Dimitrios Efstathiou, Vice President, Legal at Major League Soccer (MLS), addresses these question as he talks with LawInSport’s CEO, Sean Cottrell and consultant, Jake Cohen, about his experience working at Major League Soccer as the organisation has experienced an incredible growth over the last ten years.
If you are a sports lawyer or you are in sports business and want to find out:
- How the MLS is structured;
- The role of lawyers within the organisation;
- How the MLS sells its international media rights;
- How the MLS deals with in-house production of media content;
- The partnership with the Mexican national football team;
- How morals clauses are changing contract negotiations in football and much more....
..then you will want to listen to this podcast.
To read the transcript of the interview please sign or register for free here.
SEAN COTTRELL(SC): Welcome to today’s podcast. I’m delighted to welcome Dimitrios Efstathiou. He’s the Vice President, Legal at Major League Soccer and joining us is Jake Cohen, a consultant for LawInSport and a sports lawyer based in Boston in the United States. Dimitrios and Jake, welcome.
DIMITRIOS EFSTATHIOU (DE): Thank you for having me, guys.
JAKE COHEN (JC): Yeah, it’s a pleasure.
SEAN: My pleasure. To start off with, Dimitrios. I wondered if you could explain what your role is and what type of work you are involved with at the MLS.
DIMITRIOS: As you said, I am Vice President of Legal within the league office here in New York City, and our team here in the legal department is actually quite lean, as they would say. We are five attorneys here. I report directly to the general counsel, then I have a team of three counsel that work with me as senior counsel and two counsel along with her. Without sounding trite, what we do is proper in-house work. We are generalists by necessity and I’ll get to why that is.
We deal with every single business segment in the league, so our role is to be business affairs attorneys. We work with the corporate partnerships and sponsor team, the media and broadcast department, our consumer products and license product team, our digital team which runs our website (MLSsoccer.com) as well as creates digital content for distribution along a number of different platforms.
We work with our finance department as well, particularly when we’re dealing with credit facilities and the like. Then, we work on some big meaty projects on the corporate side, whether that’s expansion clubs or ownership stake transfers within a club. We do some league policy work, which impacts not just the league office, but all the clubs. And then we work on some special projects with the commissioner’s office as well. We run the gamut on all of our different business segments.
There is one area that the legal department does not get too involved in, and that is with the player competition side. Our player department has a staff of attorneys within that department that work on hiring and negotiating for player contracts. So, that is the one area that we don’t get involved in. Now, an interesting aspect of our job as well is that, when I say we do all this work for the league office, we do that work within all those business segments also for our sister affiliate company which is Soccer United Marketing. Soccer United Marketing is essentially the commercial arm of Major League Soccer and they also represent a few other soccer related properties within their portfolio. The two most prominent ones being the Untied States Soccer Federation and the Mexican National Team, the Federation that is, within the United States. We do work for both of those soccer properties on the commercial side, in terms of selling corporate partnerships as well as some consumer products work. For the Mexican National Team, we also help run a United States tour- a series of friendly matches between the United States that Mexico plays. That is in a very brief nutshell the type of work we do.
"My mentor at the time, who is now the GC, Bill Ordower, was very blunt with me and said, “Go get experience in a larger practice, cut your teeth there, and keep in touch.”"
SEAN: That sounds like a vast sum of work. Recently, yesterday actually, I was having a conversation with the guys at Soccerex and they were telling me, from a commercial perspective, how big the Mexican football is and how big the Mexican team is, particularly in the United States. I could only imagine the volume of work that is coming out of that.
You mentioned all these different areas that the legal team is involved with from marketing, merchandising, finance, media, policy, working in the commissioner’s office, etc., what is your background? How did you come to work at Major League Soccer? Are you a finance lawyer? A corporate lawyer? How did your career pan out?
DIMITRIOS: So, I got involved with soccer from a professional standpoint when I was in law school. Early on in my life as a law student I made the decision that I wanted to be in sport, particularly in soccer or football, so I interned at Major League Soccer back in 2004. I’m not sure how familiar how listeners are with the history of Major League Soccer, but Major League Soccer was in a very different position than they are now.
