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NCFC's Malik discusses NASL sanctioning odyssey, league's future plans

Posted January 7
Updated January 8

Carolina RailHawks owner Steve Malik, president and GM Curt Johnson and select guests address news about the future of soccer in North Carolina.

— On Friday, U.S. Soccer ended weeks of speculation and uncertainty clouding the lower divisions of American professional soccer by issuing provisional Division II sanctioning to both the North American Soccer League (NASL) and United Soccer League (USL) for 2017. The NASL, which has been the lone American D2 men’s pro league since 2011, clung to its status against a wave of club defections and other tumult. The Cary-based North Carolina FC, formerly the Carolina RailHawks, is a charter member of the neo-NASL.

WRALSportsFan spoke with North Carolina FC owner Steve Malik Saturday. It’s been a busy period for Malik after purchasing the RailHawks from Traffic Sports in October 2015. In just the past month, he’s rebranded the club, announced his intention build a new soccer stadium and apply for a Major League Soccer expansion club, and acquired a National Women’s Soccer League team to relocate to the Triangle. When the NASL issued a press release last night about U.S. Soccer’s sanctioning decision, Malik was the person charged with making a statement on behalf of the league.

With NASL sanctioning finally completed for this year, Malik spoke about that process and the league’s plans this year and beyond.

WRALSportsFan: What has the past couple of months has been like, not just from your perspective as the owner of North Carolina FC but also a member of the NASL?

Malik: “It was a challenging year for us. We all knew that Minnesota United was going to MLS, and we’re proud of them. We had a couple of clubs that were not happy there was still a lingering Traffic [Sports] involvement [with the NASL], and we were able to clean that up. That was a big deal. It was not something that was necessarily all that public, but it was causing them unrest that it had not been fully settled. We were able to get that settled, and that was a really big deal to just clean up the problems of the past. Since we were able to do that, we’ve had incredible interest on the expansion side. Frankly, speaking personally, when I entered the league this year, there were decisions made before we became involved that were not great decisions. There were challenges in the expansion process, and [the NASL owners] made commitments to each other that we were going to fix things. Part of that was becoming much better at vetting the communities and ownership groups, and not rushing to try to just field additional teams.

“We’re appreciative that U.S. Soccer gave us the time to allow us to do things in the right way, and I think you’re going to see a lot more expansion for the league.”

You mentioned divesting Traffic Sports’ interest in the league. Was their ongoing investment interest in the league a convenient straw man for naysayers of the NASL, or a very real problem for potential investors?

“It was an unresolved matter that was hanging out there, so to that extent, that’s real. Settling that allowed us to go about our business without question marks.”

What was involved in settling that, and why did it take so long?

“There was a wide gap between the parties. With everything that was going on with [Traffic], they had already divested their operations in the league—me buying their Carolina club was their last involvement with a team in the league. So, just knowing who to speak to was difficult. It was an organization that had mostly retreated from its business in the U.S., and there was a wide gap in terms of what they thought they should receive for the investments they had made [in the NASL] and the league’s position, which was quite different.”

U.S. Soccer played a major role in not just sanctioning but negotiations, as well. What expectations did U.S. Soccer have in regards to changes or improvements to the NASL during this sanctioning process? What benchmarks did it say needed to be addressed over the past weeks and months?

“I think they’re very clear on what the requirements are for the various divisions. Those benchmarks are spelled out. The primary one that the NASL was challenged with was the contraction of the league. As you know, there’s a requirement to have 12 teams in the league’s sixth year, and our appeal to them was to let us play with less than that. That was the primary issue. NASL teams have high quality. We have owners who meet all of the D2 requirements and beyond. We’ve brought big-time money into the league in the last year. We have owners who have international backgrounds and careers around the media and soccer business. And our facilities certainly meet the D2 requirements, along with our coaches and other investments. We really needed, and need, is some time to allow ourselves to build from a strong foundation and be able to add enough teams to meet the requirements going into next year.”

You mentioned the 12-team requirement by year six of the league. There’s also the three time zone requirement, which I don’t believe the league would meet at this point. So, there are two significant waivers, so to speak, that the league needed in regards to D2 sanctioning.

“Correct. And we expect to meet both of those requirements going into next year.”

Would D3 sanctioning have been a death blow for the NASL, had that occurred?

“It would have been very problematic. ‘Death blow’ is a little dramatic, but NASL teams that are playing in 2017 all meet the D2 standards.”

Much was made on social media last night that the statement made on behalf of the NASL in a press release promulgated by the league regarding the granting of provisional D2 sanctioning came from you, and not the league commissioner. What is the status of Commissioner Bill Peterson, and why was it you who gave that statement and not someone from the league’s front office?

