Interview With . . . Brian Costin

In NISA Nation’s first post Ten Reasons NISA will be different, the first reason we mention is: “Any Community Can Have Pro Soccer”.  Sure, it’s a little early in the history of this blog to be quoting ourselves but here we go:

In the United States, only one top tier (“Big Five”) professional sports team is based outside of the largest 50 metropolitan areas. About 160 million people live outside of those 50 cities and live in markets where professional soccer should have the opportunity to thrive.

This source of this information is from Brian Costin.  Brian is an advocate for open system soccer and having more cities and communities have access to professional sport, with the natural choice being soccer.  We at NISA Nation are grateful for his time with this interview as he opened up about some major topics he feels are affecting the current soccer landscape.

NN: Thanks Brian for doing this. Tell our audience a little bit about yourself.

BC: The most accurate description of my career and life goals is that I am a social change entrepreneur. My career path has crossed back and forth between non-profit social change organizations in the public policy arena, and government employment where I’ve been in policy positions attempting to change society for the positive from the inside. I’ve worked for three public policy non-profits in Illinois, where I focused on major issues facing the state of Illinois like fighting corruption, transparency and government ethics. I did the same when I worked as a deputy chief of staff in Illinois Governor Bruce Rauner’s administration for four years.

NN: What attracted you to soccer in the first place?

BC: It was a slow process that didn’t really become my top sport until adulthood. My soccer experiences in childhood were pretty limited. I remember going to a Chicago Sting indoor soccer game around the age of 7 or 8 and being highly entertained. I vividly remember being really upset when I got one question wrong on a test in grade school about soccer dribbling. I was wrong. I played other sports (basketball, football, baseball and track and field) through high school and into college.

However, soccer really started catching my attention when I was 18 and in Dublin, Ireland during the 1998 World Cup. I went with my sister to the Temple Bar area to drink legally for the first time and I remember walking down the street when all of the bars simultaneously erupted. Someone scored a goal against England. How could a large group of people care so much about a match where their team wasn’t even playing? I’d never experienced anything like that passion for sports before. My curiosity for the game really started there and my passion for the game has grown exponentially ever since.

NN: Given your professional background, what would you like to see change as far as the overall governance of the sport?

BC: My professional background is largely in non-profit management with a focus in public policy. I served four years a deputy chief of staff for policy in the former Illinois Governor Rauner’s administration in Illinois. Some of the policy areas I was focused on include anti-corruption and government transparency.

By far the #1 reform in the governance of the sport is for U.S. Soccer Federation (USSF) to establish and encourage an open professional system with promotion and relegation. In economic terms, open markets with low barriers to entry are vastly superior to closed markets with heavy regulation and gigantic barriers to entry.

Not only is an open system with P/R vastly superior when it comes to sporting merit, I believe it is superior economically because it allows unlimited investment and opportunity in the sport. The American sports entertainment industry is significantly underperforming in terms of percentage of GDP in comparison to other countries with open systems. Top tier professional sports are only accessible to the top 50 metro areas in the U.S. and the rest of the country (over 150 million people) is completely ignored.

That said, the top 50 metro areas are significantly underserved as well. Greater Manchester in England has roughly the same sized population as Chicago, Illinois, 2.8 million. Manchester has seven professional soccer clubs in just the top 4 tiers of sport (Tier One: Manchester United, Manchester City, Tier 2: Wigan Athletic, Tier 3: Bolton Wanderers, Rochdale, Tier 4: Oldham Athletic and Salford City). All of these teams have aspirations to make it to the top tier of the sport, and five of the seven have played at the top level at some point in their history. Two of these clubs are super clubs regularly competing in major continental competitions. 

On the other hand is Chicago, with one professional soccer club which happens to be the worst non-expansion team in MLS over the last decade despite having the country’s third largest economic market all to themselves. If the United States had an open soccer system like the rest of the world I would not be surprised to see a half dozen professional soccer clubs or more competing in different levels of the pyramid in Chicago within a few decades, not to mention many more clubs in the full metropolitan area which totals 9.5 million people. Selfishly, as a Chicago resident, I’d like to think one of these teams would have a little bit more ambition than the Chicago Fire. Competition tends to do that.

More closely related to my professional background, the reform I would like to see is to dramatically improve the transparency and ethics of USSF. First and foremost, U.S. Soccer should transparently bid out the Television and Sponsorship deals which are currently being handled by Soccer United Marketing (SUM), also known as MLS.  Since 2004, U.S. Soccer hasn’t had an open bidding process for awarding this contract and it is completely unknown how much money SUM has earned from these deals. U.S. Soccer refuses to release this information. As a $120 million organization U.S. Soccer has the financial capability to bring contract negotiations with TV networks and sponsors in house, or at the very least allow for an open bidding process.

