Part I here. Part II here. Part IV here. Part V here. Part VI here. This is where all of the action is. The Board of Governors are basically the […]
This is where all of the action is. The Board of Governors are basically the owners of MLS. Don Garber may be the face of the league, but the Board of Governors are the ones who make things happen. Outlined in the Constitution is the a description of what this powerful people do, and how (MLS docs in italics).
Section 1. Board of Governors
The day-to-day affairs of MLS are managed by the League Office under the leadership of the Commissioner. Generally, the Board of Governors provides input on strategy, approves the annual budget, and considers and adopts major policies. This Section 1 further explains provisions of the MLS LLC Agreement relating to the operation and authority of the Board of Governors.
A. Board of Governors.
1. General Supervision. The Board of Governors has the sole authority to manage, control and make all decisions relating to MLS, unless the MLS LLC Agreement provides otherwise.
2. Action Binding upon all Members; Super Majority Vote. All actions of the Board of Governors are binding on MLS and all Members. Actions taken by MLS generally require a Super Majority Vote of the Board of Governors. A Super Majority Vote means a vote of two- thirds (2/3) or more of the ownership percentages held by all Members eligible to vote. A Member may be precluded from voting on a particular matter as provided in the League Rules, including, for example, (i) any vote regarding the exercise of remedies if that Member defaults on a capital call or (ii) any vote to approve a Transfer of any Ownership Interest by that Member or any of its Owners.
3. Right to Employ. The Board of Governors has the power to employ the Commissioner, who shall serve as the Chief Executive Officer of MLS.
4. Affiliate Transactions. Any agreement between MLS and any Member, Owner or any of their respective affiliates must be (i) disclosed to all Members and approved by a Super Majority Vote (inclusive of the interested Member) and (ii) on terms no less favorable to MLS than those that would be obtained from an unaffiliated third party in an arm’s length transaction.
5. No Additional Payments. No Governor or Board Representative of any Member may receive any compensation that relates to his/her services as a Board member.
B. Meetings of the Board of Governors. The Board of Governors shall hold three (3) scheduled meetings per year as well as any special meetings called by the Commissioner or by the request of Members holding at least fifty percent (50%) of the membership interests in MLS.
C. Board of Governors Representatives.
1. Majority Owner. Unless otherwise approved by a Super Majority Vote of the Board of Governors, each Member must have one (1) single individual Owner who (i) holds no less than a 35% ownership interest in the Member; (ii) has control over the decisions of the Member; and (iii) serves as the Governor for such Member, unless otherwise permitted by the Board of Governors representative rules in subsection (2) below (the “Majority Owner”).
2. Representatives. Each Member is represented on the Board of Governors by a Governor, and may also appoint an Alternate Governor and other approved representative in accordance with this Section 1.
- Each Governor must be a principal Owner of the Member. The Governor must have the authority to act on behalf of the Member. Governors are required to attend Board meetings.
- Each Member may also appoint an Alternate Governor, who must be a senior director or officer of the Member and who may attend Board meetings on behalf of the Governor, provided that he/she has the authority to vote on all matters.
- Each Member may also appoint an Authorized Representative who may attend Board meetings in addition to the Governor and/or Alternate Governor.
- The Commissioner has the authority (in his sole discretion) to permit family members of certain Owners to attend Board meetings.
- The Commissioner has the authority (in his sole discretion) to permit Chief Business Officers and technical directors to attend certain Board meetings.
- General managers, coaches, players and other Team executives with day-to- day operating responsibilities will not be permitted to serve as Governors or Alternate Governors.
- The Commissioner has the sole authority to determine whether an executive of a Member has “day-to-day operating responsibilities” and, therefore, may not serve as a Governor or Alternate Governor. When determining whether such executive may serve as a Board representative, the Commissioner will evaluate the following criteria: (i) size of equity ownership in the Member; (ii) number of years of service in an executive capacity for the Member; and (iii) overall responsibilities for the Member.
- The Commissioner has the authority to call an executive session at which only Majority Owners may attend.
3. Proxy. The Governor will endeavor to attend all Board meetings, whether by conference call or in person. If neither the Governor nor the Alternate Governor is able to attend, the Member may recommend an Authorized Representative as proxy for approval by the League Office in advance of the meeting to represent or vote on the Governor’s behalf. The holder of the proxy cannot be someone involved in the day-to-day operations of the Team. If the Governor, the Alternate Governor or such approved Authorized Representative is unable to attend, the Member will not have a right to vote on the subject matter of such Board meeting. For all meetings, only the Governor or Alternate Governor or approved Authorized Representative may be permitted to vote on behalf of the Member.
4. Correspondence; Replacement of Governor. Each Member must provide the League Office with the names of the designated Governor and Alternate Governor. Such names will be the contacts for all Board correspondence, and as necessary, each may distribute correspondence to its senior advisors. The League Office must be notified of, and the Commissioner must approve, any replacement of a Governor or Alternate Governor at least twenty-four (24) hours in advance of a Board meeting.
D. Notice of Meetings. Prior written notice of all meetings of the Board of Governors will be given to each Governor at least ninety-six (96) hours prior to the meeting. Attendance by a Member representative means the Member received timely notice of the meeting.
E. Quorum. A quorum means Governors representing Members holding a majority of the membership interests in MLS held by those Members who are entitled to vote. A quorum is necessary for the transaction of any business by the Board of Governors unless otherwise provided in the League Rules.
F. Voting. Issues arising at Board of Governors meetings are generally decided by a Super Majority Vote. Each Governor has a number of votes equal to the ownership percentage in MLS of the Member that appointed such Governor.
G. Written Resolution. The Board of Governors may act outside a meeting of the Board of Governors by written resolution adopted and consented to by Governors representing Members who hold at least 75% of the membership interests in MLS held by those Members who are entitled to vote on such action.
H. Other Business of Members. Each Member, its Owners and its Affiliates are free to engage in other business ventures, subject to the non-competition restrictions in Section 9 of this Constitution and the Governing Documents.
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