o'sullivan and johnson affidavits

8/3/2019 O'Sullivan and Johnson affidavits

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IN THE CIRCUIT COURT OF THE 15THJUDICIAL CIRCUIT IN AND FOR PALMBEACH COUNTY, FLORIDACIVILDIVISION

FREEDOM SOCCER, LLC andMAGICTALKSOCCER CLUB, LLC, CASENO. 50 20 11CAO18214XXXXMBAI

Plaintiffs,

Defendant.

NOTICE OF FILING AFFIDAVITSIN SUPPORT OF DEFENDANT'SOPPOSITION TO PLAINTIFFS' MOTIONTO ENFORCE SETTLEMENT AGREEMENTAND FOR OTHER RELIEF

vs.WOMEN'S SOCCER, LLC

--------------------------~/Defendant, by and through undersigned counsel, hereby gives notice of the filing of the

attached original Affidavit ofJennifer O'Sullivan and a copy of T. Fitz Johnson's Affidavit. Theoriginal of the Affidavit of T. Fitz johnson will be mailed on Tuesday, February 21,2012.

CERTIFICATE OF SERVICEI HEREBYCERTIFY that a true and correct copy of the above and foregoing was served via

U.S. mail and e-mail this 17th day of February, 2012, upon: Joseph lanno, Jr., Esq., Carlton Fields,P.A, 525 Okeechobee Blvd., Suite 1200, West Palm Beach, FL 33401, Charles M. Rosenberg, Esq.,Carlton Fields, PA, 100 S.E. Second Street, Suite 4000, Miami, FL 33131; and Louis S. Ederer,Esq., Arnold &: Porter, LLP, 399 Park Avenue, New York, NY 10022-4690.

RENNERTVOGEL MANDLER &: RODRIGUEZ, P.AAttorneys for DefendantMiami Tower, Suite 2900100 S.E. Second StreetMiami, Florida 33131Telephone (305) 577-4177Facsimile (305) 373-6036

By Jill J x - ; ; ; ; B e r m a nFlorida Bar No. 265608

RENNERT VOGEL MANDLER & RODRIGUEZ, P.A., ATTORNEYS AT LAw, 29TH FLOOR, MIfu\1I TOWER100 S.E. 2ND STREET, MIAMI, FLORIDA 33131-2130 TEL. (305) 577-4177 FAX (305) 373-6036


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IN THE CIRCUIT COURT OF THE 15THJUDICIAL CIRCUIT IN AND FOR PALMBEACH COUNTY, FLORIDAGENERAL JURISDICTION DIVISION

FREEDOM SOCCER LLC andMAGIC TALK SOCCER CLUB, LLC, CASE NO. 2011 CA 018214Plaintiffs,

v.WOMEN'S SOCCER, LLC,

Defendant./- - - - - - - - - - - - - - - - - - - - - - - - - - - - -

AFFIDAVIT OF JENNIFER O'SULLIVAN

STATE OF NEW YORK }}SSCOUNTY OF WESTCHESTER }

BEFORE ME, the undersigned authority, personally appeared, Jennifer O'Sullivan, who

upon oath, states as follows:1. My name is Jennifer O'Sullivan and I have personal knowledge of all of the facts

contained herein. I am over the age of eighteen (18) and competent to testify and I make thisaffidavit upon my own personal knowledge. I am the Chief Executive Officer andCommissioner of Defendant Women's Soccer, LLC ("Defendant" or the "League"). I submitthis Affidavit in support of Defendant's Motion for Summary Judgment and in opposition toPlaintiffs' Motion to Enforce Settlement Agreement and For Other Relief ("Plaintiffs' Motion").

2. I have reviewed the Declaration of Louis S. Ederer in Support of Plaintiffs'Motion, in which Mr. Ederer makes certain incorrect statements regarding the League's strategyin this litigation and the settlement negotiations preceding the January 18,2012 hearing in thismatter.


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3. On the evening prior to the January 18 hearing, T. Fitz Johnson, the owner of theAtlanta Beat and the acting Chair of the League's Board of Governors, and I negotiated thedetails of the proposed settlement agreement directly with Dan Borislow. To our knowledge,Mr. Ederer was not directly involved in those negotiations until the parties' attorneys conferredat the courthouse immediately prior to the January 18 hearing. Although Mr. Ederer claims inhis declaration that he responded to proposed settlement terms from the League on January 16,I am unaware of and have never seen any written response from him on that date. Indeed,as declared below, the League did not send its proposed settlement terms to Mr. Ederer until

January 17,2012 - the day after Mr. Ederer claims to have responded to those terms.4. On Friday, January 13,2012, one of the League's owners forwarded to me an

email he had received from Mr. Borislow, in which Mr. Borislow proposed what he termed"a very good solution to settling our dispute." Mr. Borislow stated he "want] ed] to form a teamfor the next two years, that I believe must be approved by the USSF, of a number of players whoapproached me to play some games against the WPS teams and NON US National teams. Theteam would have a large contingent of my players from last year." A true and correct copy of theemail I received is attached hereto as Exhibit F.

