USL - Bethlehem Steel FC

USL hybrids, profits and imitating baseball

Photo courtesy of Bethlehem Steel FC

Devotees of professional soccer in the Lehigh Valley have noticed “hybrid” as a new term describing United Soccer League-Major League Soccer affiliations.

The term does NOT describe the relationship between Bethlehem Steel FC and the Philadelphia Union.

“Wholly-owned” would be more appropriate.

The Union have full control of both the soccer and business operations of the Steel.  They also have full responsibility for the income and expenditures.

Control and responsibility allows the Union to place player development at the apex of the pyramid of goals for the Steel project. We firmly learned the fact last July and September, when key veterans were sold off to clear opportunities for evaluation of Philadelphia Union Academy prospects.

The first of those sales triggered the playoff-killing swoon that saw Bethlehem go winless the rest of the season.

But those sales also laid the groundwork for an Academy senior invited to Clearwater to play the first ever significant minutes by an academy boy in multiple preseason events.

Anthony Fontana played 30 minutes in a closed scrimmage against Chicago on Feb. 9.  And he played 30 minutes against Tampa Bay and 17 against Montreal in two official exhibition games of the Suncoast Invitational Tournament on Feb. 18 and Feb 22.

Player development affiliates can also win. New York Red Bulls 2 won the USL double last season.

Something borrowed

The USL hybrid affiliate concept is borrowed directly from the National Basketball Association’s D-League. The basketball version began between the NBA’s Houston Rockets and the D-League’s Rio Grande Valley Vipers.

The Rockets controlled and were responsible for the Vipers basketball operations, but Lone Star LLC, a sports entertainment company based just north of the Rio Grande whose controlling owner is Alonzo Cantu, controlled and benefited from the business operation.Vipers’ basketball has been a business success.

A major difference between the sports entertainment market in south Texas and the Lehigh valley is that, before the Vipers, south Texas had nothing professional. The Lehigh Valley had professional ice hockey and baseball before it got soccer.

Something new

Major League Soccer’s Houston Dynamo asked Cantu to partner in the expansion Rio Grande Valley FC Toros of the United Soccer League precisely because of the success of his business model with the Vipers, according to ScratchthePitch.com.

Lone Star made the divided responsibilities model work in professional basketball. The idea was to transfer it to soccer.

Who provides the dollars to pay for the player signings made by the USL team? The MLS team could pay the entire cost of the technical program, or the minor league ownership might do so. But there is a  balance, and it has to be right.

Upon the devil of those dollar details hung both profitability and the cost effectiveness of player development for the Dynamo.

  • The MLS side wanted to unload responsibility for running the business and making it profitable, while getting exactly what it desired from player development.
  • The USL side hoped to make money.

In south Texas, balls in nets have resulted in butts in seats and dollars in banks, whether the net hangs on a hoop or a goal.

Rio Grande Valley FC will open its own new 9,400-seat H-E-B Park on Mar. 22 against CF Monterrey “Rayados” from Liga MX.

Imitation…

The San Jose Earthquakes have ended their independent affiliation with Sacramento Republic FC and substituted a hybrid one with expansion team Reno 1868 for the 2017 season.

Montreal Impact owner Joey Saputo negotiated a hybrid affiliation with new USL entrant Ottawa Fury and has closed down his former wholly-owned affiliate, FC Montreal.

Ottawa has commented that it no longer has to scout players and negotiate contracts.

And Saputo does not have to develop and sell to a second market. In his case, his USL sales were direct competition for his MLS ones, a problem still faced by the nine other MLS wholly-owned affiliates located in the same markets as their first teams.

… may become the sincerest form of flattery

Baseball fans may also notice that, while professional soccer reinvents its wheel and learns from doing it, it is evolving toward the structure of America’s original national sport.

Agreements between the Philadelphia Phillies, Lehigh Valley Iron Pigs, Reading Fightin’ Phils, Clearwater Threshers, and Lakewood Blue Claws address exactly the same division of control and responsibility, whatever their details.

Someday, might an MLS club’s soccer roster of, say, 35 allow 28 or 31 to be eligible for only MLS games, while the other four to seven move between the USL and MLS as needed? Baseball players shuttle between the Iron Pigs and Phillies on options all the time.

Some bridges would have to be crossed by MLS, USL and the U.S. Soccer Federation for Union-Steel players to truly drive the baseball commute.

9 Comments

  1. This is why I am desperately hoping that the NASL can survive and remain viable as a second league. For the game in the US to really grow, IMO we need each community team to actually attempt to be competitive and as good as they can be.
    .
    Minor league sports don’t move the needle in communities. I know part of the excitement in places like Louisville, Indianapolis, and Cincinnati is that these teams represent the community and are THEIR team, not the practice squad for the bigger city down the road.
    .
    More independent teams means (eventually) more academies, which means improved quality all around.

