Tim Holt explains the USL's decision to seek Division 2 sanctioning

The United Soccer Leagues organization has made quite a few headlines lately. In addition to continually adding MLS team affiliates in its top division, that division was rebranded this week. It's now known simply as the USL, not USL PRO.

Hidden in Tuesday's official announcement of the rebranding was a bombshell that delivered quite an explosion in the American soccer community:

All aspects of our league have been elevated, both on and off the field, to the extent that the time is right for USL to re-establish its Division 2 status. This year the League will apply for USSF Division 2 sanctioning to accurately reflect the quality of our league, our ownership groups, our stadiums and our fans.

You probably already know that the North American Soccer League currently holds Division 2 sanctioning. If you're new to soccer in America, you might not get why the USL used the word "re-establish." The organization held Division 2 sanctioning from 1996 through 2009, first as the A-League and then as the USL First Division.

In August of 2009, there was a change in investors in the USL First Division. That led to an ugly split among the league's owners, and eventually to the founding of the current-era NASL in 2011.

(Those of you who've been reading this blog for its entire history may remember that during the 2010 season, the second division was briefly operated and branded by the U.S. Soccer Federation. That summer, I went to a Montreal Impact game to interview Temple product Tony Donatelli and get a glimpse of the Impact's early preparations to join Major League Soccer in 2012.)

After the split, the USL dropped its league down to Division 3 and rebranded it as the USL Pro. Now the league has grown to the point where the USL believes it's time to try to move up again.

It is allowable under USSF rules for multiple leagues to hold the same level of sanctioning, but the USL's campaign is sure to spark a lot of controversy.

To get some insight into how the process will work and why it's happening, I spoke at length with USL president Tim Holt. I've interviewed him here many times before, and I'm sure I will again. He's a smart guy, and he's not afraid to speak his mind.

Holt is not one for clichés and soundbites. His answers to my questions were deep and thoughtful. So I think the best way to present our conversation is as a transcript. It's long, but I think you'll learn a lot.

What does it mean for the USL to be seeking the Division 2 sanction?

[Click here to read U.S. Soccer's requirements for leagues to gain sanctioning at various levels. A hat tip to IndyWeek.com for bringing them into the public domain.]

Our pursuit of Division 2 sanctioning is part of our overall strategic plan for the USL. As it relates to that particular aspect of it, we feel that with where the league is right now - and where it's going in the coming years, on and off the field - Division 2 is more reflective than where Division 3 is. 

 I would tell you that we meet or exceed the vast majority of the standards for Division 2 right now, at the individual team and league levels. There is some work that will need to be done with respect to venues of teams, and also in terms of the ownership net worth, the structuring of that.

Some tweaks will need to be made on the ownership side in order to make sure that we submit a bid, ultimately - in 2015 for the 2017 season - to the [U.S. Soccer] Federation that has no holes, that checks all the boxes and meets all the criteria for Division 2.

The point in time when we have all that and can package it and present it to U.S. Soccer will be the time when we do that. But this is not something that we're submitting next week, or next month. It's going to take several months to properly prepare. We're preparing, and it really doesn't change anything that we're doing. The Division 2 sanction would happen in advance in the 2017 season.

From a practical perspective, what should fans understand about the differences between Division 2 and Division 3?

The ones that typically come into play are the minimum size of venues - 5,000 seats for venues in your league - and then the net worth requirement for the primary owner of a franchise. Those are the two things that are the biggest differences in terms of the published standards that the Federation has. It is something that's provided to the pro leagues, the members of the federation. And it's pretty explicit. So you have to make sure that if you're going to submit an application, it's going to meet all the criteria.

We've modeled this league the last three or four years to make sure that we're not just meeting some Division 3 standards or Division 2 standards, but the highest possible standards for our league - and continue to elevate those as we go forward, because they just make sense in terms of strengthening your league.

As we've looked at this over the last year, we've said, "Hey, look, in terms of the Division 2 standards, we're right there. So does it make sense to make sure we're all the way there, which we think is incremental, and put ourselves on that platform?"

I think most people who follow the sport know that the USL is a growing, strengthening league with a lot of top clubs that are performing really well on the field and with attendances - Sacramento, Orlando, teams with new stadiums being built. They know that.

But for the uninitiated, either fans or potentially corporate sponsors, it's very simple to just go "Okay, well, that's Division 1, that's Division 2 and that's Division 3," the perception being that Division 3 must be inferior in all ways to anything that sits above it. So if the perception exists because of that, then it makes sense for us from a business standpoint to eliminate the perception when we're meeting the criteria at a higher level.

