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Yesterday, the North American Soccer League (NASL) announced it has filed a federal antitrust lawsuit against the U.S. Soccer Federation. The chain of events spawning this immediate legal action began on September 3 when the USSF Board of Directors voted to deny the NASL’s request for second-division professional league sanctioning in 2018. Last January, the USSF granted provisional second-division sanctioning to the NASL for the 2017 season.

North Carolina FC is a member of the NASL. The club declined official comment when contacted. However, sources close to NCFC tell WRALSportsFan that the club does not support the NASL's lawsuit.

In a statement, the NASL said that, “the USSF has violated federal antitrust laws through its anticompetitive 'Division' structure that divides men’s professional soccer for U.S.-based leagues based on arbitrary criteria that the USSF has manipulated to favor Major League Soccer (MLS), which is the commercial business partner of the USSF.” The league also alleges that “the USSF has selectively applied and waived its divisional criteria to suppress competition from the NASL, both against MLS and against United Soccer League (USL).”

U.S. Soccer has codified standards for men's and women's professional leagues at the first, second, and third division levels. Although the USSF has not spoken publicly regarding their denial of the NASL’s second-division sanctioning for next year, the NASL currently fails to meet at least two second-division requirements: a minimum of 12 teams in the league, and fielding teams in the Eastern, Central and Pacific time zones (the NASL does not presently have a club based in the Central time zone). According to the NASL’s complaint, the USSF denied the league’s request for waivers from these two requirements for 2018.

The NASL was the lone second-division U.S. men’s pro league from 2011-2016, after a group of USL team owners—including the then-owners of the Carolina RailHawks—split off to form the new NASL. Over that same time span, the USL remained the lone third-division men’s pro league. This year, the USSF granted provisional second-division sanctioning to both the NASL and USL.

While the USSF has denied the NASL second-division sanctioning for next year, it has yet to finally act on the USL’s second-division application for 2018. According to multiple sources, as well as the NASL’s lawsuit, the USSF board will consider and act upon USL’s application in early October.

The NASL’s 71-page antitrust lawsuit, filed in the U.S. District Court for the Eastern District of New York, seeks injunctive relief permitting the league to retain its second-division status pending the resolution of this action. Moreover, the complaint seeks a permanent injunction enjoining the USSF from promulgating or implementing professional league standards, declaring such actions a violation of the Sherman Antitrust Act.

Among its myriad of factual allegations, the NASL claims that the USSF has selectively adopted, amended, and implemented its professional league standards for the purpose of, in part, suppressing the NASL’s application for first-division sanctioning in 2015, and then denying the league full second-division sanctioning in 2017 and 2018. Meanwhile, the complaint alleges that the USSF has overlooked or granted waivers from various divisional guidelines to MLS and the USL in an effort to preserve MLS’ longstanding first-division status and, more recently, position the USL as the lone second-division professional soccer league.

United States professional soccer does not incorporate a system of club promotion and relegation between divisions, as is the case in most national soccer federations worldwide. The NASL complaint alleges that the divisional construct erected and administered by U.S. Soccer acts as an unlawful restraint on trade and competition.

This lawsuit by the NASL appears to place Malik in an peculiar position. Malik, as owner of the North Carolina FC, is a member of the NASL, LLC, the named plaintiff in this action. However, Malik is a member of the U.S. Soccer Board of Directors and owns the North Carolina Courage, a team in the National Women’s Soccer League, a league administered and largely funded by the USSF. Malik also has a pending application to bring a MLS expansion team in the Raleigh area. MLS is expected to announce their initial two expansion selections in early December, although those teams likely won’t begin play in MLS until 2020.

Moreover, after the USSF denied the NASL’s second-division sanctioning application earlier this month, North Carolina FC released a statement reinforcing not only its MLS bid, but also its aim of “playing at the highest level possible in 2018 and beyond,” language many observers interpreted as Malik’s desire to remain part of a second-division league next year, even if that means leaving the NASL to join the USL.