Saturday, December 17, 2011

Show Me the Money; Investing in the USSF

Article by Pedro Gomes [Editor's Note: FY = Fiscal Year]

On December  12, Soccer Insider Steven Goff dropped a budgetary bombshell on the soccer world. He revealed an inside look into the United States Soccer Federations’s Budget for FY’13. No one knows exactly how this journalistic wizard came to this information and quite honestly I don’t think many cared because its juicy details lit the Twitter Sphere ablaze with questions, comments, excitement, and disbelief. The most trending topic was Klinnsman reported 2.5 Million dollar salary, four times more than his predecessor – Bob Bradley.

However 1% ish Klinnsman’s salary might feel and appear to the casual reader, I think there were a number of revealing disclosures that should have gotten as much attention as the headline grabbing 2.5 million dollar salary.

The most eye catching number in the article for me and probably every accountant at USSF was the proposed 6.6 million deficit for FY ’13 about 2.1 million more than FY ’12.  Instantly you may think, well a simple solution there would be to fire Klinnsman and hire a guy who would demand a 400 thousand salary and fixed. However, true that may mathematically be, would we want a guy who is only “worth” 400 thousand leading our boys? But more importantly that is not what USSF is looking to accomplish with their new budget. Here is how they are validating the deficit

“We believe our commitment today to both programming and personnel will increase the overall value of our core property and in turn increase future revenue opportunities”

They are looking to invest now in order to develop a better product down the line. This is a bold move by the Federation, especially one that was enjoying a profit only a couple of years ago. But this is where you should get excited. It looks as though the Federation is listening to fans and making those deep pocketed investments to make our team more competitive and more attractive. For a Federation that has so many times been ridiculed and trashed by the loyal fan base it appears they are going “All In” in FY’13 and many of these decisions can be attributed to the fans.

So let’s take a look at the key areas USSF has dug deep to improve:

Officiating- If the 2010 MLS season had any major impact on the greater USSF as a whole it has to be seen in the officiating budget.  They will pump 3.8 million dollars for Officiating expenses in FY ’13, nto areas such as education, training, referee coaches, match evaluation, and even a pro referee department. This has to be a significant step forward for US Soccer and USSF has shown they are going to put their money where their mouth is.

Youth:  We have seen the complete overhaul of the Youth Academy both in structure and personnel. The Academy is now playing longer and playing more competitive matches along with the introduction of US Soccer Legends; Tab Ramos, Claudio Reyna, Thomas Dooley, and maybe one day Caleb Porter into the coaching ranks. They have also begun to align the style, philosophy, and overall structure from the U-17s through the full Senior Teams. Although no dollar amount was given on their investment you can imagine extending the Academy Schedule and setting up Youth camps in Germany can’t be cheap.

Away Match Experience: There has been a growing trend of playing more games abroad for the senior team and FY ’13 does not seem to get away from that. Although we fans have all been applauding the extra away match experience our players have been earning it is interesting to see just how much of a hit financially USSF is taking in exchange for that experience. On average we are losing hundreds of thousands of dollars for these away matches as opposed to making a couple million dollars in the “premiere” matches played on our soil in 60 thousand plus stadiums. This is probably their loudest statement. They are willing to give up millions in lost revenue in order to get the players the much needed away experience in preparation for future big FIFA tournaments.

With all of these investments comes a great amount of risk. The obvious risk was the disclosure of Klinnsman salary in pursuing Sunil’s version of the “Klinnsman Experiment”. This could undoubtedly add even more pressure on the coach, Sunil, and possibly the players to prove that the man on the pulpit is the right man for the job, at that given price. If history proves to show that maybe Klinnsman is not up to snuff that would be a major black eye on Sunil that could put his job in jeopardy.

Another huge risk is whether or not the USSF can sustain operating at such a deficit for enough time to begin to see results. How long are they committed to investing in the future while seeing red in the present? And what about next year’s budget, do they invest even heavier?

In an era of Soccer executive management provided nothing but irreprehensible behavior and poor examples to follow, the USSF has maintained fairly admirable character and commitment to its loyalists. They are nowhere close to perfect and there is much more work to be done, but it is hard to deny the amount of dedication they are displaying into developing US Soccer for the future. And while most Federations do it mostly with their mouths, at least the USSF is doing it with what ultimately gets anything done in the US, and that’s good ol’ fashioned Greenbacks.