by DAVE MARTINEZ

Despite several conversations between the Chicago Sting Trust and NASL Commissioner Bill Peterson, the fan-based investment group has been shut out from expansion talks — and are consequently suspending operations.

EoS has learned that the Trust will cease their chase for an NASL franchise, making a formal announcement on Thursday afternoon.

The reason is simple according to Sting Trust member, Shane Nicholson; the NASL never took them seriously.

“We spent three years putting together a viable business model that would work, that would provide continuous investment for the club through a membership system,” Nicholson tells EoS. “Every year, the club would get an injection of cash from us which I don’t know of an NASL team turning a profit right now so I don’t know any of them would turn down money. And yet, it wasn’t treated seriously.”

Nicholson is a journalist based out of Rockford, some 85 miles from Chicago. He is also a lifelong soccer fan who has been driven to revive what has become a dire state for the sport in his hometown. He is part of a group of principle coordinators in the group which includes independently wealthy members stemming from such industries as media to auto sales and real estate.

According to Nicholson, the Trust members have been speaking to NASL in some capacity since 2012, but conversations particularly picked up over the course of the last 24 months.

Over the past six months, however, the NASL found an established group of investors in Club Nine sports interested in bringing a club to Chicago. Adding to the group’s appeal is Chicago soccer icon, Peter Wilt, who left his Presidential position at Indy Eleven to join the startup in his hometown.

Since Club Nine’s arrival, the Sting Trust has been all but ignored by the league, and their initiative has stalled in the process.

“Bill for a very long time has been very nice to work with. He met with one of our guys in our working group three times. He was very enthusiastic, really gun-ho, likes the model and all it offers,” Nicholson recalled. “Then all of a sudden, 6-9 months ago, once Club Nine got involved, that was the end of those conversations. And now that Peter is involved, to me, it seems completely dead at this point.”

Unlike the Atlanta Fan Trust, which sought to keep the Silverbacks in Georgia, the Chicago Trust claims to offer a more robust, sensical approach to their business model. According to Nicholson, the group accounted for $2.3 million in startup capital. From his conversations with Peterson and NASL officials, that would pay off a hefty chunk of the league’s franchise fee ($10 million for Chicago – a varying fee by city) and operating forecast ($14 million).

Unfortunately for the Trust, neither the NASL or Club Nine made an earnest attempt at gauging the financial viability of their business model before turning their eyes away from the group.

“I can see why Bill would feel like ‘this isn’t going to work because everybody quits,’ but unless you facilitate conversations and negotiate in good faith, why the hell would you stick around?” Nicholson asked. “Once you get to the point where you have to jump and you decide to leave them standing there, that is kind of on you I think.”

It wasn’t just Peterson who suddenly eschewed the group. Shortly after announcing his move to Club Nine, Peter Wilt met with the Chicago Trust to discuss their possible involvement, offering a 5% stake in the club — without any inquiry as to the financial wherewithal of the Trust.

The gesture was a clear sign to the Trust leadership: they simply were not being taken seriously.

“You can’t just say you will give me 5% having no idea how much money I am putting into it. This is a real business. There is a mechanism to what we are trying to do,” Nicholson explained. “I am not going to do all this work at 5% of a business. That doesn’t even guarantee us a board seat, so what kind of assurance does that give the fans who are spending money that it is going to be appropriated correctly

“I had roughly $2.3 million committed in a trust scheme to help us get off the ground. The way the trust is built is as a continuing membership plan, where you have continuing turnover and revenue going back to the club. We are already registering a 501c, we already have legal counsel, we have the account set up, there is a new law passed January 1st for crowd-sourcing — it is just far easier to do then it was four weeks ago.

“If I am guaranteeing this much working capital up front without even opening up the membership scheme, I already have 10% of the capital they need to start it, and you are going to offer me 5% without knowing what I’ve got?”

Further inflaming the Chicago Trust were comments made by Peterson in an interview with EoS. “I know they want to do it. I also know it is much harder to do in real life in this country than it is as a concept,” Peterson said last month. “The concept is easy. It is a great concept. But first of all, these teams are still in investment mode so there is cash coming in. So what is the tender? What is the mechanism you would be holding on to as a fan? Is this something you would have to pay every year to cover losses? Is it something that is trade-able? Is it something that has to be monitored by the SEC? Is this something that will cost $2-3 million a year to administer? What happens in five or ten years from now? Just a lot of questions surrounding it.”

In Nicholson’s point of view, all the NASL had to do was ask them how they would conduct their business to find out just how viable a group they could be.

“Why don’t you ask us?” he said. “There were fruitful conversations for 24 months leading up to this point and now all of sudden you want to know all this stuff but haven’t asked us? You are talking about being monitored by the SEC. All you are trying to do is scare people off the idea and that’s that. You don’t know what we were bringing. It is obvious in an interview like this, they don’t want to know. They have already moved on from it.

“If they want money with no strings attached, that is not how this project worked and he always knew that,” Nicholson continues. “We always knew that. Before Club Nine and Peter were active, he was all for that. He made it clear that we couldn’t own the club outright, but he also made it clear we could have an active, participating interest in the business; something we could grow side by side. You could have told us six months ago this was the plan so we could stop working on it. The things we have done aren’t cheap.”

Despite the suspension of their operations, and the bad blood that led to the decision, Nicholson says the group would still be open to speaking with NASL — so long as they are treated with the proper respect.

“If we can get back in the conversation now, that would be great,” Nicholson said. However, parts of the group may be harder to convince. “One of the people who made up the $2.3 million, he is already done, washing his hands of it after seeing how these guys have dealt with us. For him, he was looking at the long term, sponsorships, arrangement agreements. He saw something we cared about as fans, that care about the sustainability of the supporters beyond being asses in seats. They burned up that goodwill capital.

“For us five working on this, if we could come back to the table and they are willing to have a conversation with us, sure, we would be more than happy to. But there is no point in having that dialogue because it is obvious they don’t care. They want it as window dressing for the club, not something it was set to be, which is a viable business to help sustain a club in Chicago.”