US Soccer’s $100 million a long time in the making

The American soccer world has been riled up since Grant Wahl reported that the US Soccer Federation has over $100 million in assets being spent on nothing in particular. The rest of the local soccer intelligentsia since opined on how best to spend this money. Alexi Lalas recommended the money be used to fix college soccer and other pundits chimed in to discuss all that is wrong with developing the game. That is a lot of money to not be spent on furthering soccer in these United States but the reality is this hoarding strategy has been in place for some time. Below is a look at the US Soccer federations undesignated assets since March 2008 through last year’s official release:

US Soccer Financials

US Soccer built up to this level from almost nothing in 2001 and so it has been growing this asset for about a decade and a half. Here’s a brief list of where that money is currently distributed according to the financial statements:

• Common stock
• Corporate Bonds
• Bank loan funds
• Government securities
• Equity Mutual Funds
• Cash and cash equivalents
• U.S. Olympic Endowment

If the 2016 Copa America Centenario profit figures are correct the tournament drove a surplus of $46 million in FY2017 and the latest asset level is currently well above $100 million, as reported. The landscape for soccer from a financial perspective is clearly changing. It took US Soccer over a decade to build a $50 million dollar base and then tripled that number in the next four years.

A look at England’s FA financials confirm that the US Soccer investment strategy might be outside the norm. The FA has less than 1% of their assets invested in financial instruments.

For a Federation whose remit is to further the game of soccer in the USA, it’s an odd choice to consistently invest the majority of their assets in things that don’t further the game. Are there some soccer based ventures that might provide a return and improve infrastructure at the same time? The fact that US Soccer quietly releases their financial statements every year makes it even more odd that they don’t publicly justify their strategy. As ticket prices for US national team matches increase you would think Sunil Gulati would feel some sense of responsibility to divulge his plans for the money and not just tuck it quietly into the latest ETF.

Without a public plan we can only guess as to the Federation’s goal. SI reported they may be preparing to make a large investment in a national training center. Using funds in that way would be a nice symbolic gesture, but there are so many ways that soccer needs to develop here and US Soccer has consistently taken a passive approach to them. Smaller investments in expanding the scouting network, subsidized coaching licenses, a scholarship program for players or lobbying the NCAA could have been increased long ago, and they have not been pursued in a material way.

US Soccer seems content to allow that necessary development to happen with outside investment, like that from Major League Soccer, and the growing pay to play youth system. The development academies are a start but imagine if US Soccer had invested another $25 million in that program nationally. How much further ahead could it be? US Soccer would still have a sizeable safety net in their investment account.

As the game grows and keeps feeding money into the mutual funds, US Soccer will be under more and more pressure to step out of their comfort zone and invest in the game in a serious way. It will be very telling which direction they go. Will they build a national training center to enable the already elite or invest in breaking up the myriad road blocks that stand in the way of improving the game for the majority?