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Friday, Jun 21, 2024

Irvine Soccer Club Emulates European Powers; Player Transfers, Fan Ownership

Orange County Soccer Club, which has been playing matches in Irvine for 10 years, sports a business model that emulates clubs in Europe and South America more than its peers in the 24-team United Soccer League (USL).

The team—better known to fans as OCSC—has adopted an aggressive player transfer strategy that’s brought in millions of dollars for the club, and caught the eye of well-known teams in Europe.

This month, OCSC scored another first: launching an investment program that gives fans the chance to become stakeholders in the team.

OCSC is looking to raise $2.5 million, making it the first American soccer club to crowdfund both domestically and internationally. That amount represents a 5% stake in the club.
OCSC has already raised more than $100,000 from fans in America on crowdfunding platform Republic and plans to open investing to European fans soon via Seedrs.

Fans can choose to invest in tiers ranging from $100 to as high as $2,500 for special perks, including a five-year season ticket and private dinner with the manager and a player.

The offering places a maximum valuation of $50 million for the team. Other clubs in USL—the second division of the country’s hierarchy of the sport, below Major League Soccer (MLS)—have reportedly been valued at over $70 million, accoriding to the team.

Fan Connections

While fan membership in overseas soccer clubs is common—famed FC Barcelona reportedly has over 140,000 member-owners—there’s been no teams in USL or Major League Soccer to attempt such a move.

“It’s a great way to connect with your fans. We’re building this community of soccer fans, and we want everyone to be as engaged as humanly possible,” OCSC Chief Executive and majority owner James Keston told the Business Journal.

“We thought now was the right time to launch this opportunity for fans and our broader community to be to be part of the growth of the club,” added OCSC president of business relations Dan Rutstein.

Rutstein has familiarity in the fan-owner model for soccer clubs; he’s an investor in London-based soccer club AFC Wimbledon.

New Lease

OCSC plays at Championship Stadium at the Great Park in Irvine. The stadium holds about 5,000 fans.

The team on Oct. 21 hosted a 1-0 win against El Paso Locomotive in first round of the USL playoffs. It was OCSC’s sixth consecutive sellout game of the season, officials said.

This season has had more consecutive sellout games than in the last 10 years of the club’s existence, according to Rutstein, who attributes the uptick in attendance in part to the team’s recent winning ways.

While the club won the USL championship two years ago after an unexpected late-season surge, this year’s seen the team place second in the league’s western conference, winning 17 matches in the recently concluded regular season.

Off the field, OCSC in the past month inked a 10-year deal with Irvine city council officials, after a year of negotiating, to remain at the stadium for at least another five years.

Young Talent

OCSC is breaking away from traditional business models used domestically by Major League Soccer and other USL teams.

Whereas most teams might want to keep their best players, OCSC is recruiting young local talent with the intention of transferring them to major European soccer teams.

“Our goal for the club itself is to really empower our players that want to play at the highest level to be the best and give them that opportunity,” OCSC’s CEO Keston said.

The global transfer market is worth $7 billion, Keston, a real estate exec who bought the team in 2016.

He estimates that the U.S. currently accounts for 1% of the market and expects that to increase to 5% in the next five to 10 years.

Keston has helped develop relationships with reigning Dutch champions Feyenoord and the Scottish soccer club Rangers to make it easier for American players to go to Europe.

OCSC announced last month that forward Milan Iloski will be joining Danish team Nordsjaelland in January after the end of the season. He is OCSC’s sixth player to be transferred to Europe in the past three years.

Last year, the team announced the transfer of American teenager Kobi Henry to French first division side Stade de Reims, marking what it said was “the largest transfer deal in the history of the United Soccer League.”

The specific amount that was paid in the transfer wasn’t disclosed; reports this year pegged the highest transfer for the league at around $1.2 million.

OCSC says it has an annual operating loss. “The transfer model is becoming an increasingly significant part of the club’s revenue,” the team told the Business Journal.

Another young player making an impact on the team is 17-year-old Bryce Jamison, who signed with OCSC last year. Jamison previously played for the Under-17 U.S. national team.

“We hope to be able to give him his opportunity in Europe at some point in the future,” Rutstein said.

Home Stadium

Orange County Soccer Club (OCSC) commemorated its 10th anniversary in Irvine by signing a lease agreement to play its home games at Championship Stadium for the next five years, with the possibility of five more after.

The soccer club also secured commercial rights that have never been sold before at the city-owned Great Park, officials said.

This year has been a “roller coaster” for OCSC after nearly losing the stadium last year, president of business relations Dan Rutstein said. The city had considered leasing the space to the reserve team for Major League Soccer’s LA Galaxy, before local fan pushback scuttled those plans.

Club owner and CEO James Keston reflected on when he bought the team nearly eight years ago, formerly known as the Orange County Blues.

The team previously played at University of California, Irvine’s stadium, before Championship Stadium was built.

Since then, OCSC has found a permanent home, transferred six players to major European teams and built a community brand. It’s also won one league championship and has a fair shot at making it to the title match this year.

“We’re very proud of the fact that we’ve done everything we said we were going to do,” Keston said. “We’re looking forward to bringing on more fans, more sponsors and continuing to grow.”

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Sonia Chung
Sonia Chung
Sonia Chung joined the Orange County Business Journal in 2021 as their Marketing Creative Director. In her role she creates all visual content as it relates to the marketing needs for the sales and events teams. Her responsibilities include the creation of marketing materials for six annual corporate events, weekly print advertisements, sales flyers in correspondence to the editorial calendar, social media graphics, PowerPoint presentation decks, e-blasts, and maintains the online presence for Orange County Business Journal’s corporate events.

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