Why Landon Donovan, David Villa and Other Soccer Stars are Investing in the USL

Growing up, Landon Donovan was more interested in the ownership and operations side of soccer than actually playing. Instead of running up the score against the AI when playing video games like Madden, Donovan was more intrigued with scouting, drafting and signing players in order to build a successful virtual franchise.

That may be slightly surprising for the United States soccer star, whose 20-year professional playing career is undoubtedly the most successful in American history—Donovan is the U.S. men’s national team’s joint all-time leading scorer (57 goals) and has earned the second-most caps (157). Domestically, he won a record six MLS Cups and holds the league record for assists (136), and he played abroad in Germany, England and Mexico.

So it made sense Donovan was part of an ownership group in 2017 that attempted to bring a Major League Soccer franchise to his adopted hometown of San Diego. While the deal ultimately fell through, it paved the way for Donovan to fulfill his childhood executive aspirations as co-owner, executive vice president of soccer operations and head coach of San Diego Loyal SC, which was awarded an expansion franchise in the USL Championship in June 2019 and is set to resume its inaugural season on Saturday.

“It’s funny how things happen,” Donovan said. “I feel extremely grateful this opportunity came out of that. I have a much more hands-on, impactful role here than I would have had with an MLS team, and this has been really, really enjoyable.”

Donovan isn’t the only former international soccer star to transition from the field to the front office in the United Soccer League (USL).

Former USMNT teammate Tim Howard is minority owner, sporting director and goalkeeper for Memphis 901 FC, which began play in the USL Championship in 2019. DaMarcus Beasley, another former USMNT teammate, is part of an ownership group bringing a USL League One organization to his hometown of Fort Wayne, Indiana.

David Villa, Spain’s all-time leading scorer, is a founding partner of Queensboro FC, set to begin play in the USL Championship in 2022, while former Chelsea striker Didier Drogba ended his career as co-owner/player for Phoenix Rising FC of the USL Championship in 2018.

“It’s so good for this league to have that name recognition,” Howard said. “I think that for soccer in America as a whole, there can’t be enough good teams, enough well-run organizations—it doesn’t matter the league. Every kid in Memphis wants an opportunity to play, whether it’s Memphis or Seattle, and if we can present more American kids with opportunities to fulfill their dreams at a high level and be successful, that can’t be anything but a great thing.”

Tim Howard
Tim Howard is minority owner, sporting director and goalkeeper for Memphis 901 FC. MEMPHIS 901 FC

Rise of the USL

The USL traces its history back to the Southwest Indoor Soccer League, established in 1986 to be a minor league associated with the Major Indoor Soccer League.

By 1989, the league aspired to be part of the United States Soccer Federation’s plan to professionalize the sport in the country ahead of the 1994 FIFA World Cup—which included the creation of MLS, which began play in 1995—while pushing its clubs to be considered for part of the federation’s three-tiered division system.

After a series of name changes, league creations and mergers, the USL began its modern era in 2010 as USL PRO, which merged the USL First Division and the USL Second Division. Three years later, a partnership with MLS was announced to enhance the development of professional players in North America.

The USL rebranded its divisions once more in 2018 with the USL Championship, USL League One and USL League Two representing the second, third and fourth tiers of soccer in the country below MLS.

Today, the USL is composed of 47 professional clubs and more than 180 amateur and youth clubs after adding 17 pro franchises in 2019 and 2020. The 35-team USL Championship welcomes Queensboro FC in 2022, with discussions for potential expansion in Cleveland, Milwaukee and Baltimore. There are 50 potential markets under consideration for USL League One expansion, with active negotiations taking place in 15. The league, which currently stands at 12 teams, plans to announce three to five more expansion teams by the end of 2020 and to grow to between 25 and 30 teams within five years.

“I love the project, and I love what the USL is trying to do,” Beasley said. “They’re trying to grow the game and have more kids playing soccer at a higher level, and that’s only going to help us as a country. To be able to have these professional environments at such a younger age so when they get up to the first team and national team they’ll be ready for it at 17, not at 19 or 20, because we’re already losing a couple of years.”

Canada v United States - CONCACAF Nations League
After a 20-year career including 126 caps with the USMNT, DaMarcus Beasley is getting into soccer ownership in his hometown of Fort Wayne, Indiana. GETTY IMAGES

USL Appeal

Arguably the best goalkeeper in U.S. men’s soccer history, Howard is used to wearing gloves on the field. Being involved with a USL franchise allows him to accessorize in a different way. While he still straps on his gloves and hops between the pipes from time to time, he also serves as the minority owner and sporting director of Memphis 901 FC.