U.S. Soccer needs to come to the realization that massively subsidizing a single corporate entity within a closed system model does tremendous damage to the rest of the soccer ecosystem in the United States and is counterproductive to the mission of the organization as well as counterproductive to the mission of its parent organizations, Concacaf and FIFA.

Purposely or accidentally, U.S. Soccer has done nothing to establish an open system with promotion and relegation in accordance with international best practices and FIFA rules. Instead, they have decided to subsidize a closed-system model with one corporate entity through TV deals, sponsorships and stadium selections. This one company has an invested interest in maintaining a closed-system with cartel-ish economic tendencies that restricts investment in the sport. Some of these soccer killing restrictions include restricting the number of teams, charging a $200 million entry fee, anti-player drafts, player development territories, lack of free agency, salary caps and incredibly bewildering roster rules which result in lumpy, unbalanced rosters where the majority of money is spent on a few DP and TAM players. Many of these policies are completely foreign in the rest of the soccer world and for good reason.

U.S. Soccer and its practice of subsidizing closed soccer and ignoring the global standards of having an open system is the single most destructive policy holding the country back from competing against the world’s best.

The policies of state and local governments often exacerbate U.S. Soccer’s & MLS’s protectionist agenda, when they subsidize certain teams with millions or billions of dollars in taxpayer dollars for public-funded stadiums. This has a crowding out effect as state and local governments are reluctant to give those same opportunities to all professional soccer teams in that market or other markets. Nor should they because of political and financial restraints. This rigging of the economy by U.S. Soccer and state and local government contributes to an unequal playing field that reduces competition and the incentive for multiple parties to privately invest in the game in otherwise viable markets. Why invest in a system where the rules are rigged against you and you have to get permission to compete from those you are competing against?

Despite these tremendous policy failings of U.S. Soccer, I still believe there is a huge opportunity for reform both within and outside the organization that could unleash the economic and sporting potential of the game in the United States. There is a sports economic revolution waiting to happen in the United States, and soccer is the most likely sport to realize it. If we do it first, I believe it’s only a matter of time before soccer is the number one sport in the U.S. and becomes a globally dominant force in the Men’s game too.

NN: When talking to groups interested in building a club or having their club join NISA, one of the things NISA’s expansion team has heard repeatedly is “… but you are probably already talking to [a bigger club in our area] …” and they are always surprised to hear that territorial rights are either a non-factor in evaluating expansion applications or in some cases a positive when it comes to local rivalries.  Why do you think territorial rights has taken hold here and not in other countries where soccer is more prevalent?

BC: The closed system model is a distinctly American sports phenomenon. It’s the way it’s always been done in professional sports in the United States. Baseball, Football, Basketball and Hockey all are set up in this manner. I believe they have been able to get away with an inferior sporting model largely because these four sports were invented in either the United States or Canada and our leagues have had a gigantic head start in comparison to the rest of the world. I don’t think this sporting model would be as viable if the sports were developed elsewhere first. I believe there is a huge market growth opportunity for the first major sport to adopt an open system with promotion & relegation.

Of the big five sports in America, soccer is the most likely to adopt an open system with promotion and relegation. The reasons for this are 1) American Soccer is not already globally dominant and must compete with the rest of the world for talent and consumer’s attention. 2) There are more soccer fans in the United States which are already familiar with and support teams in leagues within open systems where promotion & relegation is the norm. 3) All of the professional soccer teams in the United States are in FIFA sanctioned competitions, and thus could be encouraged or forced by FIFA to adopt the open system with promotion and relegation in the future. FIFA has stated, via article 9, that promotion and relegation systems is preferred and the “very essence of football”. It is entirely plausible, FIFA or Concacaf could push the USSF to be more aggressive in supporting and/or mandating clubs and league have a promotion and relegation system to continue their sanctioning and eligibility for future FIFA competitions for both clubs and players.

NN: John Prutch would like to see a NISA team in Dubuque, Iowa.  Chris Kivlehan makes a case for the Lehigh Valley.  What do you think are key ingredients for clubs in smaller U.S. markets to succeed?

BC: The most important ingredient for success in small U.S. markets is a pathway to the top or access to a market. If there is a legitimate opportunity to reach the top level through sporting merit, it will dramatically increase the buy-in for local fans. Instead of merely having the opportunity to watch players that might make the top level, entire teams and communities can dream and compete to reach the next highest level. Currently, the only professional sports options for communities outside the top 50 metro markets is minor leagues in closed systems, with no chance of the teams ever making it to the top level. This dramatically reduces the importance of professional sports. In an open system, every single game becomes much more important and entertaining when there are real stakes at hand.