5. I understood Mr. Borislow to be proposing that he would sign a number of playersfrom the United States Women's National Team ("WNT') to play on his new magicJack team.That understanding was based upon a number of statements in his email, and borne out bysubsequent communications. I also knew from his past statements and conduct howMr. Borislow felt about WNT players generally, and how important he believed they were to thesuccess of any team. Finally, I was in the courtroom on December 16, 2011, and heardMr. Borislow testify that he did not want to field a team that did not include WNT players.Mr. Borislow also voiced this opinion prior to his termination when the League was considering


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scheduling issues for the 2012 season. Based upon all of these factors, I had no doubt thatMr. Borislow was proposing to the League that he would field a new team that included asignificant nwnber of WNT players.

6. I discussed Mr. Borislow's proposal with the League's Board of Governors in thefollowing days, and the Board determined that Mr. Borislow's proposed team comprised mainlyofWNT players merited serious consideration. On January 17,2012, I instructed the League'sattorneys to forward a proposed list of settlement terms to Plaintiffs' attorneys. A key facet ofthe League's counterproposal was that Mr. Borislow would not be reinstated as a member ofthe

League, and that he would dismiss his lawsuit.7. Later that afternoon, Mr. Johnson forwarded me an email he had received from

Mr. Borislow in response to the League's counterproposal. I understood Mr. Borislow's email toindicate he would be signing a large contingent of WNT players for his new team.

8. Together with the League's attorneys, Mr. Johnson and I consideredMr. Borislow's responses and, where appropriate, suggested counterproposals in a January 17,2012 response email to Mr. Borislow. In addition, we added the following settlement term:"Mr. Borislow's team may sign a maximwn of 6 National Team players in each year." TheLeague added this term to ensure that Mr. Borislow was not entitled to sign the entire WNT toplay for him, which could have had an adverse impact on the League. That email also confirmedour agreement to arbitrate any disputes relating to the proposed agreement in New York beforeone arbitrator under the AAA Commercial Litigation Rules. Mr. Ackerman, counsel for theLeague, sent the email response to Mr. Borislow's attorneys during the evening of January 17,2012. A true and correct copy of the League's response, which I received, and which is redactedexcept for those provisions referenced in this paragraph to prevent disclosure of confidentialsettlement terms, is attached hereto as Exhibit G.


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9. Later that evening, Mr. Johnson and I spoke with Mr. Borislow by telephoneconcerning the settlement agreement. During that call, Mr. Borislow objected to any term thatlimited the number of WNT players his team could field for the proposed exhibition matches.He stated his intention to sign the players who played for the magicJack team during the 2011season, specifically mentioning Abby Wambach, among others. He also repeatedly used theterm "my girls" to refer to those players, and I understood his use of that term to refer to theWNT players who had played for magicJack in 2011. Eventually, we all agreed thatMr. Borislow could field an unlimited number ofWNT players in the 2012 season, but would be

limited to 8 WNT players in the 2013 season. The reason the League agreed that he could signan "unlimited" number ofWNT players in 2012 was because many of those players had alreadysigned with other teams, so the available pool of WNT players he could sign was limited.

10. Mr. Johnson fmalized the proposed terms with Mr. Borislow later that evening.I always understood that the proposed agreement with Mr. Borislow involved his fielding asignificant number of WNT players as part of his new non-WPS team, and therefore requiredUSSF approval of the playing arrangement. I would not have agreed to a settlement thatinvolved a new magicJack team without WNT players, because WNT players typically draw themost fans and attendance, resulting in a greater financial incentive for the League to play theproposed exhibition matches against the new magicJack team.

11. The next morning, I participated in a conference with the League's attorneys andMr. Borislow's attorneys at the courthouse prior to the scheduled January 18,2012 court hearing.The purpose of the conference was to ensure the parties' agreement to the principal terms of theproposed settlement arrangement, which were reflected in a term sheet that the League's counsel,Mr. Ackerman, had stored on his computer, and which Mr. Ederer reviewed during the meeting.


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A true and correct copy of the parties' term sheet, redacted to prevent disclosure of confidentialsettlement terms, is attached hereto as Exhibit H.

12. The League had concerns regarding the confidentiality of the proposed settlementterms, and expressed those concerns to Mr. Ederer. Nonetheless, Mr. Ederer insisted on readingterms regarding the playing of matches into the record. His rationale was that his client wasconcerned that we would alter the terms of the playing arrangement when the parties laterexchanged written agreements. We acceded to his request, but insisted that terms regardingfinancial matters remain confidential. Mr. Ederer claims that he advised us that he would read

terms into the record so that the agreement would be "effective immediately." Ederer Decl.,, 21. I do not recall him making that statement, nor would I have agreed that the proposedarrangement was "effective" until USSF had agreed that the playing arrangement was consistentwith its requirements, and until the WPS Board of Governors had approved the agreement.I specifically advised Mr. Borislow, and later Mr. Ederer, that final approval of the proposedsettlement was required from all members of the WPS Board. I also was dismayed to see thatPlaintiffs and Mr. Ederer disclosed in their Motion that one of the confidential terms related to"distribution of Plaintiffs' escrow bond." Ederer Decl., '19.

13. Mr. Ederer also states in his declaration that "both parties acknowledged that"USSF consent to the playing terms may be necessary because "the parties' settlement involvedplaying competitive soccer matches." Ederer Decl., , 23. This is not an accurate statement.Because this arrangement expressly contemplated that Mr. Borislow's team would fieldnumerous WNT players, the parties needed to confirm that the arrangement would not run afoulof US SF rules, regulations or Collective Bargaining Agreement with those players.