In 2004, MLS was just coming out of a period of contraction, where they closed operations down of two clubs in Florida in 2002 and 2004 was when they just started to expand the league again with Real Salt Lake and Chivas USA, so the office was small at that time. Frankly, there was no opportunity for me after that internship.
My mentor at the time, who is now the General Counsel, Bill Ordower, was very blunt with me and said, “Go get experience in a larger practice, cut your teeth there, and keep in touch. If there is ever an opportunity, we will throw your hat in the ring.”
For the listeners, if you haven’t already guessed, I am Greek and my family spends quite a significant amount of time in Greece, so I was looking for a place to work that would get me closer to my family in Greece. I found myself in London after law school practicing for a very large law firm, Allen & Overy, practicing equity capital markets and a bit of mergers and acquisitions work. I was there for three and a half years and ended up making a move into, believe it or not, private banking. There was a client of Allen & Overy’s that I was seconded to and that turned into a full time position within the Swiss private banking world.
While I was there, there was an opportunity that came up at MLS and I threw my hat in the ring and I found myself back , almost eight years after that internship, back at MLS in the beginning of 2011. I say that to make a point that it was not a direct line into sports. I knew I wanted to be a lawyer, I knew I wanted to be in soccer and it took a long time for me to get there. It was a bit of zig zagging and indirect movements to get back into sports.
"There were some days where I said, “Okay, this is who I am. I am going to be a Swiss private banking attorney or equity capital markets attorney.”"
SEAN: Did you think, when Bill said to stay in contact, that he really meant stay in contact and we will put your hat in the ring or that it is something that everyone always says? Did you ever think “oh this is going to happen”?
DIMITRIOS: Yeah, that is a great question. You know, hindsight is 20/20 right, and if you were asking me that in the middle of my career as a corporate attorney when I was in it, and I’m not sure if you’re familiar with the type of hours that corporate attorneys work. There were some days where I said, “Okay, this is who I am. I am going to be a Swiss private banking attorney or equity capital markets attorney.” Then, there were other days where whether I had a great conversation or a great meeting with someone at a conference to try to get myself back into sports, I was feeling more optimistic about it. It was a series of ups and downs, but I did have a very strong relationship with my mentor, Bill, and now we have a great working relationship today. I kept in regular contact with him and a number of other former colleagues at MLS. I think those contacts were instrumental in ensuring that I was maybe not in the front of their mind, but somewhere still there where if opportunities came up, they would let me know.
SEAN: Just to be clear then, how you kept in contact. This is one of those things that I always find really interesting. Given Jake, who is in exactly the same position, given our role in the sports law community, staying in contact with certain people, we always get aspiring sports lawyers. They can be as you were, five years qualified or more, trying to break into sport. We try to explain to them about keeping good relations and keeping in contact. I take it that wasn’t a forced thing- you obviously made a conscious decision to keep in contact, but it wasn’t something you had to force, it was something you naturally wanted to do. You wanted to keep in contact and find out how they were doing right? Is that a fair assessment?
DIMITRIOS: Yes, that is accurate. I want to make clear that I was very concerted in my effort to keep in contact with them. There is a fine line between being annoying and being genuine and authentic in your desire to keep in touch. That is a hard balance to strike and what I did, and it worked for me but I’m not sure if it will work for everyone else, is that I set a goal for quarterly basically - say that I will have at least two or three coffees or telephone conversations with people within this space. I would at least stay fresh or branch out in my networking. That is what I did over the span of seven to eight years.
"Five is still a small number, but given the amount of work we’re getting I see us growing in the next few years again."
SEAN: That shows commitment as well. That shows real commitment. If you’re keeping in contact for that long, they know you are in it for the long haul and not just a whim. You’re in kind of a privileged position and I’m sure you probably told me when we initially met, but my memory fails me on this point- you were interning in 2004 as you said it was at a point of the end of the contraction and just looking to expand again and really joining in 2011. How have you seen, given your experience in 2004 and the last four or so years, the legal functions develop? To be frank, the MLS has been a success seeing some significant growth now, so how has that changed?
