MLS to ATX #3: Does San Antonio Have Any Legal Basis to Prevent MLS in Austin?

By | 2018-01-08T13:48:39+00:00 January 8th, 2018|Austin Sports Law Blog|1 Comment

While Austin generally welcomed the MLS to ATX news, the opposite was true in Ohio as, unsurprisingly, the announcement was met with angry protests and threatened legal action, and I’ll look more closely at the legitimacy of the Ohio legal maneuvers in my next post. However, Columbus was not the only city to immediately get on the phone to its lawyers.

Within days of the revelation that the operators of the Columbus Crew were exploring a move to Austin, Bexar County Judge Nelson Wolff fired off an angry letter to MLS Commissioner Don Garber letting him know that he had asked the Bexar County DA to investigate whether Major League Soccer had violated any criminal or civil laws. Wolff was under the impression that it would be San Antonio, and not Austin, that would be the next MLS destination in this part of Texas.

The basis for Wolff’s anger appears to be some sort of assurances given by MLS President Mark Abbott that if the City of San Antonio purchased Toyota Field this would be a “clear path” for an MLS Expansion team in San Antonio. Apparently Wolff was also told by MLS that it would not establish franchises in both Austin and San Antonio. MLS denies this.

Before I look at the legitimacy of Wolff’s claims, and the response from MLS, which is of more interest to Austin, I want to express my own personal thoughts on San Antonio FC.

In the last few years I’ve been down to Toyota Field in San Antonio about half a dozen times. I’ve seen the Aztex play there twice, I’ve had a great time tailgating with the Crocketeers, and I even joined the on-field celebrations when the Scorpions won the NASL Soccer Bowl in 2014. My overall impression of San Antonio and their set-up was that they were years ahead of Austin in terms of being a major league team. Years ahead.

And I don’t just mean the modern, comfortable, easily accessible, purpose built stadium, with tons of free parking. More than that, San Antonio had already built a knowledgeable and passionate fan base. I’m also friends with some of the front office and the coaching staff. They are a top tier organization in every sense, and I still believe it will be one day.

If MLS franchises were awarded on merit, San Antonio would get one before Austin every time. But the MLS is not driven by merit or fairness. It’s driven by money.

And that shouldn’t be a surprise to anyone. MLS have no obligation to award a franchise to the best organization or the best city. MLS has a legal obligation to the company and its existing shareholders.

In response to Judge Wolff’s request, the San Antonio DA’s office and its local co-counsel determined in no uncertain terms that the MLS expansion process was “unfair, unethical, and duplicitous”. But it also concluded that despite MLS’s “misleading inducements” and “secret contractual provisions”, there was no legal basis to do anything at this time.

In making its findings, Bexar County made public some recent correspondence between its lawyers and the lawyers for MLS that provides a fascinating insight into the meetings and machinations behind the MLS franchise courting ritual.

Here is that back and forth in full. The timeline in the first document put together by San Antonio is especially useful.

It is apparent from these documents that San Antonio was ready for a committed relationship with MLS. It’s also apparent that MLS was flirting hard with San Antonio. Of course, MLS were also flirting with at least 11 other cities, but San Antonio thought that they’d seen a nod or a wink from MLS President Mark Abbott that they interpreted to mean that Alamo City was on to a sure thing.

Judge Wolff says that he told MLS that the County would only purchase Toyota Field if there was a “clear path” to obtaining an expansion team. Wolff believes he got that assurance from Abbott. MLS replied saying such a suggestion “defies reality”. We’ll probably never know for sure.

It does seem likely that the Spurs Group, Bexar County, and the City of San Antonio would have sought and received some sort of assurances from MLS before purchasing Toyota Field. But it also seems unlikely that MLS would have given any sort of commitment to one city before the recent expansion process even started. The truth is probably somewhere in the middle. MLS probably said enough to convince the San Antonio group to move forward, but in a vague enough way to avoid anything being binding.

