NASL Commissioner Sehgal remains 'bullish' about 2017 and beyond
Posted January 27
Three days after receiving provisional Division II sanctioning for 2017 from the U.S. Soccer Federation, the North American Soccer League (NASL) parted ways with Commissioner Bill Peterson following a four-year tenure. The league’s owners tapped Rishi Sehgal as its interim commissioner. The 37-year-old Sehgal earned his J.D. in 2005 from American University, and he joined the NASL in 2010 as its Director of Business Development and Legal Affairs, a position he held until earlier this month.
Commissioner Sehgal spoke with WRALSportsFan by telephone Thursday on a wide range of NASL issues, beginning with his post-mortem of the recent grueling sanctioning process before segueing into the league’s short- and long-range aims:
WRALSportsFan: You and some NASL owners have explicitly signaled a desire to work more cooperatively with the rest of the American soccer structure, including U.S. Soccer, Major League Soccer (MLS) and the United Soccer League (USL). How might that cooperation manifest itself, particularly in ways that would not have happened the past 2-3 years?
Rishi Sehgal: “I think it’s a closer look at how we can work together, both on and off the field. Certainly on the field, with respect to competition-related and player safety issues, things that affect the game of soccer itself, there has been an effort by everybody to work together. It hasn’t always come together, but I think there will be a new sense of focusing on building the sport the way we all think it can work. There are certain things we will adopt and find guidance from other leagues, and we hope to be a pioneer in our own right.
“Off the field, it’s a business discussion, and obviously all the different leagues have a different business model. But there are ways we can definitely work together. And it’s not just on the pro side—on the amateur side, we can all do a better job of getting down to the grassroots, at the youth and adult levels. There are tons of people invested in growing the sport in this country, and there needs to be more integration with the systems at play. In your market, the relationship North Carolina FC has with CASL (Capital Area Soccer League) is emblematic of that. That’s a great relationship that allows the amateur side to link to the pro side.”
What are the avenues of cooperation going forward that were not possible over the past couple of years?
“It’s not that things weren’t possible. I’d say they just weren’t a focus, and now as we move forward, our focus will be more on working with the other stakeholders to grow the game. There’s not something I can point to and say, ‘This wasn’t possible.’ I’d just say we weren’t so focused on it. We were focused on growing our league, which was our primary concern. But there are things where we can work together, such as interleague play types of things, other competition and working on redeveloping the U.S. Open Cup to create more drama. In those aspects, there will definitely be more opportunities to work together.”
You mentioned interleague play and other things. But to be blunt about it, are these cooperative measures from the league things that are being born from a new attitude or forced out of desperation?
“Definitely a new attitude. I wouldn’t say desperation is there, at all. The league went through a tough time in 2016, and we solved a lot of the issues that led us into 2016. But I think we’re very optimistic about our ability to grow.”
Speaking specifically, what were the most detrimental mistakes the NASL made that led to the tumult of this off-season?
“I wouldn’t necessarily characterize them as detrimental mistakes. I think they were problems, and they weren’t all mistakes. Some certainly were, like the relationship with Traffic Sports and the structure we had. Many startup businesses have issues, and their structures change later. Certainly the relationship we had with Traffic plagued us when the news come out in 2015 about their involvement with the FIFA scandal. That was something that carried forward and inhibited our ability to grow. The league was never designed to be an eight-team league or just a 12-team league. We want to grow to many more teams than that to have a fully national league. The demand is there, but our problem with having that association with Traffic, even the passive association at the end, became a real problem for us. Fortunately, we were able to successfully conclude that relationship in November.
“The other big issue we had was the perception of instability. We obviously had a couple of teams that had financial difficulties last year—there’s no hiding from that. Fort Lauderdale and the team in Oklahoma City, those were issues. We’ve learned from those mistakes, and we’ll put in place a much more rigorous vetting process going forward, where we hope what will result is more meaningful partnerships with investors.”
