The 2020 USL League One season seemed like a blur, didn’t it? It flew by as quickly as it seemed to be put together in the early months of this past summer. This is in no way a criticism of the league: back in June the league faced the same ultimatum as all sports leagues around the world, with the exclusion of the Belarusian Premier League, which is how competition would be able to start or finish in a safe environment?
Integrity of individual leagues in general was important, sure, but let’s not ignore the gigantic elephant in the room: lots of money was due to be lost. Today I am taking a look at where Union Omaha may have lost money, where they may have done okay, and where they might look to make up for lost revenues.
The economic problem presented by COVID-19 was different for all leagues and teams. Leagues like the EPL, Bundesliga, La Liga and even MLS (to a lesser extent) knew that while they would be giving up monetary opportunities the moment they resumed playing, but the idea of finishing their seasons without fans in stadia was palatable since media rights checks would clear, softening the blow. Of course, as was covered months ago, the USL does not have the luxury of TV money that can make up for those losses. A season without at least some clubs allowing some fans through the gates was out of the question per interviews from league and team executives because the finances wouldn’t allow it to work.
The league doesn’t distribute much to teams from the media rights deal with ESPN, in fact, rumor is that the deal is a net loss for the league, with them even passing some of the costs onto the clubs. Independent clubs are encouraged to find local media deals in their markets, and Union Omaha hasn’t publicly announced whether or not negotiations like that occurred before or during the 2020 season. So all independent USL teams, no matter their level, require revenues from match day operations to stay solvent, with money primarily coming in from ticket sales, merchandise and concessions.
So what is entailed in operating costs for USL League One Clubs? Well not a lot of information is publicly available, however some data can be pieced together from various articles written and interviews given. For example, an unnamed player giving an interview to KFOX out of El Paso during the USLPA negotiations said the average player salary is somewhere between $25,000 and $30,000. No specific details were given about whether or not this is across the entire USL organization (the professional sides, of course) or specifically for USL Championship. For the sake of this article, let’s assume they are talking about USL-C since this story originates from the El Paso market, home of Championship side El Paso Locomotive.
I believe players in Championship do in fact make higher salaries than players in League One since it’s an increased cost that Union Omaha ownership and executive groups have admitted they will have to account for when deciding whether or not to make the jump anytime in the future.
Sponsorship revenue is another income stream that dried up worldwide at the start of the pandemic. Entities facing a once-in-a-century situation were understandably reluctant to agree to new outflows of resources. A new team like Union Omaha would have been particularly hard hit as they were likely negotiating numerous critical deals in early March, including for the primary sponsor space on their kit. Ultimately, sponsorship on the kit was given away to CHI Health and Nebraska Medicine. This decision likely saw Union Omaha forfeit potential advertising revenue somewhere in the neighborhood of mid five figures to low six figures.
So like all other independent teams in the USL, Union Omaha are much more dependent on match day revenue than your average professional sports team. The good news is that Union Omaha had eight straight sellouts. While these were at reduced capacity, this still represents the highest attendance in League One. And while many of those tickets may have been season tickets, folks were paying for parking, beers, and merch every game.
In a season like 2020 where traditional revenue streams are much drier than usual, alternative revenue sources are nice to have. A common source of revenue in most soccer leagues around the world is selling players. Seeing a fire sale of players is also typically a sign that your oligarch-owner is about to get into some nasty trouble, but fortunately we won’t have to worry about that problem.
But will we ever consider the selling of players as an offseason norm with Union Omaha? We might, but it may take us a couple years to see just how routine it might become. This was an unknown for supporters across League One during its first offseason, but the verdict seems to be a pleasant surprise about the sale of players. Three independent clubs sold players to Championship sides last offseason, including a reported $20,000 transfer fee for former Forward Madison goalkeeper Brian Sylvestre. As discussed above, a transfer fee like that would likely pay close to a player’s entire salary for a future season.
The offseason economics across the entire USL are certainly out of whack this time around, so we are likely not going to be able to use last year as a measuring stick of what to expect this offseason.
What can we expect from Union Omaha in the next six months from a financial perspective? Well, we can expect to hear the announcement of which players will have their second year options exercised by the club soon (all players signed one year contracts with team exercisable second year options). While this is conjecture, it’s quite possible that small raises are built into these options. This may not be the norm this year, but also expect news of options being exercised with the sole intent of selling a player before the start of next season.
Based on other industries like podcasting, I’d also anticipate sponsorship dollars to be flowing again. Given the success of the team in year one, I’d think sponsors would be lining up to be a part of what we are building.
While this year might have been rough for the club, Union Omaha was probably better off than most teams in the league. With a hot ticket to sell, a great product on the field, great players under contract, and a coaching staff whose development track record grows by the day, the financial outlook for the club looks good.
Who Gives A Hoot? 