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U.S. Soccer President Sunil Gulati and NASL CEO Aaron Davidson Discuss the Provisional Sanctioning of the NASL

U.S. Soccer President SUNIL GULATI

“Thanks everyone for joining us on relatively short notice. We’re pleased that we’ve been able to admit the NASL on a provisional basis as a member. They and we are excited about the upcoming season and look forward to having a stable Division 2 that fits into the landscape of American soccer. It’s a difficult environment in many ways out there and the people on the call certainly know that as well. We’re excited that Aaron [Davidson] and his colleagues have been able to put together a group of investors and keep Division 2 soccer in a number of important markets, both in the U.S. and some neighboring territories, in this case Puerto Rico. Congratulations to them.”

On the importance of the San Antonio NASL franchise being in place in 2012 in light of the Montreal Impact leaving the league:
“It’s extremely important and we have no reason to believe that won’t be the case. We’ve met with the ownership group and they’ve made commitments, both financially and in other ways, to play in 2012 so we fully anticipate San Antonio to play in the NASL in 2012 and, with Montreal committed to play in MLS in 2012, that’s even more critical.”

On the restrictions placed on the NASL and requirements they will have to meet within a year regarding different ownership for Atlanta and Carolina and whether that includes Minnesota:
“The premise is not correct. We haven’t put a restriction on that in the provisional approval. The Pro League Development Task Force, which consists of our Vice-President, Treasurer and CEO, will continue to work with the NASL in a number of points that have been discussed in the meeting and with them. The immediate resolution or movement towards a single team or single ownership, we don’t have a time table on that. So, while we would like to see that done and we’ll certainly sit down and work through that with them in the months to come, there is no time table on that.

“Minnesota’s situation is obviously different because it’s owned on a collective basis by all other teams. I think in an ideal world we’ll like to see the type of situation where there are individual investor-operator groups for each of the eight teams or any number of teams the league has.”

On whether there is a target date for finding viability in a second division in terms of attendance and revenue so that other aspiring second division teams will have something to aim for:
“I think what you’re aiming for is a sensible business opportunity and financial viability so that’s not to the Federation to say that attendance has to be at X, Y or Z or sponsorship has to be A, B or C or that player costs should be anything else. The opportunity and the stability of the league are, obviously, very much related. If the league is stable, and that’s what we’re counting on, and the business plan makes sense and you have sensible attendances and so on, then there will be increased interest for people to make an investment in a team. That’s certainly what has happened in MLS and what Aaron and the rest of the NASL leadership are hoping and planning on happening with the NASL.”

On whether this year, U.S. Soccer is stepping back to let NASL run the second division league by itself, after being directly involved last year:
“On our part of it, this is a more natural situation. Last year was a temporary intervention by the Federation. We had two groups and, in our view, neither one met the standards that we were looking for. It was very late and we decided that we would then, essentially, run D2 and accept members of various clubs, which is what we did. Now, a number of those clubs were affiliated with either the USL or the NASL, so we ran that directly. It’s not something we wanted to do in the long-term, we made that clear from the beginning, and I’m glad we’ve been able to step back. This year the NASL and the USL will run their own situations. Obviously the USL did that last year in different divisions. They will continue to do that. The NASL will run their own league and have the relationship with the Federation that is more natural as it is around the world.

On whether the five U.S.-based NASL clubs are eligible to participate in the 2011 Lamar Hunt U.S. Open Cup:
“The answer is no because it’s simply too late to incorporate them into the process in the various phases of the tournament. The timing does not work for the five U.S.-based teams to participate in this annual event.

On whether it is too late for those teams to compete in the Open Cup under the normal, Division 2, pro league category rules:
“No, not under the normal, division 2 category rules, under the rules of the Open Cup and the structure that’s been arranged for this year. It’s impossible to put them into it. They are not going to be playing this year.”

On the importance of having a healthy lower division for the health of MLS and the U.S. National Team:
“I think that can be very important on both counts. If we want to see American soccer grow, having additional outlets for fans, whether in some cases it’s in very different cities than where MLS might be, in other cases it’s in suburbs of MLS markets or at a different level, I think it’s very important. Having both the NASL and the USL playing is a big plus, covering more markets than MLS could possibly do on its own. In terms of the national team, I don’t think it’s directly a feeder system but obviously there are increased opportunities at a high level. That’s a plus. In the case of the NASL it’s five of the teams that are U.S.-based, in USL I think it’s now 11 of the 15 are U.S.-based but there are obviously some American players playing on those teams outside U.S. In Puerto Rico, in both cases, the Puerto Rican Federation is not part of the U.S. Federation but Puerto Rico has a special relationship with the U.S. I think that’s important but the other side of that is, as you’re seeing in MLS, additional players coming in at younger ages, whether it’s straight from high school or through different outlets, coming into MLS at 16, 17, 18, 19, 20. In the future, I think you’re likely to see a relationship between MLS and NASL where players have additional playing opportunities and at the same time are on an MLS contract. We’ve had that in the past, early on in MLS. That may happen in the future, whether it’s through loans or anything else. I think there are any number of things that may happen in the future between MLS and the NASL and the USL to give players additional opportunities and still have a link directly to MLS.”

