Soccer

Green Bay Packers Ownership Model Takes Shape With Soccer Team In Tennessee

Fans of Chattanooga FC can now invest in partial ownership of the club. (Photo Credit: Chattanooga FC)Chattanooga FC

In the world of startup sports, the key to any team’s success is capital.  How much money does it require to start a team?  Can the team afford to operate? Where will income come from? Usually, a team needs an owner willing to take the risk.  In Chattanooga, Tennessee, a soccer team took a page from the Green Bay Packers and raised more capital than anyone could have ever imagined.

Chattanooga Football Club, a soccer team that plays in the National Premier Soccer League (NPSL) this week announced that they have exceeded the $500,000 mark in the sale of limited public stock in the club in the first 30 days of the offering. They are the first American sports team to do so since the securities reform laws passed in late 2016 allowed such investments. Proceeds from the limited offering of 8,000 shares will support the club’s move from amateur to professional players and year-round operation.

“We remain impressed and overwhelmed with the breadth and scope of this project means not just for Chattanooga FC, but for community sports clubs in America in general,” said Tim Kelly, club chairman. “We have not done this frivolously or in a vacuum; this is an investment in a soccer club with solid business and community ties and a vision for success on and off the pitch, and we know that is key in trying and succeeding to this point. The ROI on this investment, big or small, is in the people and the community. We are nowhere done, but we are proving the concept works, and that’s very exciting.”

The Green Bay Packers are the only major team in the US owned and built by selling shares of stock, with those holding stock having some sort of say in how the club was run. A board still runs the NFL Packers and the most recent stock sale helped the team rebuild parts of Lambeau Field.

The Packers are also a rarity, as securities laws were changed over the years to make public ownership of entities like sports teams illegal.  Recently there was a change in the securities law that allowed for a small loophole to actually let well-structured sports clubs see what they could do with being owned by the community. In exchange, those with a share or a number of shares could have a say in team governance, and the club could use the dollars raised for capital to run the club. While most of the bylaws of elite professional leagues like the NFL and the NBA, and even Minor league Baseball make this tough to do, there are places where public ownership could work.  The first test earlier this year Chattanooga.

Founded in 2009, Chattanooga Football Club has drawn nearly 350,000 fans to its games at Finley Stadium over the course of the last ten seasons. The average attendance is over 7,000 people a game. In 2019, the club will play an extended season with professional players in the NPSL Founders Cup, and fully launch the league in 2020.

They don’t play in the MLS or USL.  Instead, they play in the NPSL, which is a collection of mostly community based local clubs spread out over the country. This summer 11 of the clubs have banded together to create a first-ever Founders Cup, extending their short spring to early summer season into the late summer and fall.  That gave all of the clubs the ability to go beyond using amateur or semi-pro players.  Now they can select a number of professional players as well. Chattanooga, along with clubs like the Oakland Roots, Detroit FC, Miami FC, and New York Cosmos, are using their strong local followings to create their own footprint.

Chattanooga FC needed some additional cash, and they wanted to give the community a chance to invest. For small stock purchases every member gets a position in governance, and if all the stock sells, they get an ROI.

While a majority of the investment is local within the Chattanooga metro area, a significant amount (44% of the people, 37% of the dollars) are from beyond that area. That includes investment from over 44 states and 10 countries, as far away as Japan, Australia, and Africa.

Some of the bigger names to come public with investing are former MLS star and current NBC Sports Premier League commentator Kyle Martino and  Stephan Szymanski, author of Soccernomics and Money in Soccer, and a highly respected professor at the University of Michigan.

With the passage of the Jobs Acts in late 2016, Section CF crowdfunding allows non-accredited investors to make investments in corporations from a simple, online platform. Chattanooga Football Club is the first sports team to offer shares, and one of only a handful of teams to ever offer public ownership. While the practice is common in the rest of the world- even mandatory in the German Bundesliga- it is rare in the US.

The success of the Chattanooga FC may inspire other teams from small leagues to pursue public offerings.  The Green Bay Packer model might not work in major sports, but its serving Chattanooga quite well.

 



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