Turf Wars: Taking the Game Back

When people love something, investors will inevitably find a way to exploit it for financial gain. Soccer[1] has proved no exception. The rise of worldwide soccer broadcasting has attracted a new wave of deep-pocketed investors.[2] Of course, billionaire owners bring money to buy the best players in the world. However, the new influx of money into the beautiful game has not come without a price. The goals of deep-pocketed owners often acutely diverge from the goals of fans. The fans want trophies, long-term commitment and a team that makes them proud.[3] The new wave of football owner generally wants one thing: financial return-on-investment (ROI).[4]

ROI-obsessed owners that view teams as assets often make big gambles, at times leading their team to bankruptcy and chaos.[5] Single-minded ROI investors have even ventured into second-tier European leagues, where some investors buy low with the hope of cashing out if their team earns promotion to a first-tier league.[6] This short-term mindset has led to tension between fans and owners boiling over to the point of no return.[7]

The growing commodification of soccer threatens to topple a sporting culture built-up over a century in Europe; domestically, it threatens to choke out the seedling of soccer culture in America before it ever reaches full bloom. When an owner plants a team without laying down roots in the community, the team often dries out. When an owner uproots a team at a moment’s notice, it’s the fans that are left to reap the emptiness of what has been unsewn. Empty stadiums, abandoned dreams. But what if things could be different for downtrodden American soccer fans? What if the fans could actually reap what they sow by owning their own professional soccer teams? Imagine that.

This paper will explore fan ownership as a possible solution going forward to grow and sustain a thriving soccer culture in the U.S. It will start by briefly examining American soccer as it stands, then will present stabilizing factors for fan ownership, investigate possible models for implementation, and finally discuss potential drawbacks.

American Soccer Background

ROI-focused ownership can be especially debilitating when the owners lack the resources to sustain early bumps in the road, as has often been the case in American soccer ownership. The NASL, an earlier iteration of top-flight men’s soccer in America, shuttered after owners fell into extreme debt trying to keep up with the richest team in the league.[8] The United States Women’s National Team has dominated for the last several decades internationally, but domestic women’s professional leagues have typically sputtered out of the gate from lack of investment and poor business planning.[9] Attempting to capitalize on the 1999 USWNT World Cup win, the Women’s United Soccer Association lasted just three seasons after its founding in 2000.[10] Women’s Professional Soccer ran from 2007 to 2012.[11]

Major League Soccer has become more popular than ever and MLS franchises have largely maintained a sense of stability.[12] Atlanta United’s average attendance of over 50,000 fans points to the potential for thriving soccer communities in the U.S. However, the sport’s growth is limited if it can’t establish roots in the form of devoted fans beyond the 24 metro areas that currently make up MLS’s 26 teams. The sport needs a bridge league of some sort to water the curiosity of potential fans without a local MLS team. In American football, fans don’t just flock to NFL stadiums on Sunday; American fans also flood the stands of college football stadiums on Saturday. Similarly, American soccer fans need a local team to support where they can regularly attend and grow a community of devoted fans.

Unlike most European countries, American college sports are big business, so collegiate soccer could theoretically serve as the bridge to engage soccer fans in metro areas without an MLS team. However, while collegiate soccer has produced its fair share of talented players[13], particularly on the women’s side[14], it has not achieved widespread popularity and gets stuck behind other sports in university marketing and investment. Absent a thriving soccer culture at the collegiate level, lower division professional teams can help grow the sport in cities without a Major League Soccer team.

The United Soccer League, the organization operating the second and third tier leagues in America, has grown in popularity over time, thanked in part to national broadcasting deals.[15] Despite the leagues growth in viewership, teams in the USL struggle to find long-term stability, evidenced by the shuttering of two successful franchises in the league immediately following the 2020 season.[16][17]

Unsustainable spending can kill a team, but so too can significant under-spending. With no league pressure enforcing spending minimums, many owners in the USL simply don’t spend, leaving fans to watch ugly soccer performances from a hopeless team. Since few American soccer teams have planted the roots necessary to sustain fans amid an extremely dry spell, one bad owner can be disastrous for a club’s future. Locally, Tulsa Roughnecks fans suffered through several miserable seasons in the USL Championship before new ownership started investing in the team again.[18]

