Friday, April 18, 2014
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Exclusive Q&A with Philadelphia Independence owner David Halstead

When the news broke yesterday that Anne-Marie Eileraas had resigned as CEO of Women's Professional Soccer, the first person I wanted to talk to was Philadelphia Independence owner David Halstead.

Exclusive Q&A with Philadelphia Independence owner David Halstead

When the news broke yesterday that Anne-Marie Eileraas had resigned as CEO of Women’s Professional Soccer, the first person I wanted to talk to was Philadelphia Independence owner David Halstead.

In my many conversations with Halstead this year, I have found him to be incredibly well-versed in how the league is run, and also impressively honest in his assessments of the present and future of the sport.

We had a lengthy conversation this morning, and I think you should take the time to read everything that he had to say. There is a lot here – this is one of the longest posts I’ve ever put up by word count – but I hope you’ll take the time to go through it all.

I also hope you’ll post your thoughts in the comments section. Halstead has told me a number of times that he wants to attract the true soccer fan base in the Philadelphia region to Independence games, not just families and youth clubs.

You all are a major part of that demographic he is targeting. So I also would be interested to know what would make you more inclined to go to an Independence game, or what those of you who already go to games think of the experience.


What is your reaction to Anne-Marie Eileraas stepping down as CEO of Women’s Professional Soccer?

It’s actually been in the works for a while. Anne-Marie was terrific to step in. When Tonya [Antonucci] departed after the last championship game [in 2010], we just felt like we were in a situation where we needed some, I guess what I could classify as discipline, stability, internal control, credibility in the way we were conducting our negotiations.

Not that Tonya didn’t do that, it’s just that that’s what we felt like needed to focus on in the interim period. And with Anne-Marie’s knowledge of the league and background as an attorney, she was a natural selection to come in and help the owners.

She’s good with us too, because as you can imagine, we’re all sort of a hard group to get along with. We all have our own priorities, and all thing that we’re right all the time. So she’s got the right level of personality to temper our interests. We didn’t know that the [Dan] Borislow thing would turn into to the time sink that it did, in terms of discipline and magicJack moving to Florida and all that.

It’s unfortunate that when she looks back at WPS – she did a lot of good things on her watch, and I hope that her memories aren’t of spending a ton of time on the magicJack stuff.

So she’s been great for us, and I think that none of us were surprised when, about a month ago, we started talking about her departure and her future interests, and wanting to get back into, I guess, the harder legal field – I mean actually working for a law firm.

So we the owners collectively got together. We just didn’t feel like this was anything that we needed to panic about, or have a sense of urgency about.

You’ve been following WPS a long time and you know that about 16 months ago, the owners took back control of the league, and are making all the decisions at the board level. That’s how it’s gone along. Each owner has a responsibility area that they spend a lot of time on, that is a league office functional area.

So with the season ending, a great WPS playoffs and championship, and all the good news that you read in the press release about attendance, I think that we’re first of all just going to spend a week or two relaxing and getting our offseason staffing alignments how we want.

With the season the way it is, we’re not going to keep all the staff that we’ve had all year long, and I think everybody is doing that realignment this week. And we’ll take a couple of weeks – we’ve got a couple of candidates that we’re speaking to and are comfortable with, and are confident that they can take us to the next level.

Our priorities moving forward, that you are going to continue to see time and time again, are: coordination and cultivating a great relationship with U.S. Soccer – that’s something we need to do in this offseason. We need a lot of focus on national sponsorships. You’ll see a lot of focus and energy on that this offseason.

Also, trying to figure out where we’re gong on a collective bargaining agreement with the players’ union. There’s a lot of emphasis on that this offseason. And expansion, a lot of emphasis on that this offseason.

So you take those four strategic priorities, and all the owners, we’re pretty swamped with tasks that we all have to make those four areas a success. Anne-Marie has started this off in the right direction, we’re all running with that, and we’ll bring somebody on and we’ll continue with those four priorities over the course of the offseason with somebody new in place.

If you look across the many professional sports leagues in this country, obviously all of the commissioners are public figures But they put themselves out there in terms of exposure and media appearances to varying degrees.

I suspect that whoever succeeds Eileraas will be compared, to some degreee, with Major League Soccer commissioner Don Garber, and I would say that he probably puts himself out there more than others as far as that scale goes.

What do you think the new commissioner ought to be like in terms of putting themselves out there publicly versus working behind the scenes to get things done?

I think we’re looking for both. Tonya did a fantastic job of being the face of a brand-new, infant league in the first 18 months or so. She established some initial relationships and things like that. I think we were at a point last year where we needed a lot of back-office and behind the scenes stuff, and Anne-Marie was perfect for that.

