U.S. Soccer 2020 deficit grows by $5.5 million due to legal fees from lawsuits

U.S. Soccer's projected 2020 deficit is set to grow $5.5 million due mostly to expenditures of $9 million on legal fees devoted to various lawsuits.

The federation had already projected a loss for the upcoming year, but legals costs -- including those due to the equal pay lawsuit filed by the U.S. women's team -- are the primary reason for the increase.

Speaking at the USSF Board of Directors meeting, USSF CFO Pinky Raina presented reports on the federation's financial state. Entering the 2019 fiscal year, thanks in part to the financial success of the U.S.-hosted Copa America Centenario in 2016, the USSF had a cash surplus of about $160 million.

At that point that the USSF made the decision to engage in deficit spending and invest those funds in a bid to grow the sport. The spending was projected to reduce the surplus to $50 million by the end of the 2023 fiscal year. The reserve is now projected to be depleted even further.

Raina and USSF president Carlos Cordeiro both cited that an increase in litigation has added to the deficits. In addition to the equal pay lawsuit, the USSF is currently involved in litigation involving a similar lawsuit filed by former U.S. women's international Hope Solo, an antitrust suit involving NASL and an antitrust lawsuit from sports promoter Relevent Sports, among others.

"When we were projecting back in [2017], we had deficits of about $20 million each year," Cordeiro said in a subsequent roundtable with reporters. "So the concept of deficits isn't new. We've always had planned deficits, but deficits to grow our investments in our programs.

"What's happened in the last few months and will accelerate into next year is that we have these unforeseen legal expenses that are now basically coming to bear. And they are the reason principally -- not exclusively -- for why our deficits are bigger than what we had planned in 2017 and 2018."

The budgeted operational deficit for the 2020 fiscal year, which ends in March, was $14.8 million, but now, due in part to the $9 million in legal fees, the projected operational deficit for that period is $20.3 million.

Cordeiro said that the federation has insurance to defray some of the legal costs of the lawsuits, but that the insurance on one of the cases was "running out."

He declined to specify which of the cases was running out of insurance money, though it is believed to be the NASL antitrust case, which was filed in September 2017. It was confirmed that the $9 million expense also represents those legal fees not covered by the insurance.