More like, how much are you losing relative to revenue and which direction is your revenue going? Is there a way to see revenues growing to the point that loses now make sense? Will it take more investment to get there? Would that set a greater ceiling for future revenues? Or does it make more sense to cut expenses? The "everyone loses money in lower division soccer" meme obscures all of that. Like I said in the Cosmos death throes thread: there are losses, and there are losses. MLS teams lose money. But they also keep seeing revenue increases. Part of the reason they lose money is because those revenue increases keep justifying further investments. That's not the same thing as the Cosmos. That's... not how it works at all. A $10 million loss in one year has to be funded by either loans or equity injections. Mr. 2% Guy isn't on the hook for any of that unless he wants to be. His loss is capped at whatever his initial investment was. But someone has to keep funding with actual cash, or the business will not be able to keep operating. And if a business is losing $10 million a year, with probably less than $3 million revenue, I don't think even Mr. 2% Guy is going to be lining up to invest more. If he was, why didn't he go in for more than 2% in the first place? If the idea is that investment in a sports team isn't driven by return, but because it's fun, wouldn't a person interested in fun have wanted a bigger stake so that he'd have more control? Even if you didn't want control, but just thought it'd be fun to own part of a team, would you really hand over more money to management who just posted financials like you posited? I don't care how rich you are, it'd be idiotic to look at those numbers and go "sure, looks like you guys are doing a great job, this lighting people's money on fire business plan is tops!" The "fun" idea obscures another point: often these endeavours take way more time and energy than they should for the scale of business. When growth isn't there either, it stops being fun pretty fast. If you're a smart rich guy, you quickly realize that you should be devoting your time to the businesses that actually make money or are expanding quickly. Anyways, I don't think the Deltas are dead yet. But if they don't see growth next year, finding investors is going to get more and more difficult. Edit: Oh, but "organic" and "people who know about us, love us" and blah, blah, blah....
Is Igel one of the vanity owners or is he one of the funding guys? I'm surprised if he wanted to take a major stake in a soccer team it would be in the NASL instead of in Brazil. I don't see his name being dropped much when talking about the Deltas. Edit: I see in an earlier post you say he owns the majority of the shares. Is there a place that talks about that. Not doubting you at all, I'd just like to read more about this.
All brazilian big and/or tradicional soccer teams are clubs, so he couldn't be owner of any of then. He only could be one of the associates of the club as is predicted on the club's' constitution, like everybody else.
I'll answer both you and Baysider at the same time... Much of the information that I'm using for this is from Chris Kivlehan's article on the Deltas in Midfield Press, comments made by oneeyedfool in the Deltas thread and the Division 2 standards/attendance numbers from Kenn's site. Mr. Igel is mentioned as the main investor (one of 18 total) by oneeyedfool in the Deltas thread. To be that a person must own at least a 35% stake in the club. So if everyone else has an equal stake and if Mr. Igel only owns the minimum share to be the majority investor, that means that the other 17 investors own around 3.8% of the club (65%/17 investors). That's assuming that Mr. Helmick (no doubt one of the 17) doesn't himself own a higher stake. If the two together own 60% of the club, that means all things being equal the other 16 investors own 40% - that's 2.5% per investor. I was a little low, but that's where I get the 2% claim from. Based on my post above, it's obvious that I'm NOT a business guy, but that's basic math. As for Mr. Igel's commitment there is this from the Midfield Press article... In June 2015, Igel called Helmick and pitched him the idea of starting a soccer club as his next project. and this... “Fabio saw the opportunity to create something special for San Francisco,” Helmick said, and he bought in, too. So this is his baby. Vanity project? Based on what I just quoted perhaps, but it also means he probably WON'T throw in the towel after this year - unless there is some dramatic change in his fortunes. No doubt there will be losses this year. I was guessing high on the $10 million, but it doesn't seem unreasonable, given the travel and the cost of doing business in San Francisco. Certainly, revenues must grow this year and in the year or two ahead to make the club viable and to make the investment worth the trouble. A shirt sponsor is an obvious need. Many more tickets will have to be sold. But it doesn't sound like a California Victory type of situation to me. Even if they finish at 3000/game they'll be way ahead of where the Victory were (1116/game in their only season - 2007) based on Kenn's numbers.
No. Those are regular season and playoff matches only, not Open Cup matches. The spikes are two home openers and a championship.
Cosmos after four games in 2016 at Shuart: 4,360 average Cosmos after four games in 2017 at Coney Island: 4,385 average
To be fair Kenn, weather affected two out of the four matches [one was postponed]; that's part of the deal with early spring/late fall matches on a beach that isn't in San Diego.... The summer months should bring the larger numbers similar to last night [5400].
General business practice would be to have an LP or LLC opened up to own the club, the investors put the money into the LP or LLC. There is a provision in both business documents to do a "cash call". It can be complicated but the short version is the General Partner or Managing Member will issue a cash call. So the guy who owns the 10% stake is on the hook for 10% of the cash call. If he makes his component of the cash call then he keeps his ownership stake at 10%. If he refuses the cash call, then the amount of equity he owns falls from 10% to ______% depending on the math. Now it can be more complicated (and contentious) than that, but that is the basics. The guy can (usually depending on how it is drawn up) sell the 10% stake to someone else, or he may have to sell it to the other investors at the current valuation. You need a PCAOB audit to certify the valuation or you have a court case (in most situations.) That was a sell out too. Unless a SSS gets built in Edmonton or they add seats in the future or they play in Commonwealth Stadium next door...............4096 is the zenith of Edmonton soccer ticket sales.
That's true. I was thinking about how you could use flow-through taxation for losses generated from a club set up as an LLC the way you describe a few days after I posted and owe @CFLRowdiesFan an apology. The bigger point is about the capital call: if the team is losing $10 million a year, that's actual cash that someone has to decide to part with to keep the club operating.
I think Clarke seats 5k, doesn't it? I mean, it would have to. BTW, they drew 4,240 on Sept. 27, 2015. And two other crowds that season that exceeded 4,096.
#USL & #NASL Attendance Week 10: FC Cincy again over 18k (5 times this season); Miami FC & Rowdies both over 6k; Cosmos at 5,421pic.twitter.com/1B54Zicxb7
Sorry...been away for a bit. Thank you, but no need for apologies. We all want the same thing here, success for lower division soccer in North America. Your second part is spot on and is the crux of the challenge that NASL, USL and all the others face going forward. I hope that one day more than one or two clubs can make money at this level but that seems like a LONG way off. Maybe San Francisco can reduce the losses a bit, but if not they'll need those patient investors to keep writing checks.