The Future of Lower Division Soccer in America: Part 2 — NISA
Hello again. If you enjoyed my last post and delve into the proposed division 3 league NISA, *and* you are a ridiculous soccer nerd, then read on.
Here is a link to the previous piece in case you haven’t read it — https://medium.com/@AndrewBresee/the-future-of-lower-division-soccer-in-america-part-1-4307499b8495
If you were here looking for a coherent narrative, I apologize in advance. As I mentioned previously, I will try to substantiate many of my facts and you can find where I get most of my info at the end of each piece. Just a reminder, my ramblings and musings are just such, ramblings and musings. And speculation. Don’t forget rampant speculation.
Pro/rel is a really sexy subject. However it is a subject that is complex and deserves way more time that I am able to devote to it. So while this piece and other pieces surrounding it will touch and even take shallow dives into pro/rel, this is not intended to scratch even the surface of the issue. For more substantial conversations on pro/rel, check the links at the end including Peter Wilt’s Pro/Rel Manifesto and the interviews with Neil Morris (footnote 11) and Howler (footnote 12).
Here’s a question: what happens if NISA doesn’t launch in 2018. It is tough to get a league and teams together incredibly quickly. This is a short lead up for the 2018 season. It wouldn’t surprise me if they were forced to delay until 2019.
Let’s get nerdy
During the interviews that Peter Wilt has given since NISA was announced, he has left us with some tantalizing tidbits and arguments to flesh out. Let’s tackle some of those here. #PrepareYoSelfs
Wilt has stated the desire for at least 8 teams in 2018, which would be consistent with the D3 guidelines set forth by US Soccer. These guidelines include a minimum of 8 teams with 1,000+ seat stadiums, and each team with a controlling owner (more than 35% ownership of team) with a net worth of 10+ million.
The proposed long-term league structure, once fully populated at 24 teams, will include two conferences of 12 teams, east and west, with two divisions of 6 teams per conference. Teams would play their division opponents, who would hopefully be geographically situated so that travel is minimized, four times each, two home and two away. The remaining 6 teams in the conference would be scheduled one home and one away game.
-5 divisional opponents x 4 games = 20 games
-6 conference opponents x 2 games = 12 games.
Total games — 32
The other conference will do the same, and at the end of the season, just like American sports tradition dictates, there will be playoffs. These playoffs will culminate in a championship game between the two conferences à la the old major league baseball AL vs NL format prior to interleague play. The added intrigue of playing a team in the championship, that is not on your normal schedule, could be really fun for fans
Regionalizing competition keeps travel costs down and should cultivate regional rivalries which contribute to team stability, growth, and long term success.
Regional rivalries >>> travel costs
What does they mean? Exactly what it says. Regional rivalries are greater than, or more key to the success of soccer teams, than even travel costs. Travel costs are the known killer of lower division soccer teams. Why? The costs really add up, especially at the amateur level. Why the amateur level specifically? Because they can often be the largest costs and have the largest amount of variance in the budget.
How does a league cultivate regional rivalries? Through scheduling and cultivation of geographic pockets of teams.
Anecdotally, when speaking to fans of lower division soccer in Chattanooga, they often state two reasons for coming back. One is the gameday atmosphere. It’s just a really fun time that is unique. Flags waving, drums beating, chance being sung, and a hopefully a good soccer game on the field. The second is connection to the team. People feel like CFC truly represents them. They feel the connection between team and fans and want to cultivate that. Chattanooga — up! Knoxville, Atlanta, Nashville, Memphis, Birmingham, etc — down.
Regional rivalries + community connection = success
Ultimately what it comes down to…[is that] these teams are manifestations of their city, their town, their market, their community. If they get that, if they build these teams from the bottom up, they will be successful. -Peter Wilt (footnote 3)
Wilt contends NISA teams will have budgets between 1.5 and 3 million and that a “bad travel schedule” could add between 40–90k to a team’s travel budget, which is only 2–6 percent of the total budget.
