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Wednesday, September 2, 2009

RailHawks owner Selby Wellman discusses USL sale and possibility of new league

Posted by on Wed, Sep 2, 2009 at 9:56 AM

click to enlarge Carolina RailHawks majority owner Selby Wellman (Photo courtesy of RailHawks)
  • Carolina RailHawks majority owner Selby Wellman (Photo courtesy of RailHawks)

On Monday, we spoke with Selby Wellman, majority owner of the Carolina RailHawks. Wellman is also the spokesman for the Team Owners Association, which has announced a "chill" in its relations with the USL and declared that it will pursue aggressively all options—including the formation of a new league—as a solution to establishing the owner-controlled league it says is vital to the success of their clubs.

Wellman gave us more details about the buildup to the sale of the league to NuRock Soccer Holdings (a group unknown to him and his fellow owners), and about why he and his fellow club owners think an owner-controlled league is vital. He suggested that the declining attendance experienced by the RailHawks and other clubs is an issue of poor-to-nonexistent league marketing and reiterated that the owners have decided it's time to "take control of our own destiny."

He noted that the USL-1 clubs make single-year commitments to participate in the league, and that in a month or so, the league will approach the owners about committing for next season. But, "If they don't come to the table with us having the ability to control our league, we won't play with them," Wellman says.

For background on the sale, see posts here and here. Also, Kartik Krishnaiyer of majorleaguesoccertalk.com and others are working on a multipart, in-depth series on the USL sale. Here's today's Part III.

Triangle Offense: Last Wednesday, after the Miami game, I spoke with Brian [Wellman, the team president] and he said there was nothing but silence coming from the USL about where they were on the sale. Did it all come down Thursday? Did it catch everybody by surprise?

Selby Wellman: Nike called the group in St. Louis that we were teamed up with to buy the league and told them that 'we had changed our mind and we were selling it to another group' after a month of negotiations. And the issue is they sold it to a group, basically it's a non-team, non-USL-1 team entity, it's a large real estate developer in Atlanta along with his partner who owns a PDL team. So we were upset with that, and we didn't think it was right, because we've been working for almost two years [inaudible] and Nike to restructure this league to where it would have the ownership control like all other sports leagues around the world. The USL did not promote itself, did not do anything at all that a league should do. So we wanted to buy it and take it over.

And we were willing to do that. Then our bid, as owners, we lost the bid to [the people in] St. Louis, but as soon as St. Louis was awarded the bid, we went to St. Louis and joined up with them in terms of forming a cooperative group to do the acquisition.

And make that group stronger.

Yeah. So it was all going strong until last Wednesday [Aug. 26] even, I had a call with Nike and things were very strong, very positive. Eighteen hours later they called and said no, they were going another way, they had already signed a deal with this group in Atlanta. So it's a big shock, we really don't know why yet, what happened, ok? There were no deal-breakers that we knew of in the negotiations. So what we decided to do, and that's what the announcement's about, is that, you know, when this got out about this company which they sold it to, called NuRock Holdings, then the rumors started flying, and there were some things out there in this Internet, 24-hour world you and I live in, that were getting some bad information, you know, I read one where, "gee, the league may fold." None of that was true, of course, so what we decided to do was put out a press release, stating "look, we are looking at all options, we're going to explore all options, but we are going to end up with an ownership-controlled league at the USL-1 level." So we'll talk to that new owners group, but we'll look at other options too. We're strong, we're strong as ever, we're going forward, and we're going to elevate our league off the field to match what we do on the field. You know, in the last couple of years USL-1 has come a long way in terms of recognition in professional soccer. But it's all been on the pitch, on the field of play. We've never had a league that would get out and PR and market, promote it, do all the things necessary to brand us. So, we are the group of owners, we are absolutely gonna do that, and so we had to put something out, so we felt the best thing to do was just to let the world know that we are still here, we're committed as the group, and we are now going to explore all of our options.

When you talk about the goals of what you and the other owners feel need to be done, it's about essentially competing head to head with the MLS or ...?

No, no, no. Maybe down the road? Sure, you'd like to think that, but that's not even on our mind right now. Our primary goal is to, first of all, we really are focused on the growth of soccer in America. We've still got a ways to go, as you know. We think a key component of it is promoting the game. But more importantly we believe that ownership involvement is crucial for a successful, healthy league. All leagues are run that way: ownership involvement, ownership control. The USL league structure, which does not support ownership involvement, has been a significant challenge for us. We want to change that, and we've been trying to change it since January of '08. We've been unsuccessful, and then along came the acquisition opportunity and we tried to buy it, and that was unsuccessful, so it's just time for us to get control of our own destiny.

Just so I understand the challenges you face, when you talk about the USL being set up differently from the other leagues, are you talking about other soccer leagues around the world, or are you comparing it also to other American sports leagues?

