It’s been years, but Dan Egner’s X profile still shows him planting a kiss on the USL Championship’s silver cup. These days, Egner is an agent with NordicSky, representing clients on both sides of the Atlantic. But in 2019, when that picture was taken, he was the technical director of Real Salt Lake at a time when MLS teams had affiliates in the USL, the umbrella organization that runs much of lower-league soccer in the United States, including the second-division USL Championship.
When Salt Lake’s affiliate Real Monarchs won the final, the glory was sweet, but it was not profitable.
“It literally cost us money to win the championship,” Egner told the Guardian. “We sold out both of our home games, which was the only revenue we got, but then we had two road games, one of which was the final … Our travel costs for those two games outweighed the revenue that we brought in from our home games, and there was no prize money.”
The following season, an opposing head coach told Egner that the Monarchs’ financial struggles were far from unique.
“He goes, ‘Dan, my owners sat me down and said if we don’t finish top four, we’d rather not make the playoffs’,” Egner said, noting that a top-four finish meant getting a home playoff game and the resulting revenue.
And yet, with the 2026 World Cup seen as a potential driver of growth, the USL’s focus in recent years has been on expansion. Last February, the USL announced its intention to start a new league, classified as Division I alongside MLS. That March, league president Paul McDonough said it was “likely” they would enact promotion and relegation between the Championship and the new league (since named USL Premier) by 2028. The changes have been hailed as revolutionary for soccer in the US – direct competition to MLS for the first time in the league’s history, and a long-discussed introduction of the promotion/relegation global standard to the US.
Yet the ensuing year has raised doubts. There is still little to no detail of how the new league, and promotion/relegation will actually work. And while two private equity firms have announced big investments into the USL, it hasn’t improved clubs’ stability. Three USL clubs have ceased operations since the end of last season, including one just three weeks before kickoff. In total, 20 teams in the Championship or League One have bit the dust since 2015. And now, Championship players remain locked in a contentious fight over a new CBA with the league, resulting in silent protests at Championship games on the league’s opening weekend.
With the 2026 season underway, the USL’s rate of attrition warrants a closer look.
Revenue sharing
When they played in USL, Egner’s Monarchs had a few advantages over their counterparts, benefiting in particular from nesting within an MLS organization’s budget. MLS’s revenue sharing program, which sees it distribute some income from media rights and national sponsors to its clubs, guarantees each team a certain level of funding. It’s common practice in other American leagues which share MLS’s centralized, single-entity structure as well as global soccer circuits. The Premier League, for example, equally splits the revenue from its various broadcast deals – amounting to just under £100m ($130m) per club.
The USL, meanwhile, still does not have meaningful revenue sharing with its clubs. Each organization is more or less on its own, hoping to make ends meet through matchday revenue, merchandise sales, and selling players in the transfer market, with most recent moves for starters netting five-figure or low-six-figure returns. In December, Detroit City FC co-owner Sean Mann told Backheeled that “losing $4m a year puts us in the top quartile of most profitable teams in the league.”
He added: “We don’t anticipate any broadcast dollars of any note, and we’ve never looked to the league to generate revenue for us.”
Despite this lack of revenue sharing, the USL has expanded. The league has launched dozens of teams into the second and third divisions over the last decade, more than making up the numbers after MLS’s decision to move its reserve teams to its own ecosystem (MLS Next Pro).
Many of the USL’s new team owners appreciated the fact that, unlike MLS, membership in USL came with fewer strings attached – they might not share in national revenue, but they can run their soccer business the way they saw fit, in line with the needs of their communities. They got to feel good about growing access to the game for fans in for far-flung communities, and in creating jobs in soccer for players and staff alike. Many new club owners cited the 2026 World Cup as the precursor to a national boom of soccer fandom.
And yet, the expansion fees they paid (around $20m for the Championship and over $5m for League One) go directly to headquarters and stay there. Like the USL’s lack of revenue sharing, it’s a departure from other American leagues’ standards, where expansion fees serve as something of a bonus to owners whose investments helped the league grow enough to merit a new team or two.
Per the USL’s publicly available financial statements, 61% of their $56m in revenue came from expansion fees, and that could be due to grow significantly. The USL expects to launch “five or six” expansion clubs within the USL Premier, creating the potential for the league to incur a nine-figure windfall all to itself depending how they value these first-division slots.
The clubs and players, meanwhile, are on their own.
Costs
The USL often points to its owners who build soccer-specific stadiums as key drivers of an ambitious future. Louisville erected one of the finest soccer parks in the country, a cozy 11,600-seater it shares with NWSL sibling club Racing Louisville. The Colorado Springs Switchbacks opened its own 8,000-seat venue a few years ago. Both clubs stand to improve their revenue streams by controlling their home.