Let’s play with some numbers. The Bureau of Transportation Statistics allows us to find all sorts of information, which is awesome and let’s us know average flight costs from a myriad of destinations.
Geographical matchups should have everyone in your division (outside of the first couple of years) within bussing distance. NPSL and PDL teams do this every summer and make it work. Some hotels would be needed on trips but the real interesting travel situation is when teams have to fly. The average domestic round trip flight costs ~$350 in 2017 (Bureau of Transportation Statistics).
Imagine a team travels with 23 players and 5 coaches and staff. It is worth mentioning you could also cut that back to around 18 or 19 players and 3–4 coaches and staff, if you were pinching pennies.
Some numbers based on 28 person trip
-Flight — 28 x 350 = 9,800.
-Hotel — 14 x 180 x 2 = 5,040
-Food per diem — 28 x 60 x 2 = 3,360
Total — 18,200
-Bus — 3000
-Hotel — 14 x 180 x 2 = 5040
-Food per diem — 28 x 60 x 2 = 3,360
Total — 11,400
More realistically, I think teams would fly with a reduced roster of 18 players and 4 staff.
-Flight — 22 x 350 = 7,700
-Hotel — 11 x 180 x 2 = 3,960
-Food per diem — 22 x 2 x 60 = 2640
Total — 14,300
A bus can realistically travel around 500 miles per day depending on traffic (9 hours driving at 55 mpg) and therefore can only get you so far. When looking at a full roster, you can see it likely costs 3x more to book a flight vs charter a bus. However once you reduce the size of the roster that travels and include a food per diem and hotels you realize that it’s not *that* much different to fly. Pretty crazy. A season long sample travel budget could look something like the following:
Assumptions to make it easy**
-all trips require a hotel for two nights
-60 dollar per diem for meals per person (2017 TN numbers)
-bus trips include 23 players plus 5 staff
-plane trips include 18 players plus 4 staff
-16 home games — 0
-10 away games in division (bus) — 114,000
-6 away games in conference (plane) — 85,800
Total — ~$200k
**While I realize some games may be within bussing distance for a one day, up and back trip, or some plane trips might work with a red eye flight and cut down on hotels or food costs, these figures should give a fairly balanced look at bus vs air travel especially in the first few years while the league grows and travel is a bit more spread out. This is just a general snapshot for funsies.
Another interesting consideration for teams is roster costs. Amateur teams making the jump will not be accustomed to paying players, and new ownership groups will be looking at how much their roster will cost. Let’s look at some scenarios. American soccer historically has not provided massive paychecks for the athletes. The 2017 iteration of MLS has a player salary minimum of 53k with an average of 323k and a median of 135k. Thank you MLSPU for releasing these. Salary figures for USL are notoriously tough to find with reports varying widely. It is safe to assume many have part time jobs outside of their USL paychecks, just like the lower divisions in most other countries.
Unfortunately those MLS wage totals have only recently reached livable levels. Step down another rung, and you are looking at potentially lower wages. How can clubs be sustainable and maintain a roster of players to make the league competitive? That will be a key question.
Lower leagues around the world employ players who are not full time. Many players have jobs and play in the lower divisions on nights and weekends. These part-time players presumably enjoy the (small amounts of) money and chasing a dream, but do not rely solely on soccer’s wages to get them by. Many may not like to hear this, but I believe the reality of third division soccer means that there will be some (maybe a lot) of part-time players. Some of them may be roster fill-ins to help with injuries and practice numbers or some might be bench players. Some might even be starters, who knows? With projected team budgets between 1.5 and 3 million dollars, paying a “living wage” to all players become difficult. Plus cost of living can vary tremendously from place to place.
Let’s imagine a roster of 23 players and five staff. I’m going to make up numbers here just for fun. Don’t @ me.
Non Front Office (FO) staff-
-Head coach — 60k
-Two assistant coaches — 40k x 2
-Full-time trainer — 60k
-Part-time trainer — 20k
Total — 220k
- 23 players at 40k per player.
