How the North American Soccer League’s Most Unlikely Owner Plants to Make Soccer.....
How the North American Soccer League’s Most Unlikely Owner Plants to Make Soccer Finally Stick in Edmonton
There were more than a few people telling Tom Fath he’d scored an own goal when he bought a North American Soccer League franchise in 2009. After all, short of organizing your money into a pile, dousing it with kerosene and setting a match to it, there isn’t a quicker way to lose money in Alberta than buying a soccer team.
Tom Fath wants to change the culture of soccer in his home city with his recently acquired pro team, FC Edmonton
Photograph Jessica Fern Facette
But those comments would hardly have mattered because the 61-year-old Fath, Edmonton entrepreneur and owner of the Fath Group of Companies, wouldn’t have known what the critics meant by own goal (a term used when a player kicks the ball into his own net). It’s not just that he wasn’t a fan of soccer when he decided to buy the franchise; he barely even knew what soccer was. He had never watched a complete game on TV, much less in person. “I didn’t even know what an offside was,” he says.
But David Downs, the commissioner of the North American Soccer League (NASL), isn’t worried about Fath’s lack of soccer savvy. In fact, he says, Fath is precisely the kind of owner he wants. “Tom is an excellent example of somebody who knows where his expertise begins and ends,” says Downs, noting that Fath now sits on the league’s executive committee. “It’s a great source of comfort for me to have him sitting around the table.”
Fath’s route to becoming an owner of a North American soccer team is long and winding, and he took it without any apparent map. He began working road construction for O’Hanlon Paving in 1968, working out of the trunk of a car with nothing but a few shovels. He bought into the company in 1985, and the Fath family took over the business in 1990. The family conglomerate now owns a number of businesses, including Hi Signs (a manufacturer and distributor of road signs), Fath Industries (an asphalt and rubber recycling company) and Aubro Services (a pavement maintenance provider). Fath sits on numerous boards and runs a handful of other small companies on the side – more than he can count off the top of his head.
Clearly, this is not a man prone to whimsical ventures or flights of fancy, which makes his decision to take on the world of professional soccer all the more conspicuous. He invested in FC Edmonton after attending a presentation from the NASL in New York in November 2009. “It just felt right,” he says of his decision. FC Edmonton played its first match in June of 2010 versus the Montreal Impact, followed by four other exhibition games throughout the year. The team entered the league for its first competitive season in 2011.
Still, if Fath is late in coming around to the charms of the beautiful game, he’s more than making up for it now. The team is coming off its first full season in the league, and Fath is intent on ensuring that it finds a place in Edmonton’s sporting landscape. But turning the fledgling team into a cash cow could be a hard-won pursuit, particularly in a city where soccer franchises have a history of failure. The Edmonton Drillers – a team that has played both indoor and outdoor soccer in Edmonton in a handful of different leagues – has returned to the city on three separate occasions since 1979. In each instance, the club hasn’t lasted longer than five seasons.
Fath is keenly determined to reverse this trend, and he began with the team name. FC Edmonton was chosen for its traditional European appeal and because Fath “wanted to give it a feeling of permanence.” Keeping the club in the city long enough to build a solid brand will take time, he says, although he rejects the idea that the team is already struggling to stay alive. “I’m careful not to use words like ‘survive,’ because if you use words like survive, it gives the impression that you might not continue.”
The young club outperformed expectations in its first year, placing fifth out of eight teams and securing a spot in the first round of the playoffs. But the cost of putting the team on the field its first season outweighed its return. Rather than aiming to profit from the team, Fath is battling just to stay out of the red. “I thought we would break even within three years,” he says. “I was wrong. It’s been more expensive than I figured.”
Fath won’t discuss how much money he has sunk into the team but he is willing to talk about the regular expenses, and they’re considerable. Travel costs run about $400,000 for the season and the rental equipment needed to broadcast the matches is another $100,000. He won’t discuss specific player salaries, but the league average payroll is around $500,000 and FC Edmonton’s was at the higher end of the league. All told, the first-year owner doled out well over $1 million in annual operating costs.
Despite somewhat dismal attendance in the team’s first season – an average of 1,817 per game – Fath still managed to generate some revenue. The team took in about $500,000 in ticket sales and locked down a sponsorship deal with Sears Financial. But finding additional revenue streams has been difficult. FC Edmonton gets nothing for concession sales or parking at the University of Alberta’s Foote Field, where the club competes. Much of the team’s operating costs are covered by Fath’s paving and signage companies.
Fath is hopeful that the nature of the league itself will contribute to his success. He says the NASL emphasizes co-operation and long-term viability.
It used to operate under the banner of the United Soccer > Leagues First Division (USL-1) until Nike sold its ownership stake to NuRock Soccer Holdings in August of 2009. The deal caused a rift between team owners and the new management. A few disgruntled teams left the USL-1 and revived the old NASL moniker from a league that folded in 1984. Like Fath, the league is more interested in creating successful soccer teams than lucrative businesses. “Clearly, everybody wants to beat each other’s brains out on the field,” Downs says, “but off the field I think everyone is pulling in the same direction.”
They might have to pull a little harder than they have so far. The Montreal Impact was the only team in the league to make a profit during the 2011 season, and it has since moved into Major League Soccer (MLS). The Vancouver Whitecaps FC did the same thing in 2010, parlaying its success both on and off the field into the move. But Downs doesn’t worry about losing successful teams to the NASL’s larger competitor. “Even if there isn’t classic competitive relegation and promotion in soccer throughout North America, there’s de facto business promotion and relegation,” he says. “But we view that right now as a positive.”
