Market Analysis

The Raleigh–Durham–Chapel Hill, NC Combined Statistical Area (CSA), as it’s known officially by the U.S. government, is a relative newcomer to the big-market, big-league scene and it remains in search of a consistent identity. Different constituencies call it by different names (but please, don’t say “Raleigh-Durham”) and its only major pro sports team plays a game that’s hardly traditional in the Southeast or Piedmont or whatever part of the country you think that area of North Carolina occupies.

The Carolina Hurricanes won the Stanley Cup in 2006, but the franchise still hasn’t found much traction. It’s dead last in average NHL attendance this season, and the Hartford Whalers logo it used to wear is still more recognizable than the current swirling red-and-black puck storm thing. Thanks to Kevin Costner and Susan Sarandon, the same probably could be said of the AAA Durham Bulls.

The region’s most significant sporting traditions occur outside the “big four.” College basketball is king. The sport unites not-Raleigh-Durham, while the rivalries divide it. The universities in the Research Triangle (there’s another name) play along Tobacco Road (and another). UNC (Chapel Hill), Duke (Durham) and NC State (Raleigh) have won a combined 12 NCAA titles. They don’t field national championship-contending football teams, but the ACC is a competitive, high-profile league and the two state schools averaged more than 50,000 fans last season (Duke came in just under 30,000).

Then there’s soccer. One doesn’t necessarily think of the Research Triangle as a place with deep soccer roots, but Steve Malik thinks you should. And if you dig beneath the hardwood-covered portion of Tobacco Road, you’ll see he’s got a point.

“We’re a soccer city,” said the healthcare IT entrepreneur, who was raised in eastern North Carolina and is a proud UNC alumnus. “What great women’s player hasn’t played at WakeMed Soccer Park? We’ve got that history of youth soccer, tremendous numbers and a history of success. North Carolina FC has all the relationships with the academies and deep ties to the community, and you’ll see us doing the same kind of thing on the women’s side. Anson Dorrance and North Carolina, what more can you say? More than 20 national championships. And on the men’s side, [UNC] were in the final four [in December] and came close to winning it all, and they have won it all.”

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Indeed, the Triangle is the birthplace of modern women’s soccer. Dorrance’s recruiting prowess and focus on enhancing the competitive dynamic within and among female players changed the game, resulting in 21 NCAA titles and laying the foundation for the three-time Women’s World Cup champion national team. On the men’s side, UNC (two) and Duke (one) have won NCAA crowns. And the Capital Area Soccer League is more than 40 years old and now is home to more than 10,000 youth players.

“We have that history of supporting the sport and being one of the best places in the country for the sport,” said Malik, who owns the NASL’s North Carolina FC and NWSL’s North Carolina Courage. Now he wants to take NCFC to MLS.

In addition to that history, Malik will cite the Triangle’s growth and appeal to millenials when making his case to MLS. The CSA is home to around 2.1 million people—Malik said North Carolinians don’t mind a drive—which would rank around 29th in the country. As a media market, it stands 24th. While that may not whet MLS’s appetite, the area’s trajectory might resonate. Among CSAs with more than 1 million people, only those anchored by Houston and Orlando grew faster in 2010-15.

There’s not much of a Fortune 500 presence, but a December SmartAsset study ranking 527 American markets by growth in employment rate, GDP and migration concluded that Cary, which is just west of Raleigh and the home of NCFC and the Courage, is the country’s No. 2 “boomtown.” Raleigh ranks 10th. Forbes recently called Raleigh the No. 2 “easiest city to find a job,” the No. 2 “top spot for tech jobs” and the No. 3 “best [city] for young professionals” and “best [city] for business and careers.”

“We have the highest growth rate of any of the expansion candidates,” Malik told SI.com. “Our downtown has as many cranes going up as any downtown in the country.”

Ownership Group

Malik made his millions launching, selling and then buying back Medfusion, which started as a medical website development company and moved into broader healthcare communications and IT solutions. He’s a soccer fan. Malik played for his high school team—he said he remembers the squad having to solder its own goals because you couldn’t buy one in the late 1970s in eastern North Carolina—and he’s long been a supporter of UNC’s soccer programs. In early 2016, he decided to venture into the pro game and purchased the NASL’s Carolina Railhawks from Traffic Sports. Last month he rebranded the team and announced his MLS intentions and in early January, Malik finalized the purchase of the Western New York Flash—now the Courage.

Malik emerged as a leader during the NASL’s recent struggle for survival and its bid to maintain its second-division sanctioning with the U.S. Soccer Federation. Sources have told SI.com that his committed and cooperative tone made a difference as the NASL, USL and USSF sought a solution.

“What was important to us is that we’ve got to play. We wanted our men’s team and the investments that I’d started to make the previous year to be able to go forward and continue in 2017,” he said. “That was my motivation.”

Malik doesn’t have the billions that back some of his MLS competitors. But he said he does have more than enough to get things off the ground and added, “you’ll see us add to our investment group. I’m going to stay as the point of the spear.”

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Stadium Plan

WakeMed is fine for the NASL and NWSL, but it won’t do for MLS. Malik knows this and has been working for some time to secure a spot for a suitable stadium. He told SI.com that he’s narrowed eight potential sites to three, all of which will be presented to MLS as options in NCFC’s expansion application.

Malik said that he and his potential partners will fund construction of the stadium and that he will seek public support for infrastructure, such as road improvements or parking.

He wouldn’t identify the three locations, but said, “We have urban options that appeal to millennials and are accessible to suburban soccer families.”

