Pitch to Pro
Pitch to Pro is the official podcast of Ozark United FC. This will be our platform to tell our story about the club and the special place that we call home, Northwest Arkansas. This is a journey. We want to bring you along for the ride. We'll share what's going on behind the curtain, help educate the community at large about soccer, Our league, and give updates on the progress of the club along the way.
Together, we'll explore and unpack our journey to professional soccer, the magic that is NWA, our community, and talk all things soccer from on the pitch to behind the scenes, telling the story of our club.
Pitch to Pro
Stoppage Time Special: The Search for Investors
Money makes the beautiful game possible, but what happens behind the scenes to fund a professional soccer franchise? This revealing Stoppage Time edition of Pitch to Pro pulls back the curtain on the complex investment structures that can make or break a soccer club.
We dive deep into the critical role of the primary investor in professional soccer, exploring US Soccer's strict requirements and the valuable lessons learned from past failures. The tragic story of the North American Soccer League (NASL) serves as a cautionary tale—despite attracting global stars like Pelé in the 1970s, the league collapsed because owners couldn't sustain the initial years of inevitable financial losses. Contrast this with MLS, where committed investors who weathered years in the red now own franchises worth hundreds of millions of dollars.
The episode reveals our exciting new partnership with Prospect Park, a group with extensive experience working with family offices nationwide and specific expertise in USL investments. They'll lead our search for a primary investor for the Northwest Arkansas project, with the goal of securing this crucial piece within approximately a year. Once identified, potential investors undergo rigorous vetting by the USL, ensuring they have the financial stability to weather challenges like we saw during COVID-19. Most importantly, we share why our project has become more attractive to investors since shifting to a new development model featuring a mixed-use facility on new land.
Whether you're a soccer fan curious about the business side of the sport, a potential investor, or someone interested in sports franchise development, this episode provides valuable insights into how professional soccer continues to grow in America. Subscribe to Pitch to Pro for more behind-the-scenes looks at bringing professional soccer to Northwest Arkansas, and share your thoughts on what aspects of soccer business you'd like us to explore next.
Welcome to the Stoppage Time edition of the Pitch to Pro podcast. This is a highlight reel of some of the best moments from the show so far, and every other week we will be bringing you a special five to seven minute segment featuring the best stories, tales and moments of the podcast.
Speaker 2:Out of respect for privacy, we can't share names, confidential stuff. But we've talked to a lot of people, I'll just leave it at that, right, um, and we've raised those, those C capital funds. Uh, as you kind of discussed, talk a little bit more about, like, what does it mean to be a lead investor or a primary or a principal or whatever that means? And we have to have that. Per us S soccer rules, that's right, and the league which obviously operates underneath US soccer governance, their rules as well.
Speaker 3:So the US soccer mandates that you have a lead primary investor. They call it right. So it's X percent of the investment into a franchise.
Speaker 2:And it's less than half Yep, less than half.
Speaker 3:Won't share percentages, but why that's really important is that years ago right, we have launched before soccer was ready to really grow. In the States, leagues like the NASL, when Pele came and the stars of the world came, had no infrastructure, no foundation. They had owners that could maybe afford to just get a team and support it for a year. Right, because, remember, you're trying to build this thing to cash flow and get to break even, and that takes several years to do so. If that investor came in, let's say in 1975, and a team and put a million dollars, but then they needed another million dollars, did that investor have that ability to do that? And that's where things fold, right.
Speaker 3:And so the NSL had this massive spike and then poof, it was gone. There's a great doc on it. I can't remember what it's called, but if you're interested, uh, it's pretty cool. Um, cosmo is leading that way. Right. And so, as they built the mls, the smart thing they did was it was really um one. They had some really committed groups of investors at the beginning. They talk about people that got almost laughed at at the beginning because they couldn't turn a profit for years, for years I I think it was probably we don't know in a working, so we're all talking about what we hear and what we know just from being in industry is the Beckham effect in the mid-2000s, right, and the 2002 World Cup was also a big one.
Speaker 3:Bruce Farina just talked about that actually how that World Cup really buoyed MLS growth. And then Beckham, and now you see messy kind of right and so, and when we say mls growth, that's just us soccer growth as well. Right, that was, that was what the model was back then. And obviously usl has taken a whole new, a whole new growth and wsl and that's as well, right. So those things don't exist 15, 20 years ago. Right, because because for those first 10, 15 years you had ownership groups that disbelieved so passionately what they were doing that they were literally bleeding cash in the red. They couldn't get to green.
