Rethinking Division-2 Pro Soccer in North America – Part 1
This past January saw US Soccer make a decision to run its division two pro soccer league themselves – but only for one season. Sunil Gulati made the announcement in a press conference that seemed to draw a record number of journalists for business concerning US Soccer’s second division. At the time, everyone seemed to be writing about the riff between the Team Owners Association’s North American Soccer League (NASL) and the long standing United Soccer Leagues (USL). Simon Evans of Reuters News Service posted a Twitter message that said, “Suddenly everyone loves 2nd Division soccer.” Evans was referring to the sudden interest from the American soccer public after the NASL and the USL had been dueling for control of the league. While Evans was being sarcastically humorous, he was also insightful.
The league controversy is gone for now with the 2010 season into its fourth month of play. Also gone are the many North American soccer fans who followed the saga last winter. But the importance of Division-2 pro soccer has not diminished. While many soccer fans may again be focusing on MLS or the upcoming European seasons, D-2 soccer is just as important if not more so than ever. It’s a critical piece of the soccer landscape in North America. While soccer purists will hardly watch MLS let alone a St. Louis – Minnesota Division-2 match, it’s vitally important to give players who are not in MLS a high level league in order to develop and grow their skills. Over 300 players are involved with and make a partial or full time living off of Division-2 pro soccer in North America and the Caribbean.
While US Soccer has taken this year to get better control of the teams involved with D-2 they are also looking at ways to better serve the league in the future. However, two teams have already had major stutters this season. Crystal Palace Baltimore’s co-coach and owner Pete Medd stepped down from his coaching position in mid-April to concentrate his efforts on off-the-field business. Medd was said to have been looking for cash for the money-strapped team who already found themselves in trouble as the season began. Medd was able to free up family money to temporarily alleviate the problem but sources have told IMS the club is still struggling.
At the same time Jeff Cooper’s AC St. Louis was said to have been in trouble. The organization eventually folded their WPS team, St. Louis Athletica and refocused their efforts on the men’s D-2 pro team. US Soccer used some of the team’s bonding money, money that each team must submit before the beginning of the season, to make several payrolls. It was revealed later that the Vaid brothers from London who Cooper had secured as primary investors in the club had not been making payments, causing the team’s financial hardship. Eventually Cooper was able to free the team from the Vaids. This has allowed him to free up personal money which he has now invested in the team to guarantee them safe passage at least to the end of the season.
Last year saw two teams fold after spending the 2009 season in the US second division of soccer. The Cleveland City Stars folded at the end of a 1-year experiment that saw them move from USL-2 (third division) to USL-1, (second division) that ended badly. The Minnesota Thunder, a team with a 20-year history and one of the longest running soccer teams in North America, also folded at the end of 2009 due to financial issues.
A look at the record of Division-2 pro soccer in North America shows thirty-nine teams have come and gone in the last 15 years. With the 12 current teams in the USSF D2 Pro League and adding a 13th team, the Seattle Sounders who where successful in the league before moving to MLS, the numbers total 52 teams that have played Division-2 pro soccer in North America since 1995. While all minor league sports have fairly large numbers of teams that come and go, that puts Division 2 soccer in North American at a 75% fail rate. A number that would be unacceptable in any sport or franchise system.
With teams coming and going at an alarming rate it’s no wonder scores of soccer fans throughout the US, Canada and the Caribbean see the league as amateurish. US Soccer has certainly seen these issues as well. Sunil Gulati has said this year would be a season where the Federation looks at the vetting process and would develop new standards to govern Division 2 league applicants to ensure the long term viability and sustainability of the leagues and teams.
“Yes, we’ve got some very specific targets in our regulations and we intend to put in more of those,” said Gulati in a January press conference. “Whether they apply to financial stability, what staffing levels look like, etc. To give you an example, our regulations have minimum standards on size of stadiums, a full-time operation for P.R. Director and CEO and so on and so forth. We think we need to put some more meat behind those in order to make sure that the teams that are part of a Division 2, or Division 1 for that matter, meet a certain standard and most importantly can meet that standard year in and year out and improve.
