While additional information on competition format, scheduling, broadcast and other important details will be made available in the coming weeks, it’s important to note that the league’s return to play will be conducted in strict alignment with all local and state public health guidelines. USL HQ also remains in regular dialogue with the USL Players Association on all matters concerning player health and wellness protocols and looks forward to continuing those discussions.
To USL supporters across the country, we are grateful for your support throughout this process and look forward to being back in action with you all soon.
Had he purchased Newcastle or stayed with Bordeaux, he’d be amongst the many European club owners weathering a terrible climate while waiting out a pandemic.
Instead, DaGrosa sees an opportunity to build around a massive club in the Premier League or La Liga. He’s made his money in turning around companies, and believes that wisdom can be applied here on a broad scale.
“In this environment, given what’s going on with the coronavirus pandemic, we believe there’s an opportunity to recreate City Football Group at a fraction of the cost,” DaGrosa told ProSoccerTalk this week. “Club valuations are already coming down. In many cases, clubs are going to be effectively taken over by their lenders. There’s going to be some great opportunities in the next 12 months, and great opportunities to get world-class players at a fraction of the cost. This is the time to capitalize it.”
Here’s how it would work for his project, which he’s calling Kapital Football Group, “a new soccer platform holding company, to acquire controlling andinfluential minority stakes in world-class football clubs and academies at deep valuation discounts.”
DaGrosa aims to buy “an anchor club, most likely in the Premier League,” and then invest in three to five satellite clubs in Europe and South America. He’d also invest in nine academies, three in Asia, three in Africa, and three between North and South America. He didn’t rule out investing in MLS if the valuation proves fruitful, but DaGrosa is also “taking a real hard look” at USL clubs.
“If we can put that together we’ll have a formidable group that can rival City Football Group,” he said.
The CEO and co-founder of GACP Sports, DaGrosa starting eyeballing clubs, including Spanish outfit Getafe a couple of years ago. That didn’t work out during the due diligence stage, which led him to Bordeaux.
He calls running the Ligue 1 club “a fantastic learning experience for the world of European football.”
“Today we have a better appreciation for the importance of legacy of the clubs as well as the importance of the fans contributing to that success,” he said. “And thanks to that experience, we now look for those same qualities in the clubs we are looking to acquire next.”
A rumored 2019 deal to buy Newcastle didn’t work out, but DaGrosa is still laser-focused on making his impact on the global game.
What kind of club is he eyeing? Is it strictly about the best bang for his buck, or does the appeal and history of the club carry significant weight?
“Legacy is a big part out of it,” he said. “I’m even more sensitive today given our experience at Bordeaux. We always understood the legacy and passion of the fans, but all clubs have a special place in the history of the cities and communities in which they are located. In some cases, they are the lifeblood. In the U.S. you think of the Green Bay Packers. I have a much better appreciation for legacy in the history of the clubs we are looking to require, particularly in the Premier League. It’s less important in the U.S. where you don’t have multi-generational ties to one club, but it’s still important.”
There’s keen interest in the United States, as DaGrosa stresses what many investors have noted: The 2026 World Cup is going to drive interest in the potential of this country both here and abroad.
We asked DaGrosa why, given that, he wouldn’t dive into Major League Soccer? He’s not ruling it out, but expressed concerns with the franchise fees and revenues in the short-term. Building a club here takes a lot more investment, risk, and patience than, say, a century-old club that holds sway in its region.
“You can build a club (in MLS) that’s going to cost 500 or 600 million bucks,” he said. “At the end of the day, you’re paying 10 times revenues. Or you can buy a club like Bordeaux established in 1881 that has a remarkable history, pedigree, and is a brand known around the world, for 1.6 times revenue. When you look at the metrics it’s hard, not impossible to make a compelling case for MLS over the short-term. If you have a lot of staying power, there’s money to be made but clubs in general are going to trade as a function of their broadcasting rights revenue, and we’re just not seeing that in the U.S. at a rate required to justify the valuation.”
DaGrosa believes in the American soccer market and says the system is on the verge of becoming an elite talent exporter, comparing its potential to that of a current font further south.
“Other markets are going to open up,” he said. “Most of the great clubs in Brazil were insolvent before the effects of the coronavirus. There’s a movement to privatize clubs and we feel there’s going to be an opportunity to get the really top names in Brazil. Those satellite clubs are designed to be good investments in their own right but the name of the game is to secure world class players and Brazil is one of those markets that can immediately supply world class players. The U.S. is a market that can do that in five to seven years.”
DaGrosa’s interest in the Premier League is deep-seated, and has only grown given his expectations for how well the league is equipped to deal with the COVID-19 pandemic.