According to U.S. Soccer’s Professional League Standards to be sanctioned as first division, “At least 75 percent of the league’s teams must play in metropolitan markets of at least 1,000,000 persons.” This ensures an underrepresentation of smaller market teams. 45% of the country’s residents are outside of metro markets larger than one million people, but they can only have a maximum of 25% of the teams. There is no competitive reason for this regulation.  It is a completely unique and excessive regulation which makes sense if you’d like to limit opportunity and competition, but a completely baffling regulation for a non-profit which has a national mission to grow the sport in the entirety of the country.

Small markets can succeed in top level sports and the Green Bay Packers are evidence of this. Green Bay metro area only has a population of around 320K, by far the smallest market in the United States with a top tier sports team. The next smallest market is Buffalo, New York with a metro population of 1.1 million people. The Packers are a vestige of a bygone era when the NFL was a regional sports league, and Green Bay has never been considered a top tier market in any other sport. Even though the league has evolved to a national sport, the 100+ year old Packers have proven they can compete on the top level with 13 championships including four in the Super Bowl era. The Packers are also an economic success. Lambeau Field has sold out every regular season and playoff game since 1959. They also have a unique fan ownership model. More than any other professional sports team, the Green Bay Packers shows the world of top tier professional sports can realize huge growth from a vastly different type of competitive structure.

While Dubuque is considerably smaller than Green Bay, it is worth noting there are no top tier professional sports teams in the state of Iowa, which has a total population of over 3 million. It is entirely possible for a state like Iowa to have teams that compete at the highest level of professional sports in an open system if they capture the imagination of the whole state, much in the way the Packers do in Wisconsin. The University of Iowa and Iowa State University compete at the highest levels of the sport and have won dozens of team championships in various sports.

Lehigh Valley has a population of 840,000 plus residents in 2018 according to the latest U.S. Census Estimate. They are a top 70 market in the United States, just outside of the top 50 which is currently considered viable for top tier professional sports. In a closed system, they will never see the opportunity for top tier professional sports. In an open system, the Lehigh Valley is one of the top markets candidates which might see a professional sports boom.

NN: If you could pick one city or region in the country, where would you like to see a NISA club next?

BC: Chicago, preferably Schwaben AC in Buffalo Grove, IL right down the street from my house.

But in all seriousness, if I was an investor in an open system I would be looking in Virginia. Virginia is the largest state in the country without a top tier professional sports team and has two underserved metro areas that are in the top 50 metro markets in the United States. The Virginia Beach-Norfolk-Newport News metropolitan area has 1.7 million people and the Richmond, VA metropolitan area has 1,281,708. They also have historical college soccer powerhouse in the University of Virginia, which has won seven national championships.

Of the existing clubs in Virginia, the Richmond Kickers fits the market and cultural profile of a club which would benefit the most from an open system with a pathway to the top. They are a historic club which has shown ambition but has historically been denied an opportunity to compete at the highest level.

For similar reasons to those listed above, here are some other areas/clubs I think would be opportune for investment.

Top major markets with no professional sports clubs

  1. Riverside/San Bernardino, California
  2. Virginia Beach, Virginia
  3. Providence, Rhode Island
  4. Louisville, Kentucky
  5. Richmond, Virginia
  6. Hartford, Connecticut
  7. Birmingham, Alabama
  8. Rochester, New York
  9. Grand Rapids, Michigan
  10. Tucson, Arizona

Major markets outside of MLS

  1. Phoenix, Arizona
  2. Detroit, Michigan
  3. San Diego, California
  4. Tampa, Florida
  5. Baltimore, Maryland
  6. Charlotte, North Carolina
  7. San Antonio, Texas
  8. Pittsburgh, Pennsylvania
  9. Sacramento, California
  10. Las Vegas, Nevada

Top states with no professional sports teams

  1. Virginia
  2. South Carolina
  3. Kentucky
  4. Alabama
  5. Connecticut
  6. Iowa
  7. Mississippi
  8. Arkansas
  9. New Mexico
  10. Nebraska

NN: One of the stats you have brought up on social media before is the number of states that do not have access to top tier pro sports.  What is the current number of states being excluded and why do you think it is important to track that?

There are 23 states without a top tier professional sports team. Those states have a combined population of more than 50 million residents. These states which have historically been ignored or underserved in professional sports have shown they can compete at the highest level competitively and economically at the college level.