“We can’t have this constant issue that bedevils a number of sports, that the offseason is spent primarily to make sure that you can come back the following season. That you’re looking for expansion teams not because it makes long-term sense to build the game and the league, but because you need an expansion fee. We had that issue 25 years ago in our league, and we want to make sure that we’re able to avoid that so that expansion is done in a systematic way. U.S. Soccer is not going to be the one deciding that, but if people coming in the door want to be part of Division 2, they need to understand that this is a long-term play and that there are going to be some significant investments early on and aren’t counting on expansion proceeds in a year or two to reduce capital costs. The philosophy we’ve discussed with the leaders of these teams seems to be in line with that. People understand that for us the most important thing is stability, growth is right after that. But you can’t have growth without stability.”
So the question begs, how can we make D-2 pro soccer in North America successful? While suggestions are as plentiful as the teams that have come and gone, three basic concepts seem to be a common thread amongst those involved with the league:
1) A better vetting process
2) Running teams like small businesses instead of on future earning potential
3) Adding teams, regionalizing divisions and reducing travel costs
A better vetting process – a stabilized future.
Last winter, US Soccer President Sunil Gulati spoke to the issue of the federation attempting to get better control of the many teams that have come and gone in D2 soccer.
“There are going to be some challenges, I’m not going to make any bones about that. Our goal is that the people who are going to be investing in teams and leagues understand what those challenges are and are realistic about what it’s going to take to make it work financially. If we see projections from a team or an applicant that says ‘I understand I’m going to have some losses but in the second year I’m going to make money,’ we are going to look at that very rigorously and make sure that we challenge those assumptions. The absolutely critical notion is that we need investors who understand that this is a long-term investment, a long-term business model. And what we’re seeing from the teams that are involved is that they understand that. We’re going to take some actions that are going to guarantee that we don’t have some of the issues we’ve had in the past. Raising the bar early helps us do that.”
Brian Remedi is the Chief Administrative Officer with the United States Soccer Federation (USSF). He works under Dan Flynn who is the CEO/Secretary General of the Federation. Flynn is also the chair of U.S. Soccer’s Professional League Task Force which also includes USSF board members Carlos Cordeiro and Mike Edwards. Through the work of that task force Remedi has been meeting with existing teams around the league.
“We are doing something that the Federation has never done in great detail before,” said Remedi in a May interview with IMS when he met with the NSC Stars, Minnesota’s new D2 team. “We are getting out and looking at the teams in Division 2. In years past we left it up to the league administrators to ensure their clubs were meeting minimum standards and that games were run appropriately. Because we are running the league now we want to get out and make the house calls.”
“We are also looking under the hood from a marketing perspective, from a financial perspective, even from a ticketing perspective. Our goal is to ensure these teams are viable for the long term.
“It’s in our interest to make sure that there are division 2 markets that are going to be sustainable over the long haul. Not a short term 1-year or 2-year thing. We want these markets to be sustainable for long periods of time. So we are collecting information on the team and from the team and we will give some thought to that data and will be writing reports and giving it to our professional league task force who ultimately will make a recommendation to our board of directors. We assume that there will be at least one, two, possibly more entities applying for sanctioning for next year and we believe that the teams that will be part of that league will come out of the 12 teams that are in the USSF D-2 Pro League this year.
The USSF has called a meeting for the second week in August and have invited all teams currently involved with the USSF D2 Pro League. At that time, US Soccer will release their new standards that all current or future D2 teams will have to comply with. Expect the federation to require the future sanctioning league to require a more costly bond for each and every team involved with the league. It’s also said that they will have higher standards for stadiums and a more stringent litmus test for teams that want to join the USSF second division of soccer.
Tomorrow Part II – Running teams like small businesses instead of on future earning potential. Click here for Part 2.