How healthy is USL League One?

Assessing the state of the third division

When USL League One launched as a 10-team, third-division league in 2019, it did so with high hopes. Former USL President Jake Edwards estimated that League One could grow to 40 clubs by the 2026 World Cup. This was the league that would fill the gap between the USL’s semi-pro ranks and the USL Championship.

As 2024 looms, League One expects to see just 13 teams in action, and it was reported this week that the Chattanooga Red Wolves were looking to jump up into the Championship for 2025. The lofty expectations set at launch simply haven’t been met. It’s worth asking: what challenges does the league face, and how do they limit growth?

Losing the crutch of MLS affiliates over the last few seasons made a dent, and the COVID pandemic hit just as League One began to blossom. Even so, the league is overly concentrated in the southeastern United States, and it is subject to outside competition and internal concerns that pose major questions.

League One’s slate of clubs for 2024

The Red Wolves are a microcosm of the problems. The Red Wolves’ highest attendance number last year was just under 3,100, which would rank fifth-from-bottom as a season average in the Championship, where the club hopes to move. Meanwhile, they aren’t winning the battle in their own city: Chattanooga FC is more popular, has existed longer, plays at a more central venue, and also has third-division sanctioning. The NISA club is best known for once drawing more than 18,000 fans to a title game.

By and large, NISA isn’t a true competitor for League One. The upstart division is deeply unstable and messily organized, despite exemplars like Chattanooga FC. MLS NEXT Pro is a different beast entirely. It also enjoys third-division sanctioning, and its 27-team reach and MLS backing provide undeniable surety. NEXT Pro provides an increasingly attractive alternative for investors who once would’ve turned to the USL by default.

MLS NEXT Pro already added a team in Huntsville, Alabama despite stated interest from the USL. It’s poised to add independent clubs in Cleveland and North Carolina too. Elsewhere, a cold war is staring to simmer between Tim Tebow-led USL Jacksonville and a MLS NEXT Pro iteration of the Jacksonville Armada. At its inception, League One planned to have a clean runway into each of these markets.

Meanwhile, rumors persist that Chattanooga FC will look towards MLS NEXT Pro as a next step given NISA’s unprofessionalism. Why not the USL? After all, existing competition between that club and the Red Wolves hasn’t sank either team; scheduled league matchups would be a boon. Thank the USL’s territorial rights policies for driving Chattanooga FC away. Franchisees in the USL have veto power that denies new expansion teams from entering their urban area.  

League One’s expansion has been inconsistent all the while. Westward growth and maintenance is one key struggle. FC Tucson self-relegated ahead of the 2023 campaign after years of middling performances and support. Central Valley Fuego got off the ground cleanly, but they’ve flailed on the pitch while drawing just 700 fans per game. The upside? Santa Barbara, California and Spokane, Washington are set to join for 2024, and both seem impressive. Both the Spokane Velocity and Santa Barbara Sky have committed to founding women’s teams.

In the Mountain time zone, the Northern Colorado Hailstorm - the league’s only representative in that part of the country - have enjoyed a 140% spike in attendance this year. Their average number is still under the 2,000 fan threshold, but it continues to climb in the midst of a stellar 2023 on the field. More importantly, the Hailstorm spearheaded the construction of a brand-new stadium complex, one that has contributed to their rising popularity.

Comparative attendance and attendance growth, L1 and USLC

The Midwest hasn’t provided ample footing either (sorry, Lansing Ignite), but it hosts the league’s flagship organizations in Forward Madison and Union Omaha. Madison rank second in the league in attendance, one of two clubs exceeding a 4,000 average. Their branding is the most inventive in American soccer, and they’ve backed up the flash with vast improvement on the pitch in 2023.

Omaha, meanwhile, is one of four clubs with a League One title to their name; they’re a perennial contender. The club ranks third in the division in terms of attendance this year to boot. To support further growth, Omaha have announced a plan to build a $100m stadium complex, though one wonders if that move presages a bid for the Championship.

For the entire lifespan of League One, the southeast has been a bastion of stability and a nexus for expansion. Still, that regional core isn’t without underlying concerns.

North Carolina FC, who self-relegated from the Championship after the 2020 campaign, are jumping back up in 2024, which signifies the loss of an exemplary third-tier franchise. The Richmond Kickers self-relegated alongside North Carolina and now lead League One in attendance with nearly 4,800 fans at each game.

