News & Notes

If you’re a regular reader of BIR, or even just a casual observer of Detroit City FC, you are likely well aware of how the club’s attendance has grown, year after year after year. What you’re probably not aware of is how the club’s finances have fared over the same time span. We’ve gotten glimpses here and there, such as the title sponsor price tag ($75k), but never a larger, overall picture.

Now, as part of the Keyworth Stadium community investment program, the club has opened its books to the public, allowing us to get a better feel for its overall financial situation.

[Note: Information and screenshots are taken from the Keyworth Funding site, as well as the DCFC Offering Memorandum.]

To start off, let’s take a look at how much money the club has brought in on a yearly basis:

Unsurprisingly, gross revenue appears to be closely correlated with attendance:

A more detailed look:

After losing money in season one, the club has turned modest (and slightly increasing) profits over the past three years. And as income has risen, so have expenses. Much of that may be a reflection of reinvestment of profits back into the club, though. For instance, the nearly $300k spent in 2015 includes the HD streaming of home matches and the housing of players, both first-time expenses for the club.

As for individual sources of income, gate receipts and merchandise sales account for the bulk of money the brought in. Figures for 2012-2015 were not released, but we can get a good feel for the breakdown by looking at projected income over the next five years:

The club estimates it will sell 1800 season ticket packages at $60 apiece for 2016*. Adding in single game and group tickets, this makes up City’s main source of income. Looking more closely, sponsorship is poised to overtake merchandise for the first time, possibly even this coming season.

As for concessions, with alcohol set to be sold at Keyworth in 2016, it’s unclear if this is factored into the projections. If not, it could be a wildcard that makes said projections seem conservative in hindsight.

A few other random facts gleaned from the Offering Memorandum that I found interesting:

• The club has no outstanding debt but may need to borrow up to $100k at some point in the near future. (Possibly for if the Keyworth funding project comes up short?)
• 3000 people from 50 countries viewed DCFC match streams in 2015.
• The ultimate goal:

Speaking of the Keyworth funding, this is where it currently stands (as of 11/22/15):

The current pace of over $10,000 raised per day surely can’t continue, can it? If it somehow does, the $400k goal will be reached before Christmas, leaving nearly two full months for additional funds to be added on.

ED: I’m not a math major, the current pace is actually $3739 per day. If it keeps up, the $400k goal would be reached sometime at the end of January.

*2016 Season Tickets go on sale this Friday (11/27)

Amidst all the legalese and due-dilligence of the Keyworth lease agreement between Hamtramck Public Schools (HPS) and DCFC, there were several nuggets that caught my interest.

Source: Pages 27-35 of the DCFC Offering Memorandum.

(1) The lease is for 10 years at the cost of $1. If City decides to move to a different venue before the lease is up, it will cost them next to nothing.

(2) The installation of a natural grass field and irrigation system is not included in the list of projects for Phase 1 (the phase that is to be completed by Spring 2016). HPS and DCFC agree to negotiate in good faith to that end during the term of the lease. Translation: No grass in 2016, wait till next year.

(3) As long as the proper licenses are obtained, City will be allowed to sell alcohol on stadium premises.

(4) DCFC may sell naming rights to parts of the stadium, but Keyworth Stadium’s name itself cannot be touched.

(5) Smokebombs are allowed.

(6) In keeping with DCFC’s record of community involvement, this clause is included:

23. Community Service Opportunities. DCFC understands that HPS students may seek to fulfill community service obligations by volunteering at DCFC Events. DCFC commits to use its best efforts to reasonably accommodate requests by HPS students to fulfill their community service obligations at or after DCFC Events.

A nice touch and one more way to spread a little goodwill to the residents of Hamtramck.

(7) This made me smile:

27. DCFC Event Not a Nuisance. HPS represents and agrees that it understands that DCFC Events shall be principally for minor league soccer games. HPS represents and agrees that it is aware that DCFC Events attract thousands of fans. HPS represents and agrees that the lawful and Lease compliant conduct of fans at DCFC Events, and of DCFC Events themselves, are not nuisances.

#NotANuisance

(8) On a related note, there was some talk of banning foul language from the stadium when the lease was first announced. After reading through this agreement, however, I found nothing addressing the subject. Game on.

Finally, one important section that shouldn’t be overlooked:

g. This lease is contingent upon the improvements being completed by the dates specified and if they are not, at the option of HPS, this lease may be immediately terminated without recourse to DCFC or kept in force provided a new deadline acceptable to HPS is established.

If the proposed improvements in Phase 1 are not completed by this spring, HPS has the option to terminate the lease. If you needed any more motivation to contribute to the community investment initiative, there it is. As of this writing (11/8/15), here is where the funding stands:

If the current rate of investment continues – $4975 per day – the $400k mark should be reached in the first week of January. We’re on pace so far, but there is a long way to go.

To learn more and/or make a contribution, CLICK HERE to visit the funding site.

Part I: Dirty Old Ground

If you were unable to attend last week’s Keyworth Kickoff, at which City’s ownership unveiled their plan to finance the renovation of Keyworth Stadium, here are your cliff notes.