14. Immediately following that meeting, I attended the January 18, 2012 courthearing during which Mr. Ederer read certain of the agreed-upon settlement terms into the


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record. During that hearing, Mr. Ederer stated on the record on multiple occasions that the USSFhad to sign off on the proposed playing arrangement. I agreed with those representations.Mr. Borislow's team could not field WNT players in the exhibition matches without USSF'sconfirmation that the WNT players' participation was consistent with USSF rules, regulationsand Collective Bargaining Agreement. IfUSSF disapproved of the arrangement that wouldallow a large contingent ofWNT players to play on Mr. Borislow's team, there would be nosettlement agreement. If Mr. Ederer had stated at any time during the January 18 hearing that noWNT players would play on Mr. Borislow's new team or that the proposed settlement was not

contingent upon USSF' s confirmation that the playing arrangement conformed to its rules andregulations, I would have objected (or instructed the League's attorneys to object) because thatwas not consistent with the proposed agreement the League had reached with Mr. Borislow andPlaintiffs.

15. Although we had insisted that the terms of the proposed arrangement remainconfidential, word of the settlement leaked on the Internet soon after the hearing concluded.To ensure that USSF - an important League partner - was not blindsided by the news of theproposed settlement, I called Dan Flynn, the USSF CEO and Secretary General, and advised himof the proposed settlement. Mr. Plynn asked me to send him the terms in writing, and I emailedhim and Lisa Levine, the USSF General Counsel, the proposed material settlement terms relatingto the playing of exhibition matches involving WNT players.

16. Mr. Flynn called me back later that afternoon and left me a voicemail advisingthat he wanted to speak with me regarding the playing terms. That evening, I had a briefconversation with Mr. Flynn, Ms. Levine and Greg Fike, also of USSF. During that phone call,they advised me that there were "challenges" with the plan and that, as currently constituted, theplan would not comply with certain USSP and PIPA rules and regulations concerning non-


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affiliated teams. They also mentioned that USSF's Collective Bargaining Agreement with theWNT players and that scheduling games would be obstacles to the proposed arrangement.I spoke again with USSF on January 19, and they reiterated their concerns.

17. On January 19, 2012, I advised the League's owners of the substance of myconversations with USSF.

18. I also learned that Mr. Ederer had suggested to Ms. Fulmer that the League agreeto permit Mr. Borislow to rejoin the League in a non-equity, non-ownership capacity in order tosatisfy USSF's concerns regarding the affiliation of his new team. I raised this suggestion with

the League's Board of Governors, who rejected the proposal. In their view, Mr. Borislow'scomplete separation from the League was a material term of the proposed settlement agreement,and the League was not willing to modify that term of the agreement.

19. I am aware that, at Mr. Ederer's request, the League's counsel Pam Fulmer signeda joint letter sent to USSF on January 23,2012 again laying out the terms ofthe proposedsettlement and suggesting that Mr. Borislow's new team would "affiliate with an appropriateState Association or other soccer entity that is governed and sanctioned by USSF." The letteralso provided that Mr. Borislow's new team would not be "affiliated" with the League. A trueand correct copy of the January 23,2012 joint letter is attached hereto as Exhibit I.

20. On January 24, I again spoke with Mr. Flynn and Ms. Levine of US SF by phoneat their request. They advised me that they had received the joint letter but that there werecontinued issues with the proposed terms and therefore the plan was not workable. Mr. Flynnand Ms. Levine advised me that they would be contacting the lawyers for both parties to advisethem of the obstacles; however, I have been told that they never called the League's attorneys.

21. In their Motion, Plaintiffs have asserted that USSF approval is not needed for ateam with 5 or fewer WNT players. This is not my understanding. Based on my conversations


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with USSF, it is my understanding that the inclusion of even one WNT player playing onMr. Borislow's new team would require the approval of USSF. At no time during myconversations with USSF officials did they represent that Mr. Borislow could field a team withfewer than 5 WNT players, without the need to comply with USSF rules, regulations and theCollective Bargaining Agreement. I do not know what documents form the basis of Mr. Ederer'sclaim, and had not heard of that restriction before Plaintiffs filed their Motion. I spoke withMs. Levine again on February 9, 2012 and asked her specifically about Mr. Ederer's claim thatUSSF approval of the playing arrangement could be avoided if Mr. Borislow signed fewer that

5 WNT players to his team. Ms. Levine told me that Mr. Ederer is incorrect and may beconfusing matches with "public events," such as an autograph signing or player appearance,in which a threshold number ofWNT players may participate without USSF approval. However,the proposed exhibition matches with the new magicJack team are not "public events."

22. In the following days, the Board of Governors discussed the League's status forthe 2012 playing season. The League had incurred significant costs in defending against thislitigation, including attorneys' fees, lost employee time, and travel costs for the League'switnesses to travel to the scheduled December 16, January 5 and January 18 evidentiary hearingson Plaintiffs' Motion for a Temporary Injunction. Inaddition, the uncertainty resulting from thislitigation had impaired the League's ability to attract new sponsors and investors, all to thedetriment of the League.

