U.S. Soccer, FIFA lose antitrust appeal; defense shows short-sighted strategy to develop soccer in America

Cristiano Ronaldo plays for Real Madrid against Barcelona in 2011.
Jan S0L0 via Flickr CC BY-SA 2.0

U.S. Soccer and the Fédération Internationale de Football Association (FIFA) will have to defend an antitrust action in federal court for refusing to permit a Spanish La Liga match on U.S. soil, the Second Circuit ruled in March. 

In 2017, world famous football (soccer) clubs Real Madrid and Barcelona faced off in an exhibition game in Miami. The match was fabulously lucrative for the commercial interests behind it, including organizer Relevant Sports, LLC, based in New York.

World sport likes the United States, because our infrastructure practically prints money. Americans, especially the top echelons of the wealthy, have been habitualized by our unregulated and often subsidized sport-and-entertainment monopolists to pay more than people elsewhere in the world to see live events, both directly for seats and indirectly in media rights.

Incidentally, that's the principal reason that bringing the FIFA (men's) World Cup back to North America in 2026 was not really a hard sell, notwithstanding modest public enthusiasm and the theater of the global bidding process. The 2026 co-hosts, the United States, Canada, and Mexico, likely did not even have to pay the half-billion dollars that Qatar apparently spent, mostly to FIFA executive committee members, in, uh, let's say, "incentives," in siting the 2022 World Cup (about my World-Cup-2022-contemporaneous lecture; Qatar on this blog): check out the investigative exclusive by Armin Rosen for Tablet (link from inset), published late last month, using U.S. court records in collateral matters.

Understandably, then, Relevant Sports wanted to maintain the momentum of the 2017 exhibition match. The company proposed that the Spanish La Liga subsequently might site a regular-season, full-stakes match in the United States. 

However, FIFA rules say that a match cannot be held in a country foreign to both sides without the approval of the football federation in the host country. U.S. Soccer said no.

Relevant sued, alleging that the rule improperly protects domestic football from being overshadowed, and therefore diminished in interest and income, by high-profile competitors. U.S. Soccer and FIFA defend the system on the merits under antitrust law, and, saliently in this intermediate disposition, argued that the FIFA "rule" is not really a rule, because FIFA doesn't make the decision for U.S. Soccer or La Liga. They're free to make their own decisions, notwithstanding potential adverse consequences, such as exclusion from international competition for players, teams, or federations that don't play ball.

The instant Second Circuit decision is limited. The court remanded the antitrust claim to proceed, recognizing that FIFA's rule is rule enough to represent the kind of concerted action in violation of antitrust law that Relevant alleges.

Earlier this week, I wrote about Cory Doctorow's enthusiasm, which I share, for the federal government's antitrust agenda—including the Justice Department investigation of Google. (I canceled my Google Nest Aware subscription upon the 25% rate hike. Google's not the only game in town. Yet.) U.S. Soccer's loss in the Second Circuit represents a judicial step in the same right direction.

I'm not an antitrust expert. But to my relatively lay eyes, the fact that the federal district court dismissed the case in 2021 on the faint theory that U.S. Soccer was not formally bound by FIFA's command demonstrates how appallingly far U.S. antitrust law has strayed from basic fair-market principles. Or maybe the court just didn't understand the governance system in world sport and its facility for subverting the laws of nations.

USWNT celebrates in times happier than this year's World Cup.
rachael.c.king via Flickr CC BY 2.0

The U.S. Soccer position in the litigation to me demonstrates furthermore a fundamental misunderstanding of what it will take to make football successful in America. American soccer advocates often wonder aloud why the sport seems to stall again and again, even after the men's World Cup in the United States in 1994 and the astonishing run of the U.S. Women's team in an unprecedented four World Cup titles.

To be sure, there are many, many reasons for the frustrating cycle of revving and stalling. But equally surely, one of those many reasons is the short-term greed of commercial actors that works a detriment to long-term development. 

I've written previously about this problem in the context of media rights. When NBC acquired the rights to English Premier League football, the broadcaster divvied up matches among its many media properties based on the popular appeal of each. NBC's strategy was to leverage interest in the league to sell separate subscriptions to multiple services: NBC, NBC Sports, (at one time, "NBC Gold,") Peacock, USA, Telemundo, Universo.

The network either didn't consider or doesn't care what that model looks like from the customer's perspective. Football in a place such as its home U.K. (at least before U.K. media companies such as Sky started merging with U.S. media giants and took sport away from the publicly minded BBC; that's another story) maintains a multi-generational foothold because supporters follow their teams.  

