Finance USA

Sep 2 2019

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The future of the North American Soccer League appeared to be in peril on Tuesday, as club owners and potential investors met for crisis talks.

New York Cosmos and NASL working to survive as league meetings open

The future of the North American Soccer League appeared to be in peril on Tuesday, as club owners and potential investors met for crisis talks in Atlanta.

The NASL, which operates as a second-tier league under MLS, ended the 2016 campaign with 12 teams, but recently saw the Ottawa Fury and the Tampa Bay Rowdies leave for the third-tier USL, while Minnesota United is set to join MLS next season. Numerous reports have said the Ft. Lauderdale Strikers and Rayo OKC are in financial trouble.

But the biggest blow of all could come from the league’s marquee franchise, the New York Cosmos. A report early on Monday stated that the Cosmos would be shut down. This comes on the heels of an Empire of Soccer report that the Cosmos had furloughed much of its front office staff.

However, a club source denied that the Cosmos had ceased operations.

“We’re in league meetings over the next couple of days,” said the source. “Based on the outcome of those meetings, then we’ll make a decision on the club’s future.”

Another club employee added, “We’re working, but there’s no point in selling tickets when there’s no games scheduled. There’s a lot that’s up in the air.”

The Cosmos have been a success on the field, winning three league titles since joining the NASL in 2013. Attendance has been another story. This season, the club averaged just 3,775 at Shuart Stadium at Hofstra University in Hempstead, New York, which saw them ranked eighth out of 12 teams and below the league average of 4,734.

It would appear that the NASL has a stark choice in front of it. It could shut down and see some of its teams be absorbed by the USL — which is angling for Division II status — or it could attempt to carry on.

According to one former NASL team executive, the Cosmos, and chairman Seamus O’Brien, have no interest in moving to the USL, and see themselves as a Division I franchise. They had hoped to accomplish that through the growth of the NASL.

The Cosmos could have joined MLS in 2012, but rather than spend $100 million or so on an expansion fee to join the league, the Cosmos wanted to invest that money in the club’s infrastructure. To that end, the Cosmos submitted plans to the state of New York to build a stadium near Belmont Park in 2012, but four years later, the Cosmos and three other bidders have yet to hear back from the state’s Empire Development Corp. to see which proposal will get approved.

“O’Brien’s vision is media, television rights, and with the Cosmos being a global brand, he saw the club as being at the forefront of that,” said the source. “That’s where he saw the future, so for him, the USL is just not an option. No second-division league in this country has ever been on TV. It just doesn’t happen.

That’s why the big issue for them was [the NASL] getting first-division status so they could sell sponsorships and TV rights deals. They didn’t just want to have a team. For now, they didn’t really care how many fans showed up. They were trying to get a stadium built and get TV rights down the road.”

One source attending the meetings in Atlanta indicated that new owners for the Cosmos were being pursued, and that four investor groups interested in starting NASL expansion teams were also in attendance. It was unknown how far along those talks are.

The prospect of new teams entering the NASL hasn’t done much to ease the sense of impending doom surrounding the league. If the Cosmos are shut down, and Ft. Lauderdale and Oklahoma City fold as well, then the NASL would be left with just seven teams, including the expansion San Francisco Deltas, who are set to come on board in 2017.

According to standards for Division II leagues as set forth by the U.S. Soccer Federation, a second-tier league must have eight teams in its first season, 10 teams by its third year, and 12 teams by its sixth year, though a USSF spokesman confirmed that exceptions have been made in the past for the NASL.

A USSF board meeting is set for next week, and a USSF spokesman said that “a review of all [U.S.] leagues is on the agenda.” At a roundtable with reporters earlier this month, USSF president Sunil Gulati said, “I’m fully confident based on the meetings that I’ve had that [the NASL] will go forward.”

The current incarnation of the NASL was formed out of a split among teams in the USL. A hybrid league existed for the 2010 season, before the NASL emerged as a standalone entity for the 2011 campaign, and it positioned itself in direct competition with MLS.

The league was much more decentralized, had no salary cap, and began competing with MLS for players. That strategy proved to be unsuccessful, as there was always the threat that MLS would start poaching the NASL’s best franchises. The Montreal Impact, part of the NASL’s inaugural season in 2011, had already committed to joining MLS. Minnesota United will now follow suit next season.

Another NASL team, the San Antonio Scorpions, positioned itself as an MLS candidate, but the team folded in 2015, and its stadium was sold, paving the way for a new USL entry owned by Spurs Sports & Entertainment.

Much of the NASL’s funding came from a now-disgraced sports marketing firm, Traffic Sports USA, who at one time had ownership stakes in three teams. When Traffic USA president Aaron Davidson, who also was chairman of the league’s Board of Governors, was indicted for his part in the FIFA corruption scandal, his involvement with the league ceased.

But separating the NASL from Traffic’s sizable investment proved more difficult. Just last week, a report in The Telegraph stated that Traffic offloaded all of the Class B shares it owned in the league.

The hope was that the settlement would spur more investment in the league. The coming days will determine if that indeed comes to pass.

Jeff Carlisle covers MLS and the U.S. national team for ESPN FC. Follow him on Twitter @JeffreyCarlisle.

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