by Mike Woitalla @MikeWoitalla, Nov 10, 2017

To gather further insight into American youth soccer pay-to-play, we speak to, who has vast experience in youth soccer and the financial world. A Stanford law school graduate and nationally recognized hedge-fund executive who is now a private investor, Sippel, during his eight-year tenure as a youth club president in Oakland, California, oversaw the 2011 merger of Rockridge SC with Bay Oaks to create East Bay United Bay Oaks . The club of more than 2,500 players fields boys and girls teams from the rec level through the NorCal Premier League and up to the National Premier League. It also fields boys U-14, U-13 and U-12 Development Academy teams. Sippel stepped down as President in 2016.

SOCCER AMERICA: What’s the biggest budget item for a youth club?

ERIC SIPPEL: In our case, the most expensive is coaching. The next two highest, fairly equally, are scholarships and fields.

For the competitive side, all coaching directors and head coaches are paid. For the recreational side, they are all volunteer. Some assistants for competitive are volunteer and others are paid.

SA: Have coaching costs been increasing?

ERIC SIPPEL: Yes, for several reasons. The most dramatic increase is because the California EDD (Employment Development Department) singled our club out for designating our coaches to be employees rather than independent contractors and that has increased the coaching costs by 50% to 60%. The law requiring coaches to be treated as employees affects all clubs, but the EDD is not looking at most clubs, even though their coaching structure is the same as ours, so it puts us at a competitive disadvantage with the clubs who don’t comply. But it's the law, so everyone is supposed to comply.

In addition, costs have gone up dramatically over time with respect to our Development Academy coaches because of the more stringent licensing requirements imposed by the Academy that make it really expensive to hire Academy coaches.

SA: Is there any way to alleviate coaching costs?

ERIC SIPPEL: If you reduce the licensing requirements at the Development Academy level, then that would significantly reduce the cost of Academy soccer and, from my perspective, I don't think you'd be sacrificing quality because you'd still want to include your very best coaches, many of whom don't necessarily meet the licensing requirements.

One reason why some of our best coaches don't meet the licensing requirements is because they're middle-aged and to get a B or A level license in this country you have to play for a week at the licensing class. People who are in their 40s or 50s or older aren't necessarily in shape to play against people who are 20, 25 years younger than them for a full week. That's not a reflection of how good a coach they are but rather a reflection of whether they're in shape to play with people in their 20s. Further, U.S. Soccer does not place sufficient emphasis on teaching skills when training coaches; I believe that good teaching skills are critically important.

SA: Can the coaching expenses be alleviated by using more volunteer coaches?

ERIC SIPPEL: I think volunteers are great. I was a high-level volunteer coach for 15 years, but I was unusual in that regard in our club. It’s very difficult to get somebody who works a 9 to 5 job (or longer hours) to come out for a 4 o’clock practice.

You’re not going to get enough coaches if you don’t pay for them. Further, if a significant number of coaches need a B or A license, you have to pay a lot for that. I really don’t believe that license levels reflect coaching ability, particularly when clubs invest significant resources to train their coaches outside of licensing classes (that is a big focus for us).

SA: Is there any way to alleviate the costs of financial aid for lower-income players?

ERIC SIPPEL: It depends on the mission of the club. Our club has always been aid-blind, need-blind at every level. We are located in Oakland with a very diverse socio-economic, racial and ethnic population. We believe that it's important to reflect the community and provide opportunities for players in every stratum. We also believe it's beneficial for our youth coming from all these different backgrounds to play together in what we think of as one of the most diverse clubs in the U.S. If you accept that as your core mission, it's very difficult to reduce the scholarship aid. Many clubs provide merit based aid -- that is, only the best players receive scholarships.

SA: Where does the money for financial aid come from?

ERIC SIPPEL: It comes from a couple places. First and foremost, it comes from our members because the paying members are paying more than what it would cost for their child to play soccer for the club. The second place it comes from is donations.

SA: Is it an issue for some parents that they’re paying more to subsidize lower-income players?

ERIC SIPPEL: It is an issue. We try hard for each program to be self-sustaining and not subsidize other programs. We don't want our recreational program to subsidize our competitive program. We have a much higher percentage of scholarship athletes in our competitive program than we do in our recreational program. As our costs have significantly increased over the last several years, our families have started pushing back on the level of registration fees.

