Nov 10, 2021 - Business

Charlotte’s minor league soccer mess

American Legion Memorial Stadium

American Legion Memorial Stadium. Photo: Ashley Mahoney/Axios

During summer 2020, while Charlotte Independence players and fans publicly criticized a team owner for his stance on racial justice, employees had another problem. They weren’t getting paid on time.

And ownership and management expected them to be OK with that.

When former communications director James Thomas sent a company email asking when paychecks would come, managing partner Jim McPhillamy, in an email obtained by Axios Charlotte, said:

  • “I am chasing some investors — who, as you can imagine, are in the same shitty storm as all of us. One of the investors that owes a fairly significant amount said he would have the money in last week — has not as of yet funded. That is the delay there. If he or the couple others I’m chasing can’t come up with the goods, the McPs will cover but I’m hoping that its doesn’t come to that since I don’t want to be stuck at home with a wife that is not willing to speak to me ;-)”

Thomas responded:

  • “Just want to make a point here. It’s equally embarrassing for us to tell our loved ones the money will be there, and then it isn’t. And then having to ask for an update comes down to how much you respect us.”

Why it matters: You may not have heard of the Independence, even though the minor league soccer team has been here for seven years. But their players are involved in the community and have taken up causes such as racial justice here and across the country.

And this season they’ve had a remarkable run to the postseason in the newly renovated American Legion Memorial Stadium, winning their first playoff game last weekend. (They play at Louisville on Nov. 13 at 7:30 pm in the next round.)

  • But after interviews with current and former members of the organization, it appears it doesn’t matter how good the Independence are on the field, a dysfunctional front office sets them up for failure.
  • It’s a perfect storm with the team’s potential sale, possible self-relegation, lingering controversy from the primary owner’s racist and xenophobic tweets, and lackluster attendance for their first season in Memorial Stadium and the playoffs.

Of note: Axios spoke with current and former employees for this story, some of whom asked to remain anonymous for fear of professional retribution. 

Driving the news: The team didn’t pay employees on time for years, most recently as this spring, a player told Axios.

  • Paychecks were weeks to a month late, former Independence account manager Zach Nagel told me.
  • “When I got paid it was like, ‘I got it. Whatever,'” said Nagel, who worked for the organization’s lacrosse and soccer teams from 2018 to March 2020 prior to the pandemic. “I stayed, because I liked the people and the underdog mentality.”

Front office executives faced a revolving door.

“There was always a new person coming in trying to tell people what to do,” said Mary Ann Baber, who spent January 2019-2020 with the team, before team president Tim Schuldt fired her.

  • Unlike her colleagues, Baber never experienced a missed paycheck.

Between the lines: In December 2018 the team hired Jim McGuinness, a first-time head coach who had connections to Scottish side Celtic, which Charlotte hoped would lead to a partnership. (Think of this partnership similar to the way the Charlotte Knights are affiliated with the Chicago White Sox. One team is significantly larger, with more resources, which may benefit the smaller, minor league team.)

  • It did not lead to a partnership.
  • After seven months and a single win, the Independence fired McGuinness. The financial damage had been done, however.
  • McGuinness had a three-year contract and a six-figure guaranteed salary. 

Follow the money: Last year, more than $350,000 in Paycheck Protection Program loans went to Queen City Soccer Club LLC (the Independence), per the Small Business Administration.

  • A reported 41 jobs were preserved through PPP loans.
  • Even with PPP funding, paychecks still came late or not at all.

In that tense email exchange with Thomas in June 2020, McPhillamy defended the team not paying employees on time by referencing Carolina Panthers owner David Tepper: “Panthers just fired 25 staffers on Monday. I’m not a billionaire and I work my ass off to have that not happen here.”

Thomas was laid off on July 2, 2020, and put back on payroll on July 13, 2020, because the company accepted PPP and could not let him go.

  • He was paid once in June, paid in full for July, paid once in August, not paid in September, paid once in October and not paid in November, he says.
  • During the missed pay periods, he was unable to collect unemployment, as the company kept him on payroll.
  • In December, he took another job, but the Independence never told him he was off payroll.

Of note: The Independence played a condensed season in 2020, without fans for all but their final match.

  • Funds from their first home playoff match in franchise history benefitted Mckenna Woodhead, a local youth soccer player who was paralyzed in a 2018 jet ski accident on Lake Wylie.
  • The team annually dedicates a game as a fundraiser for the Woodhead family.

Schuldt told me in 2020 not having fans at games was the biggest financial hit they took that season. But even if the Independence had been able to that year, there’s no guarantee they’d do well at the ticket office.

  • They drew an average 1,700 fans per game in 2018 and 2019 at the Sportsplex at Matthews. 

And some of the most loyal fans abandoned the team after that summer of 2020 — fallout after the team’s primary owner Dan DiMicco’s actions on social media caught their attention.

  • DiMicco, retired Nucor CEO and trade advisor on former president Donald Trump’s 2016 campaign, posted racist and xenophobic tweets during summer 2020, which I reported on for The Charlotte Post.
  • The club’s original supporters group, Jack’s Militia, called out the club for failing to distance itself from DiMicco, or put out a statement condemning racism.

When Thomas, the communications director, brought this up to McPhilliamy and Schuldt in a text, McPhilliamy said: “You mean with the 15 people that actively follow us.”

  • He continued: “What I am concerned with is our team. I have already reached out to [players] Hugh [Roberts] and Brandon [Miller]. Jack’s Militia putting out a statement on this does absolutely nothing to actually do anything to fix the problem – which is my overall problem with social media. The only thing that post does is make Jack’s Militia feel like they are doing something. That’s it. Back to sipping on 1775s and watch Bundesliga. I have told Brandon and Hugh I’d be proud to attend any of the peaceful protests with them to show support. I feel that is an actual something.”

Uncertain future: Charlotte FC debuts as the city’s Major League Soccer franchise next spring, leaving a question of where the Independence fit in the city’s sports landscape.

  • USL Championship, the league the Independence play in, announced in March DiMicco’s ownership stake would be sold, but neither club nor league confirmed if the sale was related to the events of summer 2020.
  • In July, McPhilliamy told me they’re in no rush to sell DiMicco’s ownership, and the team is here to stay, but in what form is to be determined.
  • Options include self-relegation to USL League One and or selling the USL Championship rights to another market, and then purchasing rights to a League One team, as they expansion fees are $12 million for Championship and $2 million for League One.

Of note: McPhilliamy could not be reached for this story.

State of play: The went on a seven-game unbeaten run to end the regular season and hosted a playoff match Saturday at Memorial Stadium, which they moved into in July after using four other facilities as their home venue since 2015.

  • Some players have become deeply involved in Charlotte. Roberts expanded his podcast BackYardFooty into philanthropy, actively supporting Block Love CLT, which serves Charlotte’s homeless residents, and encouraging fans to do the same.
  • Roberts and Miller helped co-found the Black Players Alliance of the USL and Anti Racist Soccer Club, a coalition fighting racism in soccer.
  • Three former English Premier League players are on their roster, who have contributed to their success, one of whom, Christian Fuchs, will play for Charlotte FC next year.
  • Yet they haven’t cracked 5,000 fans at home, and the stadium holds 10,500.

What they’re saying: “The connection to the community and how you treat people matters more than what the performance is on the field, because the team has been fantastic this year, and nobody really seems to care,” said Thomas, who now works for NASCAR.

  • “If they did owe me money, it’s water under the bridge,”said Nagel, who now works for a mechanical engineering company. “They need it more than I do.”

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