Total — 920k
Players (920k) plus non FO staff (220k) = 1.14 mil
Yeesh. $1.14 mil. That’s a big salary budget for a team aiming for a total operating budget of around 1.5 mil per year.
Here’s a different take-
Non FO staff — 220k
-2 players in leadership roles — 50k x 2 [Coaches on the field, so to speak]
-12 players at 28k.
-8 young players with housing provided — 15k [plus housing costs for 2–4 players per apartment. Probably fresh out of school and willing to hustle. Might need additional jobs during week.]
-5 part-time players average of 5000 per year. [These would be practice squad players or trialists who would be paid a small training compensation and a roster bonus anytime they made the game day roster.]
Total — 581k
Players (581k) plus non FO staff (220k) = ~800k (plus housing costs for young players or trialists)
Nipun Chopra speculated in his Soc Takes article about DIII (see footnotes) that salary budget would range between 200k and 400k, fwiw. 200k/23 is ~8.7k and 400k/23 is ~17.4k. An NPSL style payment structure with young players, housing provided, and side jobs could keep that number low. I struggle to imagine how anyone could truly make the 200k number work though.
However you slice it, payroll is still going to be a significant amount of money. This is professional sports and it costs money. Adding 2 or 3 loanees through partnerships with other clubs could reduce salary and add depth.
This is division 3 and teams are going to have to be creative to make ends meet. Partnerships with sponsors who could provide jobs would be another way to reduce payroll. Players could work some shifts during the season and full time in the off-season in order to provide additional income and get those salaries closer to “living wages.” Add 15k in outside pay to that projected 28k salary and you get to a more manageable 43k, for example. Another example: partnerships with soccer camps where players can coach and make money on the side would allow for additional income.
You also might be thinking, “hey Andrew, I don’t see any tax numbers or medical insurance or disability insurance or any of the gajillion (scientific term) other things that employers have to pay for.” You are correct. For simplicity I’m not going to try to calculate tax rates, insurance costs, etc but suffice it to say that there are significant additional payroll costs I haven’t included.
More hypothetical financial scenarios
We’ve looked at some costs, now let’s take a peek at potential revenues at both the pro and amateur levels.
The amateur team looking to go pro
For this scenario let’s make some assumptions. Imagine a smaller market which averages 4k fans and plays 6 home during the regular season and an average of 4 additional home games per year between US Open Cup, friendlies, and playoffs for a total of 10 home games per season.
Let’s pretend ticket prices are currently $10 with an average of $7 actually received per ticket. Season tickets, corporate sponsorship, multi-game flex packs, kids under 5, group rates, advance purchase discounts, etc. all bring the actual dollars received per ticket down a bit from the sticker price of $10. This gives us ticketing revenue of 280k.
Let’s assume merch currently sits at $150k per year with a 10 game schedule. You might be thinking, “holy crap, dude!! $150k is a lot of money.” Yes it is, voice of public opinion, but I think it is realistic. Imagine that you sell scarves and shirts for an average of $25 apiece, and jerseys are roughly $50–75, with smaller items that are $10–15. To make it easy, imagine you need to make 6k total transactions over the length of the season at $25 per transaction. That is a lot of scarves, t-shirts, soccer balls, keychains, stickers, koozies, and other things. However, you have 4k people at every game. Having around 6k total transactions over the length of a 10 game season doesn’t seem unrealistic and $25 total per transaction does not feel unrealistic either, given the pricing laid out above.
Dennis Crowley published Stockade FC’s numbers online and they are a fascinating deep dive into running a soccer team. Granted it’s just one team and Stockade FC’s branding is *phenomenal* (and way above average) so YMMV but I think they are worth considering. Check the links at the end.
