Court of Appeals disagreed because the appellants failed to make the requisite relevant market showing. Id. at 69. Further, the district court’s finding that MLS was a single entity for antitrust purposes was not reversed because the court did not need to decide the issue. Id. at 56.
Within the typical American league structure, the single entity antitrust exemption has not been widely adopted because teams do compete against one another for the services of players, fans, etc. While Fraser leaves the door open for further discussion of MLS and the single entity exemption, recent developments in MLS have revealed a window for claims under the law of private associations. While the remedies are not as lucrative as the treble damages in antitrust cases, the law of private associations could require the league to change its practices.
MLS has a process to determine what happens when a U.S. Men’s National Team player returns to MLS involving an allocation order. In 2012, Clint Dempsey moved from Tottenham Hotspur to MLS and was placed on Seattle Sounders. In a strange turn of events, Portland was at the top of the allocation order when Dempsey returned but was passed over for Seattle. A summer later, Michael Bradley returned and was placed in Toronto. The cake was iced on August 24, 2014, when Jermaine Jones decided to come play in America. Did the league use the allocation order? Perhaps it placed him on the weakest team from the previous season? No. MLS drew a team from a hat. While a process was used to slim the potential landing spots to Chicago Fire and New England Revolution, MLS Commissioner Don Garber actually drew a team name randomly.
Over ten years ago, when Fraser was decided, MLS could get away with this sort of practice. The league was still struggling financially, and the court seemed to give some weight to its survival effort. Today, MLS needs no such protection and a claim under the law of private associations could hold the league accountable. The league is thriving, having recently signed a joint television deal with Fox, ESPN, and Univision worth $720 million over eight years. The previous deal was worth about $10 million annually, while the new deal is worth $90 million annually.
The league should not be in survival mode any longer. The goal now should shift to being a global league that can attract world-class talent. Drawing a team from a hat is not going to signal legitimacy to the rest of the world. In fact, it is more likely to signal a viable claim under the law of private associations for acting in an arbitrary manner. If MLS, and the game of soccer, is going to really take off in the United States, instances like that of Jermaine Jones need to be a thing of the past, from a PR perspective as well as a legal one.