DIMITRIOS: Well, it has changed in two very particular ways. One is just in terms of human resources. At the time that I was an intern, the legal department was a staff of one or if I want to be a little generous, I would say a staff of one and a half because it was one full time attorney and then a paralegal and an intern who would come through. In terms of resources, we have grown five fold. Five is still a small number, but given the amount of work we’re getting I see us growing in the next few years again. But, now we have a proper staff.
In terms of the role of the lawyer within this office, that has also changed just in my five years here from 2011 to now. I would say when I came in, and I think this was a result of just the small number of staff that we had in our department, less the aspiration, but we were drafting contracts. We would come in when a deal was essentially agreed to and finalize and we would come in to transform that deal form sheet into a long form. Or, we were there to send a cease and desist or to manage litigation. Now, because of our increased staff and because of the sophistication of our staff, which all but one have been here for several years, we have much stronger relationships in each of the departments and we get involved very early on in the creation of a deal. I would say we are proper members of the deal team now as opposed to, I don’t want to be too pejorative, but a scribe or just a drafter. We sit at the table, with our counterparts within the media department or the corporate partnerships department or the licensed products department. We are sitting down and helping drafting a strategy to approach a deal and issue spot early on so we’re viewed as, again, a business affairs member as opposed to the lawyer.
"...we are viewed as not... a cost center, but as a value added to somebody who is there helping make the deal better and not leaving value on the table"
SEAN: Do you think that has helped? I presume that has help increase the value because you are able to then spot certain rights or protect certain rights and advise them on what the implications may be and what may appear to be a great commercial on the face of it when you actually get down to the legal detail, you start to go “actually, what does this permit us to do or not permit us to do?”
DIMITRIOS: I would add to that. I would say that is almost a risk management position, which we definitely have-the risk manager/ compliance police officer - which is almost the red-tape kind of perspective that a lot of business people have of us, which is something that we, in our department, have strived to overcome. We have gotten to a great place now, where we are viewed as not a sandbagger or a cost center, but as a value added to somebody who is there helping make the deal better and not leaving value on the table. I felt very proud of our team for being part of that transition and to now be seen in a different light in our office. It’s fantastic.
SEAN: That’s great because I think that is something external lawyers have trouble with because sometimes you have the external lawyers that are essentially providing the in house functions for some of these small organizations. Also from what I hear, a significant amount of in house lawyers struggle with that so I think that is what everyone is playing for, so if you can develop that relationship and work in partnership to the common goal, then hopefully if it works well you can achieve your business goals.
DIMITRIOS: I totally agree.
SEAN: Even just from listening to that, it is quite apparent for those outside, particularly in the UK, that the MLS has got a different structure than the American sport generally has. Could you explain to people who are not that familiar with it the difference between the relationship between U.S. Soccer and MLS and then comparing it to something like the FA and then the leagues - the Premier League and the football league for example?
DIMITRIOS: I can speak towards the working relationship that our league has with the federation. In terms of the competition side, like I said before, we don’t get involved much on the competition side, so I wouldn’t be able to properly comment on any of those matters. I can say the league has an active and positive working relationship with the federation. What comes in to mind in particular is PRO (Professional Referees Organization) which is a joint venture not in the formal sense but in the business sense between the Federation and Major League Soccer to help raise the quality and improve the refereeing within professional soccer. That is an area where we work very closely with the Federation to train up referees to get them good experience through the lower division and up to the top division and get full time referees, where this is their job. That is something that I know is part and parcel of the English structure where, who was it that used to be a policeman? I’m forgetting now. But, he went from ‘this is a part time gig’ to a full time gig. We are trying to get that level of quality in refereeing along with U.S. Soccer. Another aspect is, as a professional league within the United States, MLS along with the other three professional leagues, which are NASL, USL, and the Women’s League (NWSL). We also sit on what’s called the Pro-Board or the Pro-Council. The Pro-Council is a member of U.S. Soccer, so we participate in the larger corporate structure of the non-profit of U.S. Soccer Federation. We sit next to the athletes and the youth leagues and the adult amateur leagues. We have a role within the governance of U.S. Soccer along with all the other people that are playing soccer within the U.S..