Oklahoma City soccer fans saw the destructive effect of dislocated and under-funded ownership combine to create true chaos.[19] In 2016, the bubbling chaos erupted when the American minority owner pulled half the turf off of Rayo OKC’s playing field in a bizarre attempt to protect his investment.[20] The turf incident with Rayo OKC perfectly encapsulates many of the problems in the American professional soccer landscape. The “Rayo” name came from the majority owners, Spanish team Rayo Vallecano, a brand that had no local name recognition or connection.[21] The foreign owners had no concern for the local community in Oklahoma, and the local owner cared nothing for soccer.

Potential Stabilizing Effects of Fan-owned Teams

A community-based ownership structure for American soccer promotes stability in several ways: (1) helps create a committed fan base (2) incentivizes prudent financial and team-building strategies, and it (3) alleviates threat of relocation.

Committed Fan base –

Germany’s first tier league, known as the Bundesliga, has required 50% public ownership of its teams since 1998. The Bundesliga owns the highest average attendance for soccer games in the world.[22] The Bundesliga’s example points to the significant upside of community ownership. The massive popularity in fantasy football leagues in the U.S. also speaks to the power of stakes in building fan engagement.[23] Compared to fantasy football, fan ownership of a soccer team increases the stakes ten-fold, and incentivizes a similar increase in loyalty from the fan-base.

Locally, Tulsa has a history of fans committing significant capital when they felt a deep connection to a soccer team. In November 1983, Roughnecks fans helped the team’s ownership make payroll by donating over $65,000 through a radio station fundraiser.[24] If Tulsa soccer fans were devoted enough to save a team that offered no ownership stake, that level of commitment would only go up if their investment provided influence in the team’s operations and a deeper sense of connection.

Fan ownership can also allow for more teams in more cities, because the local fans no longer have to wait on a rich benefactor to bankroll the club. If fan-owned teams field both a women and men’s side, they can potentially improve their outreach towards female soccer fans that may have felt alienated by a team with only a men’s side. More markets with more teams can help spur on rivalries akin to those in high school and college sports. Those rivalries can then spur on additional excitement and anticipation.

Prudent financial and team-building-

Fan-owned teams in the lower divisions of European soccer have tended to prioritize the long-term health of the club as an organization over immediate on-field success, because fans hope to support the team in perpetuity.[25] Fans of Scottish club Heart of Midlothian (known as “Hearts”) saw their Ukrainian businessman owner spend the team into debt only to later get busted for fraud with only a brief spell of on-field success to show for it.[26] Soon after the debacle, Hearts fans bought a significant stake in the team and as of late 2020 the fans agreed to buy the team outright.[27] As owners, Hearts fans believe the ability to control their own fate and invest locally more than makes up for any temporary downturns in on-the-field success.[28]

ROI-obsessed owners often rush into selling a brand to the community, such as the Rayo OKC fiasco mentioned earlier. Without the immediate pressure to turn a profit, fan-owned teams can take more time to build the brand awareness rather than putting together expensive marketing campaigns and buying the flashiest available players to sell jerseys. Instead of seeking to make a quick buck, fans can plan for a long-term relationship between the team and their city. A greater focus on the local community will also likely lead fan-owned teams to invest in diversity so as to field a team that reflects its local community.

In order to grow the team’s brand overtime, fan-owned teams may even consider starting with a youth team and growing into a professional club as the youth team ages up, similar to a new primary school growing with its inaugural class. Investment in the youth levels helps build a club’s brand because youth players and their parents build a tangible connection to the youth club which in turn helps create a greater connection to the professional leg of the club that can last a lifetime.[29] The families that have experience with the youth level of the club may end up buying into the club overall. Strong investment in a club’s youth levels can also help the team identify and develop strong talent from a young age without paying a premium for talent on the open market.