On the pseudo-promotion that has occurred in the past in which teams join MLS after being in the second division and whether this is the path the league wants to follow in the future:
“If what you mean is that Montreal, Portland, Seattle and Vancouver have played in NASL or USL previously and are now going to MLS, I think the model is completely different than, say, a European model where a team may come in and play in a much lower division and work its way up, primarily through on-field but, obviously, that’s related to financial support and so on. None of the four teams mentioned came into, at the origins, the USL with the primary motivation of moving up and promoting into MLS. That wasn’t the motivation, so that hasn’t been the model. It certainly worked out that way. But, in the case of Montreal, the Saputo family looked at MLS 15, 16 years ago. Portland is a unique situation, Seattle had looked at it several years prior to coming in and Vancouver is, well, everyone can’t be unique. I don’t think when he started his involvement he thought, okay this is what we’re going to do next. It’s worked out that way, I think it’s helpful to have a staff and administration in place, whether it’s on the technical side or the business idea, to already be established in the market certainly is a plus because you can hit the ground running. So I think in all four cases, the fact that local ownership has been there, has had staff, has had fan loyalty, has had some success on the field can only be a positive, but that’s going to be a different model to other teams that have joined MLS and to others that may join in the future.

“In theory [the model] could be repeated. It’s not a coincidence nor was it planned for four teams that had been in the USL and to some degree the NASL for a short period of time for any number of years. The motivations, I’m sure, were different but that’s really a question for those four teams and how long they’ve looked at it but in a whole bunch of other markets, it wouldn’t be practical because, in some cases you’re going to have MLS teams that exist and the international teams are in a unique situation, yet again. You may have a team that starts completely independent of an existing team. All of those things have happened, so I don’t think it’s a coincidence, nor do I think it was planned a decade that we’ll look for three to four teams to move up from the second division to the first.”

North American Soccer League Chief Executive Officer AARON DAVIDSON:

“Thank you, Sunil, and thank you to everyone at the Federation, everyone in the media and the fans that follow this. We are very happy and excited. This has been a long journey. It has been a very cooperative journey with the Federation. The decision was made on Friday. We respect it and we believe it is exactly what we need in order to have the platform to grow the second division. We look forward to working with them to make sure we have a second division, not only for 2011, but for the long haul.”

On what he will do to maintain competitive integrity while providing financial benchmarks that will be so critical to the league, given Traffic’s extensive interest in the league:
“We’ve been very clear all along that it was, obviously, out of necessity that Traffic had to invest into additional teams for the good of the game and for the good of the second division and to make this all work. We are very confident that this sport is our No. 1 priority and if you look at all of our markets, we were playing second division before, with the exception of Edmonton which had a full year to prepare, and did so. In the markets that we actually stepped into, Atlanta and Carolina, both have local operator-investors as well as management teams which are absolutely independent from Traffic. We feel, as a league, that those two teams will maintain the highest level of integrity, as will Minnesota as a league-owned team. The No. 1 thing is to put on a fantastic competition at the second division level where everyone has a chance to win the championship.”

On whether there is a target date for finding viability in a second division in terms of attendance and revenue so that other aspiring second division teams will have something to aim for:
“Clearly, MLS has done a wonderful job of leading the soccer pyramid in this country and we all have our respective budgets and clearly there’s a big difference between a first, second and third division budget and as MLS goes closer and closer to breaking even across the board, we hope that at our budgetary levels we’ll be able to do so over time, as well. No one is under the assumption that our teams are going to break even overnight, even now that we are provisionally sanctioned and we are a second division league. We have to work towards that but we anticipate bright spots along the way that will show us that we’re headed in the right direction.”

On the league’s first-year goals:
“We recognize where we’re at. The job didn’t start today or Friday. We’ve been at it for a couple years and most of our teams have been playing for a while but to really get this league going in the right direction, we need some more time. In terms of sponsors, TV and all that, this year is really about focusing on the nuts and bolts and making sure we run a league where the teams are happy with the direction it’s headed, the Federation is happy with the direction it’s headed, the media and the fans are happy so we can build a methodical growth plan going forward. I think the expectations are to run a league where our teams make it through this year and into next year and moving forward and give them a stable platform in which to grow in their markets.”

On what NASL will do differently this year:
“From an NASL standpoint, our No. 1 objective is to stop the churn rate in the second division, going either away from it, down, or folding, for that matter. Our No. 1 objective is to maintain teams on a year-to-year basis so that you all, the media and the fans, can make sense of second division and you can continue to provide a platform for teams, players, coaches to do what they have to do in order to drive up their level and ultimately, possibly, buy into MLS at that point. That is sort of what the platform has been in the past but we’ve also had too much churn at the second division level with has created the huge difficulty of following the game at all levels. The best way to describe where we’re at is that we’re humble but we’re very confident that this platform we’ve established, and you’ve heard me say it a lot over the course of this process where the owners own the league and we govern the league is own where all the owners in our respective markets are buying into NASL brand as a league and we you will see us promoting it a lot more proudly. That will mean that both the fans and the media will be able to follow both the team and the league a lot more consistently.”