"In the last two years, this has been a real focus for us to get our game out to the rest of the world"
SEAN: Great. Now, I had a conversation with Jake well in advance about this. Jake, you wanted to touch on international rights.
JAKE: Yeah, so with Major League Soccer recently signing a four year deal with Sky, and also MLS in the UK, and also signing a rights deal in China as well, I believe, when negotiating with their prospective international media partner, what are some of the key issues you want to keep in mind?
DIMITRIOS: That is a great question. In the last two years, this has been a real focus for us to get our game out to the rest of the world and to show them that we have not just a competitive league with compelling soccer, but also we have a league where at any given weekend any team can win. We have a balanced league. We are trying to do that and trying to get out into various markets. You mentioned China and Sky, we have deals in Latin America as well and for the rest of Southeast Asia as well and Australia. I would say that some of the key issues we consider are, not just the geographical territory issues, but making sure that we are aligning our interests with that broadcaster in the given territory. I say aligning interests in the sense of that it helps us that Sky promotes the games and that they create additional content outside of just the match broadcast to generate fan interest in our league in those given territories. That alignment of interests takes a numbers of different forms, but that’s really what is driving a lot of our deals. How do we get in line with that broadcaster to make sure that we are creating great content that the fans in whether England or China will find compelling.
JAKE: Okay, so it seems like the focus is more than finding the right partner and platform to showcase this MLS global product in the merging market than more about the bottom line and the raw numbers.
"...we also do quite a bit of production...
we are trying to communicate to the fans the narrative of these players & where they come from..."
DIMITRIOS: Yeah, I mean I would say that listen, cash obviously is an important element in that, right? But to say it’s just the right fee would be ignoring what our project is. Our project is about educating fans and also showing great entertainment to that fan. So if we could get the right partners in each of those markets, that has real value, as opposed to just the rights fee.
JAKE: Yeah, definitely. That sounds like a winning strategy.
SEAN: How much of the production do you do in house?
DIMITRIOS: Another good question. We have three great partners in the U.S. that do our national broadcasts that you guys might be aware of - ESPN, FOX Sports, and Univision. All three of those partners when they produce the games do the production and a lot of the shoulder programming and additional content around those matches when they produce the games. In house we also do quite a bit of production. I don’t know if you guys have spent any time on MLSsoccer.com, but we create a lot of shorts- whether it’s MLS Insider with Hock Films or ThirtySix or a number of other shows we have had in the past where we are trying to tell not just lifestyle, but we are trying to communicate to the fans the narrative of these players and where they come from, what they are doing on and off the field. A lot of that is done in house at our MLS Digital Studios.
SEAN: I wonder if you could explain what the relationship is between Major League Soccer and the player union.
DIMITRIOS: I will have to be brief here because I haven’t been a part of the collective bargaining process. That is a small executive team that works on that and I haven’t been privy to any of that, but what I do know based on just my five years here through day-to-day work that we have a very strong, good working relationship with the union. I say that through the variety of anecdotes and just hearing form other people in other leagues about the struggles they have with the unions that we are in a good place with our union as is evident with the recent CBA deal we announced earlier this year.
"We are finding more and more partners insisting on morals clauses on good behavior of everyone that is associated with the sport"
SEAN: Great. Taking a step away from Major League Soccer for a second, in the international space, what is it that you are keeping your eye on at the moment in the sports law arena as a lawyer? You know, I need to follow the developments here because this may impact me at some point in the future.
DIMITRIOS: There is one place in particular, and I’d be curious to hear what you guys have to say about this because this is something that in the U.S. sports landscape we’re dealing with daily now, is trying to figure out how to handle what I would call morals clauses. This is part and parcel in the new reality of how media is consumed today - whether it is through various social media platforms or just on your laptop watching YouTube and the like. We are finding more and more partners insisting on morals clauses on good behavior of everyone that is associated with the sport - from the athletes themselves to executives in the clubs and the league - and trying to figure out the right balance there. I don’t think a week or a month goes by without some news about a professional athlete behaving poorly. Partners care about that and we have spent a lot of time negotiating those types of clauses here in the league and I know other leagues have done the same too. Finding how that evolved- I am very interested to see that.