But building doesn’t guarantee stability in perpetuity. Take South Georgia Tormenta FC as an example. After launching in 2018 and playing its first seasons at a college stadium, they opened the 3,500-seat Tormenta Stadium at an initial projected cost of $30m, hoping to grow capacity to 5,300 as demand increased. Instead, Tormenta ranked last in League One attendance in 2025, drawing an average of 719 fans – down 36% from 2024.
On 23 February 2026, just 13 days before their home opener and having already sold season tickets for months, the club announced it would not compete in this USL season. It’s not quite folding, but few teams that have gone on hiatus ever come back. A USL source, speaking anonymously given the sensitivity of the subject, said the club had given the league assurances that it would receive a financial injection to remain operationally solvent, and the league was willing to wait in order to keep a longtime member of the league in the picture. Instead, more than three years after opening on 2 October 2022, Tormenta Stadium will host amateur league games.
Across the board, the costs of running a professional team in the US remain high. Reporting from Backheeled estimates the annual expenses of a first-year Championship club to be $24-29.5m, and for non-expansion teams to spend $3.7-8.4m per year. For League One, those figures come in at about $7.6-11.5m for debuting sides and $2.4-5.4m for returning teams.
Public records also show that one Championship club (Orange County SC) ultimately spent over $300,000 on TV and radio costs in 2024. Teams pay annual dues exceeding $300,000 as of 2025, while the USL’s franchise agreement ensures $1.50 of every ticket sold across both leagues comes back to the USL itself.
As Dan Egner can attest, travel is also a considerable hit to operating budgets. The USL had hoped to regionalize League One to cut down on travel, but as of 2026, it’s still a fully national league like MLS and the Championship. The league now hopes to enact third-tier regionalization once USL Premier debuts, but until then, clubs continue to incur considerable operational costs without league assistance.
Expansion
These costs detailed above require owners that can absorb many financial hits over a long period. Clearly, based on the number of folded teams, not all of them meet that standard.
Beginning when Tormenta became League One’s first member in early 2018, 25 independent clubs have joined the third-division league; five folded or went on hiatus within three years. Of the 17 clubs that will compete in 2026, five are debuting, while four others are in their second season. And if they start to fail, they’re likely done; a USL owner has yet to sell a primary stake to an in-market buyer.
The responsibility of vetting prospective owners is taken upon by the league office. The understanding among club sources is that this process is spearheaded by longtime USL CEO Alec Papadakis and his son, Justin, who has been the league’s chief real estate officer since 2021 and deputy CEO since 2023. Other USL stakeholders weigh in through committees.
“It makes me really nervous when you see the rate that clubs fold,” Egner said. “I don’t see how we can talk about pro/rel when you have clubs fold every year. Until we have 40-plus clubs with no question marks in terms of sustainability, finances, backing, I don’t really think it’s a fair conversation to be having – especially for the players.”
In his role as an agent today, Egner has a general hierarchy of stability for USL clubs that may try signing his clients. In MLS and Next Pro, though, he says there’s no concern about whether a club will be able to operate for the full tenure of a player’s multi-year offer. “With the USL, hopefully this club isn’t the one that folds this year.”
Egner did have a client on Tormenta FC, the first time he’s represented someone who was shocked by his club’s sudden folding. While he was able to find a new team, most of Tormenta’s players will struggle to land on a roster as rival clubs have largely filled their squad and allotted player budget.
“We’re fortunate that it’s the first time that’s happened to one of our players in the USL,” Egner said. “We know guys who have been affected by five clubs folding in their careers.
Labor
Egner said there has been considerable improvement in working conditions since players and the league CBAs; the first labor contracts of their kind for US lower-league athletes. The Championship’s pact expired on 31 December 2025, though, and the offseason has seen the USL Players Association (USLPA) and the league exchange increasingly heated barbs.
On 27 February, the USLPA voted to authorize a strike unless a fresh pact is finalized, citing “90% of the players” rejecting the USL’s last offer from nine days earlier and authorizing “all necessary steps, including calling for a strike if required.” The USL issued a statement to ESPN in response, stating they have “[negotiated] in good faith with the USLPA for more than a year.”
There doesn’t appear to be an imminent breakthrough on a new deal. Last week, the league emailed all Championship players with a PDF in question-and-answer formatting that included guidance on how to cross a picket line and how to resign union membership. The opening weekend saw nearly every Championship match begin with all 22 players standing still, arms behind their back, for the first minute.
Weeks earlier, US Soccer announced that Alec Papadakis had been awarded its highest honor, the Werner Fricker Builder Award. “Millions of Americans have experienced soccer because of what Alec and the USL have done,” said federation CEO JT Batson.
That much is undoubtedly true. But now, the league’s new focus on top-division action and promotion/relegation adds an air of experimentation. In the meantime, USL clubs will try to stay afloat in hopes of testing the model.
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