23. On Monday, January 30, 2012, the League's Board of Governors voted tosuspend the 2012 season. The League issued a press release explaining the reasons for thatdecision, which included the harm to the League resulting from this lawsuit. A true and correctcopy of the League's January 30, 2012 press release is attached hereto as Exhibit J.


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The Dispute Notices24. On January 11, 2012, Mr. Ederer, counsel for Plaintiffs, sent Ms. Fulmer, counsel

for the League, a Notice of Dispute requesting that the parties proceed with the DisputeResolution Procedures pursuant to Article XII of the Second Amended and Restated LimitedLiability Company Agreement of Women's Soccer, LLC (the "LLC Agreement"). The Noticeof Dispute is attached to the Ederer Declaration as Exhibit C.

25. On February 3, 2012, I, on behalf of the League, sent Plaintiffs and Dan Borislowa Notice of Dispute invoking the Dispute Resolution Procedures of the LLC Agreement.

The Notice of Dispute is subject to the confidentiality requirements inSection 12.04 of theLLC Agreement and may not be publicly disclosed. Should the Court wish to review theLeague's Notice, Defendant is prepared to provide a copy for in camera review.

FURTHER AFFIANT SAYETH NAUGHT.

'=]E~1FER O'SULLIVANThe foregoing instrument was acknowledged before me on this l J a . _ day of February,

2012, by Jennifer O'Sullivan, who is personally known to me or has producedJY S Dc\llftrS ~ CVJt:z(" as identification.

NOTAR

25407481


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Page 1 of2

Ackerman, David I.REDACTED - A tto rn ey /C lie nt P riv ile ge

Begin forwarded message:From: .b~blen@!lQLcQ_mDate: January 13,20125:17:03 PM CSTTo: jennifer.osullivan@_w_ome~rosoccer.comSubject: Fwd: Settlement purposes only

-----Original Message-----From: DBORISLOW To: jsahlen Cc: mstoller Sent: Fri, Jan 13,20124:53 pmSubject: Settlement purposes onlyGentlemanI think I have a very good solution to settling our dispute.I want you to talk with me about itbefore you bring it to the other owners.I propose the following.We want to form a team for the next two years,that I believe must be approved by theUSSF ,of a number of players who approached me to play some games against the WPSteams and NON US National teams.The team would have a large contingent of my playersfrom last year.I believe these games will be the best attended games you will have all season.I would do 4away games and 3 home games against WPS teams.We want our escrow back ASAP.

2/13/2012


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Page 2 of2

Any money that the USSF will distribute for the next 2 years ,we must receive pro ratashare.This format will create a lot of excitement and dollars.!t can put a good ending to a badstory.lt is what is best for Womens soccer and our kids.If you keep on listening to bad advice,it will only get worse for you.I expect to hear fromone of you over the next 48 hours. Don't let me change my mind.Dan

2/13/2012


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Ackerman, David I.

Page 1 of2

From: Ackerman, David I.Sent: Tuesday, January 17, 2012 8:10 PMTo: Louis Ederer; 'Ianno, Jr., Joseph'; Rosenberg, Charles M.Cc: Fulmer, Pam; Berman, Jill NexonSubject: Response to Mr. Borislow's Counter Offer

Our responses appear in blue below:

REDACTED -- Conf idential Preliminary Negot iat ion/Proposed Settlement TermsPROPOSED TERMS OF SETTLEMENT

EXH IB ITI{}2/13/2012


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Page 2 of2

REDACTED - Conf ident ial Prel iminary Negot iat ion/Proposed Sett lement Terms

The agreement is governed by New York law, and the parties agree to arbitrate any disputes relatingto the agreement in San Francisco, California before one arbitrator under the AAA CommercialLitigation Rulesa rbitrated in NY too NY only The Agreement shall be finalized by the Parties by 5 P.M. Eastern time on January 20, 2012,

pending approval by the U.S. Soccer Federation.Mr. Borislow's team may sign a maximum of 6 National Team players in each yearAgreement is subject to approval of the League's Board of Governors

2/13/2012


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Page 10f2

Ackerman, David I.From: Ackerman, David I.Sent: Wednesday, January 18,201210:08 AMTo: Louis EdererSubject: Terms

PROPOSED TERMS OF SETTLEMENT - 1118/12REDAC TED - C on fid en tia l P ro po se d S ettle me nt T erm s

The League will schedule matches against a women's soccer team owned or operated by Mr.Borislow (or one of his companies) in 2012 and 2013 as follows:

o Mr. Borislow's team will play one away match at each League franchise. Games aremutually scheduled, but are based on open WPS team game weekends, stadiumavailability and USWNT availability. Schedule falls out from available dates. If theLeague champion is Boston or WNY, Borislow's team will play the champion at theirhome venue the week after WPS championship. Ifthe League champion is one of theother teams, the champion will have the option to play Mr. Borislow's team at its homevenue the week after WPS championship.

o Two games each year at a location of Mr. Borislow's choosing in the contiguous UnitedStates (i.e. 2 matches per year, 4 matches total). ; WPS will make best efTorts for theteams to be WNY and Boston, Each year, the League will provide 4 potential dates to Mr.Borislow and he will select 2 dates from that list.

o Revenue from the matches shall be property of the home team.o Traveling expenses for the matches shall be responsibility of the visiting team.o The home team shall be responsible for all advertising/marketing costs.o All matches governed by FIF A ruleso The League retains the right to suspend or cease operations in 2012 or 2013. Such a decision

by the League shall not constitute a breach of the Settlement Agreement.