Alleviates Threat of Relocation

Crucially, communal ownership alleviates the ever-present threat of relocation by ROI-obsessed owners constantly on the prowl for a bigger market. In England, Wimbledon FC has become synonymous with the pain of relocation and the triumph of devoted soccer fans to overcome the unthinkable. In the early 2000s, a pop music producer led a successful campaign to relocate Wimbledon F.C. an hour and a half away from the area that had supported the team since 1889.[30] Rather than simply lament the move or rearrange their lives to drive an extra hour and a half to support their teams, a committed group of fans raised got organized and formed a trust to start a new local team called AFC Wimbledon.[31] The team raised the funds necessary for a new stadium on the same grounds as the old one, and vowed to never leave again.[32] Fan-ownership can help every team experience AFC Wimbledon’s pride without the heartbreak.

American soccer fans faced the specter of relocation in 2017 when Columbus Crew owner Anthony Precourt and MLS commissioner Don Garber threatened to relocate the franchise to Austin, Texas if the city did not provide a new stadium. Ultimately, a year-long fan campaign spurred on a lawsuit filed by Ohio’s Attorney General to stop the team from moving the club out of Columbus without additional notice[33]. The case was dropped but along with the #savethecrew campaign, it led to MLS and Precourt backing off on their threats and facilitated a sale to an owner committed to keeping the team local. Columbus Crew fans triumphed against the billionaires and the league, highlighting the importance of place in the relationship between fans and their team. Fan-ownership can further protect the integrity of a soccer team’s home base.

Some American professional sports leagues such as the NFL have regulated franchise relocation at the league level by requiring relocation fees paid to the league or relocation approval from the league.[34] League control over relocation can be a double-edged sword for fans however, as the financial goals of league officials and team owners stand in direct contrast with the hopes and dreams of local fans. Billionaire owners crying poor and holding cities hostage is a tried and true practice for American sports owners, but fan ownership can help soccer-loving communities heal from this manipulative cycle. The beauty of fan-ownership is that it all but ensures teams will stay put without using league regulation mechanisms that risk running afoul of anti-trust law.

Implementation

Buying In/Getting Started

FC Pingzau Saafelden, a third-tier Austrian soccer team, offers a streamlined investment model for fan-owned teams, using a crowdsourcing site similar to Gofundme or Indiegogo to raise funds.[35] For the equivalent of $500, anyone in the world can buy-in to Pingzau and gain some degree of influence in the team’s operations.[36] Unlike Pingzau, American fan-owned soccer teams should start with a local focus so they can keep the decision-makers local and build up a fan-base that can attend home games and start word-of-mouth marketing campaigns. Clubs could use similar strategies that teams use in selling commemorative bricks to raise stadium funds. The chicken-and-the-egg of the beginning stages of fan ownership is that a small group of super-committed fans would need to make an initial investment, recruit more fans to invest, and eventually organize elections and hire a day-to-day operations team.

Ownership Structure and Anti-Trust Issues

The only way to truly ensure that a league would be made up of fan-owned teams is to require it as part of teams’ acceptance into league membership. Requiring 100% fan ownership would likely scare away too many teams to successfully fulfill a league. Implementing a Bundesliga style 50+1 rule may be equally unlikely to succeed in a country as steeped in free market thought as the U.S. Still, requiring a smaller percentage of team ownership may still yield tremendous positive results for empowering fans and stabilizing teams. The Wycombe Wanderers of the U.K. serve as a good potential model in this regard.

In 2012, fans of the Wycombe Wanderers set-up a trust to takeover the club from an owner embroiled in legal controversy surrounding his finances.[37] After stabilizing the team during a successful seven-year stint, the fan trust sold off 75% of the ownership stake in October 2019, maintaining 25% of ownership of the team.[38] Under the new ownership structure, Wycombe climbed all the way into the second tier of English competition in 2020.[39] The Wycombe fan trust refers to their share in the club as the “supporter quarter.” The trust no longer controls the team, but fans still maintain influence in club decisions and own 100% of the club’s stadium.