When running the numbers, Stockade’s merch revenue totals don’t perfectly match my assumptions of $3.75 per fan per match, $25 per purchase, and 15% of fans who buy, but they are close at $3, $28, and 10%, respectively. The $28 per purchase is right on the money, and the revenue per fan is close. The percentage of fans who purchase is lower in Stockade’s real world scenario. Stockade FC doesn’t sell jerseys as season tickets, as far as I can tell. Chattanooga FC does, for example. Adding a season ticket option that includes a $50–75 merchandise purchase plus ticket revenue seems like a no brainer for clubs. Plus more people walking around in jerseys is good for your brand.
Combining two other line items, parking and concessions, and estimating around one dollar in total revenue per fan per game gives an extra $40k in this scenario. Five dollars to park, five dollars for a beer, etc. Some clubs will not have parking or concession revenue, but if possible, amateur teams will want at least a split of that revenue. The venue will have a big effect on that split. Every stream of revenue counts for the bottom line!
Sponsorship totals are tough to nail down. Stockade’s are not fully itemized, neither are Minneapolis City SC’s. Plus both of these clubs are pretty new clubs with relatively low attendances with regards to the 4k projected here making their totals inaccurate for this scenario, I believe.
Sponsorship dollars are based on eyeballs. Teams looking to go professional will likely have a few more years of experience, higher average attendances, and more established brands. All of these factors would lead to higher sponsorship totals.
For sponsorship estimates I went with 200k. In these scenarios of 4k average attendance, the eyeballs really add up. Peter Wilt indicated $800k was the sponsorship example at 3k fans per game in the pros. Divide that 800k by 20 games using an average attendance of 3k and you get ~13.5 in sponsorship revenue per fan per game. With theoretical revenue of 200k and 10 games divided by 4k fans and you get $5 per fan per game. Which reals reasonable. Pro sports, soccer or not, run on sponsorships and ad revenue (TV deals).
Is five dollars per fan per game truly realistic? I’m really not sure, but it’s the number we are going with. As always, if you run a team I’d love to see your numbers, whether that info will be public or not.
For total budget let’s not worry about an itemized breakdown of the expense column and just assume that we need to meet the minimum threshold set forth by Peter Wilt at 1.5 million (1.5–3 million being average). This isn’t too far from what other sources have said anecdotally about running a pro soccer team.
Let’s put it all together now-
-150k — merch
- 200k — sponsorships
- 280k — tickets
-40k — parking
Total — 670k.
So this hypothetical amateur team has an operating budget of $670k per year. This is a little less than half of the minimum projected budget needed to go pro.
And now the fun part, let’s project out into a longer season and pro league.
Let’s assume season length doubles from 10 to 20. (16 reg season + 4 misc). Ticket prices rise to $15 from $10 and average paid per ticket becomes $11. Let’s say attendance stays the same at 4k average. Let’s assume merch increases by $50k because you have local businesses that now sell it and an expanded merch line. Let’s assume sponsorship increases by going pro, hiring professional marketing and sales executives, doubling season length, and aggressively pursuing marketing and sponsorships. Let’s assume we add double the original 200k making 400k (longer season) and add another 100k (pr0 bump) making it 450k total sponsorship dollars.
-4k x 20 games x $11 = 800k in tix.
-500k in sponsorship
-240k in merch/parking/concessions
Total — 1.54 mil.
Is this math perfect? Of course not. However I believe this is a realistic scenario that you could see play out. A lot of assumptions here, but I guess that is the fun part.
This was for a small to medium market in my mind. Such as a Chattanooga or Omaha. Let’s imagine a large market like Detroit (or perhaps even New Orleans).
Let’s keep ticket prices the same but let’s assume that professional soccer is a larger draw in a larger market so let’s bump attendances to 6k per game (I know Nola’s current NPSL stadium only seats 5k, don’t @ me). Let’s imagine merch doubles with the improvements mentioned in the prior scenario and with 50% more attendance. So 300k. Add 50% more to parking and concessions and you get 60k. Let’s also assume that sponsorships are more plentiful and easier to obtain with higher attendances and a larger market. Let’s bump those from the 500k we projected in the previous scenario to 900k. Yes it’s a big jump. *shrug emoji*
-6k tickets at $11 cash collected x 20 games = 1.32 mil
-900k in sponsorships
-300k in merch
-60k in parking/concessions
Total — 2.58 mil.