2/17/2012EXtffBtT1 /


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Page 2 of2

o Each League Team retains the right to suspend or cease operations in 2012 or 2013. Such adecision by the League Team shall not constitute a breach of the Settlement Agreement.

o Home team pays expenses incurred by the visiting team if the home team cancels within 30days ofa match. Ifvisiting team cancels, game will be rescheduled at mutually agreeabledate no later than the week after the championship game

REDACTED - Confident ial Proposed Settlement Terms

The Parties agree to keep all terms of the agreement confidential until it is approved by the USSF.Thereafter, the financial and litigation-related terms will remain confidential. The terms not subjectto confidentiality will be terms related to playing of the matches. The Parties will issue ajointstatement upon execution of the agreement.

The Parties agree not to disparage other Parties and League sponsors. The agreement is governed by New York law, and the parties agree to arbitrate any disputes relating

to the agreement in New York, New York before one arbitrator under the AAA CommercialLitigation Rules . The Agreement shall be finalized by the Parties by 5 P.M. Eastern time on January 20, 2012, andthereafter will be submitted to the U.S. Soccer Federation for approval. If there are anydisagreements, the parties will submit their disputes to an agreed-upon special master.No limit on the number ofWNT players that Mr. Borislow's team may sign in 2012; the team may

sign a maximum of8 National Team players in 2013Agreement is subject to approval of the League's Board of Governors

2/17/2012


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ARNOLD & PORTER ur L ou is S . E de re [email protected]+1212.715.1102+1212.715.1399 Fax3 99 P ark A ve nu eNew York, NY 10022-4690

J anuary 23, 2012CONFIDENTIAL -VIA E-MAU.L isa L evine, E sq.G ene ra l Coun se lU ni ted S tates S o ccer F ede rati on18 01 S ou th P rai ri e A ven ueC hicago, I L 60616

Re: Freedom S occer. LLC and magicT alk S occer C lub, LLC,v. W omen's S occer. LLC. Case No.: 2011 ca 018214

Dear Ms. Levine:T he undersigned are the attorneys of record for the Plaintiffs (the "m agicJ ack T eam ") and

D efendant (the "W PS ") in the above captioned li tigation pending inS t ate Cou rt inF lo ri da , o fwhich you are aware. W e are writing jointly to respectfully request that the US SF approve theproposed tenus of the parties' settlem ent of that action to the extent such approval is needed,w hich, w e understand, i t m ay be, particularly w ith respect to the participation ofWNT players asm em bers of the m agicJ ack T eam .

T he present posture of the li tigation in Florida is as fol lows. T he action was com mencedinNov em ber 20 11 . In the action, the magicJ ack T eam, whose membership in the W PS wasterm inated in O ctober 2011, seeks injunctive rel ief w hich, am ong other things, w ould have theeffect of reinstating the m agicJ ack T eam as a W PS mem ber pending the outcom e of certaindispute' resolution procedures in the parties' m em bership and operating agreem ents. O n J anuary9,2012, the C ourt issued an order (copy attached) finding that the magicJack T eam was l ikely tosucceed on the m eri ts of i ts legal claim that the parties' agreem ents required that such disputeresolution procedures be engaged in prior to any term ination of a league m em ber taking effect.T hereafter, the C ourt scheduled a-hearing on J anuary 18,2012 regarding the appl ication by them agicJ ack team for injunctive .rel ief, including its request to be reinstated as a W PS m em ber.

On the m orning of the J anuary 18 hearing, the parties reached a settlem ent in principle oftheir l i tigation. I n addition to certain confidential financial and l itigation-related term s, theparties agreed to certain business term s. E ssential ly. w hat the parties agreed to was that themagicJ ack team would field a team for the 2012 and 2013 seasons, and play an exhibi tionschedule against W PS team s. T he business term s of the parties' settlem ent in principle, of w hichthe parties have inform ed the judge in the Florida S tate C ourt l i tigation, are as fol low s:

S S 1 8 6 8 3 9 v 2
mailto:[email protected]:[email protected]


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L is a L ev in e, E s q .J an ua ry 2 3, 2 012Page 3m ay g o forw ard a nd co nc lud e th eir settlem en t. I n that re gard, y ou sh ou ld be aw are that this is am atte r o f u rg en cy , a s th e l iti ga ti on b etw ee n th e p arti es rema in s p en di ng , a nd th e ju dg e h assc he dul ed a sta tus c onfere nce in th e ca se for this c orn in g T h ursda y, J an uary 26,20 12, tod ete rm i ne th e s ta tu s o f th e p arti es ' s ettl ement. Furth er, ifth e m atter h as no t b een settle d by thattim e, th e C ourt has sch edu led a he ari ng o n the injunc tio n p orti on of the m agi cJ ack T e am 's ca se,i nc lu di ng i ts a pp li ca ti on fo r re in sta teme nt i nto th e WPS , fo r F eb ru ary 1 ,2 01 2.

