Editor’s Introduction

It is easy to believe in a fairytale, where everything ends in sunshine, rainbows, a handsome prince/beautiful princess, and a happily ever after, but the reality of lower league soccer doesn’t allow for that type of thinking. Instead, it is a battle to survive and the road is rocky. Those who walk this path do it because they love the game. Those who walk this path for long must have a vision and a hell of a thick skin.

Dan Hoedeman and MPLS City have walked this path for 4 years and have done it with the type of passion that the rest of grassroots soccer can only envy. They are the model club at their level: creative marketing, fantastic merch, and a rising lineup full of talented homegrown players. We could use a lot more MPLS City’s, regardless of what club you root for.

Every year, Dan and his board put together their financials and put them online for the world to see. It’s the epitome of grassroots and we love it. Dan approached our site about us publishing it and I will be 100% honest in saying that I was honored and ecstatic. The Crows are everything we love about soccer and we’re humbled to present their 2019 financial review for you to read. Keep fighting the fight.

- Dan Vaughn

Minneapolis City Financial Review 2019

Minneapolis City is about to reach a milestone: next season will be its fifth season as a club.

Every season, for reasons sincere and probably naïve, we have published our financial results with a short, often heavily footnoted (1), write-up to give context to the numbers.

Like many things we do, releasing all of this information doesn’t make a lot of sense. It’s unclear that doing so has inspired anyone to buy a season ticket or check out our merchandise and more than one concerned reader has told us that now our competitors know more about us than they should. It’s (probably) largely useless and (might be) competitively irrational.

It’s (almost certainly) fair criticism.

This club is a business and in many parts of business, rationalism and effectiveness are closely correlated. We are rational in budgeting, as an example, and we do rational things like get multiple bids from kit partners. But being rational isn’t everything and certainly not in what is, inherently, an irrational business.

Did you know that the median lifespan of an NPSL club is 2 years? In the league, only 18.7% of clubs have ever made it to their fifth season. (2)

It’s a fundamentally irrational project that reasonable people shy away from.

And yet, lower division soccer is one of those spheres of human activity, like Twitter or Mom’s lasagna, where people just can’t help themselves.

We certainly couldn’t.

The advantages of illogical behavior.

The marketing benefit of illogical behavior is that it is unexpected.

When you have done something as irrational as start a lower division soccer club, and done it in so illogical a place as a city with franchises in every major pro sport, two other NPSL clubs, and a bunch of WPSL, UPSL, and well-supported minor league teams, then doing the unexpected is the only way to get noticed.

Another benefit of illogical behavior is that people tend to like it.

Economically, it’s rational to fall in love with a scrawny, hoodie-wearing Silicon Valley-type coder. And yet, you don’t see male strippers adopting that look. Some things can’t be rationalized.

In the midst of so much that is illogical, there are two very logical things clubs at this level need to do to stick around: keep their funding and keep the interest of the funders.

How we did this year.

NotGreatBob.gif (3)

But first, the good news!

We planned to operate on an approximately $100,000 annual budget. We outperformed our plans.

We sold more tickets, sold more merchandise, and received more generous donations than we planned. Our fiscal year revenue of $105,382 continues our history of revenue growth.

We are especially pleased with this continued revenue growth given the loss of one of our largest sponsors mere weeks before our first game despite having reached a verbal agreement.

Unfortunately, our spending also outpaced our budget.

Much of the over budget spending came from our decision to make a bet on increased advertising. The advertising may have helped drive our attendance increase. It contributed to our increased costs as well.

Additionally, our travel costs increased. Between NPSL playoffs and the aggressive schedule of our U23s—we wanted to get them good, competitive games and that required travel—we went over budget.

First, some additional context:

This covers our fiscal year, which is September-August (as it best represents a single season of operation).
We’re straight cash accounting, homie #WuTangFinancial. Everything you see is cash in hand. Or out of hand, which was the case this year.
There are non-cash benefits from our sponsorships that are not reflected above.
Facilities covers stadium rental and training facilities.
Gameday includes costs for Member Packs, tickets, and streaming video.
League fees includes league dues, player registration fees, and referee payments.
Mktg & Misc is primarily marketing and advertising but there are a number of operations miscellaneous items: website hosting, G-Suite for email and docs, photography, and the tent with walls we had to buy for the playoff game.