SA: Fields …

ERIC SIPPEL: Fields are absolutely a major expense. For 2016, our field expenses were about a quarter of our budget.

SA: The USA is a rich country. But it costs soccer clubs, and thereby parents, a significant amount of money to play in parks or on school fields?

ERIC SIPPEL: There is not enough field space in an urban area for the multitude of year-round sports that are being played, particularly considering the population growth. More players (youth and adult), more practice time per player and more year-round sports lead to significantly increased demand for field space. Of course, field expense depends on the club and the area. The arrangement our club has in many cases is we pay for upkeep and we get to use the fields for free. The field owners don't pay for upkeep and they get to use their own fields. For example, a school uses its field during the day and we use it after school and on weekends.

Another example is a four-field public facility that requires weekly maintenance and yearly renovation of the grass. That costs us about $250,000 every year. There are other fields that we rent. They tend to be the artificial turf fields that we don't maintain, and just pay to use them. Unfortunately, our cities can’t afford to maintain their fields at a quality that is necessary for high level soccer. Thus, we must supplement that. Lastly, a few schools have been generous enough to donate their gyms for futsal, but others will charge for that usage.

SA: What about lighting?

ERIC SIPPEL: We own the lights for our 4-field complex. The cost of the lights was $75,000, but we own and amortize them. That's not a big expense on an annual basis. Lights enable us to have 3 separate practice sessions on a field in a day without any concern over when it gets dark, thereby reducing the number of fields that we need to use (but also increases our maintenance and renovation expenses).

SA: Refereeing?

ERIC SIPPEL: That’s a small expense.

SA: Uniforms?

ERIC SIPPEL: They're paid for by the players. That's typically $150 per player once every two or three years.

SA: Travel?

ERIC SIPPEL: Paid for by the player. Depends on the age and the level of the player. All the recreational and most of the competitive teams stay very local. The top-level teams starting at U-12 will travel a little bit and for the most part, that's Southern California, the Southwest or the Pacific Northwest, except for the U-14 Development Academy team, which also must go to the Midwest once a year. Some of our girls teams travel to Sweden for the Gothia Cup. Travel expenses are there but in our club, because we're so focused on our demographic, we really try hard to keep that to a minimum. For example, we usually squeeze four players into a room and drive rather than fly whenever possible. Many teams fund-raise to pay for their travel expenses.

One reason we did not want to join the [girls] ECNL, or [boys] Development Academy at 15 to 18 is because the travel would have been prohibitively expensive for our demographic.

SA: Equipment?

ERIC SIPPEL: It's a minor portion of the budget.

SA: Registration?

ERIC SIPPEL: There are different governing agencies, whether it's U.S. Club or CYSA or the Development Academy, and it's not a major expense, particularly considering that it does cover insurance. That's not something that moves the needle. Of course, although the refereeing, registration, equipment, and administrative costs, taken individually, are not material to the budget, when taken together they do have an impact.

SA: Pay-to-play was widely cited as contributing to the problems facing the U.S. national team program after the failure to qualify for the 2018 World Cup. What’s your view?

ERIC SIPPEL: I believe there are several drivers to our issues at the national team level. First and foremost, I believe that college soccer, although really beneficial from a societal perspective, is also an impediment to producing world-class players.

You play far less in college than you do when you are in high-school because club soccer is played almost all of the year (except for the months where athletes who are not playing in the Development Academy are playing for their high schools). This may lead to a better student-athlete balance, but, as a result, the kind of development that can happen and the style of play in college is significantly inferior to what the rest of the world does at ages 18-22. Of course, this does not address the overuse injuries and burnout that year-round play creates, nor does it address the societal benefits of using soccer to facilitate attending college; many of our alumni are the first generation in their family to attend college.

Secondly, and this is a societal question again. There is not nearly as much free play or street soccer that happens in our country compared to the rest of the world. The ratio of structured to unstructured play is very different compared to many of these other countries. I don’t know what you can do about that because this is more of an issue of how American parents raise their children.

Pay to play? A big issue is how do you control the expense, because who’s going to pay for it? The Federation is not paying for most of it.