B o th p arti es w ish to a dvi se the U S S F that th ey b eli eve the abo ve settl em ent term s are fa ira nd r ea so nabl e, a nd a re in th e b es t i nte re sts o f th e p arti es a nd th e sp ort o f w omen 's p ro fe ssi on alsoccer inthi s c ou ntry . W e are, of co urse, a t yo ur imm edia te disposal to m ee t or spe ak with you,and to an sw er any que stio ns yo u m igh t hav e.Thank y ou fo r y ou r c on si de ra ti on o f th is m atte r.

Y our s t ru l y,ARNOLD & PORT E R LLPA tto rn ey s fo r m ag ic J a ck T e am

B y: ~.L~Louis S . EdererSNRDENTON

cc : Mr. D an Flynn, CE O, U S S occerMs. J enn if er O 'Su l li vanMr. Dan Bo r is low


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Women's Professional Soccer :: WPS Suspends 2012 Season Page lof3

WPS Suspends Play for 2012 Seasonby WPS - Communications01/30/2012 - 01:00 p.m.

Women's Professional Soccer (WPS) announced today that its Board of Governors has voted to suspend the2012 season to permit the League to focus on the resolution of certain pending legal issues and the challengesthat now face the League as a result of its ongoing dispute with a former owner."We are proud of what the League has accomplished in the first three seasons, but we do recognize thenecessity to resolve our exist ing legal and operational issues so that we can continue to support and grow WPSthe right way," said Sky Blue FC Owner Thomas Hofstetter. "This was a very difficult decision, but one we asowners feel isthe best business decision for the League at this time."The Board voted on Monday morning to suspend the 2012 season. Over the last year the league has facedsignificant challenges, including a lengthy and expensive legal battle with a former owner. The litigation hasdiverted resources from investment in the league and has forced the Board to take action, suspending the 2012season in order to address the legal issues head-on before moving forward with competition."We firmly believe there is a place in the global sports landscape for Women's Professional Soccer," said WPSCEO Jennifer O'Sul livan. "Making the decision to suspend the 2012 season was a difficult and painful one, butit is necessary to take the time to address current issues and solidify our business in order to provide

http://www.womensprosoccer.comIHome/news/press _releases/120 130-wps-suspends-20 12... 2115/2012

t:m-
http://www.womensprosoccer.comihome/news/presshttp://www.womensprosoccer.comihome/news/press


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Women's Professional Soccer ::WPS Suspends 2012 Season Page 2 of3

I I appropriate support needed to achieve the League's long-term goals. Those that take part in our League -players, partners and fans - deserve the best, and that is what we are taking the time to ensure we deliver whenwe resume play in 2013 and beyond."WPS has established its plans to return to play in 2013, and all five owners of the League's existing teams -Atlanta Beat, Boston Breakers, Philadelphia Independence, Sky Blue FC and Western New York Flash - wil lremain active with the CEO, Jennifer O'Sull ivan, in the governance of WPS throughout the current year.''We are deeply grateful to our fans and partners for the tremendous support they have shown for WPS, ourplayers and the sport," added O'Sull ivan. "With our supporters and athletes in mind, we are committed tocomplete the hard work necessary to resume play in 2013 and reestablish WPS as the premiere women'sprofessional soccer league in the world."

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1 ' . . .~~~~D:~ on January 30,2012

. After the great USWNT shutout at the CONCACAF olympic qual ifiers, and knowingthat Women's soccer has gained more popularity this year. it is incredibly sad to readI :~~s~~~~~:~::~~~::::~~I:h::: :::~~~he players who were already

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..... I really wish there was more that us fans could do. It was really looking forward tothe 2012 WPS season.

At least the Olympics are this year ..but i 'l i be anxiously waiting for 2013.

Score: 1ude10:31 AM on January 3D , 2012WPS has obviously had mismanagement issues, but as far as Borislow goes, I've gotto ask...how can a guy continue to hamstring the league, rather than step awaygraciously, and still claim to care about Women's Soccer?

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Oliveira10:55 AM on January 30,2012

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Ihttp://www.womensprosoccer.com/Home/news/press _releases/IZu 130-wps-suspends- 2012... 2/15/2012

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Women's Professional Soccer :: WPS Suspends 2012 Season Page 3 of3

That really SUCKS! Not much more I can say.

Score: 2utendo0311:06 AM on January 30, 2012This is bad for Women's Soccer,players,management,fans and sports as awhole.WPS is one of the top league in US and abroad.I'm so disappointed

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http://www.womensprosoccer.com/Home/news/press _rele:;lSes/120 130-wps-suspends-20 12... 2/15/2012

@ 1 replyScore: 5oonrayz

11:30 AM on January 30. 2012This is really awful and I too blame Borislow for this turning point. What a jerk he iswith his inability to understand the big picture and the importance of sustaining thisleague instead of thwart ing it for his own selfish ego and eccentricities. A sustainedwomen's soccer league in the USA has come to symbolize, in part, a civil r ights issueand progress for women in the most popular sport in the world. Borislow has played amajor role in hampering that cause and pushing the league to the brink. I hope theleague can get him out and replace him with someone who is interested in harmony

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and sustenance.
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IN THE CIRCUIT COURT OF THE 15THJUDICIAL CIRCUIT IN AND FOR PALMBEACH COUNTY, FLORIDAGENERAL JURISDICTION DIVISION

FREEDOM SOCCER LLC andMAGICT ALK SOCCER CLUB, LLC, CASE NO. 2011 CA 018214

Plaintiffs,v.