Among the list of problems, the one I keep hearing from folks on the club level is costs, under a variety of categories. The cost demands of the league began to outstrip the resources of most owners in the league.
Costs are always an issue, but it’s really more the revenue issue I’m focusing on. As we grow and our clubs are looking at their communities, I think they’re realizing there’s more we can do on the community investment level to win hearts. All our owners are entrepreneurs and business leaders in their own right. They’ve been very successful in other businesses … and they all recognize the need to build their community value, because that’s what is going to allow the revenue to come in and build that asset long-term.
“We realize we need to be a little bit more measured in some of the costs we put in place. One of the tenets of this league is the free-market structure. We want it to be more akin to the global game. Recognizing that’s one of our key principles, putting any sort of regulations in place is a challenge, but we realize that we need some self-regulation. So we’ve instituted some measures already that will protect against costs getting too out of control, and we’ll look to refine those as we move along.”
Would Division III sanctioning from U.S. Soccer this off-season effectively ended the NASL?
“I think so. The concept of being Division III would have been very tough for many of our owners, mainly because they didn’t invest in a Division III league. When you look at our markets, we’re not in what anyone would consider D3 markets. It’s not what anyone signed up for, and it wouldn’t have worked well for the league.”
How did the rancorous relationship over the past couple of years between the NASL and USL, and even the NASL and U.S. Soccer, complicate negotiations during the recent sanctioning evaluation process?
“I don’t think the relationship between the NASL and USL complicated it much. It’s no secret there were lots meetings with U.S. Soccer, the USL and the NASL to look at what’s best for the long-term future of the sport. I don’t think any past relationship with U.S. Soccer complicated it, either. Frankly, it came down to the commitment of our owners and the ability to look forward and recognize that we needed to change some things. It’s clear we didn’t meet the standards for Division II this year because we don’t have the required number of teams. It’s been reported that we needed lots of waivers in the past—while we have needed waivers, a lot of them have been immaterial. But I think U.S. Soccer wants to get away from a place where the leagues need any waivers. As long as it’s being done in the right and measured way, that’s OK.
“We could have been at 12 teams—we could have gone to U.S. Soccer and said we don’t need waivers. But our owners, to their credit, didn’t want to make rash decisions and decided to take a reasoned approach to growth. They said we’re confident in our business model and that if we can grow our league in a reasonable amount of time to be compliant with the [D2] standards, there’s no need to rush it. I think U.S. Soccer appreciated that, and that’s how we got to where we were sanctioned.”
That’s fair, but let’s be honest: USL and NASL still see themselves very much in an adversarial posture, and two years ago the NASL had an attorney sending letters to U.S. Soccer threatening legal action. There has to be a carryover effect to that.
“The effect of our past relationship with U.S. Soccer is one that they know we take this process very seriously. With respect to USL, the genesis of the NASL [splitting] from USL back in 2010 obviously caused some carryover effect. But there’s a whole new set of owners we have today in the NASL, and they had nothing to do with the breakaway from USL. I can tell you from the NASL’s perspective, there are no ill feelings from the league and the owners I’ve spoken with. There’s a willingness to work together, as long as it’s in the long-term best interests of the sport.”
When did things begin to go wrong between former Commissioner Bill Peterson and the other league owners?
“I don’t know that there was any one thing. At the end of the year, the owners looked back and said, ‘This was a really tough year, and we need to move in a different direction.’ It wasn’t any one thing; it was just their recognition that we need to change course.”
Well, it's not just being at the end of the fiscal year and deciding to get a new commissioner. You don’t make a step like that unless there are demonstrable reasons to do so. If there’s not one big thing, what are some of cumulative things that made the league decide it needed to go in a different direction with its commissioner?
“If you look at the whole of 2016, we had many challenges. Issues with teams leaving, issues with teams not coming in. When you look at the year as a whole, the owners have said that’s the direction they wanted to keep going, and that’s the reason they decided to go in a new direction.”
You and the league have spoken a lot in recent weeks about the need for financial sustainability measures in the NASL to promote growth going forward. What are the specific measures you and the league owners are contemplating?
