CAS pro/rel ruling raises questions over Fifa’s reluctance to force initiative in US

Fifa president Gianni Infantino (left) meets with US president Donald Trump in Washington DC in 2018 (Credit: Getty Images)

  • Fifa president Gianni Infantino says he would prefer for US soccer to adopt promotion and relegation
  • Despite existence of Article 9, Fifa has not put any pressure on US Soccer Federation to implement it
  • In 2015, former Fifa executive Jérôme Valcke told Australian federation that pro/rel was “mandatory”

The Court of Arbitration for Sport’s recent ruling that Fifa is not legally required to enforce promotion and relegation in the United States soccer pyramid has raised some questions over the world governing body’s ability to interpret its own statutes and not enforce them.

Article 9 of the Fifa Regulations for the Applications of Statutes says: “A club’s entitlement to take part in a domestic league championship shall depend principally on sporting merit. A club shall qualify for a domestic league championship by remaining in a certain division or by being promoted or relegated to another at the end of a season.”

Fifa president Gianni Infantino, for his part, has expressed his preference for promotion and relegation (pro/rel) in the United States, which remains the only major soccer-playing nation not committed to introduce the system in the coming years.

“I wouldn’t say [the US’s closed system] is holding American soccer back, because some good progress has been made,” Infantino said in August 2018, following a meeting with US president Donald Trump at the White House to discuss preparations for the 2026 World Cup, which is being co-hosted by the United States, Canada and Mexico.

“But personally, coming from a different background, I believe in something like promotion and relegation. I believe in the competition. I believe in a [club] president or owner who can just say, ‘OK, I want to win the league this year, and I want to invest’,” Infantino said.

Infantino, though, said that despite the existence of Article 9, Fifa is unwilling to enforce pro/rel in the US and that the United States Soccer Federation should take the lead on this issue.

“I’m empowered to talk to people and to push, but then, of course, this gentleman here [US Soccer president Carlos Cordeiro] and his colleagues, they are free to decide whatever they want,” Infantino added. “But I can be pretty painful when I have something in my mind.”

However, US Soccer and Major League Soccer have repeatedly stated in recent years that they have no desire to implement pro/rel from within. They argue that freedom of movement between leagues is at odds with the current system, in which entry into MLS is largely dependent on taxpayer-funded stadiums as well as ever-increasing entry fees. It is also believed that the lower-league structure is not yet ready for pro/rel, while MLS media-rights and sponsorship deals must also be taken into account. There are cultural differences, too, with none of the other major professional sports leagues in the US having pro/rel.

MLS commissioner Don Garber told the Kansas City Star in 2018: “Just because there is promotion/relegation in other leagues that were founded on different principles doesn’t mean that it would make sense in Major League Soccer. We have a vibrant No. 2 league in the USL. We have (Sporting KC principal owner) Cliff (Illig) and his partners that have just put $60m of capital, along with the public, into this building.  If all of a sudden they’re playing in a different division that doesn’t have national revenues – because the USL doesn’t have that – how does that make any sense? There’s no economic rationality to promotion/relegation whatsoever in the era that we’re in today.”

In an effort to enforce Fifa to impose its own rules and bring the US in line with the rest of the world, lower-league US soccer clubs Miami FC and Kingston Stockade FC filed a case with the CAS in 2017 against Fifa, North American regional governing body Concacaf and US Soccer.

The case was heard in a one-day session in New York in May 2019 following written witness statements from former Fifa secretary general Michel Zen-Ruffinen and former US Soccer presidents Alan Rothenberg and Sunil Gulati.

The CAS ruled in favor of the defendants in February, therefore allowing the current closed league system in the US – in which places in the top-flight MLS are allowed only in via an entry fee, which is currently north of $300m – to continue indefinitely.

The court ordered both clubs to each pay 15,000 Swiss francs ($15,350) toward US Soccer’s legal costs and 7,500 Swiss francs ($7,675) to each of Fifa and Concacaf.

Fifa’s freedom to interpret its rules

In the ruling, which SportBusiness has seen, the CAS argued that Article 9 is a guideline which is essentially up to Fifa’s interpretation rather than a mandatory requirement.

The CAS said: “The Panel finds that a considerable amount of deference is to be afforded to Fifa’s interpretation of its own rules and regulations and therefore to Fifa’s position that Article 9 does not apply to USSF.”

But the CAS also said: “The Panel acknowledges that the wording of Article 9 could arguably lead one to believe that Article 9 is universally applicable and that the system implemented in the United States is not compliant with Article 9.”

It was also ruled that the specific wording of Article 9 “does not say that all Fifa member associations are obliged to implement a system of promotion and relegation”. The CAS said: “Sporting merit alone is not decisive in determining whether a club is entitled to take part in a domestic league championship, but it should be the principal criterion.”

(Matthias Hangst/Getty Images)

Yet in 2015, former Fifa secretary general Jérôme Valcke warned Football Federation Australia that pro/rel was “mandatory” after the top-flight A-League announced that it would not introduce the initiative until at least 2034 despite the creation of the second-tier National Premier League. At the time Sepp Blatter was Fifa president.