WOMEN'S SOCCER, LLC,Defendant.______________________________ 1

AFFIDA VIT OF T. FITZ JOHNSON

STATE OF GEORGIA }}SS}OUNTY OF FULTON

BEFORE ME, the undersigned authority, personally appeared, T. Fitz Johnson, who uponoath, states as follows:

1. My name is T. Fitz Johnson and I have personal knowledge of all of the factscontained herein. I am over the age of eighteen (18) and competent to testify and I make thisaffidavit upon my own personal knowledge. I am the owner of the Atlanta Beat, one of thefranchises that comprises Defendant Women's Soccer, LLC ("Defendant" or the "League").In addition, I served as the Chair of the League's Board of Governors during the 2011 season,

and currently serve as the acting chair of the Board. I submit this Affidavit in support ofDefendant's Motion for Summary Judgment and in opposition to Plaintiffs' Motion to EnforceSettlement Agreement and For Other Relief ("Plaintiffs' Motion").

2. I have reviewed the Declaration of Louis S. Ederer in Support of Plaintiffs'Motion, in which Mr. Ederer makes certain incorrect statements regarding the League's strategy

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in this litigation and the settlement negotiations preceding the January 18,2012 hearing in thismatter.

3. In the days prior to the January 18 hearing, I, along with Jennifer O'Sullivan,the League's Commissioner and Chief Executive Officer, negotiated the details of the proposedsettlement agreement directly with Dan Borislow. To my knowledge, Mr. Ederer was notdirectly involved in those negotiations until the parties' attorneys conferred at the courthouseimmediately prior to the January 18hearing.

4. On Friday, January 13,2012, I became aware that Mr. Borislow had made asettlement proposal to certain of the League's Board of Governors, and received a copy of thatproposal. Mr. Borislow stated in his email that he "want[ed] to form a team for the next twoyears, that I believe must be approved by the USSF, of a number of players who approached meto play some games against the WPS teams and NON US National teams. The team would havea large contingent of my players from last year."

5. I understood Mr. Borislow to be proposing that he would sign a number of playersfrom the United States Women's National Team ("WNT") to play on his new magicJack team.That understanding was based upon a number of statements in his email. First,Mr. Borislowadvised that he "believejd] [his team] must be approved by the USSF." USSF, or the UnitedStates Soccer Federation, is the official governing body of SOccerin the United States and alsooperates the U.S. Women's National Team. As the official governing body, USSF enforces anumber of rules and regulations concerning soccer matches in the United States and also has aCollective Bargaining Agreement with the \VNT players. I knew that the USSF rules andregulations and the Collective Bargaining Agreement limited the types of teams that the WNTplayers could play for. I believe that Mr. Borislow was also aware of these restrictions at thetime he sent his email.Second.Mr. Borislow wrote that his proposed team "would have a large

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contingent of my players from last year." Mr. Borislow's magicJack team fielded the mostWNT players in the League during the 2011 season. Third, at the time ofMr. Borislow's email,

a number of those former magicJack players had not yet signed with WPS teams for the 2012season. Fourth, Mr. Borislow wrote that he "believe[d] these games will be the best attendedgames you will have all season." Mr. Borislow is well aware that the WNT players generally aremore well-known to fans and the public than non- WNT players. In an Olympic year, such as2012, matches featuring players from the u.s. Olympic squad are likely to draw the largestnumber of fans. Fifth, Mr. Borislow wrote that his proposed new team would play matchesagainst the national teams from other countries. It would be unusual for a foreign women'snational soccer team to agree to play matches against tean1S that did not include \\tNT players.Based upon all of these factors, I had no doubt that Mr. Borislow was proposing to the Leaguethat he would field a new team that included a significant number of WNT players. Theinclusion of a significant number of WNT players on Mr. Borislow's new team was the onlything that made the proposed arrangement attractive to me.

6. The League's Board of Governors discussed Mr. Borislow's proposal in thefollowing days, and the Board determined that Mr. Borislow's proposed team comprised mainlyof\VNT players merited serious consideration. With that in mind, the League made acounterproposal to Mr. Borislow. A key facet of the League's counterproposal was thatMr. Borislow's franchise would remain terminated and he would no longer seek to be reinstatedas a member in the League.

7. I am aware that the League, through counsel, forwarded a set of proposedsettlement terms to Plaintiffs on January 17,2012. Later that afternoon, Mr. Borislow emailedme his response to the League's counterproposal. The subject line of that email read: "ChangesSettlement purposes only-I am using my money to make you a ton of money." I again

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understood Mr. Borislow's reference to "money" as a representation that he would be signing alarge contingent of WNT players for his new team. Generally, WNT players command higher

salaries than non-WNT players, and therefore a team comprised of many such players wouldneed to pay more money in salaries. A true and correct copy of Mr. Borislow's email, redactedto prevent disclosure of confidential settlement terms, is attached hereto as Exhibit K.