When we knew for sure that one of our larger sponsors was not going to come through on the verbal agreement, we made spending adjustments. However, we weren’t able to quite adjust enough and ended the fiscal year with a loss of $3,257.

Checking in with a legitimate loss is not great. Even though we’re talking about a relatively small sum, it’s still real money and we still have to find a way to get out of the red. We will. But the margins at this level are fine.

The disadvantage of not being enormously wealthy.

Most other sports teams are funded by extremely wealthy owners. At the highest levels, these teams are massive moneymakers. The owner may decide to manage them to spin cash or as an investment asset (for stadium land, franchise value, or similar), but no matter how they are run major American pro sports teams are incredibly profitable businesses for incredibly rich people.

At the lower levels most owners can call on significant personal wealth to fund the team. Even in the NPSL, club owners include the founder of a major cable network, founder of a famous tech start-up, Sting’s son (for real) (4), and others who have done very well for themselves. A second set of owners are youth soccer clubs which, if you do the math on player dues over thousands of players to figure their revenue, shows that they are damn well funded too.

Minneapolis City, on the other hand, is funded by a bunch of regular people who buy Memberships and tickets (and our loyal sponsors).

Our budget reflects that reality.

And that reality is reflected in the wider world.

It creates a major disadvantage: Quick, which Midwest club is best known for its pink jerseys, cheeky Twitter presence, and lovably ramshackle minor league feel?

No matter how charmingly illogical and powerfully unexpected the brand and its marketing are, wealthier competitors can “borrow” what is working for us and just swamp us because they have the money to be everywhere, the channels to get their message all over, and the glamor, for lack of a better term, to get casuals to notice them.

It’s a scenario that isn’t unique to sports. It happens in every category and in real life, too. Maybe you have had an idea at work that a senior muckety-muck overheard and then brought up in a meeting. Too bad you got swamped, it was a good idea.

Anyway.

We live and die by our ability to get people to support us by buying tickets and merchandise. And we do so in a world where our competitors, funded by TV money, fat sponsorships, and personal wealth, can, and do, massively outspend us. (5)

It really is an irrational business that we’re in.

Being illogical costs money.

This year alone, we:

Opened a physical retail store for an NPSL team
Did an ad campaign on the crazy back page of the City Pages with…
…an 800 number we set-up to Rick Roll that team up I-35
Had a promotion where we sold match tickets (and a bandana) to dogs
Brought over a bunch of Dutch street artists to do some semi-permanent murals

One of the reasons I was excited about getting involved with Minneapolis City was to test a belief. Over the years, I have seen the ideology of rationality take over business decision making. Like any ideology, it distorts thinking. The current trendy distortion is turning everything into a problem that can be modeled on a spreadsheet and attributed to textbook-rational causes: optimization, economies of scale, test-and-learn, or any one of those MBA buzzwords.

Since it’s all the same management consultants advising all the same companies, they all end up doing the same things. In the name of competition, they’ve homogenized themselves around the same best practices and key metrics. (6)

This isn’t the set-up to make fun of MLS for giving all the teams the same white jerseys. It’s a larger and completely serious point: I believe that Minneapolis City will be successful and sustainable long term because companies are treating sports as a rational, corporate business while love—which is what sports are all about—is fundamentally irrational and human.

People want to fall in love with a community, not be a brand ambassador for a corporation.

The issue is that corporations think in rational, measurable, fit-it-on-a-spreadsheet ways. For example, there is no ROI-based business case to be made for flying Kamp Seedorf out to do murals for our players.

We did it because we love our players, want to celebrate them, and think street art is cool. We hope that it got noticed. We hope that it showed what this club is all about and acted as a sort of beacon to people who share our values. We hope it did a lot of great things, but we did it because it was awesome and we fell in love with the idea, not because it was an efficient marketing expense.

Love can’t be measured in terms of efficiency. The very concept is ridiculous. An efficiency mindset would tell you to buy fresh flowers on February 15. However, despite the obvious savings, it is not smart to buy your sweetheart flowers the day after Valentine’s Day.