Divvying up the matches makes it impossible in the United States for a viewer to follow a team. Each week, one gets whatever match a selected service happens to carry, based on its level of market appeal.  If you subscribe to a middle-tier service and your team starts to lose, you might get more matches. If your team starts winning, and you start becoming more engaged, you find yourself suddenly deprived of matches.

That market behavior doesn't build a fan base. For American football or basketball, maybe there are enough viewers who will watch any game because they love the sport. But Americans don't yet love soccer that much. Sport-market development requires fostering two interrelated conditions at the same time: public enthusiasm for the sport, and public enthusiasm for a team. Neither can thrive without the other.

U.S. Soccer's refusal to permit La Liga to play a match on U.S. soil also is self-defeating, if for the converse strategic blindness. Both media rights usurpers and U.S. Soccer, focused on short-term profits, are dampening American enthusiasm by impeding U.S. viewers' access to the highest level of play in the world, in the Premier League and La Liga. While NBC's strategy deprives Americans of the opportunity to root for a team, the U.S. Soccer strategy deprives Americans of the opportunity to root for the sport.

Again, neither can thrive without the other.  U.S. Soccer is trying to protect Major League Soccer and the federation's underage and lower divisions. The federation reasons coldly that someone who buys a $500 La Liga ticket will skip five or ten $48 Tampa Bay Mutiny matches.

They're wrong. One of my U.S.-based family is a card-carrying member of the Toon Army, a dedicated supporter of Newcastle (U.K.) United FC. He traveled domestically to see Newcastle play an exhibition match in the United States this summer. Being a Newcastle supporter has made him a more, not less, enthusiastic supporter of his nearby D.C. United and the U.S. men's and women's national teams. With access to the matches of each, live and on TV, he's more likely to spend money on all of them.

Antitrust law is not a device to make commercial actors prioritize long-term interests over short. To the contrary, if NBC and U.S. Soccer put themselves out of business, that's a healthy outcome for the free market. But if antitrust inadvertently compels U.S. Soccer to up its game and compete for eyeballs by actually developing the sport, rather than constraining consumer choice, then that's an outcome I can get behind.

The case is Relevant Sports, LLC v. U.S. Soccer Federation, Inc. (2d Cir. Mar. 7, 2023). U.S. Circuit Judge Raymond J. Lohier, Jr.., wrote the opinion of the unanimous panel that also comprised Chief Judge Livingston and Judge Lynch. In 2017's "El Clásico Miami," Barcelona bettered Real Madrid 3-2.

UK orders commission to study women's football; rising TV prices warn of commercial monopolization

Karen Carney in 2019
(James Smed CC BY 2.0 via Wikimedia Commons)

The UK has announced "an in-depth review into the future of domestic women’s football" and appointed the decorated footballer and today commentator Karen Carney MBE to chair.

In the United States, this year marked the historic equal pay settlement for the blockbuster Women's National Team (USWNT). And in the UK, England hosted and won the 13th UEFA Women's Euro 2022, delayed two years by the pandemic, in a nail-biter over Germany.

Though to say women's football is coming into its own is an assertion decades late, just as it is decades early to say that women's football has at last been afforded parity with men's in social and commercial recognition.

The UK announced three points of focus for the review:

[1] Assessing the potential audience reach and growth of the game—by considering the value and visibility of women’s and girls’ football in England, including the potential to grow the fanbase for women’s football and whether current growth still supports home-grown talent and can be achieved without overstretching infrastructure.

[2] Examining the financial health of the game and its financial sustainability for the long term. This will include exploring opportunities and ways to support the commercialisation of the women’s game, broadcast revenue opportunities and the sponsorship of women’s football.

[3] Examining the structures within women’s football. This includes the affiliation with men’s teams, prize money, the need for women’s football to adhere to the administrative requirements of the men’s game; and assessing the adequacy, quality, accessibility and prevalence of the facilities available for women’s and girls’ football for the growth and sustainability of the game.

The UK does have already a system for youth development in women's football that looks sophisticated from the U.S. vantage point. Carney is a case in point. Even in the 1990s, Carney came up through the ranks of Birmingham City since age 11. She became one of England's top capped players, scoring 32 goals for the national side from 2005 to 2019.

After three years at Arsenal, in 2009, Carney moved to the United States to play for the Chicago Red Stars, a team then affiliated with the Women's Professional Soccer league (WPS). The WPS was a short-lived installment in the fits and starts of women's pro soccer in the United States. The league collapsed after scarcely a year. Carney returned to England in 2011 to play for five years again for Birmingham City, then three years for Chelsea.

Today, Carney comments on both men's and women's football for Sky Sports and Amazon Prime. The Chicago Red Stars play today as part of the National Women's Soccer League.