That’s a bigger budget and towards the top of the projected 1.5–3 million budget range.
Obviously this is over simplistic. You could leave ticket prices lower and increase merchandise or sponsorship revenue. Or whatever. I love numbers but I’ll spare you 17 other scenarios.
Links between divisions
Wilt has stated a desire to have several key links between divisions 2, 3, and 4 in the future. Commercially with shared broadcast deals and joint marketing and competitively with a cup competition between leagues, a player combine, and eventually the holy grail of pro/rel.
A strong and sizeable league office will be incredibly important. NISA’s league office will look to provide access to experts in branding, marketing, capital raising, club services, soccer ops, and ticket sales and direct access to Club 9 Sports, a consultancy which specializes in launching professional soccer teams. And of course Peter Wilt, arguably the greatest mind in American soccer.
NISA’s league office will also provide a safety net. USL and MLS take too much control away from owners, in my opinion. Buying a franchise is not the same as owning and cultivating your own brand. Freedom vs stability has been largely the choice between the NASL and USL until now. NISA must learn from the shortfalls of the NASL. Freedom to operate and own one’s brand, while also having mechanisms that guarantee stability. What is happening currently in Fort Lauderdale is unacceptable and demonstrates one of the pitfalls of the NASL model.
What kind of safety net can NISA offer and will it be sufficient? This could make or break the league.
Unlike MLS and USL, and similar to the NASL model, team owners would own shares in the league and run its governance. This means owners and teams have more freedom and more control. The “Board of Directors” would be comprised of team owners. This is both high risk and high reward. For ownership groups who want control, this is as good as it gets.
Vetting of teams and minimum standards
When we say vetting, what exactly do we mean? A league needs to find the owners, clubs, and markets that are best suited for this league. Whether it is Midland-Odessa in the NPSL title game in 2017, Rayo OKC, Fort Lauderdale Strikers, Atlanta Silverbacks, et all in the NASL, or Chivas USA in MLS, the need for proper vetting is apparent.
So let’s talk about some minimum league standards. Peter Wilt has mentioned four main categories included in the vetting process: venue, owner net worth, business plan, and community connection. Note market size is absent. Wilt states ownership, venue, and management are all more important than market size. Markets will likely be top 100 MSAs with populations of 500k plus.
As diehard soccer fans, we like we spend most of our time thinking about the product on the field. However the product on the field is only a small part of the overall game day experience. The venue in which the soccer is played is a huge part of success and failure. What concessions are offered? How are the lines? Are there adequate bathrooms? Are there at least 1k seats? Is the price of admission high? Is the stadium half empty? Are the fans engaged? Are there drums and singing from supporters? Are the sight-lines good? Can you see what is happening? Are the prices of concessions reasonable? Do kids have fun? Do adults have fun? And that’s just fan experience. What about from the team sustainability viewpoint? Can alcohol be sold? Does the venue allow vendor choice or are there vendor exclusivity contracts? How is parking revenue distributed? How is the concession revenue divided? How many tickets can be sold per game? Can merchandise be sold effectively? Is this experience more than just acceptable, but hopefully optimal? These are not trivial questions. Teams need their venues to provide both revenue and a great fan experience. On the field play is only the beginning of that experience.
This category is fairly self-explanatory. USSF guidelines require that there be an owner with at least a 35 percent stake in the club with a net worth of greater than $10 million excluding their personal residence. Ideally that owner would also be committed to investment in the team and its future success and not just a paper giant. In lower leagues like the NPSL and PDL, relatively low net worth individuals can own and operate soccer clubs. This low barrier to entry is great for the overall growth of grassroots soccer in America but it also means teams can cease to exist fairly easily. In a professional league with millions instead of thousands on the line, extra stability and commitment are required.