SA: MLS clubs subsidize their Academy players …

ERIC SIPPEL: We’re in the academy through 14, and then we produce a lot of players who go on to play for the San Jose Earthquakes [academy] and to a lesser extent DeAnza Force’s academy program. They’re not paying us for the players we’re producing. Who’s going to pay? It’s really expensive to run a program.

We’re delighted to place our players in these programs but how can you provide that service for free? Someone’s got to pay for it and, at the moment, it is private donors and the players in our club -- thus, pay to play.

The other possibilities are the Federation, the professional clubs, the members of the Academy, and the sponsors — those are the choices.

SA: At what point can a youth club get sponsorships?

ERIC SIPPEL: You can get sponsorships at any level but sponsors aren’t going to pay a lot of money. They’re looking at it as a form of advertising, and businesses have a choice of lots of different advertising venues that they can utilize really effectively without putting their name on a bunch of T-shirts and jerseys.

SA: If there’s good way to lower expenses, what would you point to?

ERIC SIPPEL: First, I would reduce the number of months that competitive soccer was played and encourage players to play unstructured street soccer during that period and to play other sports. That would dramatically reduce all of our costs, including coaching, fields, referees, administration and the like. Second, I would increase the number of coaches eligible to coach at various competitive levels by reducing the burdens of receiving appropriate licenses. Increasing coaching supply will reduce the compensation levels paid to coaches.

SA: It’s often cited that hopes of getting scholarships drive parents to pay a lot for youth soccer …

ERIC SIPPEL: Our club produces a lot of players who go on to play in college. It is typical that every player on our top boys and girls teams are capable of playing in college (and many of our second-team players are also capable). Not everyone chooses to do so, or they choose to play collegiate club soccer. But we have a very significant number who go on to play intercollegiate varsity soccer.

It has not been our experience that the parent base has been pushing those kids because they think they’ll get some financial relief in scholarships to play in college.

For us, the kids fall in two categories.

We have a large number of low-income, often immigrant families, where the kids would be the first generation to go to college. Those kids often, without soccer, would actually not have the ability to attend college. If they’re Division I or II players, they frequently get partial athletic scholarships, but Division III players often get need-based financial aid to go to college. There’s also generally need-based financial aid that fills in for athletic scholarships at the Division I and Division II levels because athletic scholarships don’t cover the full amount of the cost to attend college.

A big part of our mission is to provide an opportunity for those kids to be the first generation of their families to go to college.

Then we have a second cohort in our club, where the players are very likely to attend college but they end up going to a more selective college than they otherwise would have been admitted to because soccer has provided them an avenue. Plus, once they get to college, being part of a college soccer program facilitates their ability to adjust to college on a social and academic level. That’s not about scholarships. They are not getting money to attend college, but they’re getting significant benefits that the non-recruited athlete doesn’t get.

I think our club is unusual in the degree in which we counsel our high school athletes as to how to navigate the college recruiting process. We worked on this for many years and have been very successful in helping our athletes connect with college soccer programs and think through their college recruiting choices.

Most high schools don’t provide that for their soccer players.

SA: How would you use a magic wand to improve American youth soccer?

ERIC SIPPEL: I believe there are significant problems with youth soccer. I believe athletes are playing far too much structured soccer for far too long. It’s not unusual for high school soccer players to play 11 and a half months of structured soccer in a year. That’s not good mentally or physically.

As a result, I don’t think it produces the best soccer players and I think it’s bad for social, emotional, and physical development. Adult involvement -- the combination of coaches, referees, and parents -- puts such a significant amount of pressure on our young athletes that inhibits them from taking risks because they are afraid to fail.

Succeeding and failing through facing challenges creates resiliency and a growth mindset that sets you up to succeed in life. That also leads to a healthier outlook on life and reduces stress. We have far too much stress and anxiety in our youth in our country today. Sports should be a vehicle to reduce stress and anxiety, rather than a vehicle that exacerbates it.

Second, I think that clubs need to focus more on finding good teachers who understand the various stages of social and emotional development and who are focused on inspiring confidence in our players. Our club focuses very much on development over winning, but that’s a very difficult message to get across to the parent base, particularly when most other clubs don’t focus nearly as much on development. They give lip service, but winning is still a significant portion and that makes it very difficult to exist within that environment.