National Sports Center Officially Announce They’re Looking for Investors for Stars Soccer Team
The NSC Minnesota Stars announced on Monday they are officially looking for investors for their Division-2 soccer team.
Last winter the NSC non-profit organization spoke of the concept of partnering with other investors. At the time, the NSC announced they believed they were capable of running the team without investors but could do a better job with investors. The short 90 day time span from the announcement that NSC would field a team until opening day didn’t give the organization enough time to properly investigate if a non-profit could partner with investors.
Several weeks ago Paul Erickson, Executive Director of the state run Minnesota Amateur Sports Commission and who oversees the NSC and the Stars soccer team stated that the NSC had held meetings with legal counsel and had decided to move forward with the concept. This was before the USSF placed the new D2 standards on August 9th. The NSC has several advantages over other teams in division 2 soccer in that they own their own stadium and that stadium that was upgraded two years ago and freshened up again this season, is paid for.
The NSC Stars also share staff with the other programs that the non-profit runs, therefore saving money again. At one point this season Stars General Manager and NSC Chief Administrative Officer Kris Bjerkness told IMS that the team only needed to draw 2500 fans per game to break even. However, the Stars hired a ticket sales person Rich Zellmer last spring. After poor gate sales most of the season, the NSC released him a month ago.
Lack of capital and incoming revenue has not allowed the organization to market the team properly and the result has been a dismal attendance figure of around 1,400 per game. The lack of revenue has caused the NSC to step back and see the need for others to help them achieve a goal of 2500 to 3500 fans a game. A very realistic number for a metropolitan area the size of the Twin Cities and historically possible with the numbers the Minnesota Thunder drew the last ten years.
While the NSC has struggled at the gate and have had poor revenue streams, including lower than expected sponsorship support, the USSF has created new tough standards. These difficult standards are meant to better vet teams to combat the 75% fail rate division-2 soccer has seen over the last 15 years.
What the new standards will mean for the Stars is a majority partner of 35% will need to be found who is worth more than $20 million. A more remote possibility is a number of partners are found and that the NSC applies to USSF for a waiver. The principle idea of USSF being that teams need to withstand losses for a number of years with cash calls and assets liquid enough to satisfy those unexpected needs.
The NSC will also need to come up with a letter of credit in the amount of $750,000 with the joint beneficiaries being the Federation and the sanctioning league 90 days prior to the start of the season, which is the middle of January of 2011.
At the current time the NSC does not fit the criteria for the USSF standards. It’s expected that the USSF would not allow a waiver unless an investor steps in and works out a partnership with the non-profit.
Here is the NSC’s press release in its entirety:
BLAINE, Minn. (August 16, 2010) – Last week the United States Soccer Federation, USSF, released new higher standards for Division 2 professional soccer teams playing in a USSF-sanctioned league in 2011. The National Sports Center (NSC), owners of the NSC Minnesota Stars, view is this is a positive development for pro soccer in North America.
“We welcome and support the efforts by USSF to upgrade the standards for pro soccer” said Kris Bjerkness, the Stars General Manager. “The new standards will necessitate that we find a partner organization or individual in order for the Stars to qualify under the new higher standards. As we stated early on, we are open and pursuing creative public/private ownership model going forward and we look forward to the opportunity”.
“The NSC had many motivations in starting the Stars pro team,” said Paul Erickson, Executive Director. “But one of our primary reasons was to preserve the long and proud history of Professional soccer in Minnesota at the highest level possible.”
“Ownership of a team based at the NSC is a unique opportunity,” continued Erickson. “The facility boasts one of the best, accessible, soccer specific stadiums in the country, at the largest amateur sports campus in the world, with year-round training facilities for player development. We are proud of what we have accomplished in the past seven months and look forward to the opportunity to continue pro soccer in Minnesota.”
For more information on a partnership please contact Stars GM Kris Bjerkness.