- The Washington Times - Friday, April 21, 2000

Major League Soccer has won a giant legal victory against the league's players association, preserving not only its own single-entity structure but giving new hope to many pro sports leagues starting up nationwide.

A summary judgment, rendered late Wednesday night by Boston federal judge George A. O'Toole, threw out the players' claim that the single-entity organization violated federal antitrust laws and artificially depressed salaries. The claim was the heart of a five-count, class-action lawsuit filed in 1997 in the U.S. District Court for the District of Massachusetts.

"As a single entity, [the MLS] cannot conspire or combine with its investors . . and its investors do not combine or conspire with each other in pursuing the economic interests of the entity," O'Toole wrote.

In the single-entity structure, the league owns all the teams, controls all player movements and negotiates all salaries. Investors in the league hold only the operating rights for each team.

The league said it now wants to begin negotiating a collective bargaining agreement with the players. The judgment came five months before the matter was to go to trial.

"There are a few other counts that will still go to trial [Sept. 18], but for all intents and purposes, this lawsuit is over and we have won," said Mark Abbott, chief operating officer for MLS. "We now want to sit down and negotiate an agreement with the players at the bargaining table and not in the courts. It's the same thing we've been saying for 3 1/2 years."

Don't count on that, though. Jeffrey Kessler, the New York-based attorney for the players, said an appeal already is planned, and he pledged no slowdown in the overall legal challenge against the league.

"We are disappointed with the judgment," Kessler said. "We think it's wrong and inconsistent with prior rulings in this area. But this doesn't really change the trial. A jury will still be able to decide on whether this league is a monopoly. They've cleared only one part of it, and we're going to try to appeal that on an expedited basis."

The trial now will center on a claim by players that MLS, its teams and the U.S. Soccer Federation exercised monopoly power by refusing to allow the formation of any other major professional soccer league. MLS received exclusive certification from the USSF before starting up, but that exclusivity has since expired.

The trial also will determine whether the league imposed illegal transfer fees on players leaving MLS to play in Europe, and whether players' promotional rights were violated by the standard player contract. Legal experts, however, say the players now have an uphill fight with few viable options.

"It's going to be much tougher [for the players] to show the league is a monopoly without the single-entity claim," said Mark Conrad, a law professor at the Fordham University School of Business. "It's the center of their case."

The players do not plan to unionize and strike.

"I wouldn't say single entity is well, but it's still alive," said Jeff Agoos, D.C. United defender and player representative. "We filed the suit not to go on strike. We didn't form the group as a union. We did it as an association to keep the league going and not disappoint the fans."

Other fledging leagues that use single-entity structures, including the WNBA, received a strong endorsement for their financial plan. The single-entity design is intended to avoid the type of salary wars that doomed many start-up sports leagues like the North American Soccer League.

"This is a precedent for any existing or future league that is organized like the MLS," said Michael Cardozo, a New York-based attorney representing the league. "This fully confirms that this structure is not unlawful. Since we are essentially one company with many divisions, there is no one else we can conspire with [to break antitrust law]."

If the ruling survives appeal, it also should have a dramatic effect on MLS operations. Abbott said the salary cap and all other league expenditures have been depressed since 1997 because of the "multimillion dollar" amount spent on legal fees.

Relieving those legal fees would help raise the salary cap, but Abbott would not specify how much. The league's salary cap is $1.7 million per team and the average salary is now about $90,000.

The ruling also should help the league find new investors. The league has not had one since its inception in 1996 and is actively trying to close operating rights sales for both D.C. United and the Dallas Burn.

"Everybody with a stake or possible stake in the league, whether it be investors, sponsors, TV or whoever, can have confidence in the league," Abbott said. "There is now certainty that our structure is fully and legally sound."

• Staff writer Ken Wright contributed to this report.

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