    • This is the main reason I support promotion and relegation. It provides “sky’s the limit” incentives for investments in any club in any community. That would also provide incentives for putting more investment in local academies.

      I suppose a second division of independent clubs could thrive without the potential for promotion, but at what point would investors in those clubs be tempered by the limits of being second fiddle and when might MLS see a second division of independent clubs as a potential competitor that poses a risk to their business model?

      I’m generally impressed by what MLS has accomplished*. But at some point the league has to put a plan together to work first on decentralizing ownership and then really looking at how to make sure independent clubs thrive outside of the league. Pro/Rel seems to take care of that. If MLS has a better idea, let’s hear it.

      *(I can also see an argument made that the surge in soccer fandom is not the result of MLS investment but rather a natural phenomenon from which MLS is benefiting, but I have no data or evidence to make that claim. It’s just a hunch I have. The truth is probably somewhere in the middle.)

      • I would certainly like pro/rel in the longterm and the decentralization of the ownership as well.
        .
        I want to prevent MLS from having a complete monopoly on the sport. I think it’s a good thing for multiple teams to be able to compete in a metro area. If say the Chicago Fire aren’t going to offer a good product, the city of Chicago should have other options.
        .
        I’m not really sure if promotion/relegation will ever really happen, but I think it’s achievable for the Open Cup to become popular like March Madness. Without independent teams, the Open Cup is pretty much pointless.

    • Absolutely correct. I moved to Indianapolis about a year ago and have been totally impressed by the fan support here. And since the bid to enter MLS was announced there has been a palpable excitement, with exactly zero games played so far this year. Really hoping this is one of the markets they choose. (Also planning to get to Cinci and Louisville for a game this year, they’re not too far out of the way).
      .
      I’m measuring the success of American Soccer based on ambition. We want as many teams as possible pushing to be at the top of the pyramid. Seeing 12 “teams” put in bids to join MLS is a huge deal. As the league continues to expand the model will eventually have to change, since its going to be difficult to justify a 28 team first tier, let alone when the number climbs even higher.

  2. el Pachyderm says:

    Tim this is outstanding work by you. Keep it up. It raises the understanding of an entire fanbase both local and regional.
    .
    I’m hoping for an MLS of 100 teams.
    .
    I’m hoping for four divisions…. that under NO circumstances have interleave play.
    .
    I’m hoping for a Supporters Shield Champion in each division… that grants a league winner and an enormous fucking trophy.
    .
    I’m hoping for a 32 team… USA CHAMPIONS League which then pits the 8 beast teams in each region in a tournament to determine who the head of the snake is.
    .
    This is the way froward in my opinion. Promotion and relegation is not likely to arrive so we need to think outside the box.
    .
    For the record I am PRO PRO and REL.

    • Old Soccer Coach says:

      MLS = the English FA’s entire 4-league structure.
      .
      That is an exciting vision.
      .
      Gonna have to look at that.

    • I think a version of this proposal (similar to how Brazil does their competition with state and national leagues) is the most likely long term solution. Will be very interesting to see what soccer in this country looks like in 10-20 years.

      • el Pachyderm says:

        It doesn’t really solve for the bottom 4 or 5 shitty teams in each division but hopefully there is volume and a Carling Cup added or some such thing which teams can compete in with the Open Cup to keep fan interest in those cities with poorly run franchises which there is going to be a standard deviation of.
        .
        I’m on the record for Pro/Rel and it pains me to see Staurt Holden or Mike Piazza investing money in overseas 3rd tier clubs, because IMO it is very very telling… not to mention the multiple enormous clubs in the world that are held by US businesses.
        .
        Its funny when people argue for there not being enough investors in an open US pyramid then we see these case studies and examples which completely refute that hypothesis. Either way, soccer is in the hands of businessmen and not communities, so we need to maximize that reality as much as possible. If that is the case then MLS needs to be the biggest sporting league in the world and rival NFL which in time I TBH believe is possible… providing the league doesn’t sell out the rhythm of the game with commercial interruptions and all that stuff which has ruined American Football.
        .
        This is why I changed my name in the offseason for awhile, I turned a new leaf and decided to stop rail on about what isn’t and start focusing on what is and how to best manage that reality to raise the standard as best as possible.
        .
        Ultimately for me its about developing a pool of young players winning the World Cup anyway.

  3. Tim Jones says:

    Thanks, el P. Appreciated.
    .
    full marks to the writer on Scratchthepitch.com, Chad Hollingsworth, whose July 22, 2015 material I used about transferring the D-League success to the USL.

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