Just take the past few years in the top two college sports basketball and football. Alabama and Clemson (South Carolina) are the two most dominant programs of the last decade. Neither state has a top tier professional sports team. The University of Virginia won the last Men’s Basketball National Championship, to go along with the 7 national championships in soccer. Both the Men’s and Women’s basketball teams in Connecticut have won multiple national championships since the turn of the century. The UConn women’s basketball team is perhaps the most dominant team in any sport. Nebraska Football won two championships in the 70’s and three in the 90’s. Even the country’s smallest state by population, Wyoming, won a national championship in men’s basketball back in 1943. The potential for sports excellence isn’t limited by state population on the college level, which highly suggests it wouldn’t be a limiting factor on the professional level.

Top tier professional sport is sabotaging its own potential economic success by limiting itself to the top 50 metro areas in the country. No other large industry in the United States limits itself in such a way.  Could you imagine if Apple, Microsoft, GM or Walmart limited its geographical footprint in such a way? They’d lose billions in potential economic activity and profits every single year. The professional sports entertainment industry is an extreme outlier in how to develop a large scale industry in America.

NN: One of the topics you have brought up before are university towns like Tuscaloosa AL or Lexington KY where college football and basketball respectively are the top team in town.  What do you think clubs in NISA should try and tap into as far as growing soccer in communities of a similar size to top programs in American college sports?

BC: Colleges have a huge strategic cultural advantage when it comes to growing support for sports teams. Every year thousands of students come to campus from afar to a new culture which is strengthened from a collective experience of rooting for a sports team. While students may only stay in one place for a short period of time the cultural bonding experience is something that often lasts a lifetime. The college sports experience in “small” markets show there is a natural human desire for community bonding that is strengthened by the opportunity to compete at the highest level. There’s a natural human longing for belonging. Even small campus communities have the hope of competing at the highest level. I believe properly structured open competitions on the professional sports level can give rise to the same type of feelings of a community pride that are seen within college sports, and represents a huge growth potential for professional sports.

NN: What do you hope to see from NISA going forward as a fan of soccer and a fan of the open system?

BC: While in its infancy I’m excited to see NISA is committed to the values of an open system. Those foundational principles, if they come to fruition via action over a period of time, sets NISA up for exponential growth over the long term. NISA has the potential to be truly ground-breaking league in professional American sports and revolutionizing the entire industry, not just soccer.

These formative years for NISA are crucial. I see a number of important deliverables to build a base for unique long-term growth in the sports entertainment industry. Some of these key deliverables includes a good market mix of clubs, freedom to experiment through different club models, and establishment of an open system with promotion and relegation based on sporting merit.

There needs to be a good market mix of clubs.

NISA will need to compete in many of the top 50 markets that are already dominated by other top tier professional sports teams, especially in the big three markets of New York, Los Angeles and Chicago. NISA would hugely benefit from convincing historical clubs in these markets to join an open system that gives them a platform for growth.

The New York Cosmos is a worldwide brand that currently doesn’t have a permanent home after the collapse of the closed-system NASL. The Cosmos would be on the top of my wish-list of competitors I would like to see in the NISA to grow the league.

In Los Angeles I’d like to see teams which have made runs in the U.S. Open Cup in recent years, like the Cal FC or L.A. Wolves. I’d like to see NISA also be a platform for historical teams to rise from the ashes with new opportunities. Defunct historical teams like the Maccabi Los Angeles Soccer Club, who won 5 U.S. Open Cup Championships, could get reorganized and flourish under an open system. As a new league NISA is short on history. Incorporating historical and ground-breaking clubs would help grow the culture and fan base quicker than starting from clubs from scratch.

In Chicago, I’d like to see teams like RWB Adria, A.A.C. Eagles or Schwaben AC be under consideration because of their historical success in state and national competitions. Schwaben AC’s 100 year anniversary will coincide with the 2026 World Cup. A.A.C. Eagles have won two Open Cup championships. RWB Adria has won numerous state championships. Chicago Sockers FC is a fantastic club in the Developmental Academy and has a history of producing top young talent. There’s also the opportunity to resuscitate defunct clubs like the Chicago Sting, whose memory still warms the hearts of older soccer fans in the area.

Also, with NISA’s opposition to territorial rights removes a tremendous growth restriction, that will allow for more rivalries with multiple clubs from the same city. This creates a unique growth potential in big cities that are currently underserved.

Some major markets beyond the big three which are overlooked are major metro areas without MLS teams, that have been stymied from participating at the top level. Phoenix, Sacramento and San Antonio are some of the biggest overlooked markets. San Diego, Tampa, Baltimore, Pittsburgh and Charlotte are also in that top tier of markets. Detroit FC can be a huge cultural and market accomplishment for NISA, it was great to see they saw value in joining NISA to build on their success.

