United Soccer Leagues at a Crossroads – Part Two: The Struggle for Power
On Monday, Inside Minnesota Soccer, in conjunction with Kartik Krishnaiyer, released the first of a three part series on the United Soccer Leagues. The series describes where the league has come from, where it might be going, and some of the behind-the-scenes events that have taken place over the last several years as the league and its USL-1 owners struggle for control and direction.
Monday’s news of the USL brought forth many things IMS and Major League Soccer Talk have brought to your attention over the last week. A major power struggle within the league that has gone on behind the scenes for years went public today with several press releases. The League Owners Association released a statement saying they are looking at all options for the 2010 season, while USL announced a reconfiguration of their power structure since the announcement of the league’s purchase by NuRock Holdings last Thursday.
Today, Part II – The Struggle for Power
After Umbro purchased the last 30% of USL stock available (Francisco Marcos retained 6% that he reportedly did not want to part with) Umbro took control of the league.
However, just a year later Nike was rumored to be looking at purchasing Umbro. The deal was finally announced in October of 2007 for a price of $582 million. Nike was said to want the UK branding of Umbro and knew the company had not been as innovative in marketing as the Oregon-based corporation had been. Nike felt they could do better with the company so the deal was finalized in February of 2008.
With the acquisition of Umbro, Nike became the new 94% owners of the United Soccer Leagues. Initial excitement soon turned into frustration by team owners who had hoped for a new commitment and innovative ideas from the sports giant. Nike did interact with the league and team owners but not to the degree many had wanted.
In the spring of 2008, the Minnesota Thunder made an abrupt move away from their home in St. Paul at James Griffin Stadium, a narrow high school fill-turf field, back to the National Sports Center in Blaine. The Thunder, in conjunction with the National Sports Center (NSC), refurbished the stadium in a matter of weeks into a soccer-specific stadium (SSS). Manny Lagos, team president, went on record as saying that Nike was pressuring teams in the league to play in soccer-specific stadiums and to improve their on-field product.
Nike was not used to being in the business of owning a league and to make matters worse, they soon found out they had overpaid for the UK brand, some reports saying up to twice the amount it was worth. The man who orchestrated the deal for Nike was soon gone and the footwear giant began reassessing their whole company as they moved through the recession of 2008/09.
In March of 2009, Aaron Davidson, President of Miami FC and vice president of Traffic Sports US [who owns Miami FC], admitted he was leading a team owners association in a move to “restructure the USL in a way that would elevate the league and raise the franchise values of its teams.” Davidson admitted that the Team Owners Association (TOA) had been operating since December of 2007 and told IMS that it officially started in Feb. of 2008.
The Carolina RailHawks, Miami FC and the Minnesota Thunder were all said to be primary supporters of the TOA. However, there were other teams that were supportive of TOA but did not necessarily want to go on record. Montreal Impact, Portland Timbers, Puerto Rico Islanders, Vancouver Whitecaps, the withdrawn Atlanta Silverbacks, as well as the expansion Tampa Bay Rowdies were all said to be supportive of the TOA. There were also a handful of teams that agreed on many of the issues TOA had but were more cautious in their support.
Davidson said one of the issues the league owners had with USL is the lack of direction and influence the teams themselves had on the league’s direction. He said there was great frustration amongst the owners for lack of marketing and support of franchises. It was reported that Francisco Marcos had only been to Minnesota once in the 15 years that team had been involved with the USL and that was in 1999.
Davidson compared the TOA to a players union. He asked the question, “How is it the teams can be treated as players,” stated Davidson. “How can the teams be forced to “unionize”? Because really, there’s not a better word for it. It’s ludicrous! We had to create a team union because our league is not team-owner controlled.”
The TOA wanted a league that was team-owner controlled but were willing to negotiate with the league. The teams felt they needed more representation in the league office in decisions that directly affected the franchises.
The financial structure of the league was also in question by the team owners. They claimed the league did not share in the losses and held no accountability to the teams. The USL is structured in a way that teams pay a one-time franchise fee and then have yearly renewal fees. If a team was having financial trouble and would drop its franchise, the league would just repopulate and claim another franchise fee. Some owners were frustrated by this, as many USL teams lose hundreds of thousands of dollars a year. The annual operating expense for an average USL-1 team is between $1.5 million to $2 million. The long distances between USL-1 cities does not help with the cost of airfare and its said that most teams will spend more on travel expenses for one game than they will make in revenue in a home game. The average break even point for most teams is a home attendance of about 5,000.
In October of 2008, a month before the USL Annual General Meeting (AGM) and amongst rumors of USL-1 teams unhappy and willing to break off from the league, the league owners themselves felt they were making enough progress with USL and Umbro/Nike to commit themselves to another season (2009).
The Atlanta Silverbacks were the lone team that dropped out. Numerous reasons were stated for dropping from the league. One was the economy and another that MLS was rumored to be possibly moving into the Atlanta market and team owner Boris Jerkunica felt he couldn’t compete. In addition, it was said that Jerkunica had numerous disagreements with the league’s front office and was frustrated.
The league front office was still aware Traffic Sports-run Miami FC was not happy and they believed there was still a possibility they could withdraw from the upcoming season and other teams could follow. The expansion team Austin Aztex were scheduled to enter into the league in 2009. With the withdrawal of Atlanta, and Seattle moving to MLS, it’s said league officials feared they could lose several teams.
Those same officials then asked Cleveland City Stars, a successful USL-2 team that was only 2 years old, to move up to USL-1 for a discounted franchise fee from the normal $750,000. This rash move left the faith-based City Stars ownership with little time to make the big jump to USL-1. They forged ahead with an announcement made in early December, after the AGM meetings, and struggled to ready themselves for the new season. Ron Underwood, coach for the City Stars, wasn’t announced until the beginning of February, a time when most teams have the bulk of their players already signed to contracts. Martin Rennie, the team’s former coach, had left to manage the Carolina RailHawks just weeks previous to the move in December and took several of his best players with him. Rennie was said to have been surprised himself with the move of Cleveland to USL-1.
The move also meant the team would need to find a new stadium. Cleveland State’s 2,000-seat Krenzler Field was a happy home to many City Star supporters. USL-1 rules state teams must play in 5,000 seat stadiums. So the team moved to Bedford’s Bearcat Stadium, which seats 5,000. The team has struggled to see the same attendance they did as a USL-2 team in the cozier Krenzler Field with a winning team.
The sudden move up to USL-1 seems to have taken its toll on the organization, which currently sits in last place in the league with 3 wins in 26 games. There has also been trouble both in the front office and on the field for the franchise. General Manager Mark Geissbauer, who was named the league’s 2007 Executive of the Year, unexpectedly resigned midseason and there were some issues on the field with players and Coach Underwood.
It was announced this August the Cleveland City Stars are up for sale.
Tomorrow- Scheduling gaffe in Austin – not their fault, Miami FC felt alone in fighting MLS, Nike sells the league but at what cost?
Comments are closed.
The Cleveland situation seems indicative of the overall lack of USL direction. How is a 3/4 empty 5,000 seat stadium better than a mostly filled 2,000 seat stadium? And how was the franchise ever going to cover their travel expenses with their expected average home attendance?
Good reporting by the way. This is fascinating stuff.
On the other hand I think the league needed to set some standards for stadiums. So in that regard, I understand the 5000 seat rule. It cost the team $15,000 to play there. Those figures are from an article from a Cleveland Newspaper. They were not clear as to per game or season so I assumed it’s for the season but that’s dirt cheap.
I do agree that it was a poor decision to ask them up and sadly this has ended badly for a club that was tooling along quite happily as a USL 2 team.