NASL Officially Receives One-Year Sanctioning As Division 2 League

The NASL will be allowed to compete as a Division 2 league after the USSF sanctioned the first-year league at U.S. Soccer Annual General Meeting. The season will now go ahead as scheduled with the first matches being held on April 9. The sanctioning is for only one year, as the league will now be expected to meet certain financial requirements to receive permanent Division 2 status. It is rumored that one of those requirements is for Traffic USA to divest itself of ownership in two of three franchises it currently helps fund.

“Division 2 soccer is an important element in the success and popularity of the sport in the United States and we are pleased the NASL will play professional games in their markets this season,” U.S. Soccer President Sunil Gulati said in a statement. “The Federation’s continued interest is in sustainability and stability at the Division 2 level of professional soccer.”

The USSF has granted the NASL a one-year sanctioning as the country’s Division 2 league, according to a report in IMSoccer News. The vote to sanction the fledgling league was 6-5 with MLS Commissioner Don Garber and U.S. Soccer President Sunil Gulati abstaining. The NASL has essentially been given one year to more closely meet the standards USSF put forth for D2 leagues. There will be another ratification vote on Saturday. IMS’s report indicated the biggest concern the USSF board had with the NASL was Traffic USA’s ownership stake in several teams.

The one-year sanctioning, though, buys some much-needed for the NASL. Since losing its provisional sanctioning on Jan. 20, the league’s owners have put up more than $6 million in letters of credit and agreed that the money would cover any potential catastrophic losses.

It should come as little shock if you’ve been following the storyline, but NASL CEO Aaron Davidson sounded very confident that his league would receive Division 2 sanctioning from the USSF during this weekend’s annual General Meeting. There wasn’t necessarily a lot of news broken during Wednesday’s conference call, but the claims of confidence do seem to be the strongest to date.

As has been reported over the last couple of days, the winner of the Carolina Railhawks name was, indeed, Traffic USA. Now it has been confirmed that Carolina will indeed play this season under their old name, but as an entirely new organization.

After previous owner Selby Welman gave up his ownership and auctioned off the team assets, Traffic USA took ownership of the Carolina team and entered an eBay-bidding war for assets such as the team’s name. Traffic USA ultimately won that bidding war, paying $14,999.

In the wake of losing its provisional Division 2 sanctioning from USSF, the NASL has put up a $6 million letter of credit as insurance against its teams defaulting during the season, league CEO Aaron Davidson has confirmed. It’s still unclear whether this will be enough to grant sanctioning, but teams have started releasing schedules and appear to be moving forward with planning their seasons.

That $6 million represents $750,000 for each of the eight teams planning to play next year. It is being presented as a lump sum, meaning that if one team were to default and require more than $750,000, it could be accessed. The San Antonio Scorpions, who won’t begin play until 2012, also contributed to the letter of credit.