If NISA could attract a major investment group that has tried unsuccessfully to get into MLS, and succeed economically in NISA, it could ground-breaking moment for U.S. sports and break the stranglehold of league cartels which restrict investment in the sport.

Mid Major Markets

After the top 50 major markets it really gets interesting.  These markets are professional sports starved and bursting with potential market opportunities. There are 57 metropolitan areas with between 500,000 and 1.1 million people that are completely ignored by top tier professional sports. The total population of these markets is over 42 million people.

If these mid-major metropolitan areas were a country, they’d have a comparable GDP to major European countries, like Italy and Spain. Individually these metros have comparable economic outputs to Valencia and Seville in Spain. Likewise Turin, Genoa or Venice in Italy. Juventus is a global soccer giant from Turin, Italy. While Turin, Italy’s population is larger, the GDP ($58 billion) is comparable to many cities within this mid-major tiers in the United States including Des Moines, Iowa; Grand Rapids, Michigan; and Rochester, New York – given the right sporting model, these cities could flourish.

Neglected State Markets

On the topic of the 23 states without a top tier professional sports team I think there is a huge opportunity for NISA. As the college sports entertainment model shows there is huge potential in these untapped markets for economic and sporting success. The connection in a league playing against teams from big states and big cities is an entertainment story as old as David vs. Goliath, that is being completely missed in top tier professional sports.

Adding this David vs. Goliath narrative to a top tier professional sports league is something that can capture the attention of the entire nation. Once again we can look to college sports to see this theory in action. Putting aside the fact many small state programs have transformed into goliaths of the sport like Alabama & Clemson football, Cinderella college stories have lit the hearts of millions across the country. Think Davidson and Seth Curry in the 2008 NCAA Basketball Tourney. Think Gordon Hayward and Butler being inches away from the biggest underdog story in college sports history. Or looking to soccer, think of Leicester City winning the Premier League in 2016.

The 23 states without top tier teams is the greatest story never told in sports. NISA can give 50 million people hope, community and connection to the sports they love, or will love in the future.

Diversity in Club Models

U.S. Soccer is incredibly strict when it comes to club model within the professional league standards.  Division one sanctioning rules dictate each team must have one principal controlling interest owner who owns at least 35% of the team, with a minimum net worth of $40 million. The total net worth of all owners must be in excess of $70 million. League stadiums must be enclosed and have a minimum seating capacity of 15,000. Every additional rule is an artificial barrier to investing in soccer in the United States.

No fan ownership, like Real Madrid, FC Barcelona and the Green Bay Packers. No member owned non- profits like most clubs in the German Bundesliga. No publicly traded clubs like Borussia Dortmund or Ajax. The only limitation in club ownership should be based on the ability to pay operations, maintenance and debt obligations. If a club has the financial capacity to pay salaries for players, coaches and other employees what business does U.S. Soccer have in over regulating the industry?

Historical problems with sustainability in the U.S. market has been given as rational for the regulations. But the failure of previous closed-league models shouldn’t be used as justification to shortchange the economic possibilities within an open system.

Promotion and Relegation

What’s glaringly omitted from these professional league standards is the global standard in soccer, sporting merit based systems with promotion and relegation. The current PLS rules significantly discourages implementation of promotion and relegation because it doesn’t speak to the issue, despite it being the global standard and a point of emphasis for FIFA. At this early stage it may be impractical for NISA to implement promotion and relegation, due to the size of the league and PLS regulations, but it is important to set a long term vision which includes the possibility of the practice in the future. By eliminating territorial rights and expansion fees, NISA remains flexible on this issue, while MLS has all but ruled it out.

A long term vision could include plan to implement promotion and relegation once the league reaches a set number of teams or certain financial goals. A short term policy goal should be to lobby U.S. Soccer to change its professional league standards. For decades U.S. Soccer has been subsidizing the closed-league model, it’s way past time U.S. Soccer spends time and resources setting up rules for establishing an open system. There is a significant underinvestment in soccer in the United States in comparison to other countries. I believe this is significantly due to the emphasis in establishing and subsidizing a closed system, as opposed to open system with promotion and relegation. At the very least U.S. Soccer could establish a parallel open system that is set up with global standards in sporting merit and diversity in ownership structures as recommended by FIFA.

NISA needs market differentiators to transform the industry. Having a different sporting model than any other major league in terms of franchise fees, territorial rights and most importantly promotion and relegation has great potential to lead to long term success of NISA and the sport of soccer as a whole.

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