The United Soccer League (USL) sent shockwaves throughout the American soccer business world on Tuesday when it announced the addition of BellTower Partners as a strategic investment partner, with BellTower CEO Kewsong Lee joining the USL Board of Directors as Vice Chair alongside Chief Executive Officer Alec Papadakis and Chairman Rob Hoskins.
“Kewsong and BellTower are joining the USL at a moment of tremendous opportunity,” Papadakis said. “The investment underscores their confidence in, and alignment with, our vision for the future of the USL. It strengthens our ability to deliver on that promise by advancing top-tier Division One, introducing promotion and relegation, and aligning American soccer more closely with the global game.”
“As we enter this next chapter, we have charted a bold course for the sport in the United States. With Kewsong’s strategic perspective, operational acumen, and proven leadership, we gain an invaluable partner in the ongoing effort to bring that vision to life.”
A significant moment for US Soccer
Since launching in 1986 as a men’s indoor soccer minor league, the USL has gone through many peaks and valleys, but today, it is the largest and fastest-growing soccer organization in the country.
And whilst it continues to be regarded as the nation’s second-tier league, the arrival of Lee might very well allow them to close the gap on Major League Soccer and challenge them for relevance.
For the cost of one MLS team, you could own 20+ USL League One clubs with a chance to rise in cities that have been denied a slice of the pie, but pretty soon, they could have a chance to play in a top-flight soccer league.
As opposed to just about every single country in the world, professional American soccer does not feature promotion/relegation. MLS team owners recognize that there is absolutely zero chance of their club ever suffering relegation to a lower tier – they have a permanent seat at the table – and as such, the cost of purchasing a club has skyrocketed.
Take the example of the most recent MLS expansion franchise San Diego FC. In 2023, an ownership group led by Egyptian billionaire Mohamed Mansour and the Sycuan Band of the Kumeyaay Nation paid a record-setting $500 million expansion fee to join the league (100 times what the first expansion fees were three decades earlier when MLS started).
In contrast, Saudi Arabia’s Public Investment Fund paid just $392 million to acquire an 80% stake in Newcastle United in 2021.
It’s meant that a number of would-be investors have set their sights elsewhere, rather than splashing their cash in the USA. However, thanks to the USL’s rapidly expanding structure, these investors might be tempted to switch their attention to acquiring a USL club.
Buying a USL Championship team costs approximately $20 million, whilst USL League One franchises are priced around $5 million. USL investors have the opportunity to buy a franchise in metropolises like Tulsa, Santa Barbara and Colorado Springs, where, despite having sizable populations, communities are starved of professional sports franchises.
For the cost of one MLS team, you could own 20+ USL League One clubs with a chance to rise in cities that have been denied a slice of the pie, but pretty soon, they could have a chance to play in a top-flight soccer league.
Earlier this year, the USL announced it is planning to launch a new US men’s league with first-division sanctioning to be granted by US Soccer – the second league in the country to receive this status after MLS.
Tentatively named the USL Division One, this top-flight league is set to launch in 2028. Not only will they launch a new top-flight league, but they’ll also become the first sports league in the US to institute promotion and relegation between its men’s divisions.
This means that USL will be able to attract a new type of soccer viewer – the kind that cherishes promotion fights and relegation scraps, and the kind that has been put off by MLS’s single-entity structure.
The USL currently administers three men’s leagues: the second-tier USL Championship, third-tier League One, and a semi-professional League Two, whilst they also operate two women’s leagues – the Super League and W League.
However, by acquiring a minority equity stake in the organization, Lee and BellTower will be able to usher in a new era in USL history and attract even more investors, thereby increasing the league’s value.
Who is Kewsong Lee?
Lee served as CEO of The Carlyle Group from 2018 to 2022, leading a period of rapid growth and diversification into new business segments for the firm. After departing Carlyle, Lee founded BellTower, a private investment firm supporting operating platforms focused on scalable, lasting growth.
His investment group already boasts a diverse portfolio ranging from infrastructure to energy to sports business, including Patricof Co, a firm which has assisted athletes like Travis and Jason Kelce and JJ Watt find optimal investment opportunities.
These athletes could be invited to invest in a USL club with potential for healthy returns on investment, thanks to the potential of promotion.
BellTower has also invested in the Connecticut-based real estate developer United States Development Partners (USDP). According to their website, USDP “fosters community engagement and economic growth by developing sports-related infrastructure, housing, and mixed-use real estate.”
USDP has already engineered the development of Centreville Bank Stadium in Pawtucket Rhode Island, the home ground of the USL Championship’s Rhode Island FC, and it is currently focused in a $600m proposal for a soccer stadium and mixed-use project in Lee’s hometown of Albany. Having initially targeted a team in MLS Next Pro, Albany have since switched their focus to establishing a USL club.
With promotion/relegation looming on the horizon, the USL promises to become an even more welcoming harbor for potential investors. They’ve already brought in USMNT international Gio Reyna, who recently became a minority investor in Fort Lauderdale FC, and with Lee steadily running the ship, there’s reason to believe they’ll be attracting quite a few more buyers in the near future.
This is the first credible, domestic challenger league MLS has faced since its inception 25 years ago, backed by serious money.