So, requiring 25% or 33% ownership may work in theory, but would such a restriction work under the law? Implementing a “Wycombe” rule in an American professional soccer league could run into anti-trust issues as to whether such a rule represents an “unreasonable restraint of trade”.[40] Of course, a fan-owned league could follow Major League Soccer’s example in claiming a “single-entity” defense to avoid dealing with the Sherman Act. Since MLS was set-up by a single organization that “owned” all the teams, the league has semi-successfully maintained its legal status as a single-entity incapable of contracting or conspiring to create an unreasonable restraint on trade.[41] However, in the case of a league requiring partial fan ownership over teams, a single-entity structure would undermine the grassroots spirit behind the idea of fan ownership anyway, so the single-entity defense would likely not be a good option.

Without the single-entity defense to fall back on, a league requiring partial fan-ownership for its teams appears to constitute a contract that places a restraint on trade because it stops individual owners who might possess more capital from taking full control over a franchise.[42] However, similar to the court’s ruling regarding MLS in the Fraser case, it is unclear what relevant market a league requiring fan-ownership would really have any substantial control over, since other soccer leagues exist where teams non-compliant to the fan-ownership restraint could apply for membership.[43]

It is possible that a new league does not fully trust this paper’s analysis and does not want to run the risk that a court could end up finding a rule requiring partial fan ownership violates the Sherman Act. In that case, teams within any professional soccer league could adapt the principles of fan ownership on their own. While it may be difficult for fan ownership to grow momentum without a rule requiring partial fan ownership, all it takes is one team to start the movement and find success, and others will follow.

Municipality Ownership

Municipality ownership may be another option to implement community-based ownership. Local governments in the U.S. already invest in sports as a public good by committing millions of tax dollars towards massive, state-of-the-art high-school athletic complexes such as Tulsa Union’s 5,600 seat Multipurpose Activity Center.[44] At the collegiate level, most states already pump incredible amount of money from student fees and tax dollars towards college athletic programs of public universities.[45]

Many municipalities already commit tax-payer dollars towards building stadiums for private professional teams, even knowing that those teams may take their money and run, as they have many times before. Locally, the City of Tulsa owns the BOK Center.[46] What if instead of just owning a stadium, the city owned a team to play in it as well? Municipality-owned teams could serve to create a thriving community in the same way cities and counties put money towards local schools, local parks, local events and social programming.

Potential Drawbacks of Fan Ownership

The limited time of fans may hinder their ability to successfully fulfill their duties as owners. However, the diversified nature of communal ownership allows each individual fan to take time for other priorities when needed without letting the team down because other owners can step up when they are busy. Fans can also hire executives to run the day-to-day operations of the team, as seen in American football by the Green Bay Packers and in soccer by Hearts of the Scottish Premiership.

Limited capital will also likely become an issue with any fan-owned team at some point. Instead of competing for championships year-after-year, fan-owned teams will have to set reasonable goals based on the financial reality they face. Fans may even have to accept the fact that their team may at times get embarrassed on the field and that their team may never reach the heights of MLS. However, limitations often lead to innovation, and the limitations faced by each fan-owned team can allow for diverse team-building strategies for each club. Absent blank checks to buy players, local academy systems, scouting, and unconventional tactics become more important than ever for fan-owned teams hoping to compete.

De-centralizing ownership inevitably means more cooks in the kitchen. Additional voices can lead to innovation and strength, but will also inevitably lead to some heated moments between owners with divergent viewpoints. While some fan owners may be content planning for the long haul, some fan owners may be more impatient in nature. Parents lobbying for more playing time for their kids may also emerge as an issue at the youth and professional level, but could be dealt with through policies setting conflict-of-interest rules.

Conclusion

Like soccer itself, the future of fan-ownership in America faces many challenges, both legal and practical. However, the chance that fan-ownership will bear significant fruit in growing and sustaining America’s appetite for soccer outweighs any reasons not to give fan ownership a try. Yes, fan-ownership will likely start out chaotic. Yes, fan-ownership will likely result in some hardly watchable soccer at times. Yes, fan-ownership will take time to catch on. Yes, fan-ownership can go wrong in so many ways. At its best, though, fan ownership has the chance to challenge ROI-obsessed ownership because it empowers the people who love the beautiful game and the beautiful community it offers, not just the mounds of money that can be extracted from it.

