On Sunday, Brian Quarstad of the soccer blog Inside Minnesota Soccer reported that negotiations recently collapsed between the current owners of the Carolina RailHawks, led by majority owner Selby Wellman (who is Brian Wellman's father), and potential new investors in the club.
According to IMS, this prompted the elder Wellman to send an e-mail to the USSF and NASL officials notifying them that financial assistance would be necessary in order to keep the RailHawks in operation for the 2011 season. In response, Traffic Sports USA, the Miami-based division of Traffic Sports, a São Paulo-based sports event management company, would provide financial support in order to keep the RailHawks afloat.
Brian Wellman confirmed to Triangle Offense that discussions with one potential investor had fallen apart, necessitating an appeal by Selby Wellman and the other owners for help to keep the RailHawks operational in the short and long-term.
“We still have employees and staff, and we still have bills and payroll,” said Wellman. “Just because it’s the offseason doesn’t mean anything. We have to keep the operation running, so the investment is needed immediately to keep things going.”
Wellman held out the possibility that another investor would be found for the RailHawks.
"There’s still a possibility of working something out with one of the other investors we’re talking to,” although he was not at liberty to identity this other investor.
Nevertheless, Wellman states that the current owners of the RailHawks—Selby Wellman and minority partners H. Paul Singh, a Cary physician, and Bob Young, founder and CEO of LULU.com and former CEO of Red Hat—are both unwilling and unable to continue bankrolling the club themselves.
“The current owners just don’t want to be involved anymore and they don’t want to operate at a loss,” said Wellman. “They need to find new investors and new owners of the club, and that’s going to take longer than the business needs right now to keep operating. That means the league, Traffic Sports, etc. will step in to keep it going for now until we figure out how the new deal is going to be structured with the owners.”
In discussing the details of Traffic Sport’s involvement, Wellman says that “[t]hings probably won’t get worked out until next week, but basically they’re going to be a part-owner of the team. And, there’s some other things that Traffic has a lot of interest in with Carolina because Traffic over the past few years has started to get into the player development business, transferring and moving players from South America, mainly Brazil, to other countries, including Mexico and the U.S. They see [Carolina] as a team that’s clearly figured out how to produce on the field and how to develop players, so they have a lot of interest from that standpoint in what we do.”
When pressed on the amount of Traffic’s prospective ownership stake, Wellman says that hasn’t been determined yet, but “it seems like it’s going to end up being around 50 percent.”
Wellman said Traffic Sports' ownership is short or long-term “depends on several things, including who the future partners are and how the franchise can perform financially going forward."
Wellman said that his own future role is part of the negotiations.
“At this point, the discussions between me and [Traffic] have pretty much centered around me continuing to operate the team and them kind of overseeing it from the overall budget and ownership role. But, as far as day-to-day operations, that will still be left up to me. That’s what we’ve discussed thus far.”
It is widely suspected throughout the league that the RailHawks carry one of the largest payrolls in D2 American soccer. However, according to Wellman, he does not expect that to diminish in the aftermath of this financial and ownership upheaval.
“I don’t think the payroll is going to change a lot,” he says. “It looks like maybe two, three or four of our guys might be moving on to another club in Europe or possibly MLS. We hate to see any of them go, but if they can get an opportunity in Europe or MLS, that’s great for them. But, they’ll be some changes in player personnel but not really a lot of change in the payroll.”
Wellman also assures that the current coaching staff, led by manager Martin Rennie, will remain intact next season. “[Two years ago] I signed Martin to a two-year contract with a one-year option. The option had performance bonuses to renew automatically, and he’s blown away all the performance options. The third year is an automatic renewal, so he’s under contract for this year."
Wellman added with a laugh, "He had playoff and performance standards, and he’s more than met those expectations. One game short of winning it all.”
While the disclosure of these financial and ownership changes was sudden, Wellman says the NASL and Traffic Sports have been aware of these issues for some time.
“They knew all along; they knew everything. The only thing that blindsided everybody was [IMS] getting hold of this information that’s not really ripe yet."
Regarding matters on the pitch, Wellman did reveal that the RailHawks, the newly reformed Atlanta Silverbacks, and USL-Pro side Charleston Battery have agreed to revive the Southern Derby next season. First played in 2000 between Charleston, Atlanta, and the erstwhile Raleigh Capital Express, the round-robin tournament will begin in late March with the Battery visiting WakeMed Soccer Park to play the RailHawks and will continue with other matches being interspersed throughout the regular season.
“The [RailHawks'] fans should expect a lot more of the same: a top-notch team, the great stadium and the great atmosphere,” said Wellman. “Not a whole lot is going to change, no matter how the percentages shake down with the new owners. We’re just going to keep doing what we do and try to win a championship.”