SEAN: And presumably though that also has impact with the CBA as well because essentially that could be quite restrictive obviously depending on how onerous the path you’re dealing with is trying to make it being, creates a tension there. From my understanding from the people I have spoken to at various events and etc that we go to, it seems to be one, how well the clause is drafted, how wide the clause is, but I think in reality it is about what mechanisms are being put in place to educate people to the standards that are expected of them.
DIMITRIOS: I one hundred percent agree with that. It is about setting expectations and also about ensuring that whether it is a club or a league, the ability to respond to it and address it. I’m going to sound like my parents now, my father in particular, but everyone makes mistakes. Sometimes people behave poorly and it’s about how you respond to that behavior or that mistake more than the actual mistake itself. It is also about ensuring that the leagues and the clubs have the flexibility and confidence to respond to it appropriately. This space I can see changing and evolving quite a bit in the next years, particularly when you have cameras all over the place.
SEAN: I think this is new technology and new platforms and new levels of direct engagement with fans that creates so much wealth of opportunity, but what always comes with that offset is a number of risks.
DIMITRIOS: Yeah, and that’s what I was telling you before about the desire to create more compelling content both on and off the field. There is a tension there. There is a total tension there.
SEAN: But if it wasn’t for these things I guess this is the whole thing isn’t it? This is why sometimes, particularly working sport, where there is that impact of sport is much greater than the financial rewards of it I believe, unless you are a major star. That makes it so interesting, particularly from a legal perspective, to be involved with these opportunities and challenges that maybe sometimes some of the other sectors don’t have.
JAKE: I would say anecdotally I have also noted these moral clauses with regards to sponsorship agreements have become much more rigorous than previously; a lot has to do with it being to easy to make mistakes on social media, but then a lot of it has to do with sponsors really wanting to exert as much control as possible over what they consider an investment, but it is really a living, breathing club or a living, breathing individual. In fact, one of the potential sponsors I was talking with recounted a deal in which he was able to prevent the individual that was sponsored from changing their haircut or their hair color. You know these moral clauses are really getting rigorous with some of the cases are million dollars at stake.
DIMITRIOS: Yeah, those are more of the endorsement deals and the endorsement deals between an individual player and a corporate entity. I get that, but in terms relationships with the club or league, I think the desire for moral clauses is reflective of the club, the move from what I would call a sponsorship maybe a decade ago, to what would be viewed as a proper partnership between the corporate partner in the league or the club. It shows that parties view themselves as integrating each other’s brands more fully in terms of the way they go out to market their relationship. I want to be clear, I am not questioning what the desire is. It makes sense to me for somebody in that position to want some sort of morals clause, it’s just about how it evolved and where you net out at the end of the day to make it reasonable and sensible. That is the tough part.
SEAN: I guess it’s like any relationship as is developing. I know there is a guy, Doug Levy, who says we are moving towards what they say is a relationship era as opposed to this legal consumer era or contractual era where in the old days, when it was “let’s sign a sponsorship deal or whatever it may be or another commercial agreement and you give me exactly what I pay for. Exactly. “ And now it’s this more an evolving process where it has got to be good for both of us and again, if you’re not using your activation properly, if there is no true partnership, then it’s not really worth as much as they thought.
DIMITRIOS: That works both ways too.
SEAN: Thank you very much for your time. It has been fascinating insight to hear about your career and the growth of Major League Soccer. I have been going to the US now for about 4-5 years for sports law events it seems over that period I think partly the success of the national team has definitely aided with that. But, the growth of soccer in the US, and I guess the Premier League deals also helped raise awareness. More people want to go to Major League Soccer games and fit in with the atmosphere, and see, as you call it, the entertainment of soccer, or football as we would call it over here. It has been great to chat. Thank you so much for your time and Jake, thanks for your insightful questions and your expertise from your U.S. perspective- it was very interesting as well.
DIMITRIOS: It was a great conversation, it was my pleasure.
JAKE: Yeah, it’s been really great chatting
**A special thank you to Yasmin Hosseini of Pepperdine University, School of Law, for her excellent work transcribing this interview.
- Broadcasting Commercial Law Football Governance Major League Soccer (MLS) Media Rights Morality Clause Regulation United States of America (USA)