A move by Chattanooga FC could foreshadow a change to the landscape of American sports organization ownership.
Chattanooga FC, a team in the National Premier Soccer League in Tennessee, launched a crowd-funding campaign on WeFunder earlier this month, becoming the first American franchise to offer public ownership shares.
The team’s founding owners had thought about the idea of public ownership since following its second season in 2010, but was only made possible with the passage of the Jobs Act in late 2016 which allowed for crowdfunding in corporations by non-accredited investors.
The team was started by a group of guys who shared a passion of Chattanooga and now they want to attach the team to the community for years to come, said Tim Kelly, one of the founders and current chairman of the board.
“We’re never gonna leave,” Kelly said. “If we’re not going to move, why not latch ourselves to the mast. We’re wedding ourselves to the community in a permanent way.”
Since the team offered their public ownership campaign last Thursday, more than 1,300 people across the U.S. and nearly 10 countries have purchased a piece of the team — at a minimum of $125 a share. The early investors raised more than $350,000 in less than five days. The company’s initial valuation was $2.95 million, according to the WeFunder site.
Supporter shares are capped at 8,000 with an initial $1.07 million goal.
The team’s website cites the Green Bay Packers community ownership as an inspiration, but the model for Chattanooga FC goes well beyond the symbolic structure of the NFL franchise.
Chattanooga’s shareholders are equity owners, with voting rights to appoint a voting member to the board, as well as veto rights. Shareholders also have full liquidation rights.
“Part of it is, it’s a really cool thing to say you’re an owner of a sports team and for Chattanoogans, the ability feels hyperlocal,” Kelly said. “People around the world see how bent the American sports landscape is and like the democratization.”
The soccer team’s commitment to Chattanooga is clear. Kelly said the founders would have been happy with 500 spectators at games. Instead, the first game in 2009 attracted 1,600 fans — in a thunderstorm.
In Chattanooga FC’s 10 years, the franchise has brought more than 400,000 through the stadium gates, including a single-game amateur soccer record of 18,000 spectators at the 2015 NPSL National Final. Beyond fielding the team, the organization also launched Chattanooga FC Women, Chattanooga FC Academy, Chattanooga FC Foundation, Highland Park Commons, Chattanooga Sports Ministries, and Operation Get Active.
“We didn’t do this to get rich, we did it to enrich the culture of Chattanooga,” Kelly said. “When it started catching on, we thought our supporters, the Chattahooligans, would love [the opportunity for public ownership.]”
As professional sports team valuations continue to rise, and owners can seemingly relocate teams when a city doesn’t treat them just right, Chattanooga’s offering could send a signal lower level teams could garner further, and literal, buy-in from communities. Kelly said he’s already received interest from other soccer ownership members in how the process worked.
“We look at this from a world perspective, where teams are rooted in communities,” Kelly said. “Our secondary hope is to serve as an inspiration to stay rooted in a town and a way to raise capital for lower division teams across the country.”