8. Together with the League's attorneys, Ms. O'Sullivan and I consideredMr. Borislow's responses and, where appropriate, suggested counterproposals in a January 17,2012 response email to Mr. Borislow. In addition, we added the following settlement term:"Mr. Borislow's team may sign a maximum of 6 National Team players in each year." TheLeague added this term to ensure that Mr. Borislow was not entitled to sign the entire WNT toplay for him, which could have had an adverse impact on the League. That email also confirmedour agreement to arbitrate any disputes relating to the proposed settlement agreement in NewYork before one arbitrator under the AAA Commercial Litigation Rules.

9. Later that evening, Ms. O'Sullivan and I spoke with Mr. Borislow by telephoneconcerning the settlement agreement. During that call, Mr. Borislow objected to any term thatlimited the number of\VNT players his team could field for the proposed exhibition matches.He stated his intention to sign the players who played for the magicJack team during the 2011season, specifically mentioning Abby Wambach, among others. I-Iealso repeatedly used theterm "my girls" to refer to those players, and I understood his use 0f that term to refer to the\VNT players who had played for magicJack in 20 II. Eventually, we all agreed thatMr. Borislow could field an unlimited number of WNT players in the 2012 season, but would belimited to 8 WNT players in the 2013 season.

10. Following that phone call, I exchanged a number of emails and text messageswith Mr. Borislow regarding the terms we had discussed. I always understood that the proposed

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agreement with Mr. Borislow involved his fielding a significant number of WNT players as partof his new non-WPS team, and therefore required USSF approval of the playing arrangement.

I would not have agreed to a settlement that involved a new magicJack team without WNTplayers, because WNT players typically draw the most fans and attendance, resulting in a greaterfinancial incentive for the League to play theproposed exhibition matches against the newmagicJack team.

11. I attended the January 18,2012 court hearing during which Mr. Ederer readcertain of the agreed-upon settlement terms into the record. During that hearing, Mr. Edererstated on the record on multiple occasions that the USSF had to sign off on the proposed playingarrangement. I agreed with those representations. Mr. Borislow's team could not field WNTplayers in the exhibition matches without USSF's confirmation that the WNT players'participation was consistent with USSF rules, regulations and Collective Bargaining Agreement.If USSF disapproved of the arrangement that would allow a large contingent of WNT players toplay on Mr. Borislow's team, there would be no settlement agreement. IfMr. Ederer had statedat any time during the January 18 hearing that no WNT players would play on Mr. Borislow'snew team or that the proposed settlement was not contingent upon USSF's confirmation that theplaying arrangement conformed to its rules and regulations, I would have objected (or instructedthe League's attorneys to object) because that was not consistent with the proposed agreementthe League had reached with Mr. Borislow and Plaintiffs.

12. On the evening of January 18,2012, Ms. O'Sullivan advised me that she hadspoken with certain USSF officials, who had indicated that the proposed playing arrangementinvolving \\tNT players would not be acceptable to USSF and was unworkable. I calledMr. Borislow on January 19,2012 and informed him that USSF was not agreeable to theproposed terms.

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13 . Near the end of January, the Board of Governors discussed the League's status forthe 2012 playing season. The League had incurred significant costs in defending against this

litigation, including attorneys' fees, lost employee time, and travel costs for the League'switnesses to travel to the scheduled December 16, January 5 and January 18 evidentiary hearingson Plaintiffs' Motion for a Temporary Injunction. In addition, the uncertainty resulting from thislitigation had impaired the League's ability to attract new sponsors and investors, all to thedetriment of the League.

14. On Monday, January 30, 2012, the League's Board of Governors voted tosuspend the 2012 season. The League issued a press release explaining the reasons for thatdecision, which included the harm to the League resulting from this lawsuit.

FURTHER AFFIANT SAYETH NAUGHT.

The foregoing instrument was acknowledged before me on this _ _ C ? day of February,201~y T. Fitz Johnson, who is personally known to me or has producedQL.- as identification.

y Commission Expires:_--,/.__':,:_2,-/-~_L~-=~---"- / _ _ c ' d = - , ~ C L _ Y - = r_r 72 5 4 0 7 4 8 3

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Page 1of2

Ackerman, David I.REDACTED - Attorney/Cl ient Privilege

Begin forwarded message:From: [email protected]: January 17,20123:26:19 PM ESTTo: [email protected], louis.ederer@aporte(.com, [email protected]_QillCc: [email protected]: Changes Settlement purposes only-I am using my money to make you a ton ofmoney

PROPOSED TERMS OF SETTLEMENTREDACTED - Conf idential Proposed Sett lement Terms

The League will schedule matches against a women's soccer team owned or operatedby Mr. Borislow (or one of his companies) in 2012 and 2013 as follows:DACTED -- Confidential Preliminary Negotiat ion Terms

2/13/2012
mailto:[email protected]:[email protected]:[email protected]:[email protected]


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Page 2 of2

REDACTED - Con fid en tia l P re lim in ar y N eg otia ti on /P ro po se d S ettleme nt T erms

The agreement is governed by New York law, and the parties agree to arbitrate anydisputes relating to the agreement in San Francisco, California before one arbitratorunder the AAA Commercial Litigation RuleaArbitrated in NY too

The Agreement shall be finalized by the Parties by 5 P.M. Eastern time on January 20,2012, pending approval by the U.S. Soccer Federation.

o'sullivan and johnson affidavits

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