Sports teams are normally controlled by billionaires and although loved by fans, often fans don’t have a part of the action beyond the jersey they bought to wear to the game.
But in the Detroit area, we’re doing it different. Nearly 500 investors have crowdfunded a soccer team – and are already getting paid a dividend on their money.
For many, this might seem as an unconventional way to fund a business or a project – to get investors through the internet, sometimes large, sometimes small – and crowdfund your way to the money you need.
But more and more, it’s the wave of the future. One of those organizations that used this kind of funding model that is near and dear to the hearts of many Detroit area soccer fans is the Detroit City FC, raising $725,000 from 492 individual investors.
According to DCFC, this week they began distributing $107,000 in revenue sharing checks to investors of what they’re saying is the first community investment campaign in American sports history.
The funds were used to rehabilitate Detroit City FC’s new home at Keyworth Stadium in Hamtramck, Michigan.
The campaign, which launched on October 29, 2015 and closed on February 15, 2016, was open to Michigan residents through the Michigan MILE legislation.
Revenues, according to the club, were up by more than 17 percent from what was projected for the first six months of the year, meaning investors were paid greater than the estimated 10.4 percent internal rate of return for the first payback period.
Some of the other goals the team accomplished:
- Rehabbing an 80-year-old stadium including major structural improvements to the grandstands, locker rooms, restrooms and lighting. Supporters and investors assisted in bleacher painting, general clean-up and outreach throughout Hamtramck neighborhoods.
- By year end, DCFC’s gross revenue is projected to increase by more than 50 percent compared to 2015.
- The team recorded a total attendance of 52,550 supporters in 10 matches at Keyworth. Its average of 5,255 supporters per match was a 48 percent increase from 2015.
- The home opener drew 7,410 supporters, which set the National Premier Soccer League (NPSL) regular-season record for attendance.
- In its June 25th match against Dayton Dynamo, Le Rouge supporters raised $2,000 in support of Freedom House through a silent auction of player-worn charity jerseys at Keyworth.
- The team also opened a brick and mortar retail shop at 2750 Yemans St in Hamtramck. The club shop, which opened in April, features a mixed-use office and community space, as well as has club merchandise available for purchase.
“It’s been a remarkable year in terms of the growth of DCFC,” co-owner Todd Kropp said. “We set extremely ambitious goals for 2016, and with all the supporters who once again rallied behind us we proved that a club that has close ties to its community can be a huge success. Although we met or exceeded most of our targets for 2016, we are not going to get complacent. We’re already looking at how we can reach an even wider audience for 2017.”
With this kind of progress in just one year, it’ll be very interesting to see what DCFC has in store for next season.