I think we’re in a position now where we have enough history in the league to talk about trends in attendance, trends in sponsorship, trends in revenue and revenue projections. Our model has been through the meat grinder a number of times, and we continue to try and refine it.

So we’re positioned such that we need someone who can get in front of a camera and get in front of a bunch of CEOs, and convince them that we are here to stay, and this is our direction, and here’s how we’d like you to come on board and work with us.

But we also need that person who is methodical and patient, and can read through a spreadsheet and understand the struggles that the franchises are having as we try to clean up our profit and loss margins.

That’s the difficulty. Generally, people’s skills are grounded in one or the other. We would be fortunate to find somebody as talented and gifted as Don Garber, and I guess that’s kind of the direction we’re going – to find somebody that can do both, as Don can. I think that it’s a credit to him and MLS that he is able to meet all of those requirements and standards.

But I think that when you start out as a league, you’re all over the place. You don’t know where your strengths are, you don’t know where your weaknesses are, you don’t know how the fans are going to support you., you don’t know anything about the players who are going to play in your league.

And so I think that we’ve had a couple of seasons now such that we know we should be focusing on a couple of things. We’re going to let all of that other stuff go by the wayside, and it will eventually resolve itself.

We’ve got to get franchises to the point that they are, if not making money, then not losing a significant amount of money. That’s got to be key, because otherwise we keep losing teams, and we don’t want to keep losing teams.

Whoever thought that owners don’t care about losing money year over year, that’s crap – and I’ve said that from the day I got in this league. As a guy that talks to expansion candidates every week, rich people don’t like to lose money. That’s why they’re rich.

We have to evolve from a charity – we’re putting great players on the field, and having the buzz and the great product, but it is a charity right now, because we’re all losing money – into a money-making business that puts great players out there on the field. If we can’t make that transition, we’re all going to fail.

So what does that require? It requires somebody that can talk to CEOs, and be the face of an organization, and be comfortable in front of a camera, and it requires someone who can read through spreadsheets and understand profit and loss margins and balance sheets.

Whoever is the next commissioner will be overseeing a league that has all of its teams in the east, but has a league office in San Francisco, California. What kind of a structural challenge is that, and is there a chance that the league office moves?

That’s a great question, and I think that it’s fair that we need to be looking at that. I told you that all of the owners have a specific area that we’re focusing on, and mine is expansion. It looks to me like we have tons of interest on the west coast – when I say "tons" I mean a half-dozen teams in markets we’re talking to on the west coast at various levels of interest, and commitment, and willingness to sign a letter of intent.

But timing-wise, from my gut feeling and knowing that I brought other teams in – so I know the due diligence process and the background process – I’m guessing that west coast stuff is going to be 2013 entries.

Because the other thing we don’t want to do is, we don’t want to bring in one or two teams out west in 2012, and have them isolated, and have incredibly high away travel expenses. So I think everyone would agree, including the teams coming into WPS, that an entry of four to six teams simultaneously is a better gig.

If we can nail that down for 2013 and maybe add a team or two on the east coast for 2012, then we’re looking real strong for 2013. If that is what is going to play out – and that’s all just sort of gut feeling of me, who’s talking to these franchises or potential franchises – then it makes sense for us to look at a league office that is on the east coast.

And that’s certainly something that we’re considering as we talk to the replacement candidates for Anne-Marie. Some of the people in the league office have ties to the east coast, so it wouldn’t be that big of a move for them anyway. So it wouldn’t surprise me if we have the presence over on the east coast.

But it’s also not something that’s a showstopper, because I think that everybody in the league – at least at the ownership level – is confident that there’s going to be a west coast group out there by 2013.

So it seems to me, on a personal level, that if I’m going to run a league, I want to be where the action is. I want to be going to the games, to the staff meetings, to the sponsorship meetings. But with Anne-Marie’s role, that wasn’t necessarily required.

The priorities for the offseason I mentioned a minute ago require a lot of face-to-face stuff: U.S. Soccer in Chicago, national sponsors that are everywhere, including California, and expansion candidates that are all over the place, including on the west coast.

So there’s a strong argument either way, but it is something that we’re thinking about.

I’m sure you’ve seen the commentary that has been out there since Eileraas’ departure, and also some of the reporting on the financial situations of existing teams. The Boston Breakers are looking for new ownership, and the magicJack situation is something we could spend a lot of time discussing on its own. 

You’ve talked a lot about your role overseeing expansion. What role do you play in dealing with the financial situations of clubs that already exist?

Only one-sixth – because I’m one of six owners. In terms of Boston, we had some great meetings the week of the championship game. All those four priorities I told you about, we spent hours talking about those topics and how we were going to move forward.