There's already a Division 2 in the United States in the North American Soccer League. If you get Division 2 sanctions, can two Division 2 leagues co-exist alongside each other?

Yes they can. Two Division 3 leagues, three Division 3 leagues could co-exist. It's not that someone has it and you're the only one that gets it, and someone has to unseat you. That's not how it works. The Federation is an open-membership organization. If any league that applies for any of the respective divisions meets the criteria, by definition they can have a right to be able to do that.

Just as we operate presently on the Division 3 platform, another outside league could make an application for Division 3. That doesn't mean we would lose ours, it would just mean there's another league operating at that particular level of professional soccer in the United States.

It's different than in other federations, admittedly, where you've got one Division 1 league and one Division 2 and one Division 3 and it's a closed shop. That's just not the case within the U.S. Soccer Federation's structure.

Right now, you are the only Division 3 league sanctioned by U.S. Soccer?

That's correct.

To what degree is the relationship with MLS a factor in the decision to seek the Division 2 sanction?

None. Zero. This is entirely driven by the ownership of the teams and the leagues. I guess "zero" with an asterisk, because we have MLS team ownership groups that are also USL team ownership groups, so they have a voice in that process as part of our Board of Governors. But by no means is this any type of MLS-associated or MLS-driven thing. This is entirely driven within USL.

I think for MLS, it probably doesn't affect them one way or the other. There are three sanctioned pro soccer leagues right now, and if and when we achieve Division 2 status, there will still be three sanctioned professional leagues. So no, it doesn't have anything to do with our partnership with MLS.

You have been involved with American soccer for long enough to have seen not only the USL but other leagues aspire to move up divisions. That includes the NASL, which for some time now has been the subject of rumors that it wants to move for a Division 1 sanction. And the USL held the Division 2 sanction for many years before the NASL-USL split that resulted in the USL moving down to Division 3.

Is it to the benefit of American soccer as a whole that leagues have the ability to move up and down sanctioned divisions?

I don't think that's for me to - well, you're asking me for my opinion on whether it's a benefit. I think each of these sports leagues are entities, they're businesses. So each individual league and business has to make a decision at any given point in its life cycle about where it may fit.

We had Division 2 sanctionings in the incarnate leagues of what is now the USL for over a decade. At a particular time in 2009 we decided that we'd operate off of the Division 3 platform. Now, five or six years later, things have evolved and chanced to the point where we think it's appropriate to do that [return to Division 2].

We certainly think it's something that should be able to happen. It's certainly something that's permitted to happen within the current structure. But I can't speak beyond the scope of our property to whether that should be there. Look, the right does exist the way things are currently structured, and I'm certainly not advocating any changes to that structure.

Part of the reason why I asked that question is that the American soccer "pyramid" isn't really a pyramid. It's a set of tiered leagues that teams can't move up and down between as they would in other countries. There are a lot of people who want to get American soccer to the point where it does have an open pyramid - and it's well known that there are some extremely vocal proponents of such a system.

But one of the biggest stumbling blocks is that MLS, the NASL and the USL are all different corporate entities. Is there a way to overcome that and create a truly open system?

I certainly don't have a solution to that. It's not anything in terms of [being] outside of our realm that we spend time thinking about. As we look at our longer-term strategic plans, if we're able to grow our professional league in a significant manner, then it may provide us some opportunities or abilities to add different features or facets to that, which may internally allow us to implement any of that different type of stuff. We're even a long way from that.

It's certainly not something that we are focused on. I understand where [some] fans that follow the sport in other countries around the world are new to following American soccer [and ask]: "So why isn't it the way it is in England?"

We also need to understand that different countries all don't have the same model around the world. There are different models. Promotion and relegation exist in most countries around the world, but in not all cases is it a one-year, strict performance basis on the field. Take Mexico, for instance.

So I don't know. I personally, and USL doesn't, have the right formula for what that would look like going forward. I think it will continue to be an issue, a topic of discussion, just because we're different in that respect of the global game.

I think it's interesting to talk about. But I also think people need to look at that we're still trying to get to the point where professional soccer is stable, where leagues can be stable and sustainable, and teams can be stable and sustainable.

We're making huge strides based on what's in place now - there's more of a permanence about clubs, about the stadiums that they play in, about their fan bases. I think it's incremental steps here over time. But I think the fact is fine that people that people are passionate and want to talk about that. I don't have a solution for it.

Well, you said the magic words. There are a lot of people who want to see promotion and relegation in MLS. Some of them understand the divisions that exist, and they wonder if down the road MLS might create its own two-division structure in some fashion. Is that something that the USL might be able to play a role in?

We're speculating…

Oh, I know.