“The PL will emerge as the strongest league and there may be some good deals to be had,” he said. “There are going to be financially distressed owners throughout football globally. There will be some lenders that are going to be scared to death who’d love to create a win-win with someone with capital. If the market is down 20-30 percent, segments of the public market that will be down 30-40 percent, football could be down 50-75 percent. It’s a great time to buy with dry powder so after the acquisitions you can build up a world-class team at a fraction of what it would otherwise cost. In our discussion with investors, we can essentially buy today and invest 25-40 cents on the dollar relative to what we would’ve paid six months ago.”
That’s when he was in “mid-to-late stage discussions” with Newcastle United owner Mike Ashley and his partners about the northeast outfit.
DaGrosa insists that Ashley was “first-class” in negotiations despite many reports about his combustible nature.
“It’s unfortunate in one respect that the deal didn’t go forward,” he said. “With a guy like Mike Ashley you might get punched in the face but you’ll never get knifed in the back. At the time it was disappointing the deal didn’t go forward. It was on our side that a major backer pulled out at the last minute but hindsight is 20-20. Better to be lucky than smart because we probably dodged a short-term bullet.”
Now that twist of fate and timing may launch a wildly ambitious project in the next 12 months.
League Two operates at the unofficial fourth tier of American soccer and has long been a showcase for top college players wishing to maintain their eligibility. Tim Ream, Graham Zusi, and Geoff Cameron are among a long list of USMNT veterans to have played in L2 — formerly called the PDL — before going pro.
The problem is that the season is played in a tight window between the end of college spring semesters and the recalling of players for fall. And each week that passes in May shrinks the window for clubs, some of whom are filled with a majority of out-of-town players.
Throw in the variety of obstacles for small clubs spread across a gigantic country in the coronavirus era and you’ve got a significant challenge.
The National Premier Soccer League, a fellow “fourth-tier” operation, announced earlier this week that it was “canceling” its 2020 schedule and re-evaluating how it can support its clubs should they want to play this summer. The UPSL postponed its season’s start to May 2, though that’s looking quite early, too.
So we talked this weekend with USL vice president Joel Nash about plans for the summer with League Two. He says a lot of clubs are raring to play once it’s safe, and that they will find the right road together.
“Our first priority has to be the health and wellness of everyone involved with our league, but based on the feedback we’ve received from our owners, it’s still our intent to play in 2020,” Nash said.
He says that some clubs or even entire divisions may find that it “makes sense to forego participation in this year’s competition” and that the USL will support those clubs.
“Our decision-making going forward will be rooted in the information we receive from public health experts. We’re in regular communication with local, state, and national health authorities, as well as the CDC. We also sit on a national COVID-19 task force comprised of medical, legal, and operational experts from U.S. Soccer, Major League Soccer and the NWSL, to ensure that we are all aligned, and sharing guidance and best practices. Based on the information we receive, and the input of our owners, we’ll continue to make decisions that put the health and safety of our players, supporters and staff first.”
Could that mean an odd league season structure or some unusual competitions? Maybe. This is an atypical time in the world.
“We may have to get creative with our competitive format, but that’s true of everyone in sports at the moment,” Nash said. “We’re in daily conversations about how we can all work together give our clubs as many games as possible. … We are going to prioritize getting the greatest number of games in for the most number of L2 teams that want to play. We will then work with our owners to identify other non-L2 teams that we could supplement for additional games.”
The United Soccer League is prolonging its season suspension of the USL Championship and delaying the start of USL League One.
The Championship was originally suspended for 30 days in the wake of the coronavirus. That’s been extended through May 10, while the third-tier League One was set to begin March 27.
Wednesday’s move signals a shift that could reverberate in American soccer, as it explicitly cites the Center for Disease Control’s weekend recommendation not to gather in groups of more than 50 for eight weeks.
We will continue to monitor ongoing events, receive guidance from local, state and national health authorities, and participate in a national task force comprised of other professional sports leagues and organizations from around the country.
The USL announcing a move like this independent of Major League Soccer is interesting, especially as numerous national and regional leagues eye their summer calendars in suspense.
The CDC guidelines may loom large, and the USL has set a precedent in wisely following them.
CONCACAF has suspended play for a month, while UEFA postponed all fixtures next week ahead of a meeting to discuss plans for both club and international European competitions including the Champions League and Europa League.
The United Soccer League begins its 10th season on Friday with a pair of matches in the Championship; Seattle Sounders 2 will host Reno 1868 and Orange County plays host to El Paso Locomotive.
A lot has changed in under a decade. The Championship division now has 35 teams, while the third-tier League One has another dozen (with 30 more lobbying to get into it the thing).
We caught up with some USL mainstays at all levels to talk about the progress, from league president Jake Edwards to San Diego Loyal co-founder Warren Smith and Pittsburgh Riverhounds coach and serial hardware winner Bob Lilley.
The coach is a good place to start. Lilley has won titles in the A-League with the Montreal Impact, the USL First Division with Vancouver Whitecaps, and the USL with the Rochester Rhinos in 2015. Now he’s turned around the Pittsburgh Riverhounds ahead of the 2020 season.