This heading is a bit murkier. What does Wilt mean exactly when he says “business plan?” I’m not sure about every detail, but my guess is he refers to the goals and ambitions of the ownership group and club. This is one of the reasons that many (reportedly around half) of the projected NISA participants are currently operating amateur teams. Why? Because if you are running a soccer team you have some experience and if you have an established brand, you’re likely to want to continue to build it. NPSL clubs like Grand Rapids, Tulsa, Chattanooga, and Detroit are likely to exist with or without NISA. If they choose to make the move to full season professional soccer, it is hopefully a calculated step forward and not a whim. Peter Wilt has launched or helped launch around a dozen professional soccer teams and leagues. This means he has experience and a blueprint for successful soccer teams. When he and NISA look at a proposed business plan, they will be looking for sustainability, commitment, and fit for the league. Teams and owners should not be able to just fake it. Or at least that’s the goal, right?
A successful club needs not only butts in seats but also committed supporters. Wilt says “it takes a village”. He was referring to the community that surrounds a club. There are never enough marketing dollars to go around nor time in the day to accomplish everything. These clubs will not be running with bloated front office staffs. They will likely be on a shoestring budget. When a club has buy-in from its community, its chances for success are raised. Are people bringing their friends? Do they show up early and stay late? Do they follow the team to away games? Grassroots marketing. Gameday experience — drums, banners, and flags. This connection cannot be bought and cannot be faked. It must be cultivated and maintained. This is why regional rivalries are so important. Cultivate regional rivalries and you will receive added buy-in from fans. Every club’s connection to their community is unique. Chattanooga, Detroit, Grand Rapids, Des Moines, Kingston, Asheville, Tulsa, whoever. One thing is for sure, you cannot fake it. NISA, Wilt, and their vetting group will be searching for these unique connections.
There are two questions that we, as American soccer fans, should be asking. One, what is the primary goal of a division 3 league? And two, what differentiates NISA from USL D3? In my opinion, a third division league should provide a conduit through which a successful grassroots club can transition into becoming a stable and successful professional team. It should also function as an incubator for creating thriving soccer cities across America, through local clubs. Stories like Sacramento and Cincinnati are nice, but American soccer also needs the Tampa Bay Rowdies, Richmond Kickers, Indy Eleven, Detroit City, Chattanooga FC, and clubs like the Des Moines Menace to truly move the sport along.
As far as NISA goes, club freedom is NISA’s biggest strength. We all know of USL’s strong operating structure that has proven itself to be a sustainable system for growth. Yet its negatives include limiting the amount of organizational freedom its members possess. The tradeoffs for more freedom might include more instability, if NASL’s woes are of any guide. Perhaps NISA will be able to find its niche as a sustainable division 3 league as opposed to shooting for the moon without any long term plans for what to do on arrival.
American soccer is a constantly evolving landscape. A decade ago the idea of a soccer team drawing 5k+ fans in Chattanooga was laughable. We need a framework for growth in division 3 for future Chattanoogas (and maybe Chattanooga itself). Can NISA provide that? Only time will tell.
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Links, sources, and additional reading
1 — NISA debut article with Peter Wilt
2 — Peter Wilt interview
3 — Peter Wilt interview
4 — Peter Wilt interview
5 — Dennis Crowley and Stockade FC
6 — Dennis Crowley and Stockade FC
7 — Dennis Crowley and Stockade FC
8 — Peter Wilt’s “Pro/Rel Manifesto”
10 — SF Deltas Attendance (and more)
11 — Peter Wilt interview
14 — USSF pro soccer guidelines
15 — Air travel data
16 — Air travel data
18 — Interesting sports travel reading
19 — Interesting sports travel reading
20 — Interesting sports travel reading
21 — Interesting sports travel reading
22 — MLS salary numbers
24 — MLS salary numbers
25 — Minneapolis City SC 2017
26 — Soc Takes DIII article