Speaker 3:But now those valuations of those franchises that they bought at making it up $20 million, whatever those initial MLS franchises were, I mean, they were nothing by standards. Nowadays they're worth hundreds and I think InterMiami is close to a billion now, like there's one's over. So again, it just speaks to if you have a willingness to be patient in pro sports, aligned with an area that's growing, aligned with a group that has a good passion and understanding of how to do this, you have a really good opportunity for long-term valuation growth. Right, that's the play Never without risk. We always say that.
Speaker 2:Oh yeah, Of course I mean, any investment isn't.
Speaker 3:So that leads to where we are now. So we have now partnered with a really really exciting group. So we had a group called Prospect Park reach out to us through. Again, the soccer community is unbelievable and helps each other. We had a partner, kevin Willer let's say his name. He was a Chicago guy, been involved in a lot of soccer teams, a lot of soccer franchises. We had some connection to Northwest Arkansas and we got in touch. And then it turns out Warren and him had crossed paths several times and so we started talking and had some really great points of feedback from him. One of them at the end of our conversation was hey, you should reach out to this or this other group is actually interested in kind of talking to you guys. They're really interested in USL and they have some investment ideas. I said, yeah, sure, we're open to talk to anybody. And that was Prospect Park.
Speaker 3:We didn't know anything about them at the time and this been filling each other out for several months and exploring them, exploring the project and us. We lost learning about them and how they work. And they have an immense background in family offices. Right, they relationships with family offices nationally. Um, so this is this search is for, for a primary is is really going to be local and regional, national, right and um and they have um been just tremendous partners with us, helping us in terms of kind of how we can set this up, and then they have a massive network, right, this is what they do, so we can go and keep building our project and support them, but they're the ones that know how to execute this and have the relationships and know how to communicate with other family offices, right? This is a really important part for us, and so we just started that, like, literally, you're about to announce it and so out off the press.
Speaker 3:Hopefully, this podcast won't precede anything it will not, wes will make sure. But that's really exciting for us because they as a group have worked in pro sports already. They've worked particularly in USL as well, and they really like our project and that's important because they're going to spend time on it. So if they didn't think that there was a pathway to success here, they probably wouldn't be on our list to work with right and be great partners for us. So we couldn't be more excited about that, and their objective is to find that primary and that's. You know, let's call it a year from this time window. That's kind of you know where we think we can get to and that usually then just snowballs right. So we've had several folks that we know, that you know, really interested in being part of this, just maybe not wanting to be a primary right, right, and so that's really important.
Speaker 3:Come back, this is not a one person, one family. It just doesn't usually work that way. Almost any pro sports right, it's usually their structures and percentages that get broken out behind a primary right. So we have a pretty good feeling and a pretty good opportunity to engage. Some of those other folks re-engage that said they want to be part of that. Um, but we got to get that primary to kind of put it over there. Once that primary comes on board, they go through a long and extensive process with the usl.
Speaker 3:Yeah, background checks, it's you know, access to liquid capital understanding network. There's really strong criteria. They're very strict about it because they don't want to have these ups and downs, right, they need someone who's reliable and can come through and manage something like COVID Can you sustain no fans for a year and you can be able to support that and get through the next year and that's something that's important, right? And so, anyway, we're really excited about that next phase. It allows us to really focus on building what we need to do and just supporting them and their search, and then we'll engage once they kind of say, hey, here's the groups that are really interested, and then we're going to get back to them.
Speaker 2:So that's how that process will work yeah, really, really excited about this partnership and these guys and this team. They've been absolutely fantastic and I I think again another. I get reassurances all the time but seeing that this group is what they do they put deals together in this space all day long for their clients and relations and they have been just chomping at the bit so excited about what this project could be and represents for the region and for their interested investors.
Speaker 3:And much more interested in our newer scenario new land, new development, mixed in multi-use facility versus where we were in the old program.
Speaker 2:Yes, much more so. So that's again going back to the importance of that shift in scope.
Speaker 1:Thank you for joining us for this Stoppage Time special of the Pitch to Pro podcast. If you've enjoyed the conversation, you can click shift in scope.