It's not any conversation we've had internally, it's not any conversation we've had externally. It's well beyond where our thinking is right now, which is focused on just continuing to strengthen our clubs - to get them to profitability, to get them in their own stadiums, to continue to grow and expand our league into different markets.

We think that the structure we have right now internally is the right structure to be able to do that. So our thinking is not beyond that - I think at least our strategic thinking is not beyond that. There may come a day when we can look at that stuff. It's just not in our sights.

Within the strategic thinking, whatever the range of that is, do you see the USL remaining its own corporate entity?

Yes. I don't see any reason why that would change.

If, for example, MLS and/or Soccer United Marketing called up and said we want to buy the USL, is that feasible?

[Disclaimer: I have no evidence whatsoever, nor have I had any evidence at any point in my life, that this has ever been even considered by anyone involved in any way with MLS or the USL.]

I don't own USL. I serve the teams and I serve this league. So I couldn't answer that. I wouldn't be the right guy to be able to answer that. It's a question that someone would have to answer who owns equity in the [USL's] businesses.

But that's not something that has happened, and you're asking me to answer a question that probably goes beyond where - it's not something I think about. So if it were to happen, I don't know. It's another speculative scenario that I don't want to get into.

Here's another MLS-related question, but of a more pragmatic nature. If a MLS club wants to launch its own team in the USL, explain what the process is for that.

Great question. It's the exact same process that we go through with any expansion candidate, in terms of provision of comprehensive business plan, operating budgets, venue information - both immediate-term and longer-term - organizational structure, how the playing side is going to be put together, marketing.

We've evolved quite a bit over time in terms of what we require from prospective franchisees, and we require the same things from the MLS clubs that express a genuine interest in establishing these [affiliated] teams.

It's important for us that any MLS clubs that establish teams in the USL are doing this not just to have 28 soccer games played to benefit their academy, but are committed to building a second professional team. Either in their market - in some cases in their market initially - or in satellite markets around them.

We understand that it's a player development-driven initiative for most clubs in most cases, but it can't exclusively be about that. It has to be about running a proper, sustainable soccer club, otherwise that adversely affects what the entire league is all about.

Our partnership with MLS isn't to run MLS the reserve league. We're not the MLS reserve league. We do have teams that have affiliations, and we do have teams that have ownership in actual franchises - eight of those, to be specific.* But we're very thorough. And we feel very, very good about where most of those teams are tracking for their first seasons, in terms of where they're going to play, fan support, etc.

I think there are going to be some real exciting additions this season in places like Seattle, Portland, and Salt Lake. We think they're going to hit the ground running. In other markets, especially where they're playing in the same place, it may take a little longer to establish a second fan base, but teams can be creative.

All the teams are really engaged. It's not like they're just figuring out how to put a roster out there for 28 games. They're really engaged in the franchise side, and all the different things that we're doing off the field.

[* - Those eight teams are: Los Angeles Galaxy, Montréal Impact, New York Red Bulls, Portland Timbers, Real Salt Lake, Seattle Sounders, Toronto FC and Vancouver Whitecaps.]

How would you describe your relationship with the North American Soccer League these days? NASL commissioner Bill Peterson was a guest on Tuesday's edition of Soccer Morning, and said he doesn't talk with you guys as much as he does with MLS.

[For the record, Holt was on a guest on Wednesday's edition of Soccer Morning, where he discussed many of the same subjects that he discussed with me.]

We don't really have a relationship with the NASL. They're one of three sanctioned pro soccer leagues in this country. Obviously, we have a partnership with MLS and we're pretty involved. We don't have regular dialogue with the NASL, nor do we have any type of relationship with them.

I think people think we're trying to figure out ways to compete with them every day, or vice versa, and that all the moves we make with the league are driven by them. That's just not a fact.

We're all aware of what's going on in the market in which we operate, [with] different cities and everything. But I would say it's not positive or negative - there just really isn't any type of relationship.

It's professional and cordial - we respect them, we respect Bill, and we respect the team owners they have that are putting millions of dollars into the game each and every year. But I think our approaches to building a professional soccer league domestically here are very different, and that's okay. They can both be successful.

I'll leave this as my takeaway comment. We're just really focused on our property, and all the exciting things that are happening within our league right now - the rebrand, and the digital stuff that goes in associated with the rebrand, and broadcast stuff, and the growth of the league. We're really a lot less concerned about everything happening around us than about just strengthening what it is what we have, and especially getting our new teams off to a good start. That's where our heads are.

If, hypothetically, a NASL team wanted to launch an affiliated team in the USL in the manner that MLS teams have done, what would happen from the USL's side of things?