[1] The rest of the world calls soccer “football”. However, to avoid confusion with American football and out of deference to local custom, this paper will use the word “soccer”.

[2] Ryan Murphy, Playing Fair in the Boardroom: An Examination of the Corporate Structure of European Football Clubs, 19 Mich. St. J. Int’l L. 409, 411 (2011)

[3] Michael Walker, Hearts and Wimbledon show fan ownership model can work, The Irish Times (Feb. 8, 2020) https://www.irishtimes.com/sport/soccer/english-soccer/michael-walker-hearts-and-wimbledon-show-that-fan-ownership-model-can-work-1.4164385

[4] Walker, Hearts

[5] Simon Stone and Dan Roan, Wigan Athletic: Administration is a ‘major global scandal’ says MP, BBC Sport (July 3, 2020) https://www.bbc.com/sport/football/53261368

[6] World Football Summit, Jordan Gardner: “American soccer needs major improvement to catch Europe”

(Oct. 14,2020) https://live.worldfootballsummit.com/jordan-gardner-us-soccer-needs-major-improvement-to-catch-europe

[7] BBC Sport, Swansea City Supporters Trust dispute selling shareholders’ claim, (Feb. 13, 2019) https://www.bbc.com/sport/football/47223722

[8] Diana C. Taylor, Aimed at the goal? The sustainability of Major League Soccer’s Structure, Willamette Sports Law Journal, 1, 3 (Fall 2011).

[9] Jaime Lowe, Why is U.S. Women’s Soccer Still Fighting to Exist?, The New York Times Magazine (June 5, 2015) https://www.nytimes.com/2015/06/05/magazine/why-is-us-womens-soccer-still-fighting-to-exist.html

[10] Brian Straus, Women’s Pro Soccer League Forced to Fold, Washington Post (Sep. 16, 2003) https://www.washingtonpost.com/archive/politics/2003/09/16/womens-pro-soccer-league-forced-to-fold/d3e974bd-62a9-4e41-ad11-ab524c2961e3/

[11] Dan Lauletta, 10 years after debut, WPS still has a complex legacy, The Equalizer (March 29, 2019) https://equalizersoccer.com/2019/03/29/wps-womens-professional-soccer-10-year-anniversary/

[12] Graham Ruthven, MLS to become bigger than baseball? Why the need for comparison?, The Guardian (Mar. 2020) https://www.theguardian.com/football/2020/mar/09/mls-to-become-bigger-than-baseball-why-the-need-for-comparison

[13] Such as Edmond, Oklahoma native, former University of Virginia star and current Orlando City SC star Daryl Dike.

[14] The entire World-cup winning 2019 US Women’s National team played at the collegiate level.

[15] Tim Sullivan, The pandemic isn’t the only reason for constant church facing the USL, Louisville Courier-Journal (Nov. 15, 2020) https://www.courier-journal.com/story/sports/2020/11/15/usl-soccer-leagues-rapid-growth-includes-casualties/6277525002/

[16] Duke Ritenhouse, Reno 1868 FC ceases operations after four seasons in USL, Reno Gazette Journal (Nov. 6, 2020) https://www.rgj.com/story/sports/2020/11/06/reno-1868-fc-ceases-operations-usl/6189678002/

[17] Brian Straus, USL’s Saint Louis FC to fold with MLS expansion club on the way, Sports Illustrated (Aug. 25, 2020) https://www.si.com/soccer/2020/08/25/saint-louis-fc-fold-usl-mls-expansion-st-louis-city

[18] Matt Trotter, Three Local Brothers New Owners of Tulsa Roughnecks, Public Radio Tulsa (Aug. 20, 2019) https://www.publicradiotulsa.org/post/three-local-brothers-new-owners-tulsa-roughnecks#stream/0

[19] Jeff Rueter, From Raul to ruin: the rise and fall of NASL, once MLS’s challenger, The Guardian (Nov. 10, 2017) https://www.theguardian.com/football/blog/2017/nov/10/from-raul-to-ruin-the-rise-and-fall-of-the-nasl-once-mlss-challenger

[20] Rueter, Raul.

[21] Rueter, Raul.

[22] Murphy, supra at 423.

