A United Soccer League official said the organization is moving up to Division II, which will create additional revenue opportunities for the league and for its clubs, including Louisville City FC.
U.S. Soccer, the sport’s top governing body in the United States, recently granted the USL provisional Division II status, up from third division last year. That means the USL this year will play directly below Major League Soccer.
Several USL clubs, including LouCity, told IL that it was too soon to gauge the upgrade’s financial impact, though Patrick Barry, president of Saint Louis FC, says that he believes the Division II status will open more revenue opportunities, at least in the long run.
Once the club’s multiyear advertising and sponsoring contracts run out, for example, Barry said the club might be in a better negotiating position to upgrade any new contracts.
And that’s exactly how the USL envisions one of the benefits of obtaining Division II status, according to Lenny Santiago, the league’s vice president for marketing and communications.
“Division II has a real tangible impact,” he said.
Obtaining the upgrade validates many teams’ efforts and investments, which have reached about $100 million in the last couple of years, Santiago said.
The new status will confer upon the league reputational benefits and interest from more fans — but also from more sponsors and advertisers.
The league has not provided any financial estimates of the impact of reaching Division II, Santiago said, but as public awareness rises and sponsors and advertisers compete for spots on stadium screens, naming rights for stadiums and logos on team uniforms, teams should be able to leverage the greater interest for more dollars.
Clubs also could generate revenue by selling broadcasting rights in their local markets. The USL has a partnership with Vista Worldlink to produce and package all USL games for national broadcasts, and Santiago said the league hopes to expand its national broadcasting relationship with ESPN. But clubs like LouCity are free to create relationships with broadcasters in their markets to generate more dollars.
“There’s certainly opportunity,” Santiago said.
The stadium question
For LouCity, this year, its third in the league, is shaping up to be a pivotal year. Club leaders have identified the need for a soccer-specific stadium as their primary goal this year. The club hopes to build a $25 million venue in Louisville, but hasn’t ruled out moving to Southern Indiana, depending on how the finances work out. Chairman John Neace has said that the local owners plan to raise millions of private dollars toward construction, but likely will need some public support to make the stadium a reality.
While Louisville Mayor Greg Fischer has said that the bulk of the stadium construction has to be paid with private dollars, he is generally supportive of the club’s efforts. The city last year spent $75,000 on a feasibility study to identify possible locations and financing options for a stadium. Some metro council members have told IL that they’re open to helping the club build a stadium.
While the city said in an FAQ that the city needs a soccer-specific stadium by 2020 for LouCity to retain its license, Santiago said that the USL’s demands on clubs are less stringent than that.
The league has said that a “critical part of our strategic growth plan is to have all USL clubs as owners or primary tenants of soccer-specific stadiums by 2020.”
As of now, about half the clubs would fail the standard. Of 29 current teams, only five own, or partially own, the stadium in which they’re playing. About half of the venues are owned by cities or universities.
In about half of the stadiums, the soccer teams could be considered the primary tenant, which means that about half the clubs would not qualify under that standard either, because, like LouCity, they’re playing in a baseball stadium, or, like Ottawa Fury FC, they’re playing in a Canadian Football venue.
Santiago said the league’s Vision 2020 identifies “a goal” and that teams would not lose their franchise in 2020 so long as they were working towards playing in a soccer-specific stadium as the primary tenant.
Benefits of ownership
Even without a hard requirement for a stadium, LouCity officials have said that without their own stadium, they are unlikely to be able to generate a profit because they’re losing opportunities for stadium naming rights, advertising and concessions. LouCity is playing at Slugger Field, home of the Louisville Bats baseball team, which has a long-term lease on the city-owned venue. The soccer club is paying the baseball team $5,000 per home game and is incurring costs to convert the baseball field into a soccer field. And all the concession sales benefit the Bats.
Representatives of USL clubs that own their stadiums told IL that ownership confers critical revenue streams without which they would struggle to operate the clubs profitably.
The Charleston Battery have owned their stadium since 1999. The stadium seats 5,000, and the team has averaged about 4,000 spectators in the last few years, said Andrew Bell, the team’s president. LouCity, on average, draws more than 7,000.
Bell said he believes that the Division II status and continued investments the team has made, including a 3,000-square-foot video board and a mobile app, will continue to push attendance toward capacity.
“We feel very bullish about it,” Bell said.
The club uses the stadium as much as possible and hosts sporting events, including professional, college, high school and youth soccer. It also hosts music festivals and charitable events.
“Really, the stadium is a hub for the community,” Bell said.
While he would not comment on whether the club is profitable, he said the club’s longevity should give people an indication of its fiscal health.
All of the events the club hosts generate revenue, and the Medical University of South Carolina is paying the club $185,000 per year for the stadium’s naming rights, according to The Post and Courier of Charleston. That kind of cash infusion would cut a significant chunk of the Louisville club’s loss, which was more than $1 million last year.
Barry, the president of Saint Louis FC, said the club’s nonprofit parent, which began as a youth soccer club, is profitable, in large part because it owns its soccer venue, Marshall Wireless Stadium.
The organization has rehabbed and improved the venue, built in 1983, several times, pumping in about $4 million since 2011, Barry said. The pro club has existed since 2014. The stadium’s capacity, 5,280, can be expanded to 6,000, and average attendance has hovered around 5,000.
“From our point of view it (stadium ownership) is critical,” Barry said.
Beyond tickets and concessions, the club also generates revenue from parking, for example.
“Everything is enhanced and improved if you own your own facility,” Barry said.
Building a stadium
Santiago, the league official, pointed to Edinburg, Texas, as an example of teams continuing to invest in USL soccer infrastructure.
Rio Grande Valley FC, which will play its second year in the USL this year, is constructing a $16.8 million soccer stadium with 9,400 seats. The team is owned by the RGV Vipers basketball team.
Club President Bert Garcia and Edinburg Mayor Richard Garcia could not be reached, but Agustin Garcia, executive director of the Edinburg Economic Development Corp, said the stadium, which is scheduled to be completed in March, is funded completely by private dollars.
The new stadium is next to a city park, and replaced a defunct water park that had been out of business for years. Concrete slabs, left over from the water park, had become an eyesore.
“Now we have a really nice park there,” Garcia said.
The club said in a press release that the stadium, called H-E-B Park, will include “a full-service restaurant and concessions, a park with a playground, an amphitheater with a capacity for 2,000 individuals, practice fields, executive lounges, a sports bar, and 33 suites.”
While Edinburg has a population of only about 80,000, Garcia said the Rio Grande Valley, which borders Mexico, has about 850,000 inhabitants, plus another 1.2 million just across the border.
Soccer is the most popular sport in the valley — and in Mexico, he said, and the club, which is affiliated with MLS club Houston Dynamo, already has attracted quite a following.
RGVFC also has hosted youth tournaments including one 10 weeks ago with more than 100 teams, bringing in thousands of players, staff, parents and fans, giving the city a nice revenue boost from sports tourism.
“It was noticed by the community that the restaurants were full,” Garcia said.
Once completed, club officials plan to host festivals, concerts, high school and college tournaments, professional teams from Mexico and eventually, World Cup qualifiers of the U.S. national team.