Sky, like NBC in the United States, is a division of Comcast. The anti-competitive bundlings of these interrelated companies is making it unaffordable for viewers in the UK and in the United States to follow a team. I'm not sure how long UK viewers and regulators will tolerate the exploitation. Some Latin American governments have been increasingly ruffled about commercial efforts to make access to football a privilege of the elite. I've speculated that in the United States, NBC is effectively killing the goose that laid the golden egg. U.S. viewers will never commit to world-class Premier League football if they're given access only to different teams and lower priority matches week to unpredictable week.

Unfortunately, commercial development of the women's game presents the same conundrum. Commercialization in the priorities of the Carney review is presented as an undisputed good. To be sure, that's where the money is, and it will take money to bring the women's game to gender parity.

At the same time, there is evidence already in the United States that commercial success, ironically, invites audience exclusivity and, thus, narrows public appeal. USWNT television rights presently lie with ESPN and Fox Sports, both divisions of Disney. But Disney+ viewers won't find the USWNT there, nor in the Disney+/ESPN+ bundle, as "+" seems to be a number less than (ESPN)2 and (ESPN)3.

In March, US Soccer awarded USWNT and men's team rights together in an eight-year deal to HBO Max and Turner properties, all divisions of AT&T by way of WarnerMedia. An HBO subscription doesn't come cheap, and different Turner channels require subscription to different bundles.

With media empires now controlling access to football on both sides of the Atlantic, fans' budgets will be stretched thin, and appetite for allegiances to new endeavors, such as expanded women's football, might prove difficult to stir. If the women's game is to be kept from becoming a victim of its own success, the goal of commercialization should be viewed with a discerning eye, wary of monopolization.

A call for evidence in support of the Carney review is expected from the UK Football Association in the coming weeks. HT @ lawyer Paul Maalo, writing for the Wiggin digital commerce team in London.

U.S. footballers celebrate equal pay settlement

Alex Morgan
(Jamie Smed CC BY 2.0 via Wikimedia Commons)

I was elated in April to hear of a proposed $24m settlement in the equal pay dispute brought by U.S. Women's Soccer.

I wrote about the matter in April 2021 and May 2020. There were ups and downs, and, frankly, things were not looking good for the plaintiffs.

However, the case is a lesson in persistence and the value of a public relations campaign running alongside a litigation. U.S. Soccer had the upper hand in the court of law, but was taking it on the chin in court of public opinion.

The case is Morgan v. U.S. Soccer Federation (C.D. Cal. filed Mar. 8, 2019). A June 22 motion seeks court approval of the class action settlement. Named plaintiff Alex Morgan talked to MSNBC about the settlement last week.

UPDATE, July 4, at 1934 EDT: Watch today's CONCACAF match and tell me Alex Morgan should not be US Soccer's highest paid player!

From soccer pitch to memoir, and now to White House, Rapinoe shines in USWNT equal pay crusade

Rapinoe speaks at the White House (from White House video).

Today a federal district court in California is expected to approve a partial settlement over working conditions in the equal pay battle between the U.S. Women's National Team and U.S. Soccer.  The settlement leaves the central issue of equal pay in play in the case.

As Tokyo seeks "to blunt" its fourth wave of coronavirus, public support and flat-out feasibility fade for pulling off the 2020 Olympic Games even in the summer of 2021.  An Olympic omission will downplay the news of late March that the U.S. Men's National Team failed to qualify for the Olympics upon a loss to Honduras.  Meanwhile the U.S. Women's National Team (USWNT) has been training up for another record-shattering international appearance.

Rapinoe, 2019 (Jamie Smed CC BY 2.0)

The USWNT has not fared as well in court as on the pitch.  On the equal-pay front, the USWNT complainants suffered a major setback in a trial court decision in May 2020.  I wrote then that the court's conclusion was defensible on the law, if arguable on the rationale and tormenting for its rank unfairness.  The complainants plan to appeal.

One is left to marvel at U.S. Soccer's shameless persistence of what I can only imagine is a cold commitment to the bottom line.  At some point, the bad PR for the sport in America must become too costly even in the commercial calculation.  And with the winds having shifted in Washington, the women wisely have opened up other fronts in the war.

A soccer legend in her own time and a hero of mine, USWNT captain Megan Rapinoe has been on a tear lately on the PR-and-lobbying circuit.  On March 24, she joined the J'Bidens at the White House to commemorate "Equal Pay Day."