On May 6, 2015, Valcke wrote to the FFA: “The [attached] article suggests that FFA have ruled out any possibility of the A-League moving to a promotion and relegation system. In line with our earlier correspondence on this matter, we remind you that the principle of promotion and relegation is of fundamental importance to Fifa and is a mandatory principle binding on all Fifa Member Associations as provided in [Article 9].”

But according to the CAS: “Mr Valcke’s statement should…be seen as an attempt to exercise certain (undue) pressure on the FFA to implement the principle of promotion and relegation, because it is clear that – even though not required – Fifa considered the principle of promotion and relegation to be important and would prefer to see this principle implemented worldwide. However, having a preference to see the principle implemented is quite different from actually requiring a constituent to implement the principle.”

Exactly why Fifa has not similarly attempted to exercise “undue pressure” on US Soccer to enforce pro/rel remains unclear and unanswered. US Soccer said it had no comment on the CAS ruling, while Fifa did not respond to a request for a comment by the time of publication.

Attempts to prevent another ‘Granada case’

The original purpose of Article 9 was to ensure that a situation which arose in Spain in 2007 could not be repeated. Then, a wealthy investor who owned fourth division club Granada bought second division club Ciudad de Murcia and moved the club to Granada, renaming it Granada 74, thus giving the city a second division team without it having to be promoted.

As such, the CAS ruled that Article 9 “was only intended to apply to member associations that had already implemented the principle of promotion and relegation and to avoid, inter alia, within such existing systems, cases like the ‘Granada case'”.

The CAS argued that the development of MLS and the US soccer landscape since then, which included the growth of a lower-league structure, did not alter the meaning of the original statute.

It said: “Given that the principle of promotion and relegation had neither been implemented in the United States when Article 9 was enacted, nor afterwards…the Panel finds that it was never the intention of Fifa that Article 9 would be applicable to USSF. Accordingly, USSF was not required to implement a system of promotion and relegation of sporting merit in the United States.

“The argument of the Claimants that the exemption created for the United States and Australia only applied to league structures that were in place at the time, but that no such exemption is warranted anymore because the league structure in professional soccer had changed significantly over time, must be dismissed.”

The CAS also concluded that a closed league such as MLS is “not prohibited by Article 9” and more generally “closed leagues are commonplace in professional sports in the United States”.

In an official statement, Miami FC owner Riccardo Silva and Kingston Stockade FC founder Dennis Crowley said: “Two and a half years after the filing of this case, the CAS arbitral tribunal has finally rendered its decision. The CAS panel found that the wording of Article 9 of the Fifa regulations could arguably lead one to believe that the rule is universally applicable, and that the system implemented in the United States is not compliant with Article 9.

“However, the tribunal ruled that Fifa has considerable discretion and deference when it comes to the interpretation of its statutes, and concluded that Fifa didn’t intend for the rule to apply to US soccer. We are proud to have raised an issue which has been affecting soccer in the USA for many years. We respect the CAS ruling, but we still believe that an open, merit-based system would bring major benefits to the quality of the game, and would create inclusive, competitive and non-discriminatory soccer in the USA.”

Onus still rests with Fifa on issue

Sports lawyers believe that Miami FC and Kingston Stockade’s case was always going to be difficult to win, as it was believed to be appropriate under the CAS precedent and Swiss law, that Fifa, as a private association was entitled to substantial deference in the interpretation of its own rules and regulations.

Miki Turner, a Seattle-based sports lawyer and journalist, said: “The Panel’s decision seems to in some ways be looking for a way out. They acknowledge the ‘sporting merit’ component of Article 9, yet they spend much of their time in the weeds, looking to the historical record to make a determination that what’s in front of our face isn’t really there.

“As to where we go from here: just as Fifa as a private organization is afforded wide discretion in how it conducts its affairs, it means that there is a world where they change their mind. Statutes are made to be amended after all, so it’s possible we’re here in five years or 50, having this argument all over again.”

The most effective way forward for pro/rel supporters in the US now appears to be lobbying Fifa to change its rules rather than going down the legal route.

“This [ruling] does not mean that Fifa or the Fifa Congress could not require promotion and relegation in the future,” says Professor Steven Bank, the Paul Hastings Professor of Business Law at UCLA School of Law. “Nor does it reject the possibility that some people wanted to require promotion and relegation, including in the United States, at the time Article 9 was adopted or in subsequent years.

“Indeed, it is possible that the ambiguity of Article 9 itself might have been the product of an internal battle among the drafters on the issue of whether to mandate promotion and relegation and, while the opponents of such a stance won, they thought it best not to provoke controversy in Fifa’s Congress by drafting Article 9 to make explicit in the text that promotion and relegation was not actually required. Nevertheless, those seeking mandatory promotion and relegation did not prevail then and apparently are not in the majority now either. The CAS is effectively saying that if promotion and relegation supporters want to make it mandatory, they need to lobby Fifa and its members rather than contest Fifa’s interpretation of its own rules.”

Alexi Lalas, the former US men’s national team defender and current Fox Sports analyst, said the CAS ruling “does not preclude the US from having pro/rel”.

He added: “Fifa doesn’t want to do things that hurt the game. Mandating pro/rel on an existing and successful league that operates within a unique sports culture could hurt the game [in the US]. If pro/rel is such an elixir then the market will demand it and the customer will get the product they really want. Someone will build a better mousetrap…and I will support that effort.”

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