[23] Marc Edelman, A Short Treatise on Fantasy Sports and Law: How America Regulates Its New National Pastime, 3 Harv. J. Sports & Ent. L. 1 (2012)

[24] J. Hutcherson, Tulsa’s Charity Case: The Story of the NASL’s Roughnecks, US National Team Soccer Players (accessed Dec. 1, 2020) https://ussoccerplayers.com/history/the-nasl/tulsas-charity-case

[25] Walker, Hearts.

[26] Walker, Hearts.

[27] Walker, Hearts.

[28] Walker, Hearts.

[29] Victoria Shelton, Developing Diehards: The Power of Marketing Sports to Children, Samford University (Dec. 15, 2017) https://www.samford.edu/sports-analytics/fans/2017/Developing-Diehards-The-Power-of-Marketing-Sports-to-Children

[30] Owen Blackhurst, Return to Plough Lane GIANT podcast, Spotify Studios (Jul. 10, 2019).

[31] Blackhurst, Plough Lane.

[32] Blackhurst, Plough Lane.

[33] Kristofer Guldner, Dollars and (Non)Sense: An Analysis of Team Relocation in Sports and How Cities Can Protect Themselves, 44 Seton Hall Legislative Journal 345 (2020).

[34] Ray Yasser, James R. McCurdy, C. Peter Goplerud, III, Maureen Weston, 9 Sports Law, League Decision Making: Relocation, 312–313 (2020).

[35] Wefunder, Invest in Fan Owned Club, (March 2020) https://wefunder.com/fan.owned.club

[36] James Nalton, FC Pinzgau Saafelden: Austria’s Fan-Owned Club Making Waves in the Mountains, Forbes (Aug. 26, 2020) https://www.forbes.com/sites/jamesnalton/2020/08/26/fc-pinzgau-saalfelden-austria-fan-owned-club-making-waves-in-the-mountains/?sh=7032d3d03a21

[37] BBC Sport, Wycombe Wanderers Trust complete club takeover, (June 30, 2012) https://www.bbc.com/sport/football/18657039

[38] Wycombe Wanderers Club News, It’s done! Rob Couhig completes majority share acquisition, (Feb. 21, 2020) https://www.wycombewanderers.co.uk/news/2020/february/its-done-rob-couhig-completes-majority-share-acquisition/

[39] Stephen Gray, The Biggest Little Club in the World: Why Wycombe Wanderers’ Promotion to the EFL Championship Is a Huge Deal, Urban Pitch (Jul. 22, 2020) https://urbanpitch.com/the-biggest-little-club-in-the-world-why-wycombe-wanderers-promotion-to-the-efl-championship-is-a-huge-deal/

[40] American Needle v. National Football League, 560 U.S. 183, 193 (2010).

[41] Fraser v. Major League Soccer, 284 F.3d 47, 71 (1st Cir. 2000).

[42] NCAA v. Board of Regents of the Univ. of Okla., 468 U.S. 85, 115 (1984).

[43] Fraser, 284 F.3d 47, 71 (2000).

[44] Stephen Pingry, High schools: 2004 opening of Union’s athletic facilities led way for investment in similar projects around area, Tulsa World (Oct. 22, 2015) https://tulsaworld.com/sports/high-schools-2004-opening-of-unions-athletic-facilities-led-way-for-investment-in-similar-projects/article_d287144d-e9d2-5c85-921c-3753ea1b6f49.html

[45] Brad Wolverton, Ben Hallman, Shane Shifflet, and Sandra Kamphati, The $10 Billion Sports Tab: How College Students Are Funding the Athletics Arms Race, The Chronicle of Higher Education, (Nov. 15, 2020) https://www.chronicle.com/article/the-10-billion-sports-tab/#id=table_2014

[46] Curtis Kilman, Who approves events at the BOK Center? City’s contract with facility manager offers insight, Tulsa World (Jun. 17, 2020) https://tulsaworld.com/news/local/who-approves-events-at-the-bok-center-citys-contract-with-facility-manager-offers-insight/article_4dd20752-1cea-529b-a356-ed3d8cf54cf9.html