Chattanooga FC Serving As Catalyst To Change The Narrative In U.S. Soccer

On the surface, the similarities between Chattanooga and Green Bay, Wisconsin appear to be few and far between.

Green Bay has long been known as a hardscrabble, working-class town just trying to get some respect from its big brothers Milwaukee and Chicago situated a couple of hours to the south.  Compared to those cities, Green Bay is viewed as somewhat of an outlier.

But Green Bay is also synonymous with a century-long love story, a fascinating tale of community spirit and sacrifice melding together in unbridled passion for its Packers of the National Football League.

Chattanooga has experienced its own identity crisis at times, being wedged between a pair of glitzy neighbors like Atlanta and Nashville and their ongoing urban sprawl.  But much like Green Bay, Chattanooga has created its own feel-good story with the advent of Chattanooga Football Club over the past decade.

But that’s not where the comparisons end.  In fact, it is the thread that not only connects these two cities but makes them uniquely relevant among professional sports in the United States.

Since 1923, the Green Bay Packers have been the only publicly-owned organization among all professional sports.  Structured as a non-profit entity the Packers have emerged as one of the most unlikely business models in American history, kept alive at several junctures by its loyal shareholders – its passionate fans.  

The first three stock offerings in the early years – 1923, 1935 and 1950 – were purely for survival. Local businessmen and loyal fans purchased shares to help the team through lean times.  The Packers even held an intra-squad scrimmage on Thanksgiving in 1949 just to have enough money to finish the season.

But the Packers gained financial stability after becoming the dominant NFL team in the ‘60s under coach Vince Lombardi.  A pair of subsequent share issuances in 1997 and 2011 sold out quickly to fund capital improvements to their home stadium, Lambeau Field, raising $24 million and $67 million respectively without asking for a single penny from taxpayers.

The NFL passed a league rule in 1960 forbidding other teams from becoming community-owned, allowing the Packers’ structure to be grandfathered in perpetuity.  There are currently 360,760 shareholders who own over five million shares of a stock that pays no dividend, doesn’t appreciate in value and cannot be sold.  But for owners of the stock, the intrinsic value of owning a piece of their beloved Packers remains priceless.  

While publicly-owned sports teams are common in Europe – even mandated in the German soccer Bundesliga – adopting such a model became unfeasible in the U.S.  That is, until the passage of the Jobs Act in late 2016 created an opening which the brain trust of Chattanooga FC saw as an opportunity to become the testing ground for the emergence of a new model of professional sports ownership.

Chattanooga FC began offering equity shares to its supporters in late January, with a maximum target of $1,070,000 being sold.  Thus far nearly $600,000 has been raised from over 2,100 investors in 48 states and from far-reaching places such as Africa, Japan and Argentina. It has not only become just the second publicly-owned franchise in the country but is also boldly navigating unchartered waters and innovation that is reflective of the club’s leadership.

“It has been incredible the initial response we’ve received,” said CFC chairman Tim Kelly of the offering conducted through California-based Wefunder.  “It allows a level of engagement for fans that just isn’t possible otherwise.  I think the best analogy is the difference between dating and marriage.  

“When a girlfriend wants to break up and move out, she’s going to move out and there isn’t a thing you can do about it.  This is not that.  There is a depth and engagement possible in a situation like this that just isn’t possible otherwise.  Just look at the Packers.  They wouldn’t still be in the NFL apart from their community ownership, so this represents something permanent.”

With the exception of Green Bay, this ownership model snubs its nose at the rest of professional sports where the ultra-wealthy use their teams as leverage to rake in lucrative tax-driven deals and loyalty is primarily driven by profitability.

“The way that the business of sports works in the United States, in the professional ranks anyway, is different than it works any other place in the world,” Kelly said.  “In most other places in the world the team is attached to the place.  You can’t get a toothpick between them and they never move.  
“Here we kind of hand the keys over to these super rich guys who, when they don’t get their way, pick up the team and move.  So if you’re a Raiders fan in Oakland right now, you’re just kind of going, ‘Oh, well. There’s nothing we can do about them relocating.’  So, we determined really early on that we were not that kind of team, that we were never going to move.  I think what makes Chattanooga FC special is a really strong sense of place.  If we’re never going to move, then why wouldn’t we offer community ownership?”

Chattanooga FC can certainly glean some insights from the Packers’ rich and sometimes tenuous history.  Cliff Cristl, who serves as Green Bay’s team historian, is direct when addressing the Packers’ community-based structure.

“Without it they wouldn’t exist today.  It was the only thing that kept them viable as a professional football organization,” Cristl said.  “The fact it is community-owned has created a unique brand of loyalty not found in any other professional sports franchise. They went around town selling shares for $25 in the early days and it created a sense of not only ownership in the team, but it instilled a loyalty that has been synonymous with the Packers organization ever since.  

“Today, Packers shares are owned by people around the globe.  It is one of America’s great success stories.  But in the early years, it was the business leaders and everyday people of Green Bay that enabled the franchise to survive.”

Brad Zimanek covered the Packers for 14 seasons as a beat writer for the Milwaukee Journal Sentinel and the Appleton Post-Crescent.  The uniqueness of fan-based ownership created a heightened passion and emotional ties to the team which today has a waiting list of 93,000 to purchase season tickets.