“Bill is the commissioner of the league. He was present for our meetings and part of the process. I can also say that, as has been reported, the league owners held a summit to really figure out who we are, what we wanted to be, what our principles are, etc. There was a great coming together of our ownership group going through these difficult times and figuring out what our vision was and what kind of culture we wanted. We’re looking at all aspects of that, and there’s more work that we have to do. We want to be cooperative. We want to work with all the leagues. We want to work well with U.S. Soccer, and we want to help grow the sport.

“The league statement came from me because the media and public was anxious for a response. They asked us for a quote, and as a group we felt that was best coming from an owner. So, I offered up a quote.”

Just to clarify: are you the chairman of the league’s board of governors?

“I am not.”

We discussed the NASL proceeding with eight teams to open the 2017 spring season: North Carolina FC, Indy Eleven, FC Edmonton, Miami FC, Puerto Rico FC, the Jacksonville Armada, the San Francisco Deltas, and the New York Cosmos. What are the chances additional teams will enter play during 2017 season, whether it’s the fall season or another time?

“There is no current plan for that.”

What’s the forecast for the next round of expansion for the NASL? What’s the expectation of when the next round of expansion will occur?

“We’ll be making announcements throughout the year about teams that we expect to come on in 2018.”

So the expectation is that the entire 2017 NASL season will comprise the eight teams that start the season?

“Yes, that is the expectation.”

What is the status of the Jacksonville Armada for 2017? It’s been rumored that they will be league supported or owned this year. Is that correct?

“The league is planning to buy the Armada. The Jacksonville market is a great market. They’ve drawn well previously and had strong support from the community and local government. And there was and is intense interest from multiple ownership groups. The league made the decision to plan to acquire them so we could come forward with our plan to U.S. Soccer, and it would give us time to vet potential owners, set their expectations, and allow us to move forward with our options without a pall over the process.”

So, is there an expectation that there will be a new owner of the Armada before the end of the 2017 season?

“Yes.”

How about the New York Cosmos? The latest news, from the website Empire of Soccer and Bob Williams of The Telegraph, identifies media magnate Rocco Commisso as a prospective buyer of the club. How would you summarize their off-season odyssey?

“I’ll let the Cosmos speak for themselves. I think they’ll be making statements in the near future.”

What is the status of the Fort Lauderdale Strikers in regards to the NASL?

“They’ve had a number of ownership groups who have been interested in purchasing the club. Our league has been vetting them, and we want an ownership group in place who has the time to be successful in 2018.”

So there’s no plan for the Strikers to play in the NASL in 2017?

“No, they’re not going to play in 2017.”

Steve Sandor of The11.ca recently published an interview with Peter Wilt in which Wilt suggested that the NASL could have 20 teams by the fall of 2018. Do you share Wilt’s enthusiasm and optimism?

“I do share Peter Wilt’s enthusiasm. We’re not fixated on a number like that, but there are quite a few opportunities, and we’re going to pick the best ones, people who check all of our boxes, and give them the time and resources to be successful in their markets.

Both the NASL and USL are provisional D2 leagues. You’ve closed many deals and made many sales in your professional career. What is the sales pitch for a potential investor to join the NASL as opposed to another league?

“Each community should evaluate their options and select the one that’s right for them. The primary difference is the business model. One is a franchise model, and the other is ownership in the league. People come to their investment in soccer with a preference for one model or the other, and having an option is good for American pro soccer. The USL has done a great job with their league, and when investors and communities come forward there are a lot of things to consider. Each scenario has its own set of criteria, and investors need to make the decision that’s best for them. If their concern is around lower travel costs, they might have a better fit in one league over the other, as opposed to a model where you own your club and make investments to increase your asset value. It depends on the ownership group, the locale, and which things they think are important.”

Is it oversimplified to say that the primary goal of you and other NASL owners while trying to figure out what would happen in 2017 was making certain all the league’s teams had a place to play next year?

“Speaking personally, NCFC wanted to play. The circumstances forced us to consider our optionality, and I know many of the other teams felt the same way. Even during the season, we did what we needed to do to support teams that needed support, and all the teams finished the year. There was certainly some unrest. But we actually had and have resolution plans to all those scenarios. Even with some of the things that remain to be cleaned up, we have resolution plans that we’re executing.”

How would you describe the role that U.S. Soccer played in the recent sanctioning process, not just their official position as the sanctioning body but also your interaction with USSF officials, including President Sunil Gulati?

“I thought they were very transparent and clear in what was important to them. They have the interests of what’s best for U.S. soccer as a primary motivation. They were accommodating, accessible, and responsive. When you have people who all want to see the sport grow and succeed, and have the United States attain its highest aims in the world market, that’s very good for working through challenging situations.

“We’re appreciative that U.S. Soccer has given us an opportunity to work in a principled way, with integrity and transparency that allows us to have an exciting and successful 2017 and then to grow from here.”

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