THE GOAL

Raise a minimum of $400,000 by February 15th, 2016, with an overall goal of $750,000.

As shown in the previous post, here is a breakdown of the projects that would be funded:

THE MECHANISM

#NotADonation It was made very clear that these improvements will be financed through a community investment program, NOT donations. Basically, if you choose to put money towards the project, you will receive that amount plus a little extra back over the course of several years.

For example, if you invested $1000, your expected return would be $1350, paid out in semi-annual increments over 6.5 years (sooner if revenues exceed expectations, later if they fall short).

DETAILS AND STIPULATIONS

– You must be a Michigan resident. This has to do with the fairly new legislation that is being taken advantage of in this instance. If you live outside of Michigan and would like to contribute, here is one possible option: https://www.gofundme.com/5m7qrz4w

– Michigan investors may invest $250, $500, $1000, and increments of $1000 thereafter – up to $10,000. Accredited investors may invest as much as they would like. Perks are as follows:

– If the $400k isn’t raised by February 15th, you get your money back.

CAN WE DO IT?

I think so. For one, as of this writing (11/3/15), $100,000 – 25% of the goal – has already been raised.

Beyond that, this is a club that has gotten into a habit of exceeding expectations from its very beginning. Year after year, growth in attendance, sponsorship, atmosphere, and the club’s overall reputation tend to go above and beyond most reasonable projections.

This investment initiative is the biggest risk taken by ownership to date. It’s also incredibly ambitious and if it succeeds it will set a new milestone for supporter-funded ventures in American sports.

Most stadium construction, including the one going up by City’s first home, is paid for primarily through tax money. Rather than sucking funds out of the community, though, the Keyworth plan will rejuvenate a part of our city and benefit the students and citizens of Hamtramack for years to come, while asking nothing of them in return.

I’ve made a contribution, not only because I love this club and want it to continue growing, but because I’m a true believer in the positive impact it has on our local community. Whatever the outcome, this is a project I feel very positive about supporting.

If you are interested in investing, or simply want some more detailed information on the plan, you can go to the official funding website HERE. You must register to view the site, and you must be a Michigan resident.

 

After more than a year of speculation regarding City’s future beyond Cass Tech, we finally have our answers. The new home will be Keyworth Stadium, and its reconstruction will be financed through an ambitious community investment program. Later in the week I’ll take a look at the details of that plan, but first I thought it would be good to examine the actual work that needs to be done.

According to the club, the first phase of renovations includes the following:

That may sound like a lot, but every single one of those repairs (plus several more that aren’t listed) is badly needed. From one visit to the stadium, it’s evident just how rough of a condition it’s currently in.

It’s clear that the resurrection of Keyworth will be a multi-year project, and the bulk of the cosmetic and artistic touches will have to wait until 2017 or 2018 when the foundational and infrastructural work has been completed. For now, the focus will be on simple things, such as securing benches to the stands, and making sure there’s no exposed rusty rebar that someone could impale themselves on.

I’ll likely reference this again when I go into more detail about the club’s funding proposal, but here is the list of the desired Phase 1 projects:

The biggest concern that I have with this initial phase is that there may not be enough time and/or money to address the most important part of a soccer stadium – the field.

On the plus side, the wider dimensions will allow City to host U.S. Open Cup matches for the first time. The downside is that Keyworth’s current artificial playing surface is in very poor condition and appears to be several years past its replacement date.

At this point, it looks like we may have to endure at least one season of gridiron lines, bouncy passes, and skinned knees.

For all its dinginess, Keyworth has incredible potential. At the high school match between Hamtramck and Cranbrook a few weeks ago, an impressive level of noise was generated by a mere 100ish people. The concrete stands have much better acoustic qualities than the metal bleachers at Cass, and once there is a full contingent of supporters occupying their brand new terraced section on the east side of the stadium, the atmosphere will be electric and deafening.

I should also mention my favorite part of the stadium, the lettering on the south wall behind which trains regularly pass.

In the age of Whataburger Field and the KFC Yum! Center, having your team play in a stadium with a simple, non-corporate name is a rare treat. In this instance, Keyworth refers to Dr. Maurice R. Keyworth, Hamtramck’s Superintendent of Schools in 1923.

The classic lettering would look good in gold on a wall painted rouge, which just so happens to be the primary color of Hamtramck H.S. Just sayin’…

Moving away from Cass means we will be losing the awesome view of the downtown skyline, but I think the aesthetics of Keyworth are a more than adequate replacement. The concrete terraces, the tall light towers, the train tracks, the rows of tightly packed houses to the north and west of the stadium – if you squint and visualize a little bit, you can see a sight that wouldn’t be out of place in an urban, working-class area of England or Germany.

As it stands, there are less than six months to go until City plays its customary first preseason friendly. With the amount of work to be done, it seems as though the only part of the stadium that DOESN’T need to be addressed is the flagpole. In Part II we’ll look more closely at how the club plans to pay for the plan to bring Keyworth back.