You can look at major league baseball, NFL, NHL, MLS, all of them, they are ownership-controlled. The commissioner reports to the owners, which are the board and things like that. That's the way it is around the world. Matter of fact, FIFA, as we said in the press release, that's one of their requirements, that it's owner-controlled. So we're just trying to adopt the FIFA rules plus do what's best for our teams. We've been unsuccessful at convincing the owners, so, you know, if you fail at something, you can't just give up, right? So we'll take charge of it, and we'll fix it. We don't know yet how [laughs], we've got a number of ideas, of course, and it would be premature to share any of those with anyone, but we've got to pursue those.

Is there an analogy you can draw when you describe the dysfunctional USL ownership structure?

Maybe better than an analogy, let me just give you a simple definition of it. USL is referred to often as having a pyramid structure: At the top it's USL-1, then it's USL-2, then it's PDL and they've got a women's league and then you've got the Super-Y league, etc. All of those teams combined number about 710 teams. So the league office, basically, is an administrative operation. Just keeping up with 710 teams, registration and all those kinds of things they do. They move paper. They're not like most league offices where you have marketing people, public relations people who can promote your league, who can go out and get national sponsorships, who can go out and seek new owners and get franchises and things like that. They don't have the skills and the resources to do that. That's what we're trying to fix. And if we had been successful at buying the whole league, that was what we were going to do. We were going to restructure the league office into a marketing organization, not just an administrative operation. Because again, we believe on the pitch we're very competitive, we play outstanding soccer here in America, but the world's gotta know about it. The world's gotta know about it, and we've gotta have some national sponsors and all those kinds of things that leagues do that have not been done, and that's what we want to do. Now if we were a ragtag league or something like that, you know, we wouldn't be thinking like that, but look, you've watched us play, you've seen us play MLS teams, you saw us a couple months ago beat a Mexican Premier team [Estudiantes Tecos].

And the New England Revolution—

And we beat New England too. It's pretty frustrating as an owner, I can tell you this, to put a lot of money, which we've done, into our team, and have the attendance to be pretty much not acceptable to us, related to the perception of us being just minor league soccer. Then all of a sudden, you know, I bring New England and whoever here, and my crowds will quadruple on me. So what that tells you is that we're in the market here in Carolina. And by the way, my fellow owners around the league have experienced the same thing. We know we have markets, we know we're good soccer markets, all right, and we know we play really strong professional soccer. So we've got to promote it. And the league has to do that, the league office, that's a league office's function. That's what MLS league in New York City, that's what they do.

They've done a good job of branding themselves.

They're great: [MLS commissioner] Don Garber and [MLS president] Mark Abbott and the guys up there, we have good relationship with those guys. I was up there three or four weeks ago ... they're like us, they want to see pro soccer grow in this country.

In the release that you put out, you said that the RailHawks and seven other ownership groups of existing teams and future teams were exploring all options. Are there any USL-2 teams that are part of these discussions?

Not to our knowledge.

At this point is it premature to talk about the viability of a new league or another way to compete outside of the USL?

I think that's clearly one of the options, is to potentially start our own league. And [now] we have to go do an assessment of what's required, etc. You have to file with the federation and all those kinds of things too. So there's a lot involved in that and that's just one of the options that we're going to start evaluating.

Where are some of these other clubs, in particular I was struck by the absence [from the TOA press release of certain USL clubs]—Portland is heading up to the MLS—but what about Rochester, Charleston, a couple of these other really old clubs?

Matter of fact, I can rattle them off: Let's see, it'd be Austin, Charleston, Rochester and Cleveland, and Portland, who play in our league right now but who are not in this press release. Portland, you just defined why they're not. But the other four, don't read into that that they're not part of our league, they just did not want to participate in the acquisition of the league, they still wanted to play, and they're still with us and part of our group wanting to move the league forward.

Does that also go for FC New York [scheduled to begin USL-1 play in 2010]?

FC New York is a new club [and] would fit in that last category I just talked about. Matter of fact, they were down here visiting us at our last game. So they're a little surprised too, when they signed up to join USL-1, to find out that all this turmoil was going on. So they're right now saying what's going on. I have every confidence that if we put the right options in front of them, they'll get with us very soon.

Do you think that this could end up in court in any way?

No, no. Nothing illegal or anything's been done here. Nike made a decision and we respect that decision, we just don't agree with them. There's no liability...

or any kind of breach of contract—

No. The way the league works is that the teams—that being us, Carolina and the others, we own our teams—all we do is we have a one-year franchise agreement with the league. We pay fees to be part of that league. So we can stop any time.

Is there a particular date, in the next few months, where there's going to be a point of no return or something, maybe when those dues are supposed to be paid, when you need to make that commitment?

Now that the acquisition has been announced, they'll obviously take some time with the new owners to sort everything out. But I would expect somewhere in the next 30 days or so they'll start coming out to us, wanting us to recommit to play in 2010 in USL. If they don't come to the table with us having the ability to control our league, we won't play with them. That's why I think in the press release it says we have not recommitted to 2010 yet. At the same time we're more than willing to sit down with these new owners and see what their plan is, see if they can, once we fill them in on the history and our goals, and get them to agree on the ownerships being in control of the USL-1, then perhaps we could still play in the USL. That would be our preference, matter of fact. But again, you know, we just don't know. We've been working on this for two years now. So to start this process all over again with an entirely new group is not a very exciting thing to think about.

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