Part I here. 

Soccer United Marketing: SUM gets its own section in the Constitution and for good reason–it is a significant source of revenue for the league. Formed in 2002, SUM was created to help leverage US Soccer’s television and marketing rights (which were nonexistent at the time). It’s since expanded to include the Mexican National Team rights in the United States. Don Garber is the Chief Executive Officer of SUM. Below is an outline of SUM and its operations (MLS documents in italics).

1. General; Purpose. 

(i) Purpose: In 2002, Major League Soccer owners formed Soccer United Marketing, LLC for the purpose of increasing the commercial value of soccer in North America. All Team Operators own an equal share of SUM. 

(ii) Governance: The day-to-day affairs of SUM are managed by the SUM Corporate Office under the leadership of the Chief Executive Officer. Each Team Operator has a seat on the SUM Board of Governors. The SUM Board meets three times per calendar year and with limited exceptions all decisions are made by a Super Majority Vote. 

(iii) Committee Appointment: The CEO has the authority to establish committees for any purpose and to appoint the members and the chair of each such committee in his discretion (except for members of the Executive Committee, who are subject to approval by the Board of Governors as described below). Each committee will have a representative membership as determined by the CEO in good faith. All committee members will serve staggered terms of three years each, except for Executive Committee members who have varied term length. The CEO may serve as an ex officio member of all SUM committees and may appoint other ex officio members to any SUM committees. The CEO may serve as chairman of any committee. The CEO may at any time dissolve any committee.

Commercial Rights. Pursuant to the Rights Agreement between MLS and SUM, SUM has the exclusive right to sell MLS’s national commercial rights, including sponsorship, broadcasting and consumer product licenses. As noted above, Team Operators may enter into local sponsorship and broadcast agreements in compliance with the League Rules. SUM also currently (i) sells the commercial rights for Federación Mexicana de Fútbol Asociación, A.C., United States Soccer Federation, Inc., CONCACAF Champions League and CONCACAF Gold Cup, and (ii) promotes multiple games featuring international clubs each year.

  • There is a significant “non-competition” component to the SUM Agreement. Basically the league/SUM gets first dibs on any (soccer related) business opportunities that arise. It is EXTREMELY restrictive and SUM doesn’t take kindly to SUM members going into business for themselves.

SUM Non-Competition Provision. A basic tenet of the SUM Operating Agreement is the non-competition provision, which requires each member of SUM (including Team Operators) to provide SUM the first right to pursue any new soccer-related business opportunity (e.g., relationships with any national team, club team or international soccer federation, broadcast rights acquisition and sale, etc.) in North America before it may pursue such opportunity. 

(i) Application. The Member must submit an application for waiver to the SUM CEO detailing the opportunity in full. The SUM CEO will then make a preliminary decision whether or not for SUM to explore the opportunity. Alternatively, the SUM Board of Governors upon a Super Majority Vote may elect to consider the business opportunity. If SUM approves the opportunity preliminarily, then all material terms shall be defined and presented to the SUM Board of Governors for final review and approval.

(ii) Approval. If SUM approves the business opportunity, then SUM may act upon such opportunity. If SUM does not approve, then the Member that presented the opportunity may pursue it on the same material terms.

(iii) Prohibition. The SUM Board of Governors may still, by Super Majority Vote, prohibit the Member from pursuing the business opportunity. 

(iv) Adverse Impact. If any business opportunity would be adversely impacted by SUM’s direct participation, then such business opportunity may be pursued in the name of the Member so long as SUM approves by a Super Majority Vote and SUM fully participates in the economic cost and benefits of the opportunity.

(v) Costs. SUM will pay preliminary costs and expenses of the business opportunity if SUM opts in or prohibits a Member from pursuing the business opportunity. SUM will not reimburse for any costs and expenses in excess of $25,000 unless otherwise approved by the SUM CEO or President or approved by a Super Majority Vote of the disinterested Members.