Ultimately it was the Spurs Group that made a decision to withdraw from the first phase of the expansion process. This decision was made independently of the Austin revelation, (and also apparently without telling Bexar County and the City of San Antonio).

So does Bexar County or the City of San Antonio have any legal basis to stop PSV moving to Austin?

No.

And are are Bexar County or the City of San Antonio going to do anything?

No. At least not according to advice of their lawyers.

The path is now clear for Austin.

MLS were not happy about Wolff publicly accusing it of potentially criminal behavior. The response from the New York lawyers for MLS to Wolff is worth reading, and one section is of particular interest to Austin.

This paragraph is tucked away on page 3 of that November 17th letter:

With respect to a potential MLS team in Austin, let me start by saying that the MLS Board of Governors has the sole and exclusive right to decide where MLS clubs will be located. Likewise, any decisions to relocate any club or to grant any party any right to relocate are, subject to any existing club leases and other contracts with third parties, within the sole discretion of the MLS Board of Governors. For present purposes, and without getting into the particulars of any such arrangement, suffice it to say that (i) at no time has MLS agreed not to place an MLS team in San Antonio (even if there is also an MLS team in Austin), (ii) from MLS’s perspective, there is nothing that would contractually prevent MLS from awarding an expansion club to San Antonio should MLS determine that such a course of action is desirable, and (iii) at this time Mr. Precourt has not formally notified MLS of an intention to relocate his club to Austin nor have the conditions that would need to be satisfied for any such relocation been met.

MLS Letter to Wolff, November 17, 2017

Let’s just unpick that.

At that time, and the letter was dated November 17, 2017, MLS stated that 1. there had been no formal notification from Precourt of his intention to relocate his club to Austin, and 2. that the conditions that would need to be satisfied for any such relocation had not been met.

So now we have a little bit more information on the ‘Austin Clause’. We know that the process must start with formal notification, and that has not happened. Ok fine. But now we know that the move has not been entirely pre-approved. There are still conditions that need to be satisfied.

What might those conditions be? Probably a stadium, of a certain size, in a certain area? Perhaps some sort of green light for such a stadium by the City of Austin. Perhaps a period of notice to Columbus? And maybe even a vote by the MLS Board of Governors? Probably a timescale for all that to happen too.

The other point that MLS repeatedly make in that letter is that there is nothing to preclude there being a team in San Antonio AND a team in Austin. Even more specifically, MLS says that there is nothing “that would contractually prevent” MLS from awarding a team in San Antonio.

MLS couldn’t be clearer: even if Austin gets a MLS team, that doesn’t mean San Antonio wont.

I appreciate that San Antonio FC fans are angry right now, and they are right to be angry. It’s not fair that Austin might get a MLS team before San Antonio. Most of that San Antonio anger is directed at MLS, some at PSV, some at their own owners, and some, unfairly, at soccer supporters in Austin. But my message to San Antonio fans would be – don’t give up.

Soccer was built on rivalries, and whether MLS intended it not, they just threw gasoline on an already smoldering rivalry between Austin and San Antonio.

It’s maybe not a Celtic v Rangers level of animosity, but it would at least be on the Arsenal v Spurs, or the Roma v Lazio level. I can already imagine the sort of chants that the San Antonio supporters would be aiming at the Austin fans after all this. Actually, to be fair, I think Austin fans should expect to be on the receiving end of some nasty stuff from every other team in the league if the Crew does move here. But I’m getting ahead of myself.

Both cities could support its own MLS team and I genuinely believe that having another team an hour away would enhance and elevate both franchises. The clubs wouldn’t be competing for fans. I’d love to see both Austin and San Antonio field teams in MLS competing for the Queso Bowl again. According to MLS there is nothing to stop that happening. Unfortunately for San Antonio, Austin just might be getting there first.

One Comment

  1. […] and get everything approved by MLS. They may have to deal with some legal issues in Ohio, but as I already explained, I don’t think there is anything there that could prevent a […]

Leave A Comment