One was described as an “urban setting” that Malik liked to Seattle or Portland, where fans can walk to the game from nearby restaurants or bars. Another was a bit further out and “right off the highway … more of the Sporting KC model,” he said.

“What we’re looking for is feedback from MLS on their preferences and we want to be able to come with options that mimic the areas they’ve seen great success in.”

Malik said at NCFC’s unveiling that he was targeting a venue with at least 20,000 seats. Gensler, an architectural firm based in Washington D.C., has been hired to design the stadium. Gensler designed Los Angeles FC’s Banc of California Stadium, which is under construction, and the renovations at Toronto FC’s BMO Field.

WakeMed will continue to serve as a training and academy facility.

Soccer and Sports Scene

The Railhawks/NCFC launched in 2007 and left the USL for the NASL in 2011 as part of the ill-fated deal that introduced Traffic Sports to U.S. pro soccer. Its best season was the 2010 transition year, when the USSF administered the second tier. The Railhawks were league runner-up. While fortunes on the field have fallen since then—the last playoff appearance came back in 2012—attendance has gradually risen from 3,883 per game that year to 5,058 in 2016.

Malik didn’t the think name Railhawks sounded major league so he decided to re-brand the club.

Conversely, he’s quite proud of the “Courage” moniker and the fact that NCFC is the only minor league men’s club with a women’s partner. The original Courage were champions in the original women’s pro league, the WUSA, which played from 2001 through 2003. Hege Riise, Birgit Prinz and Tar Heel legend Carla Overbeck were among the stars back then.

Charlotte tends to attract the big international matches, whether its CONCACAF Gold Cup games or club friendlies, and the U.S. national team has visited the state just once in the past 20 years—a 1-1 exhibition draw with Jamaica at WakeMed in 2006 that drew more than 8,000 fans.

The American women are far more frequent visitors. In six games at WakeMed between 2002 and 2014, the U.S. is 6-0-0 and has attracted an average of 5,019 supporters.

MLS Pros

The Carolinas are a growing area of the country and represent a definitive hole on the MLS “map.” There are around 650 miles separating Washington and Atlanta that the league might want to try and fill. Speedway Motorsports president and CEO Marcus Smith has declared his intention to bring an MLS team to Charlotte. It’s a bigger market than the Triangle but with less soccer tradition and now, less stadium certainty following a Thursday vote that killed any chance of city funding. MLS won’t be putting two clubs in the Carolinas.

NCFC would be the Triangle’s only major league sports team other than the struggling Hurricanes and as Malik said, the demographics seem promising for pro soccer, as does the area’s wealth and tradition for support and participation. The growth-rate is high. NCFC’s academy structure already is set up and club president and GM Curt Johnson, who held the GM role for Sporting Kansas City (then the Wizards) from 1999 to 2006, is well respected.

The impact Malik’s stadium plans might have on his bid won’t be known until the sites and renderings are revealed. He said those will be public “in the next few weeks.”

MLS Cons

The Triangle is up against bigger markets (only Nashville is smaller and Cincinnati is comparable) and wealthier ownership groups in the MLS expansion sweepstakes. The lack of major league competition at home, ironically, also may work against it. Is this an area that can muster consistent fan and sponsorship support for a major league franchise? Malik said he was confident that it would and that potential corporate partners have been engaged.

North Carolina itself may be an issue as well. The March 2016 passage of the state’s notorious HB2 law—the “Bathroom Bill”—and the ensuing controversy has resulted in several high-profile boycotts. Among the most notable on the sports front are this year’s NBA All-Star Game, which moved from Charlotte to New Orleans, and the ACC football championship. More recently, the Electoral Integrity Project run by Harvard and the University of Sydney suggested that the state wasn’t even a functioning democracy.

“Our system has been hijacked by elected officials who are not working for the good of the people,” Malik said. “We’re all having to stand up for the things we believe in.”

He called HB2 “unacceptable in so many different ways” and said he still believed it was going to be repealed. And as for whether MLS should do business in North Carolina, he pointed to the NWSL’s approval of his purchase of the Courage and his commitment to make his teams an example.

“We believe absolutely that the cultural diversity of soccer is a great part of its strength, how it brings the community together, and we’ve supported that in every way—not just being open to everyone on a gender basis, but for all minorities and socioeconomic levels. I think our track record shows we’re part of the solution,” Malik said. “There’s a lot that we can do to help fix something that is clearly broken … This state has always been the most progressive of the Southern states, bringing around many of the changes that needed to appear in society and accepting them before anywhere else in the South was prepared to do that. That’s the real North Carolina.”

In July, for example, the Railhawks hosted a friendly against West Ham United and donated funds from a tailgate and jersey auction to a local LGBTQ advocacy group.

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Commissioner's Thoughts

“We recently met with Steve, and he shared with us his vision for growing soccer in the areas, including his ambition for an MLS team,” MLS commissioner Don Garber said last month. "I think it starts with North Carolina FC. And I think that's a step in the right direction. It is early on, and we look forward to learning more about what his plans are in the coming months … We all know what the interests in soccer is in Carolina generally. And it is one of the places that has enormous soccer participation and support. I look forward to spending a little more time in finding out more about what their vision is.”

Regarding the region as a whole, Garber said, “I say that it's obviously a strong market with some real soccer history at the grass roots level. Certainly we in this business know the power and the legacy of what college soccer is in the state. We know a lot about CASL and Raleigh, and the other big youth clubs that are in the state and that represents sort of a legacy that can ultimately create a fan base.”

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