  • So those are some of the basics behind SUM, though the really good stuff continues to be under lock and key. One other note: The SUM agreement has been amended over the years, and as of 2017 they were on the fourth version:

“SUM Operating Agreement” means the Fourth Amended and Restated Limited Liability Company Agreement of SUM, as it may be amended, restated, supplemented or otherwise modified from time to time.

  • I decided to add the “Defined Terms” section here, because it doesn’t really fit anywhere else.

Defined Terms

For the purpose of the Constitution, all capitalized terms shall have the meanings set forth in the MLS LLC Agreement, unless otherwise defined below or otherwise in this Constitution. 

“Alternate Governor” means the individual appointed to such position by a Member in accordance with the MLS LLC Agreement. 

“Authorized Representative” means an individual who is a senior director or officer of the Member and has been appointed by the Member to attend Board meetings. 

“Board of Governors” means the governing body of MLS comprised of representatives of the Members, as such governing body is appointed in accordance with the MLS LLC Agreement. 

“Collective Bargaining Agreement” means the Collective Bargaining Agreement between MLS and the Major League Soccer Players Union, including any and all exhibits and side letters, and any successor thereto. 

“Governor” means the individual appointed to such position by a Member in accordance with the MLS LLC Agreement. 

“League” means the Division I professional soccer league operated by MLS. 

“Member” means any Person who has been admitted to MLS as a member of MLS in accordance with the terms of the MLS LLC Agreement and who, at such time, owns a Membership Interest. Most Members are also Team Operators. 

“Member Equity” means, collectively, (i) all membership interests, partnership interests, capital stock and other equity interests of any kind in any Member; (ii) all membership interests, partnership interests, capital stock and other equity interests of any kind in any Person that, whether directly or through one or more intermediate entities, owns any Member Equity of the type described in the foregoing clause (i); (iii) all notes, obligations, evidence of indebtedness and other securities or interests of any kind that are or may become convertible or exchangeable into any Member Equity of the type described in the foregoing clause (i) or (ii); and (iv) all warrants, options and other rights to purchase or otherwise acquire any Member Equity of the type described in the foregoing clause (i), (ii) or (iii). 

“MLS Games” means all regular season, playoff, exhibition, championship, all-star and international soccer games presented by, on behalf of or otherwise sanctioned by MLS. 

“MLS LLC Agreement” means the Sixth Amended and Restated Limited Liability Company Agreement of MLS, as it may be amended, restated, supplemented or otherwise modified from time to time.

  • Hmmm, sixth version of the MLS LLC Agreement, you say?

“Owner” means, with respect to any Member, each Person (including both the trustees and beneficiaries of any trust) that, directly or indirectly (including through one or more intermediate entities) owns of record, or beneficially an interest in, such Member. 

“Ownership Interest” means, with respect to any Member or Owner, collectively (i) any membership interest in MLS and (ii) any Member Equity.   

“Player” means any soccer player (regardless of whether or not he is currently employed or under contract to MLS) whose playing rights within MLS are held by a Team Operator according to MLS’s Competition Guidelines. 

“Player-Related Party” means any Player’s agent, relative, or any other entity or individual acting on behalf of or controlled by such Player, including any entity that may hold rights to such Player. 

“SUM Board of Governors” means the governing body of SUM comprised of representatives from the members of SUM. 

“SUM Operating Agreement” means the Fourth Amended and Restated Limited Liability Company Agreement of SUM, as it may be amended, restated, supplemented or otherwise modified from time to time. 

“Team” means a soccer team that is a member of the League. Where appropriate, such term shall be deemed to include a reference to the Team Operator of such team. 

“Team-Related Party” means any Team Operator, any Owner, officer, director, employee, agent or representative of any Team Operator or Owner, or any related entity or other third party acting on behalf of a Team or Team Operator. 

“Team Operator” means any Member who holds a class of membership interest under the MLS LLC Agreement that grants such Member the right to operate a Team. 

Coming soon: The Board of Governors

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