I don't think that would be something that's in our best interest. I think it's in our best interest in the case of MLS, because of the comprehensive partnership that we have with them to grow the sport at all levels. We're talking about another speculative situation. I don't envision that happening and we've never been approached about that happening. I don't see where that would be in either league's best interest.

Here's another hypothetical. What if the global soccer marketing agency Traffic Sports wanted to launch a team in the USL to add to its portfolio. What would you say to them?

[For those who don't know, Traffic is a really huge company. It has significant investments in teams around the world, including outright ownership of the NASL's Carolina Railhawks. Traffic also holds marketing contracts with CONCACAF and the NASL, among other organizations; and brokers television rights for CONCACAF World Cup qualifying games which take place in many Caribbean and Central American nations.

In addition to all of that, Traffic operates a player agency. It has a history of representing American prospects, though it rarely does so anymore. Former clients of note include Club Tijuana and U.S. national team defender Greg Garza; New York City FC striker Tony Taylor; and Tampa Bay Rowdies defender Gale Agbossoumonde.]

Again, I don't think that would be in our best interest. There's a history of relationship there, and I think with any group you look at the history you have with them. I don't mean that in any disparaging kind of way, I just think it wouldn't be in our best interest. So you're asking, again, an extremely speculative and hypothetical question.

I plead guilty to doing so, but it is something that I've been asked about by readers in the past. For the readers who don't know, can you explain that history you referred to?

They owned a team, Miami FC, starting in about 2006 when they acquired it. They operated a team in the league until 2010. Traffic and Miami FC, along with a couple of other teams at that time, decided that they preferred a different vision of operating a professional soccer league in the United States. And they decided to essentially secede and create that own vision, which has become the NASL at this point. So that's what happened.

People have choices to make in terms of how they want to run that. At that time we had no monopoly on running lower-division professional soccer. I think it was played out fairly publicly in terms of the divorce between the two leagues.

Teams have every right, and owners have every right, within the parameters of the agreements that they've signed, to pursue other options. And that's what they did. Really, the simplest way to say it is there was just a different philosophy on what the approach to running a successful professional soccer league would be. They had a different philosophy than what we did at that time.

Let me ask a much more parochial question. How do you see the state of things with the Harrisburg City Islanders right now? There has been a lot of conversation in Philadelphia about Harrisburg's lack of a stadium that matches other USL facilities. There have also been rumors of the team possibly practicing in the Philadelphia area during the week to strengthen the ties between the Union and City Islanders.

Well first, let's understand that their affiliation partnership with the Union - driven by Nick [Sakiewicz] and Eric Pettis - has been the model that pretty much everyone has followed, and it has evolved into where we are right now in terms of the partnership between the two leagues. Both of those guys and those two clubs deserve a great deal of credit.

Their affiliation relationship has evolved over time. It's no secret that the Harrisburg City Islanders need a different and better venue to play in if a USL club is going to be sustainable in Harrisburg. The stadium on City Island maybe 10 years ago was adequate. It will be inadequate going forward if the City Islanders are going to be able to keep pace with where the direction of the league is going.

I'm not speaking out of school. Eric knows that. They've produced stadium plans. Their ability to get that done will go a long way toward what [happens] going forward. In terms of the relationship we speak regularly with both the Union and the City Islanders. It continues to be mutually beneficial for both.

You look at last year, when the City Islanders got to the [USL PRO] final. Guys like [Pedro] Ribeiro, [Jimmy] McLaughlin and even [Antoine] Hoppenot, in the championship run, played significant roles in that. They made the players around them better, and at the same time it gave them meaningful game minutes in big-time games in great environments.

And with the investment that the Union have in player development, which is almost unmatched - it's at least as good as anybody's in MLS - that part of things makes a lot of sense.

I'm sure they can speak more to the specifics. They're considering all kinds of scenarios going forward that will allow them to continue a relationship which has been really good and a model for the league. We're working really hard to try to make sure that the City Islanders can stay in Harrisburg and be playing in the type of venue that will alow them to make things work, and that would benefit the Union.

What do you make of the possibility that the City Islanders might practice at PPL Park during the week at times?

Well, that could be. And it could be in the preseason as well. We're focused on keeping that team in Harrisburg. That's been a long time market. Without a new stadium I don't know how that could be sustainable.

Eric and his group have worked exceptionally hard to try to get that to happen, and they're prepared even to make some investment themselves. But time will tell if that's the case. It would be very challenging for that team to stay there without a different stadium solution.

[This interview took place before a report surfaced Wednesday night in The Tennessean that there were discussions last fall between the City Islanders and officials in Nashville about the team to . That report was confirmed Thursday by PennLive.com, which added more details on the matter. I haven't had time yet to follow up.]