MLS conference call on Major League Soccer’s victory in the lawsuit filed against the league by eight of its players. The lawsuit was thrown out by Boston Federal Court Judge George A. O’Toole last night, dismissing the heart of the players’ antitrust case against Major League Soccer and upholding MLS’s “single entity” structure. The Court ruled that it was not unlawful for MLS to require that all players be signed by the League, and not individual teams. A summary of key quotes follows. Today’s guests: MLS Chief Operating Officer — Mark Abbott MLS Lead Attorney — Michael Cardozo (Proskauer Rose LLP) Mark Abbott’s Opening Comments “Yesterday Judge O’Toole of the Federal District Court in Boston issued a ruling which essentially dismissed the heart of the plaintiffs’ lawsuit. The Judge ruled that the single-entity structure of the league is both proper and lawful and does not violate the antitrust laws. This is something we’ve been saying for seven years, and particularly during the last three years of the lawsuit. There are a few minor issues on which for technical reasons we couldn’t seek summary judgment. They don’t relate to the single-entity. Those few issues remain in the case, but for all intents and purposes, the case is over and MLS has won. We are very pleased by that result. For the last three years we’ve had an open invitation to our players to negotiate. The players have been advised to litigate rather than to pursue that strategy and we’ve always regretted that, but now it has come to a close. The litigation is behind us and now we can go about the business of working with our players, the most important part of this league, to build it going forward. We are pleased the judge agreed with our analysis and has issued this ruling.” Michael Cardozo’s Opening Comments “Because Major League Soccer has been organized with the league owning all the assets, all the teams, and the league signing all the players, the league viewed itself as what is called a single-entity. Under the antitrust laws of this country, there can be no antitrust violation if you are a typical business if you act by yourself, and don’t “conspire”… so the league has always contended it was just acting by itself. It was not conspiring with any of its teams because it owned all the teams. The players contended that this was a sham, and that the league should be viewed as a bunch of different actors like the NFL or the NBA. What the judge said, taking legal precedent from other areas of the law, was that the players were wrong and that this should be looked at like some single company with a bunch of divisions. Therefore, what the league has done is perfectly lawful, and we don’t need to have a trial.” Abbott on the potential of an appeal by the players “I think the case is over. Our desire is that we sit down and negotiate, but it’s up to them what they do next. We’ve known for seven years that we were right on the law. The judge confirmed that, and undoubtedly if they did appeal it, it would be confirmed on an appeal too.” Cardozo on the potential of an appeal by the players “The technical answer is that while the players don’t yet have the right to appeal the decision, ultimately under the law, you always have a right to an appeal and if the players want to do that, they would have the right to do that. Every losing party ultimately has the right to appeal. They don’t have the right to appeal yet, but at some point, depending on how the rest of this case goes, they have a right to appeal this decision to the First Circuit Court of Appeals in Boston. It (their appeal) would have to take place after these other portions are ruled upon, unless the players ask for, and the judge allows an earlier appeal. An appeal would be made to the Appellate Court that covers New England. It is based in Boston and is called the First Circuit. It has the power, but we don’t think that would happen. If by some hypothetical way that should happen it would be sent back to exactly where we were the day before yesterday.” Cardozo on Judge O’Toole’s decision “Remember how MLS is structured. Unlike other leagues, it owns all the teams, it signs all the players, and each of the investor-operators in the league received a management fee. If you want to analogize it to a company that may have divisions in various different cities, you would have a vice president in Minnesota and a vice president in Kansas City and a vice president in Boston. What the judge said is ‘that is still one company.’ If it is one company with divisions in the various league cities, even though the head of each city sits as a member of the MLS Board, it does not change the fact that it’s one company. If it is one company, under the antitrust laws there is no conspiracy and there’s no illegality. The judge said ‘that’s right,’ therefore if it’s just one company and there’s no conspiracy.” Abbott on MLS’ attempt to contact the players “It’s really too early to have a view on that. This just happened last night and we haven’t had the chance to assess the next step.” Abbott on the expense incurred by MLS due to the lawsuit “I don’t have an exact figure, but it is multimillions of dollars so far.” Cardozo on the precedent the ruling may set for other sports leagues “We do think it sets a precedent for any other existing or future league that is organized the way MLS is organized. This is the first decision of which I am aware that specifically confirms that a league organized this way is lawful. Therefore, other sports leagues that decide to organize this way will take a great deal of heart in this decision. There are a lot of other laws that even the NBA and the NFL might be viewed as a single-entity under a different legal analysis.” Cardozo on similarities between the case with MLS and the case involving the NBA’s Chicago Bulls “The Chicago Bulls case was cited (in the MLS decision) a half a dozen times as analogous, so it seems the judge took a great deal of solace from the Bulls case. The Bulls case did require two or three different trials that lasted a long time. Here we saved all that time and expense.” (WGN challenged the NBA’s limitations on the number of superstation broadcasts) Abbott on a potential discord in relations with MLS players “It is hard for me to speculate on how these players might feel, although my hope would be that they’d feel positive about this. I understand their view of the lawsuit, but that being said, what we are now saying is what we’ve been saying for three years. We want to sit down and negotiate. We think that they (the players) were ill advised by some people to pursue a lawsuit as opposed to negotiation. That lawsuit obviously turned out to be frivolous and now it is time for negotiation. We have a very positive view with respect to our players. The players are the essence of the league and we want to form a partnership with them. We don’t view it as a negative we view it as a positive.” Abbott on what course negotiations with the players would take “What we’ve been saying is that if the players have concerns, bringing them to court isn’t the right way to go about it. That was showed last night when the judge agreed with us. Over the coming months we need to sit down and hear those concerns to see if they can be addressed. We won’t go into it with any preconceptions.” Abbott on the confusion with the issue of transfer fees “Our position was that they should have called us and asked us if we were doing it (collecting transfer fees for players whose contracts expired). It would have put an end to all of that. They never called us, they never asked us, and we just don’t do it. We are puzzled by that claim. We informed the judge in 1997 that we don’t do it.” Abbott listing the players named in the lawsuit “The players named are Ian Fraser (no longer in MLS), Steve Trittschuh (Tampa Bay Mutiny), Sean Bowers (no longer in MLS), Mark Semioli (MetroStars), Rhett Harry (no longer in MLS), David Vaudreuil (Colorado Rapids), Mark Dodd (Dallas Burn), and Mark Dougherty (Columbus Crew).” Cardozo on the players named in the lawsuit “Let me just add that since this is a class-action suit and that those are the eight players who were the individual plaintiffs to represent the entire class of Major League Soccer players.” Cardozo on the issues that still remain in court “First there is the so-called transfer fee claim. It claims that when MLS signs a player from a foreign league whose contract has expired, that MLS violates the antitrust laws because the international federation requires that his former team be paid compensation. That claim, we don’t think is valid because MLS has long ago announced that is not the league’s policy and that the league has never and will never charge such a fee (for MLS players our of contract). The second claim that remains is that somehow the USSF and MLS did something wrong in 1995 when the USSF certified MLS as the only Division I soccer league in this county. The third claim is that the licensing provisions in the MLS contracts are illegal because the players didn’t have the sufficient opportunity to negotiate about them. That claim, according to the players’ expert, is worth a total to all the players of $330,000.”