I was just trying to make a point with this column about crowdfunding a new big-league soccer team in San Diego.
But I had no idea the river of enthusiasm I was dipping my toes into.
My point was this: We have a flawed approach to big-time sports and the facilities they need in this country. We think of them as government problems. This is good for the owners of said sports teams.
But it’s bad for the sports fan in a place like San Diego. Why? Because we have to wait for the government to get it done.
It’s further complicated here because — unlike, say, Texas — in California you need to get approval from two-thirds of voters to pass a special tax hike to pay for a stadium.
It’d be easier to build a floating airport.
Our salvation, I speculated, might lie in Europe, where teams often find funding for stadiums not from taxpayers but from fans who want to own a share of the team. Two researchers I keep referring to believe there’s so much potential in selling shares in a pro sports team that these teams are actually sitting on a “sleeping giant” of potential capital.
You know who’s not sitting on sleeping giants of capital? City governments in California.
Unfortunately for Chargers fans, the NFL only allows the Green Bay Packers to sell shares to fans. And it sells many, many of them.
So, I proposed we test the idea with Major League Soccer. I couldn’t find any reason why we would not be able to raise — each one of us soccer fans — a significant amount of money.
I said I could put up $1,000. How many others would? Major League Soccer told me that ownership groups must have a majority partner. So that means we need someone with $21 million and 19,000 other shares at $1,000.
Again, I was making a point about how not hard this seems.
I had no idea how many of you would turn up. If only raising money for nonprofit journalism was this easy. (Actually, maybe I should give our staff some soccer tryouts.)
It’s a crowdfunding site. Crowdfunding is the new fancy way to say fundraising. It’s fundraising with a digital and social-networking assist. Our very own musician, arts maven and investigative reporter Kelly Bennett explained how her band used it here.
In other words, if you have an idea, instead of trying to call all your friends or search in the dark for people who might want to pitch in, these sites give you a platform to pitch your idea, market it online and then see if it catches fire.
Where Kickstarter has been the launch pad for a gazillion creative projects, peerbackers wants to focus on entrepreneurs and their enterprises.
Outlaw had this to say about crowdfunding a pro-soccer team in San Diego:
One way to do this without having to worry about stock and all the legal requirements that come with it is to allow folks to “buy in” as a membership — not equity. They did this in England. They created a web-owned soccer club (in their case non-profit I believe) where fans paid a fee to join and then they got to vote in which players to recruit, what ticket prices should be etc.
Then they got member benefits — such as access to VIP boxes, videos of the games, etc… You could do the same. $1,000 gives you x benefit, $2,500 gives you x benefits and then at $5,000 you get x. I bet you could raise all $40 million!
She wants to launch it. Like, now. Yikes. This is getting real.
Reader Robert J. Smith says getting a Mexican club to partner with us might be the ticket.
I like your idea, but to fill the stadium I think we would need to market the idea south of the border, perhaps with a Chivas feel to it, or using Chivas as a model. Club America would offer a great theme, wouldn’t it?
Chris Fanning says he’s in:
I would gladly put $1,000 toward an MLS team and frankly wondered why one of the hottest soccer cities has no premiership team for the nation’s top level of the sport.
This is a constant theme. How is it that San Diego does not have a place in Major League Soccer but Salt Lake City does? (I kid Salt Lake, it’s my hometown.)
This brings us to Clent Alexander. The CEO of SDSP Soccer Marketing Inc. scrambled to get in touch with me with a simple message: We’re already on it, dude. His company operates the San Diego Flash team, which plays in the National Premier Soccer League.
Alexander says he and his partners — Fox Soccer Channel analysts and stars Warren Barton and Eric Wynalda — are trying to create a viable soccer business. They’re looking for youth clubs to merge with, they’ve got a new video channel and they’re helping to co-promote friendly games like the recent one between international soccer heavyweights Real Madrid and Chivas Guadalajara.
If you want to invest in soccer in San Diego, Alexander told me, take a look at them.
But my dream was about Major League Soccer. How about that? Maybe someday, Alexander said.
And my dream was also about crowdfunding. How many great ideas have died simply because investors who might have made it happen didn’t know about it? Exchanges like Kickstarter and peerbackers are arising that connect people who have capital with those making the case about how they could make something happen with it.
Unfortunately, I did get a bit of a reality check. Notice how Outlaw alluded to “all of the legal requirements” that come with giving someone a share of an enterprise in exchange for their investment.
Right now, if you want to advertise for investors in a new business, you have to register with the Securities and Exchange Commission, which is neither easy nor cheap. You can avoid this only if you agree to seek money from people with whom you already have a relationship.
A fix is afoot. Laws now in the U.S. Senate would change this. It’d make it possible to crowdfund for a new business venture.
Unfortunately, Outlaw says she’s not overly optimistic about the new law.
If it ever does pass, I fear it will be too watered down (lower per person allowed investment, more requirements by the crowdfunding platforms, more reporting requirements/red tape, etc) that it will not have the intended effect of spurring our economy/investment in small business.
Unless we want to wait for the Senate, it may be best to consider a membership approach. What if members got to vote on player personnel or the general manager?
From email, Twitter and Facebook, my little column attracted 36 pledges at $1,000 or more. Even Assemblyman Nathan Fletcher’s team called to say he’s interested in helping.
By my count, we only need 18,964 more of us at $1,000.
It would go a lot faster if it were on a crowdfunding platform. Anyone want to take Ms. Outlaw up on her offer to do that?
I’m Scott Lewis, the CEO of voiceofsandiego.org. Please contact me if you’d like at firstname.lastname@example.org or 619.325.0527 and follow me on Twitter (it’s a blast!):
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