“I can’t go into specific details. I can tell you that there are measures that have been put in place to address costs on spending on players. Not to control it, but to make sure things are being done in a reasonable fashion moving forward. One of the premises of the league is recognizing it’s a global, free-market game. The league has tried to respect that and make sure we’re not straying from our principles. We recognize that what allows for a successful club in North Carolina is different from what allows for a successful club in San Francisco, New York or Miami. So we needed to allow for flexibility. That’s the system we’ve implemented. We’ll make some of those measures more public, but we’re not done. We recognize there are other reforms we need to make internally to insure that clubs are sustainable.”
Can you speak generally about the categories that these measures address? You mentioned player salaries. Are there other overarching issues that need to be reformed under this effort?
“The biggest one that we’re starting with is looking at one of the biggest line items on the budget, and that’s player salary. But ultimately, we’ll look at all the different aspects of league and club business to make sure we’re moving forward in a unified approach.”
If those financial sustainability constraints aren’t mandatory or strictly defined, how are they effective in checking owners who still desire to spend at will on player salaries and other costs, thereby undoing the purpose of those constraints?
“They are mandatory, and there are consequences. The effectiveness will be there, and to the extent they’re ineffective, like any good body of legislation we’ll refine it. We’re hopeful that with the measures we’ve already taken, the self-policing that we had previously will be done better because now the league will be policing the clubs a little bit.”
One criticism of the NASL’s expansion strategy the past several years is that in its chase for Division I sanctioning, it became preoccupied with pursuing major metropolitan markets at the expense of undeserved metro areas. Is that a fair criticism?
“I don’t agree with the criticism. Looking at the markets we need to be in as a league to survive and thrive, there are a lot of major markets that can support more than one team. We’ll also look at mid-tier markets that are undeserved, but there has to be a balance between the big markets and the medium markets for all sorts of reasons, not the least of which is commercial purposes. There’s has to be a healthy balance. From a commercial perspective, being in a big market with lots of eyeballs certainly helps the business of the league.”
What are other reasons why larger metro markets are more advantageous than medium markets from a commercial viewpoint, beyond just television and sponsorship opportunities?
“From a cost point-of-view, the travel to and from bigger markets is usually easier. From a revenue point-of-view, it’s on the fan engagement side. Smaller markets obviously offer the benefit of maybe not having as much competition for the fan development, but where there are more people it’s that much easier to find them.”
Let me ask about a few specific items. Has the NASL finalized its purchase of the Jacksonville Armada?
“I’m in the Jacksonville Armada offices, and it’s all but finalized. It will be finalized very shortly.”
How long do you expect it will take before a new independent owner takes the reins of the Armada?
“I don’t want to put a timeframe on it. Our intention is to find the right owner and not rush it. As with every expansion discussion, we view this the same way. We want to make sure when we bring a new owner in that they are committed to growing the Armada in the market and there’s a viable plan here. We’re going to make some changes to the way things operate here, but for us it’s about the quality and not the timing. The league is prepared to run the team for as long it takes.”
Will the Fort Lauderdale Strikers field a team in the NASL in 2017?
Has Rayo Vallecano’s involvement in the NASL to the extent of owning, funding or fielding a team come to an end?
“No. We’re still in discussions with them on what their future involvement with the league will be.”
Who is the current chairperson of the NASL’s Board of Governors?
“The position will be re-elected in short order, so it’s vacant right now.”
The NASL recently announced that each of its current eight teams will play a 32-match schedule in 2017. Why did the league opt for an imbalanced competition instead of, say, a 28-game schedule where each team would play each of the other teams four times each?
“Primarily because we wanted to give more games back to the fans. It was a long off-season without soccer, and the desire was to create more excitement about the competition rather than create a short season. I’ve read rumors out there that we had penciled in other teams to play and then canceled them. That speculation is just speculation. The decision was made to have as many games as possible and focus on the competition.”
When will the NASL release its 2017 schedule?