Howard said it’s always been a pipe dream of his to be an owner, so when the opportunity presented itself in Memphis to join Peter Freund and Craig Unger, he jumped at the chance to provide his knowledge, expertise and vision for the club.

“There was an enticement that you can wear a lot of hats here,” Howard said. “You can go to a club, don’t ever leave the boardroom, you don’t ever get out of your suit, and that’s what you do, and that’s okay. Being so young at this, when I came in, I wanted to be able to have my finger on the pulse of different parts of the club and learn as well—learn the business side of what running a football club is like, learn how to deal with agents, learn how to build rosters—all things you kind of know about but until you put into execution, you don’t know that well.

“Being in the USL allows you to do that, and do that at a successful level.”

Donovan is adding to his post-playing career responsibilities as well with the Loyal. Initially a co-owner with Warren Smith, who also cofounded Sacramento Republic FC, and executive vice-president of soccer operations, Donovan was named head coach in November 2019; it’s his first foray into coaching. He doesn’t intend to maintain all of these roles indefinitely, though.

“There are some days I’m wondering what the hell I’m doing, but the reality is for a club that is starting up, it makes a lot of sense right now to be able to be a part of all these different conversations because there’s so much overlap,” he said. “I don’t think this is the right structure, that’s for sure … and at some point it’s not going to make sense for me to be trying to handle all of that, not even mentioning that I have no experience in any of it. 

“It’s not a smart thing as an owner to carry all that on for too long, so I’ll get out of the way and get in people who know what they’re doing.”

While Donovan and Howard are venturing into new territory, they can rely on one another as well as their soccer connections along their journey while also providing support to those who follow in their footsteps like Beasley. In fact, Howard alerted Beasley, his former USMNT roommate, that the USL was interested in working with him in some capacity, which led to the creation of the Fort Wayne franchise.

USA v Algeria: Group C - 2010 FIFA World Cup
Tim Howard (right) and Landon Donovan celebrate after Donovan’s stoppage-time winner against Algeria in the 2010 FIFA World Cup. GETTY IMAGES

Howard said he leans on Atlanta United FC vice president and technical director Carlos Bocanegra and Austin FC sporting director Claudio Reyna when he has questions. Donovan speaks to Howard as well as former teammates Todd Dunivant (Sacramento Republic FC general manager) and Brian Ching (former Houston Dash managing director).

“We’re all in similar boats,” Donovan said. “Tim, DaMarcus and myself haven’t been through this before, so sharing experiences is really valuable. There’s a lot of nuance you wouldn’t understand until you get in it. You also have big decisions to make, and you don’t want to go in blindly not knowing anything as you make a decision on a player or a marketing idea; you want to make sure you’re getting as much information as possible.”

Not only are these players-turned-owners enticed by the prospect of maintaining multiple hands-on roles at the USL level, but the financial aspect is equally appealing, offering more bang for their buck. 

Expansion fees in the USL Championship are $12 million in 2020, up from $10 million in 2019; they were as low as $1 million in 2015. At the USL League One level, initial franchise fees in 2020 (for the 2021 season) are at $2 million, double what they were the year before.

MLS, on the other hand, set an expansion fee of $200 million for its 28th and 29th franchises in St. Louis and Sacramento while the Charlotte franchise’s fee was $325 million—nearly four times what New York City FC and Orlando City SC paid less than five years ago and a 712.5% increase from the Montreal Impact’s $40 million fee to join in 2012.

MLS Charlotte Soccer
Carolina Panthers owner David Tepper (right) led a record $325 million bid for an MLS expansion franchise in Charlotte. ASSOCIATED PRESS

“I love MLS, but MLS has become very, very big money,” Donovan said. “It’s billionaires and some of the wealthiest people in the world, and when you have that, decisions are often made that are financially driven, and that’s fine because sports is a business, but at the USL level, there’s a much more grassroots feel to it. You have the ability to really start from scratch and build something that you hope is going to be meaningful and long lasting. That’s probably similar to new MLS teams coming in, too, just on a much smaller scale with USL clubs.”