The Boston ownership group gave an update, and I’m confident that Boston is going to be around. The things that are going on in Boston in terms of their profit and loss, and ticket sales, and interest level, they’re already talking to some investors that will take up that percentage that the other investor is departing with.

There’s nothing we, the owners, can collectively do on that front, except to sit around and let Boston do their thing, and use the data that they have at the league and Boston franchise level, and find investors.

I don’t have much of an impact in that, other than trying to show anybody that’s interested in the league a strong Philly program. I’ve long said that all of us as owners, the best thing I can do for T. Fitz Johnson in Atlanta or Thomas [Hofstetter] in New Jersey [the owner of Sky Blue FC], or the rest of them, is build a very, very strong Philly franchise.

That’s the best thing I can do for all of my partner owners. Anything I can do for Boston along those fronts is good, but otherwise, it’s going to be a wait and see game for how they come out. But I think they’ve got a good story, they’ve got interest, and it’s not unsual for investors to move in and out of franchises.

So that’s where I am on Boston. I’m encouraged by the discussions we had last weekend.

On magicJack, I think that Dan came in and had a real passion for soccer, and a real passion for his franchise and the magicJack brand. Dan has dropped the lawsuit, and I think that we’re all going to play in the sandbox real well together. I think magicJack is in the league. I don’t have any updates on that, other than we’re all moving forward.

And the other four franchises, we’re solid and are trying to sell tickets and get sponsors.

Independence coach Paul Riley mentioned Borislow in his end-of-season conference call yesterday, saying, "As crazy as he might be, I think we need him." There was also an article by Jenna Pel of All White Kit, in which she wrote, "Relations between Dan Borislow and Eileraas were said to be strained, almost irreparably so."

What are your reactions to those two quotes?

In my book, there’s not much that Paul Riley doesn’t understand about WPS. He knows how to coach, and he knows how to run a youth club, and he knows a lot about marketing a business and connecting it to a community to sell tickets.

I think Paul’s right – I think we need magicJack in the league. I think that right now there are a lot of great players that are affiliated with magicJack, and we need them in the league. I know for certain that when I have asked Dan Borislow what specific goals he sees for WPS, and what he wants to see happen, he lists goals that are the same goals that I have.

They are the same goals that Fitz Johnson has, and Thomas Hofstetter has, and [Western New York Flash owner] Joe Sahlen has. So Dan, in his heart, loves this sport, and loves his franchise, and wants to make sure it is successful. Do we need that passion in WPS? Absolutely. So that’s the way I approach it.

Riley speculated on that conference call that the U.S. national team players and other big names who will play in the Olympics will only be available for eight of the 20 games next year. He also wondered aloud if there might be a salary cap and salary floor next year.

What’s your guess on how much we will see of the U.S. national team players and other Olympics participants next year?

I don’t want this to be a cop-out, but I don’t think we know at this point. One of the topics we spent a lot of time on last week was that we need to get out and see the U.S. Soccer Federation, and get out in front of the scheduling issue, which we did not do last year.

I think that due to WPS’ immaturity, only being in business for a couple of years and then being faced with the World Cup, I don’t think we planned well in advance.

I don’t think we sat down with U.S. Soccer way in advance and said to Pia [Sundhage]: When do you need the players? What does that mean to our schedule, and how much can the players, without too much burden, satisfy World Cup or Olympic requirements, and what does that mean to us?

I think that before we need to put any pen to paper for the WPS season next year, I think we need to analyze closely the impact on our fan base, the impact on our league, the impact on individual franchises, and certainly the impact on national team players.

We, as the WPS, need to be hand-in-hand with U.S. Soccer. I think both of us have the same goals for women’s soccer in this country, and they have tons of things, benefits and features, that we need and vice versa.

We have to come up with a solution that keeps the national team players healthy and active for the Olympics, and then also gives us access to the national team players to play in our local franchises’ games.

Paul is probably thinking: Well, the league is probably going to play 18 to 20 games, and I know when the Olympics are going to be, so I’m going to guess eight or 10 games with those players. I don’t think we know enough yet to begin to build plans for our national team players.

Every WPS team wants the national team players in this league. They’re great players, they elevate the quality of play. WPS needs them. So I just don’t think we’re there yet with our discussions and we’re not far enough along in scheduling.

Jonathan Tannenwald Philly.com
About this blog
The Goalkeeper is your home for the latest news about the Philadelphia Union, Major League Soccer, U.S. national teams and the rest of the world's most popular sport. It's also a place for fans to gather and celebrate the culture of soccer and its unique place on the sports landscape.

Reach Jonathan at jtannenwald@phillynews.com or 215-854-2330.

Jonathan Tannenwald Philly.com
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