The gap between successful and unsuccessful teams in the NASL has, at times, been immense. That has led to a requirement that owners put forward a $750,000 line of credit each year, a measure meant to ensure teams survive longer than a single season and to protect their creditors in case they don’t. Still, the NASL is quickly expanding despite the challenges it faces, and much of the growth has been in Canadian markets like Edmonton. “In general, soccer is probably better liked and attended throughout Canada than it is in many U.S. markets,” Downs says.
An Ottawa-based team was recently purchased for US$1 million and will compete in its first season in 2012. Downs believes two additional teams will come on-board the following year, with each expected to sell for US$2 million. (Hamilton, Calgary and Winnipeg are among the possible locations.)
Another upside to Canadian soccer is the game’s propensity to attract loyal fans, who tend to be devout followers rather than mere observers. While FC Edmonton’s attendance numbers were modest, the home-game atmosphere was vibrant. The crowd would erupt when the club scored, stomping the stadium bleachers as horns and bagpipes sounded. Part of that energy was a result of the FC Edmonton Supporters Group, a dedicated fan base devoted to making soccer a staple product in the city.
That passionate soccer environment is something Downs believes will eventually sell tickets in Edmonton. He says live soccer games provide fans with something they can’t get at home on the TV. If he’s right, it would bode well for the NASL, which boasts the highest-quality soccer available in each of its markets.
Fath plans to capitalize on that positive energy by developing as many homegrown stars as he can. FC Edmonton had 19 Canadian players in 2011, more than any other team in the league. It was also the only club to stay beneath the league’s cap on foreign players per team. That kind of local support lured St. Albert-born midfielder Shaun Saiko back from England’s Football League Championship for the opening season. The 22-year-old was easily sold on returning to Edmonton when he caught wind of the expansion team. “It was exciting to hear the news,” he says. “It means there’s lots of Canadian talent, and FC Edmonton’s trying to make them better.”
Fath may still be learning the ins and outs of professional soccer, but he’s already one of the team’s biggest fans. He attends every home game and regularly gives media interviews at centre field during halftime. He and his wife, Jo-Ann Kolmes, even greeted the team at the airport at midnight when the club was returning from a lacklustre 5-0 loss to the Fort Lauderdale Strikers at the end of last season. If there’s such a thing as the soccer bug, he has caught it.
That might explain his plan to build a stadium to house FC Edmonton, one that will almost certainly get no support from municipal or provincial governments. Fath hopes to have the final layout for a 10,000- to 20,000-seat multipurpose stadium ready by 2014 and says it could easily be the difference between a team that thrives and a team that merely survives. A new stadium was integral to the success of Toronto FC, Canada’s first MLS team, and that franchise is now estimated to be worth $100 million. If Fath can make that happen, it’ll be those early critics who will be struggling to explain what is and what isn’t offside.
Things that struck me
Things that struck me were the franchise prices....
Ottawa 1million Franchise
Future franchise "possible" 2millions.....for a NASL franchise that seems steep, but on the other hand better ask more money now at least whom ever can afford it will "hopefully" be with NASL in the long run.
I really hope that at least 1-2 more teams will join NASL on the West Coast thus cutting down some travel expenses.
Here's hoping he doesn't run out of money.
Originally Posted by orletafc
Read somewhere this week that a team in San Diego is exploring a jump to the NASL.
Originally Posted by orletafc
If the figures are accurate, then it looks like the club may have lost a half million or so last year. Unless his group of construction companies is poorly run (which I very much doubt), that number is not much more than chump change in the Alberta road construction industry and could be sustained indefinitely in this energy driven economy barring any serious downturns.
Originally Posted by Soccerpro
Don't put anything into that. The club is the D4 NPSL San Diego Flash and they do not have the money or stadium to go D2. They couldn't survive as a USL-Pro right now. Also, Mexican Club Tijuana(and other Mexican teams) basically own the San Diego market now. It would take a MLS team to challenge them for fans.
Originally Posted by munseahawk
No one wants to lose money. And 500k is NEVER chump change. Every business always looks to cut the dead weight at some point.
Originally Posted by kj52
Last edited by Opie; 07-01-2012 at 07:21 PM.
Not to imply that anyone would want to deliberately throw away money but it's not all that different from donating that amount to charities. The payback is if you want something bad enough and can afford to absorb the cost, why not do it?
Originally Posted by Opie
Charitable status for Sports clubs? Now theres an interesting Idea. Small time Rugby clubs in the UK have used this trick for decades, even getting ground renos on the back of lottery funding.
Originally Posted by kj52
To update the article a little.
The Club move from Foote to Clarke field this year. Its a considerably lower rent than Foote and was supposed to be fitted with additional seating for the start of the season. Unfortunatley the Vogons who inhabit the Permit department have screwed things up so don't expect them to turn up anytime soon. (apparently amoungst the permit requirements is a LANDSCAPE PLAN!?) However, as it stands the Stadium has a capacity of 1000 but is literally working on standing room to allow and average of 1500. 2500 turned up to one match this season and the joint was bouncing. actually with 1500 in most weeks it still comes across as bouncing.
The Grandstand has a Roof which makes the Audio on Team 1260 and the CBC (yes CBC) stream sound like a classic Div 3 English game at times. Not in small part to a number of North of England voices calling the ref at time to time.
Tom and Dave are not in this to lose money, but to some extend they its never been viewed by them as a money spinner either. I think they locked into a five year plan of having a steady gate and a place to play in.
I think the telling comment is the one one below which gives the impression that they want to make it work long term.
“I’m careful not to use words like ‘survive,’ because if you use words like survive, it gives the impression that you might not continue.”
Last edited by alberta white; 07-03-2012 at 12:04 AM.