I have no doubt that flash TV ads and $10,000/month billboards on major highways are surely more efficient than silly back page City Pages ads and street art murals. It’s just that it’s hard to fall in love with efficiency and, even if it’s nicely packaged by a top tier ad agency. The whole efficiency marketing apparatus creates a level of distance. It’s similar to when you were a kid and your grandma told you that for Christmas she didn’t need a present and just wanted you to make her a card. She didn’t need a flashy gift because the point is love. (7)

Love is a bunch of soccer fans building the club we always wanted.

And, especially in soccer, where supporters are typically independent-minded, with a visceral dislike of manufactured hype and a stubborn unwillingness to defer to corporate authority, Minneapolis City is an interesting value proposition for people who want to get DIY as well.

It would be nice to have a bigger budget, though.

The downfall of passion projects.

If humans made sense, placebos wouldn’t work.

If people made economically rational decisions, Minneapolis City wouldn’t exist.

This club, like all lower division clubs in our closed league system, is a passion project. And, like all passion projects, even if the club is financially sustainable (and we are) the concern is that eventually everyone gets tired.

People have limited energy and even the most driven and passionate of people will have a limit in what they can give, be it time, effort, emotion, or, most of all, money.

Loss of passion, more often than not, is the reason that clubs below MLS fold.

We have kept that in mind from the beginning and, though we’ve persisted more out of stubbornness than anything else, we’re striving to build a functioning community of club volunteers and to have enough of them that the emotional labor we’re asking for is manageable over the long term.

We don’t have an army of employees and interns like others do. We don’t have a budget to pay anyone on a salary.

But we do have a mission that’s pretty compelling.

Build something.

Where do we go from here? My accountant (8) tells me that I should talk to the Pohlad’s. Or maybe the Wilf’s (9). You know, big hitters with political influence and financial means. It’s a perfectly rational thing to do.

But this is not a rational project.

So, with delightful illogic, we’re not looking for the rich and powerful. We’re looking for regular people with shared values who want to build something.

The best thing about our project is that it doesn’t take millions of dollars or continent-spanning celebrity to make a difference. Everyday actions make a huge impact: a t-shirt or a Membership makes a big difference to us. You can see that in our budget numbers. Volunteers make a big difference for us. You can see that in our website, done for fun by a new volunteer. Simple things like spreading the word about the club makes a huge difference for us. We don’t have the money our competitors have. But social media means that we don’t necessarily need it if people are talking about uncorporate soccer.

We started Minneapolis City thinking that a group of regular people could build something worth falling in love with.

Want to build it with us?

Footnotes

1. But not this year! JK lol.

2. SocTakes reported this: https://www.soctakes.com/2018/09/21/npsl-clubs-median-survival-rate-2-years/

3. On the field though, where we won the conference again and added a U23 trophy for good measure, it was more GreatBob.gif (which doesn’t exist but it should).

4. "His music, I don’t really listen to it. But the fact that he’s there. I respect that.” – Hansel. Also, it’s completely true and par for the course in the weird, wild, wonderful NPSL: https://www.theguardian.com/football/2016/dec/22/city-of-angels-mls-soccer-sting-joe-sumner

5. To put the budget differences in perspective (and explain our own marketing limitations), one month of that big billboard on I-94 by Snelling is approximately our entire year’s marketing budget.

6. Doing this helps the incumbent leader, because they’re not going to fear companies that are copying them, and helps businesspeople trying to keep their heads down in a large organization, because nobody is going to fire them for implementing a “best practice” from the market leader. So, of course, this is how American business works.

7. Yes, the implication is that back page City Pages ads and street art is what love is. With that information, would it surprise you to know that my 10th wedding anniversary is coming up this year?

8. I don’t really have an accountant. But my Dad, who is an accountant, said this to me as a joke so it’s true enough for journalism.

9. For readers who aren’t from Minnesota, the Pohlad family own the Twins and part of other pro sports franchises in town and managed to get taxpayer money to build a stadium in Minneapolis and the Wilf’s own the Vikings and somehow managed to get taxpayer money ($500 million!) to build a stadium in Minneapolis.