He sees the USL’s growth as pay-off for a generation of players, coaches, and owners who were willing to put in the time for the good of the sport, looking back fondly on the role he played in helping ambitious clubs Montreal and Vancouver win on their way to MLS.
“It’s an investment that starts out where you’re just putting pennies in a piggy bank and at some point it grows big enough that it takes on a life of its own,” Lilley said of the USL’s progress. “The increases keep getting bigger, and the last 3-5 years we’ve been really driving forward. We need to find new ways to be meaningful to our market. We need to stay aggressive, trying to keep pushing this thing forward.”
Like Lilley, Smith has done this dance and done it well in a lot of different places. Now the president of first-year side San Diego, he’s overseen the resurgence of the Portland Timbers and the growth of Sacramento Republic.
Smith makes a remarkable claim about what a USL club can mean to a market.
“The difference between us and MLS, just because of where they are choosing to have to put their teams, I think New Mexico United means more to the whole state of New Mexico than most MLS teams mean to their particular cities. We’re able to electrify communities and bring people together, uniting and celebrating the people of the region.”
To Smith and Edwards, it comes down to the variety of top minds running clubs.
Smith says that less than a decade ago, the investors in the room were coming from soccer backgrounds. Now, it’s others who see the investment as sound.
“In 2012 at the annual meetings, the room was full of soccer fans, soccer people, more soccer people than business people,” Smith said. “Since then with the success of Orlando and Sacramento, we’ve seen an influx of more experience and different sports experience. There’s a lot more sophistication, and the league has chosen a good group owners who want to grow the brand. The USL was good football then, but it’s even better now.”
Edwards said the league likes “to hang its hats” on its ownership groups, who in turn have had to learn from the successes and mistakes of their forebearers while also recognizing that this giant country has a plethora of soccer cultures.
“You’ve got to listen first and foremost,” Edwards said. “You’ve got to spend the time in the community and learn it before you launch to learn what it is they want out of a football club. You have someone who owns the team but really they own the team.
“Ultimately they’ve got to listen and be amongst the community and let the fan base have a voice. Our clubs can be such a great representation of their communities. There’s a real sense of pride people have in their communities that they might not have an outlet for, and the football club gives them that outlet. Go down and be with six or seven thousand people, and wear your colors and show your passion to be from Louisville, Albuquerque, Austin, or Oklahoma City.”
What Edwards stresses is doing expansion “the right way” over the long-term, angling to grow and grow to make a massive impression when all eyes are trained on the United States for the 2026 World Cup in North America.
“What do we want to look like when it arrives?” he asks. “We will see between now and the World Cup, a few more expansion markets like Providence, Buffalo, Des Moines, and some of you haven’t heard of yet. League One is a huge focus for us. We’ve gone from 10 to 12 teams, and now we have 30 markets that are actively lobbying to bring League One to their communities.”
Lilley says it helps that the soccer has improved tremendously since he was a player in the early 90s, pre-MLS.
“It’s just a whole different landscape now,” Lilley said. “You know the movie ‘Slapshot?’ Some of the start of me coming into the pro soccer environment — NASL was done. MISL was just shutting done — in the late 80s, some of the fights and some of the stuff going down on the field was comparable.”
The players are better, and the coaches, too. Three of his former players, in fact, have gone on to coach in MLS (Mauro Biello, Mark Watson, Nick Dasovic).
Lilley has seen the tactics grow from when he instituted a flat back four in the late 1990s after seeing it become all the rage in Europe. He’s worked past three at the back, five at the back, you name it, but it’s only in this last stage of the USL that he’s seen big changes in coaching (so credit to whom for still winning).
“From 1997 to 2010, whatever I saw from a team early in the season a lot of times it would be the same thing later in the season,” he said. “That’s not the case. I think it makes everyone better when new ideas… everyone’s trying to win and that’s the expectation of owners. It’s not okay just to make up the numbers.”
Lilley says that’s why he’s sure to instruct his players on being functional outside of a base system. He switches it up on them.
What drives him?
“Trying to survive,” Lilley said. “Trying to win so I can stay in it. I try to build flexibility in my team. I think part of growth is not just giving guys game but trying to give them information tactically. There’s so much tape out there, we’re always looking for an edge. Sometimes with the team, if you play the same way all the time and it’s not quite working, and then you change, you can send them in a tailspin, ‘Well what’s wrong? What did we do?’ but if you tell them you’re preparing them and looking for an edge, well, good players adapt to the environment, to the coaches, to the system, to the weather, to the referees, to the opponent. It’s hard to prepare for us because we do a lot of things well.”
So as the league drives forward into Year No. 10, there is a collection of executives, staff, and coaches who’ve been through the proverbial war and are smarter for it. There’s been attrition, of course, but now there’s stability.
And it’s Edwards’ job to remember where they’ve been as much as where they are going.
“When I think back to the wild west days, the boom or bust days, it was a core mission to get away from that,” he said. “We’ve done that, but we’re still in growth mode.”