“It was one of the most amazing things I’ve ever seen.  Everyone felt the team was theirs.  People frame their stock certificates and display them in their homes.  But when they lost, Monday was like a day of mourning because everyone felt like it was truly “our” team,” said Zimanek, who now serves as the USA Today South Sports Director.

Kelly, along with co-founders Krue Brock, Sheldon Grizzle, Marshall Brock, Thomas Clark, Daryl Heald and Paul Rustand, explored the possibility of community ownership as far back as 2010 after Chattanooga FC’s second season.

“We knew we had something special going on here, so we explored the idea,” Kelly said.  “Krue got a copy of the Packers’ offering agreement and we spent money doing research only to realize that it was financially impossible at the time.  But when we went back to the well with a company called Cutting Edge Capital to look at restructuring, they asked us, ‘Have you thought about a community offering?  You know that you can do this now.’  This was in 2017, and the rule had passed in 2016.  Since then we’ve been full speed ahead and have been the first sports team to take advantage of this new equity crowdfunding opportunity.”

The timing of the stock offering was driven by CFC’s move to the professional ranks after a decade competing at the amateur level in the National Premier Soccer League, a consortium of 91 mostly community-based teams across the country.  CFC is one of 11 teams that have formed the NPSL Founders Cup, joining clubs such as Detroit FC, Miami FC and New York Cosmos in a competition that will run from August to November this year.  That will lead to a full league schedule in 2020 and involves using professional players. 

Ironically, the transition coincides with the arrival of the Chattanooga Red Wolves’ inaugural season as a member of the of the newly-formed USL League One, a 10-member Division III professional division launching this spring.  The Red Wolves are owned by Park City, Utah developer Bob Martino and have former CFC co-founder and general manager Sean McDaniel steering the daily operations.

But Kelly insists this equity raise isn’t a counter-punch to the Red Wolves’ emergence.
“It’s wholly and demonstratively untrue that this was in response to the other team deciding to come to Chattanooga,” Kelly said.  “This idea started well before the Red Wolves came around, and ironically our former general manager had to have known because we were working on it before he left.  We were already having talks with NISA (National Independent Soccer Association), which is a new league coming up, about us going pro as far back as late 2016.  At that point it became obvious that we were going to need the funds in order to afford a professional player payroll, which we had never had before, and to run operations for a longer season which includes a large chunk of the budget for travel.”

Kelly firmly believes that the Red Wolves’ timing was more than coincidence.

“My personal theory is that the USL knew that we were ramping this up because they peeled off our general manager and everything he knows in an effort to kill the baby in the crib,” Kelly said. 

"They understand that if this model spreads, they’re not going to sell a heck of a lot of franchises. It dovetails nicely because Chattanooga has always had the mindset of a separate city-state wedged between Nashville and Atlanta.  We’ve always had the mindset in the town that we have to scratch things out on our own, and it’s created a little of a David v. Goliath narrative, and this fits within that narrative.”

Green Bay conducts its annual shareholder meeting at Lambeau Field as the Packers start their summer training camp.  It is a spectacle that helps galvanize the community of just over 100,000 residents, the smallest population base in all major professional sports.

“I covered the first stockholders meeting in the stadium, and it was like a community party.  People were tailgating like it was a game day, and everyone was bragging that they had to go to their stockholders’ meeting,” Zimanek said.

Kelly expects a similar event for owners of CFC shares but is still working out the details.

“We have not figured that out yet, but it will be a celebration like the Packers do.  We’re all excited about the possibilities of doing it at Fort Finley.  I can’t wait to have a vote in the stands with our incredible supporters’ group, the Chattahooligans, in full force.  It will be a great moment for our city,” Kelly said.

The leadership of Chattanooga FC has used soccer to improve the quality of life for numerous residents since their inception.  In addition to adding Chattanooga FC Women and Chattanooga FC Academy, the Chattanooga FC Foundation has been instrumental in funding Highland Park Commons, Chattanooga Sports Ministries and Operation Get Active.

Having a community mindset and vision is something that Cristl said has been hallmarks of Green Bay’s success.

“The times when the Packers flourished has been when it has had strong internal leadership that would shape the direction of the organization,” Cristl said.  “That would be my advice to those behind Chattanooga’s public-ownership effort.  The times they didn’t prosper during the ‘70s and ‘80s were periods where there wasn’t strong internal leadership to create a vision for the organization.”

Thus far 55-percent of the Chattanooga FC shares have sold to local investors, including one particular pair of buyers that deeply touched Kelly.  Thelma Collier, the mother of late Packers Hall of Famer Reggie White, and Lurone Jennings, White’s high school coach at The Howard School, are both shareholders.

“It’s powerful concept what we’re doing, and we were honored to have Lurone and Mrs. Collier participate,” Kelly said. “It speaks to the belief people have in what we’re proposing that reaches all facets of our community.”

Kelly is hopeful that CFC’s strategic plan is viewed as more than just an investment opportunity, but rather the catalyst to change the landscape of American soccer by stimulating a move toward more supporter ownership across the U.S.

“I can’t say the publicity this has received has surprised me. I expected it,” Kelly said.  “I think the United States is ready for this sort of thing.  I think part of the problem is that we’ve been pulled into this false belief that public ownership is leftist.  What’s wrong with it?  There’s nothing left or right about a team being publicly owned.  I think American sports fans are ready for it.”

Contact Paul Payne by email at paulpayne6249@gmail.com or on Twitter @Paul_A_Payne