No matter where you live, if you have kids playing sports you’ve probably paid your registration fees and asked yourself, “Where does all this money go?”
I know I do (far too often for my wife’s liking).
That curiosity generally subsides, though, as the cash leaves our bank account and our youngsters take the field smiling from ear-to-ear. This year, though, instead of moaning about how much we have to pay for our kids to participate, I am determined to answer my own question.
And, even further, explore whether different sports and different geographies follow similar economic models for youth sports.
In this week’s edition, the largest soccer organizations in the thriving, sports-loving Tampa area are in the spotlight. The Indy Premier Soccer Club (of Indianapolis, Indiana) will serve as a “benchmark” soccer organization for comparison purposes (selected based on size, metro population, and cost of living similarities).
Let’s dive in.
Not-For-Profit
First things first -all of the teams discussed are characterized by the IRS as Nonprofits. While you can read the boring stereo-like instructions that defined this tax jargon, for now, just take note of a few important features of this tax classification (specifically 501(c)(3)).
First, these organizations pay no taxes. Next, annual financial forms must be filed with the IRS and made available to the public (Form 990). These documents provide some financial details with regard to the organizations sources and uses of funding, executive salaries, and a brief description of large operating expenses. Lastly, the IRS calculates a “Public Support Percentage” which assesses the percentage of revenue (cash in the door) derived from the club’s stated purpose (ie: in these cases that is providing community soccer programs). A Public Support Percentage near 100% for nonprofits.
Anyone can search for their favorite charitable organization’s (sports and others) various IRS filings here.
The 2019 Form 990’s filed by Tampa Bay United (TBU), West Florida Flames (WFF), Chargers Soccer Club (CSC), Florida Premier FC (FP), and Indy Premier Soccer (IPS) provide the basis for the financial facts that follow.
Financial Facts
| Organization Name | Revenue ($k) | Wages ($k) | Top Salary ($k) | Assets ($k) | Public Support % | Website |
| Tampa Bay United (TBU) | $3,654 | $1,994 | $112 | $858 | 99.93% | www.tbus.com |
| West Florida Flames FC (WFF) | $1,906 | $419 | $0 | $364 | 100% | www.floridapremierfc.com |
| Chargers Soccer Club Inc. (CSC) | $1,753 | $0 | $0 | $850 | 100% | www.chargerssoccer.com |
| Florida Premier FC (FP) | $1,526 | $189 | $71 | $550 | 99.88% | www.fcflames.com |
| Indy Premier Soccer Club (IPS) | $2,895 | $1,541 | $0 | $4,123 | 98.91% | www.indypremiersc.org |
Some items to additionally note on the 2019 tax forms of each:
- TBU reported the highest “profits” at just above $200k.
- WFF reported the steepest “loss” at $538k.
- IPS’ assets (land and buildings) dwarf its Florida counterparts by nearly 10x. The primary asset of all Florida teams was non-interest bearing cash balances.
- Other Expenses breakdown:
- TBU: $1.4M including $315k in tournament costs, $200k in field maintenance, and $140k in league fees.
- WFF: $2.0M including $1M in contract labor, $100k in field maintenance, and $100k in league fees.
- CSC: $$1.7M including $1M in program costs, $200k in employments costs, and $365k for league fees (to USSFDA)
- FP: $1.2M including $800k in coach and training, $200k of compensation of key personnel, and $100k of league fees. Florida Premier is the only club to list a miscellaneous revenue item for “Uniform Rebate” of $24k.
- IPS: $1.2M including $300k in tournament fees, $200k for a CrossFit facility, and $100k in league fees.
- All clubs state that copies of financial data will be provided upon request
Key Takeaways
That’s a lot of data to take in. So, let’s digest together.
First, the salaries of the top executives illustrate inconsistencies in how clubs pay employees directly. For example, Florida Premier’s top earner is listed as a 75% employee while West Florida lists two individuals as full time executives at $112k annually each. Those clubs reporting $0 paid to top brass, I suppose, must pay club execs as contract labor (a category in “Other Expenses” that is less specific and buried in Form 990 schedules).
Stripping away the salary inconsistencies, the high price of admission for programs for these clubs does not make a CEO uber-rich, but does provide a solid living for top earners and an additional income stream for those at the organization’s coaching levels.
Second, the Florida soccer clubs asset-light business models appear flimsy. I know little about the Indy club except that if all participation went away (or dipped severely for an elongated period), they’d be able to use their accumulated assets to stay afloat. A business model with few non-cash assets (like the Florida team’s) facing the same issue would require new, short-term ways to garner revenue if costs increase or participation plummets – like uniform rebates, additional private grants/sponsorships (that corporations can/do write off as charitable giving), or increased prices for parents to fund (oh no!).
Next, the fees charged, salaries paid, and other expenses reported are consistent within Tampa and when compared to the benchmark Indianapolis club. So, if you’re a soccer parent villainizing one club’s economics and corporate bloat over another, you’re wrong – they appear structurally and fiscally similar.
Lastly, if all organizations are paying $100k+ for admission to various leagues and national programs, maybe we should take a look at the financials of those charitable organizations!!??!! The Clearwater Chargers make note of paying $365k to US Soccer Development Academy in 2019. That is 20% of the club’s revenue!!!
With thousands of such clubs paying similar bills nationwide, that is A TON OF MONEY!
Breaking down your $$$ in Tampa soccer
So, bring it back to a parent’s wallet, if you pay $100 for soccer in Tampa, your money is likely spent on:
- $80 on Non-Executive Salaries
- $5 on League Fees
- $5 on Field Maintenance
- $3 to the club’s Top Executive
- $2 on game related fees like referees
- $5 on Miscellaneous expenses (travel, training, equipment, etc.)
I’m not sure these numbers make me feel better or worse about the high costs of playing sports for kids.
What is apparent, though, is the expansion of organization structures for these clubs drives the need for collecting as much cash as they do from parents. In fact, the “About Us” section of each club’s website features an impressive and vast management pecking order.
Could the organization structures be flattened? Of course.
Would parents pay less if coaches, staff, and the Board were only volunteers? Yes.
Would the implosion of a club’s bureaucratic structure leave top communal talent aimless? Not sure.
So many questions abound – many of which have answers unbeknownst to me.
I’m am sure, though, that I’ll keep paying. Today, there is not much of a choice. I’ll keep shelling out cash with the hope that, one day, someone else might not have to (at least as much).
Who/What Sport is next?
I’m not picking on soccer, I want to explore the financial models of other sports and activities for kids, too.
Have a question about the youth sports economics in your community? Cheer, baseball, gymnastics, etc?
Let me know in the comments below!
