The Canadian Soccer Players’ Association (CSPA), the union representing players on the women’s national team, has filed a $40 million lawsuit against current and former board members of the governing body Canada Soccer over a media and sponsorship contract signed in 2018 with private company Canadian Soccer Business (CSB).

The claim was filed last week with the Ontario Superior Court of Justice, with the CSPA alleging the deal “has created and continues to create a serious risk to the ability of Canada Soccer to carry out its mandate.”

The dispute centers around Canada Soccer’s controversial 10-year deal with Canadian Soccer Business (CSB), a new entity set up in March 2018 to represent the commercial assets, including sponsorship and broadcast deals, for the national teams.

Canada Soccer does not hold an ownership stake in CSB but is paid a set amount each year, around $3 million to $4 million, with the rest used by CSB to help fund the top-tier Canadian Premier League.

The lawsuit says that the yearly fee increased “only slightly over the initial nine years of the CSB agreement and not at all during the 10-year renewal period” while “all other revenue generated by CSB in respect of the national teams is retained by CSB.”

It also alleges the board failed to canvas the market for competing bids, failed to conduct appropriate diligence concerning the fair market value of Canada Soccer’s media and sponsorship rights, and failed to make adequate disclosures to the membership of Canada Soccer.

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It also claims the board failed to follow necessary approval processes after members retroactively approved the CSB agreement in February 2019, leading to five members reportedly voicing concern over the process.

The lawsuit said: “The 2018 Canada Soccer board knew or should have known that the CSB agreement would, at best, deprive Canada Soccer of revenue that could be spent on development, and at worst, could compromise Canada Soccer's ability to operate as a going concern.

“In approving the CSB agreement, the 2018 Canada Soccer directors failed to demonstrate prudence, good faith, and any reasonable belief that such approval was in the best interests of Canada Soccer.

“The CSB agreement has a direct and negative impact on the budget, support, and programming for the senior and junior national teams and has resulted in the unauthorized use of national team player names, images, and likenesses by Canada Soccer sponsors, all without any direct benefit flowing to Canada Soccer, the national teams, or their members.”

The suit names the 2018 Canada Soccer board of directors, five of which are still currently sitting, including president Charmaine Crooks and former presidents Nick Bontis and Steven Reed.

Responding to the suit, a Canada Soccer spokesperson said: “We have been made aware of legal proceedings filed by the CSPA against members of the 2018 Canada Soccer board.

“Our organization is currently seeking advice on this matter.”

The issue first came to light last year, when the men’s and women’s teams started negotiating their respective collective bargaining agreements, with the players stating they were never formally told about the initial deal or details of its financial arrangements.

At the time, both teams demanded Canada Soccer make its partnership and financial agreements with CSB transparent, adding: “Canada Soccer must also respond to the players associations' requests for proper, transparent, and comprehensive access to its financial record, particularly in light of recent budget cuts to the very programs that have generated unprecedented sponsor interest in supporting the national teams.

"It needs to address the unauthorized use still being made of national team player images. It needs to take immediate action to address the untenable financial constraints imposed by its agreement with Canadian Soccer Business, once and for all."

Both teams are still negotiating their labor agreements with Canada Soccer, with the women’s previous deal expiring at the end of 2021.

Last March, Canada Soccer reached an interim funding agreement with the women’s team after a bitter dispute that saw Nick Bontis resign as president of the national governing body.

Canada entered last year’s FIFA Women’s World Cup as the seventh-ranked team in the world but dropped out of the group stage after being beaten by co-hosts Australia. They are current Olympic gold champions.

They are seeking the same financial backing as the men’s team and have clashed with the governing body over cuts to its program.

The women’s team’s grievances, which include not being compensated for 2022 and being forced to cut training camp days and full camp windows, as well as trim the number of players and staff invited into camps, overshadowed its run-up to the World Cup. They were also told there would be no home games scheduled before the Women’s World Cup.

The men, meanwhile, are negotiating their first formal agreement in the wake of forming their players association, the Canada Men’s National Soccer Team Players Association.