That those teams could drop down and solidify themselves is a positive sign for the health of lower-division soccer. Still, North Carolina’s decision to jump back up raises questions. Their actions, read a certain way, indicate that League One is a stop-off rather than a permanent and attractive destination.

The Charlotte Independence, a third Championship dropper, are a vision of instability. They’re locally irrelevant as compared to MLS’s Charlotte FC. Their owner, Dan DiMicco, is reviled for his repeated offensive comments on race and politics. DiMicco was to sell the club in 2021 in the wake of the outrage but remains today. Now, he’s set to own Charlotte’s USL Super League club, but his presence in the sport is a quixotic vanity play, one that shouldn’t be counted on in League One’s future.

A look at (some) confirmed expansion efforts for League One

Other stalwarts like the Greenville Triumph and South Georgia Tormenta have instituted top-to-bottom youth programs and always field high-end rosters, but they struggle to draw more than 2,000 supporters per match. This year’s expansion crop of One Knoxville and Lexington SC are in the same territory, boasting of solid community engagement and nascent stadium projects but middling attendances.

These clubs shouldn’t be disparaged; they’re doing everything right on the operations side. Still, when does sustainability become a question for their ownership groups? Ticket sales are the main source of revenue for every independent club in the lower leagues. Championship clubs with triple the attendance of, say, Greenville struggle with viability; financial survival in the third tier is more precarious still.

Player salaries provide a window into the situation. If League One teams earn a fraction of the money drawn by their Championship peers, that ought to be reflected in the numbers, right?

Per the league CBA, League One clubs must roster 15 professional players with a minimum monthly salary of $2,000. Assuming a team signs the lowest number of players at the lowest possible salary, they would pay a total of $270,000 to field a team for the season. Using the same method, a USL Championship team would cost about $300,000 as a floor in 2023; the gap is only 13%. Future states are shown above, but the spending gulf never exceeds $80,000.

The idea that any team in either league is minimizing roster size and salary outlay in such a manner is silly. Nevertheless, the minimums are in place for a reason. There are USL players making those amounts each month, and the gap between the Championship and League One is rather small with that knowledge in mind.

Ultimately, the financial burden at the low-end for USL Championship and League One clubs is nigh indiscernible. If you’re an owner, why wouldn’t you try and get into the Championship? Second-division branding carries weight, and smart owners will seek out higher revenues to cancel out relatively unchanged costs.

Some argue that promotion and relegation could help the monetary cause. When news broke that the USL was set to discuss that model, some hoped that League One could benefit from the stabilizing presence of drop-down sides from the Championship. Moreover, proponents of pro-rel argue that it would boost fan support and multiply sponsorship revenue.

A discussion of the topic was tabled until the offseason, but actions in the wake of the news have been instructive. North Carolina and Chattanooga may be motivated to join the Championship to assure their futures and build in “promotion.” It’s easier to jump a league by signing a check then by building a winning soccer team.

Pro-rel isn’t a silver bullet. The approval of the system by the USL’s Board of Governors is no guarantee in the first place. The assumed benefits are hypothetical as well. The much-ballyhooed spike in attention may be temporary. The system does nothing to address the stigma fans carry around following lower-division sports.

That the league continues to grow in the meantime - however haltingly - is a success. League One weathered the COVID crisis admirably. It lost no independent teams during the pandemic, though the economic damper had an incalculable effect on investment and expansion. Meanwhile, League One hasn’t benefited from the once-promised possibility of a dozen teams dropping down from the Championship, as Jake Edwards once posited. 

Clubs like Rio Grande Valley FC in Edinburg, Texas or Monterey Bay FC in Seaside, California seem like prime candidates to stabilize League One’s western bloc. Despite their sub-million populations, small television markets, and relatively modest budgets, they persist in the USL Championship. Newly independent Loudoun United could fit as a further stanchion in the southeast. Instead, the flow has reversed.

It’s easy to be pessimistic at the situation. At every level, the USL suffers from that “minor league” stigma. The most fruitful expansion markets going forward are liable to be contested. Even League One’s best-run clubs may not garner sustainable crowds. No one with a brain gets into lower-division soccer to make money, but consistent losses certainly aren’t the goal.

USL League One has weathered a multitude of issues in its five-year run, and it’s still finding its footing. Is this an organization with a scalable, stable operating model that can match unmet demand for soccer in America’s midsize markets? The answer to that question is crucial in stabilizing the base of the national soccer pyramid.