The White House visit had added significance because Rapinoe feuded with Donald Trump while he was on office—see commentary in 2019 by Sue Bird, Rapinoe's then girlfriend, now betrothed—and Rapinoe said she would not go to the White House even if invited.  In March, President Joe Biden ordered resuscitation of the White House Gender Policy Council, and Rapinoe gave the White House visit a positive review.  Newsweek observed that Rapinoe received a White House invite before Sen. Mitch McConnell.

Here is Rapinoe's statement at the White House.  Watch the whole event at YouTube; Rapinoe's four minutes followed statements by USWNT teammate Midge Purce and First Lady Jill Biden.  

Rapinoe got her money's worth out of her ticket to Washington, because she also testified before the House Committee on Oversight and Reform, which was "examining the long-term economic impacts of gender inequality."  Her affirmative statement, below, ran only about two and a half minutes.  With experts representing NGOs also testifying, Rapinoe participated in the questions and answers afterward; the full-length video of the committee hearing is posted online (image from House video).

Rapinoe wound up her testimony with the USWNT rallying cry, "LFG."  She has since remained ready to fight when the situation calls for it, recently, as Comic Sands put it, "eviscerat[ing an] NBA star who criticized female athletes 'complaining' about pay gap."  An HBO Max-CNN Films documentary on the USWNT, titled "LFG" (teaser), is set for release later this year.

All the while, Rapinoe has let no artificial turf grow under her feet.  At the day job on Saturday, she scored for the USWNT to pull out a draw against Sweden and preserve the women's undefeated streak.

Rapinoe published a memoir, One Life, in the fall.

LFG.

U.S. female footballers suffer slide tackle in equal pay match: Understanding the summary judgment decision

U.S. co-captain Alex Morgan is the first named plaintiff.
(Photo by Jamie Smed CC BY 2.0.)

The women of U.S. Soccer suffered a major setback Friday with an adverse court decision (e.g., N.Y. Times).

The U.S. District Court in Los Angeles awarded partial summary judgment to defendant U.S. Soccer, rejecting the plaintiffs' core claim in the case, pay discrimination against the U.S. women's national team (USWNT) relative to the men's national team (USMNT).   In the complaint filed in March 2019, USWNT players claimed violation of the Fair Labor Standards Act of 1938, as amended by the Equal Pay Act of 1963, and of the Civil Rights Act of 1964, as amended.

The USWNT always faced an uphill battle on the numbers.  To generalize, the women could not deny, they were paid more than the men, dollar to dollar.  The devil lies in what "more" is.

The USWNT has been fantastically successful.  The team has won the World Cup of women's soccer four times, most recently in 2019 in France (I saw a match from a Paris Fan Zone, and my daughter went to one) and won the Olympic gold four times.  The squad has been a global force to be reckoned with since its inception in the 1980s.  Moreover, many a football fan, such as myself, will tell you that the women's talent is a marvel to behold on the pitch, the United States having substantially defined the women's game for the world.

We were in France for World Cup 2019. (CC BY-NC-SA 4.0.)

Direct comparison between women's and men's play is inevitably uneven, because the style of play in the women's game is different from in the men's, apples and oranges.  And worldwide, many soccer-power nations have failed to invest in developing female talent, so any given head-to-head is not necessarily taking place on a level playing field.  Nevertheless, by many a worthwhile measure, including technical proficiency, the women indisputably are better than the men—who failed even to qualify for the 2018 World Cup in Russia.

The women's superiority was exactly their problem in the equal-pay litigation.  A plaintiff bears the burden of making out a prime facie case of pay disparity.  Compensation in professional soccer in the United States is mostly based on the principle of pay for performance.  The women played more than the men and achieved more than the men, so they were paid more.  Their burden, then, was to show, in essence, that their pay rate was relatively lower than the men's.

We win, 2019.  (Photo by Howcheng CC BY-SA 4.0.)

U.S. civil rights law is, thankfully, sufficiently sophisticated to account for disparity based on pay rate.  As U.S. District Judge R. Gary Klausner explained in the instant case, quoting precedent, it can't be that "an employer who pays a woman $10 per hour and a man $20 per hour would not violate the EPA ... as long as the woman negated the obvious disparity by working twice as many hours."  However, the parties disagreed about how to calculate rate so as to compare apples to apples.

Hardening defenses on their polar positions, each side posited a favorable calculation.  Plaintiffs urged the court to look at women's compensation through the lens of the men's contract.  If the women had won the World Cup, etc., under the men's contract, they would have been far more richly rewarded.  Defendant U.S. Soccer urged the court to look at the numbers in gross.  The women simply make more than the men, and even though the women play more matches, they make more than the men on a per match basis, too.