“Hopefully next week.”
Will it be the spring and fall split season format, as in past years?
How long will be the mid-season break this year?
“I believe two weeks.”
As the league is making changes, will it retain the spring and fall split season format?
“I think so. It’s something we’ll look at going into the future, but I think it’s something that we’ll keep. It creates a lot of excitement on the field … The race for the spring season championship has come down to the last weekend each year we’ve had it. Same thing in the fall and the race for the final championship spots. From a competition perspective, it’s been nothing but positive. The cons have been as we’re growing the number of teams we have, it makes it hard to balance [the seasons] sometimes. That’s an issue we’ve gone through in the past when we’ve had ‘the spring sprint,’ if you will. Even though those springs seasons are extremely exciting off the bat, and everyone feels the pressure that they have to win every week, we understand it’s not the most ideal thing to have a team qualify for the championship after one-third of the season.”
What are the NASL’s broadcast plans this year?
“We’ll make announcements about those in the next couple of weeks. They’re still being finalized, but there will be national broadcast platforms.”
[New New York Cosmos owner] Rocco Commisso recently hinted that One World Sports would not be part of the league’s broadcast equation this year. Is he correct?
Do you anticipate any television partners this year that were not part of the league’s broadcast package last year?
“I don’t think so, but discussions are ongoing.”
One of the secret sources of financial angst among some NASL clubs has been the high cost broadcast expenses, especially equipment and local television broadcast fees. Does the league have plans to curtail or lessen those costs in any meaningful way?
“The answer is yes. It’s not a simple question because there are a number of factors that go into the cost. Some of them are hard equipment up front, and those costs will amortize over time. The other costs are associated with developing the local broadcast business, so there are investment costs there. Like every other cost that we have, it’s something to take a hard look at. We do recognize the tremendous value that all of our broadcast partners bring to us, so I don’t think you’ll see a significant reduction in investment there.”
You mentioned North Carolina FC at the top of the interview, and I’m curious about your thoughts regarding the model that their owner, Steve Malik, has embraced over the past 16 months, which is a bit different from the single league-based approach. NCFC now has its mitts in several different pots for the benefit of the overall club. Is that something the NASL embraces?
“What Steve Malik has done has shown a tremendous commitment to soccer. He wants to grow NCFC to the highest level possible. Right now he’s committed to his investment in the NASL, and he’s a great partner. Where that goes in the future will be partly the responsibility of the league to grow with him. The investment he’s made on the NWSL side bringing the Courage back to the Triangle is amazing. All those things will only increase the profile of professional soccer in the region.”
You are currently the interim NASL commissioner. Would you like to become full-time commissioner?
“We’ll see. I’m enjoying the role right now and the responsibility. I’m humbled by the faith that the owners have shown in me. If I can provide some results that give them the faith to give me that trust full-time, then that would be fantastic. I’m sure the owners will take their time with this decision, and they’ll find the right person for the job.”
You, as well as other league and club officials, have brought up the lingering investment interest of Traffic Sports in the NASL as a source of internal and external league strife, and the final divestiture of Traffic’s investment interest as part of the league’s effort to move forward. You were brought into the NASL around 2010 by Traffic Sports USA President Aaron Davidson and were a confidant of Davidson for several years. With that background, are you the best person to lead the NASL in its post-Traffic era?
“I had no relationship with Traffic other than working with the league. I had nothing to do with any of the things they got into or any knowledge of it. It’s an unfortunate piece of our history, but fortunately now a piece of our history.”
Looking beyond just the next sanctioning review following the 2017 season, what’s your confidence level about the long-term viability of the NASL?
“I think it’s very strong. Getting through that period was very difficult, but it allowed our owners to take a hard look at themselves and take a hard look at their options. They came back together and said, ‘We believe in this model.’ The conversations we’ve had with prospective ownership groups who want to come into the league are very positive. The sport has not saturated this country. It’s definitely the sport of the future … For the NASL and their future, I’m very bullish about it.”