The United Soccer League (USL) announced that it has agreed to a new revenue-sharing model with its men's professional clubs, allowing those teams to participate in the growth of the USL's national revenues.
The proposal was approved by the USL Board of Directors at the end of August, with team owners in the USL Championship and USL League
One approving the deal last Tuesday via a two-thirds super-majority of voters.
The deal applies to those two leagues as well as USL Premier, which is a first division league slated to begin play in 2028.
The agreement is for five years and will require a renewal at the end of the term. The precise percentage of revenue being shared was not disclosed.
"We have a tremendous opportunity to grow soccer in this country, and we're much clearer today about the role the USL can play in doing that," USL president and CEO Paul McDonough said in a statement.
"We can bring professional soccer to more communities, give more players and coaches meaningful environments to develop and create a competitive system where games matter and clubs have something to play for. Our owners have invested tremendously in this league, and today's vote shows the alignment we have around where we're going and what we're building together."
The USL operates under a franchise model and prior to this agreement, the league collected national revenue streams without sharing those funds with the league's clubs.
This left the teams relying on more localized revenue streams such as ticket sales to generate income.
Franchise agreements also varied from team to team in how much they paid for various league fees.
As a point of comparison, MLS operates under a single entity structure in which such national revenue streams are split among the league's teams.
The agreement the USL announced on Thursday means that national revenue streams will be shared with the league's clubs.
Among the streams to be shared are franchise sales, revenues related to sports betting, media rights and sponsorships.
The cut of revenues teams will receive will depend on the league they are in. Teams in USL Premier will receive a bigger slice than teams in the USL Championship, which in turn will get a bigger portion than League One.
"I've been around the USL a long time, and I've seen this league evolve tremendously," John Neace, chairman and CEO of USL Championship club Louisville City FC, said in a statement.
"As owners, we look at things from our side of the table, and the league has its responsibilities on the other side. This is an important step that allows us to work more cohesively and make decisions that are good for the game, not just our own individual interests. A rising tide lifts all boats, and I believe this will strengthen the USL as a whole."
In an exclusive interview with ESPN, McDonough said the impetus for the agreement came from the owners, who have long wanted a bigger slice of the revenues the USL brought in.
"We've kind of been all over the place in the way we've done certain things in the past; some teams with ticketing, some teams not with ticketing, collecting fan data from some, not from others." McDonough said.
"This allows us to govern with more discipline as we go forward. This is a transparent process now with the team owners, so they get to see the franchise sales and that requires us to have more discipline and pricing integrity and payment integrity.
"So we're happy with the help of the [investors] we've brought in with BellTower and Weatherford to try to professionalize how we do business as we move into the next iteration of what the USL is."
While the agreement doesn't include the Super League - the USL's first division women's league - McDonough said there are plans to reach a similar agreement with the team owners.
"The men have just taken a long time for us to navigate and we are working on the women at the same time, but we're just not ready for it yet," he told ESPN.
The revenue sharing announcement should help pave the way for further investment in the USL, especially as it looks to add new clubs to help fill out the USL Premier ahead of its 2028 launch.
The USL's announcement indicated that the plan is for the USL Premier and USL Championship to operate as 20-team national leagues in a single table while USL League One will remain regionalized. A system of promotion/relegation will connect the top three tiers, with USL League Two continuing as an amateur league.
"We have a different mindset as we continue to grow," McDonough told ESPN.
"We're not looking to be antagonistic in the marketplace. We're looking to be collaborative and trying to help the game grow. And we feel really strongly whether it's the men's game or the women's game, if we can collaborate with all the other stakeholders, that this can help the game grow and it's better for everybody."
The announcement follows last week's ratification a new collective bargaining agreement (CBA) by the USL Players Association, which covers players in the USL Championship and USL Premier.
Last year, the USL took on BellTower Partners as an investor in the league. BellTower is led by former Carlyle Group CEO Kewsong Lee.
The USL's broader investor base includes Weatherford Capital, Advaya Capital, family offices and other partners.