Both positions are counterarguable.  The women's and men's contracts are both the result of collective bargaining, and a lot goes into a bargaining contract besides its raw numbers.  Simply pumping the women's performance statistics through the men's contract formula ignores the broader context of each contract, or collective bargaining agreement (CBA), and the inter-dependency of its compensation formula with other bargained-for terms: like squeezing an apple with an orange juicer.

New York ticker-tape parade for the USWNT, 2015

(Photo by Anthony Quintano CC BY 2.0)

At the same time, the women's argument in converse challenges the defendant's attempt to aggregate numbers.  Maybe the women are paid more per match because they are better soccer players, which the evidence supports.  That doesn't mean that they are paid so much more per match relative to the disparity in talent and achievement between the women and the men.  To analogize, oranges might cost more than apples because oranges taste twice as good.  But an orange for $1.20 is still a bargain relative to an apple for a dollar.

The court's recitation of the women's collective bargaining process is painstaking, packing in plenty of detail for those who want it.  In sum, considering that the plaintiffs bear the burden to make out a prima facie case of discrimination, the court found the defendant's position more persuasive.  The contractual context was really the clincher.  Judge Klausner wrote (footnotes omitted):

This history of negotiations between the parties demonstrates that the WNT rejected an offer to be paid under the same pay-to-play structure as the MNT, and that the WNT was willing to forgo higher bonuses for other benefits, such as greater base compensation and the guarantee of a higher number of contracted players. Accordingly, Plaintiffs cannot now retroactively deem their CBA worse than the MNT CBA by reference to what they would have made had they been paid under the MNT's pay-to-play structure when they themselves rejected such a structure. This method of comparison not only fails to account for the choices made during collective bargaining, it also ignores the economic value of the "insurance" that WNT players receive under their CBA. 

[¶] One of the defining features of the WNT CBA is its guarantee that players will be compensated regardless of whether they play a match or not. This stands in stark contrast to the MNT CBA, under which players are only compensated if they are called into camp to play and then participate in a match. ... [T]here is indisputably economic value to this type of "fixed pay" contract, as compared to a "performance pay" contract.  Merely comparing what WNT players received under their own CBA with what they would have received under the MNT CBA discounts the value that the team placed on the guaranteed benefits they receive under their agreement, which they opted for at the expense of higher performance-based bonuses.

There are problems with the court's approach, including prominently that there are systemically discriminatory reasons that the women elected for the terms they did.  Many male players are able to make a living as athletes, so playing for the national team is a bonus.  Women's soccer meanwhile has faltered as a nationwide business model, for arguable reasons that must include the ingrained underdevelopment of women's athletics.  That makes it harder for a woman than for a man to play at the national level, even if the two squads have the same number of seats.

USWNT selfie with the President, 2015 (White House photo)

Consider that a man who plays professional soccer is incidentally training for the U.S. national team while he's at work.  And his day job gives him time off, sometimes months, to play for the national team.  A woman with a collateral occupation that is not professional soccer cannot invest the time and energy in the physical training and playing time required to be a globally competitive athlete.  Of course, some women do find work in professional soccer, but far fewer than men who do.  Characteristically, the USWNT's star players bargained for better job security not just for themselves, but to support their teammates.  And that's not all selflessness; their investment in part explains the ongoing developmental success of the USWNT over athletic generations.

That doesn't mean Klausner is wrong on the law.  The facts of the case show something we already know, which is that historically rooted discrimination can persist well beyond demonstrable intention, is exceptionally resistant to eradication, and is more susceptible to redress socially and politically than judicially.  There are good reasons why the standard to establish a civil rights violation of federal law is high.  Failure to surmount that bar in court does not establish that the plaintiff is right or wrong as a social or moral matter.

Federal courthouse in Los Angeles (Photo by Los Angeles CC BY-SA 3.0)

There were other claims in the case, and the plaintiffs' cause is not formally over, even notwithstanding appeal.  The court's treatment of the plaintiffs' claim of discrimination in turf is a worthwhile read.  Female footballers often play on artificial and unstable surfaces, resulting in physical injury and career wear and tear, while the USMNT always plays on grass.  Despite the disparity in fact, the plaintiffs were unable to prove the discriminatory motive, or intent, that civil rights law requires.

The women's case persists upon some ancillary claims related to fringe benefits, such as better hotels and more frequent charter flights for the men's team than for the women's.  There might not be enough there for the women to want to keep the litigation going.  Plaintiffs probably will ask Judge Klausner to allow interlocutory appeal to the Ninth Circuit directly from this partial summary judgment, and I expect he will.

The case is Morgan v. U.S. Soccer Federation, No. 2:19-cv-01717 (C.D. Cal. May 1, 2020).  Court Listener has the key documents.