The financial appeal has even caught the eye of high-profile sports ownership groups. The San Antonio Spurs’ ownership group, Spurs Sports & Entertainment, owns San Antonio FC; Indiana Pacers owner Herbert Simon owns Reno 1868 FC; and Tampa Bay Rays owner Stuart Sternberg purchased the Tampa Bay Rowdies. MountainStar Sports Group, an investor in Liga MX side FC Juarez, owns El Paso Locomotive FC.

While the valuations of USL Championship clubs have increased by five times since 2014, club revenue continues to grow as well. In 2018, clubs saw a 28% overall increase from the prior year on an average of sponsorship, ticketing, merchandise, and ancillary revenue generation.

“The experience, knowledge, professionalism and visibility these guys bring to USL is invaluable,” USL COO Justin Papadakis said. “We’ve never felt more confident about the future of our organization than we do today, and their involvement is a big part of that. The 2026 World Cup is just six years away—we’re going to accomplish a lot together between now and then.”

Creating Opportunity

Phoenix Rising
Phoenix Rising FC hasn’t slowed since the departure of Didier Drogba; the club won 20-straight games en route to the 2019 USL Championship regular-season title. PHOENIX RISING FC

While MLS has franchises in seven of the country’s ten most populous cities, there were voids in Phoenix (No. 6), San Antonio (No. 7) and San Diego (No. 8) that the USL filled. The same can be said in various other top-30 markets, including Indianapolis, El Paso, Memphis and Las Vegas.

Thirty-one USL clubs in 2019 are located in the Nielsen Top 100 TV Market Universe, including six in the top 15. While the USL is expanding its broadcast reach—all matches are broadcast on the ESPN family of networks via a three-year agreement announced in August 2019—the league was seeing attendance numbers increase as well before the pandemic hit.

USL Championship match attendance had increased by at least 30% year-over-year since 2015, with clubs welcoming more than 2.7 million fans through the gates in 2019. Expansion sides produced some of the strongest attendance numbers, with 11 combined sellouts last season; as a whole, the Championship had 61 sellouts in 2019 compared with 38 the prior season. (Teams play a 34-game schedule.)

“One of the biggest issues with our country is how big it is,” Donovan said. “While MLS occupies big markets and nobody can say it’s anything other than spectacular what (Commissioner) Don Garber and MLS ownership has done, there’s still a lot of cities in this country that weren’t getting soccer. That’s what USL has done between League One, League Two and the Championship. 

“There’s 60, 70, 80-plus markets now served with soccer, professional soccer and high-quality professional soccer. That’s helped expand the footprint of this sport throughout the country.”

Certain markets, including Charlotte, Austin, Miami and New York City, have or will have overlap with MLS and USL franchises.

David Villa
Former FIFA World Cup and UEFA Champions League winner David Villa is part of an investment group bringing Queensboro FC to New York City. QUEENSBORO FC

The presence of New York City FC and the New York Red Bulls, the latter of whom plays in nearby Harrison, N.J., didn’t dissuade Villa, majority owner Jonathan Krane and minority owner Michael Cohen from bringing Queensboro FC to the Big Apple, in Queens. Villa, who lived in the borough while playing for NYCFC from 2015 to 2018 and developing his DV7 Soccer Academy, said they’re in the right place for the project while the USL is the best possible league for it.

He’s excited about the potential growth of the league, highlighted by the big names of former players, especially ahead of the 2026 FIFA World Cup.

“We feel we can help in many ways grow soccer in the States,” Villa said. “We saw that because we’ve all played here. … The World Cup is the best tournament in this game. It’s going to be huge for the soccer community in the U.S., and we’re trying to help.”

The former USMNT players hope their investments in American soccer will create more interest in the sport for fans and opportunities for players, which hopefully leads to greater success not only domestically but internationally as the World Cup returns to North America.

“The world’s going to be watching—the world’s always watching America—and certainly with soccer we’re starting to push that envelope,” Howard said. “When the World Cup is here, there’s just going to be more lights, and it’s going to be more magnified, and that’s when you hope that you’re at your height in every sense, so the USL is no different.”

Said Beasley: “I think about one day hopefully celebrating a World Cup win, having a beer on the couch, saying all these leagues we have helped grow the game of soccer in the U.S. To be part of that—a little, little piece, a .1% part of that—that win will be enough for me.”

NOTE: First appeared on Forbes SportsMoney


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