Team Financial Losses Have Partners Grumbling : Days Numbered for Sockers’ Bell?

SAN DIEGO — As someone who has invested in race horses, gambled at the blackjack tables in Las Vegas and served as a financial consultant in the world of commodities, Bob Bell knows what it’s like to play for some very high stakes.

However, those risky ventures might be considered conservative compared to Bell’s misadventures with the San Diego Sockers.

As Sockers managing general partner, Bell has lost $9 million dollars on a team that has won four straight championships.

“I made up my mind about 50 times that I wouldn’t put anymore of my own money into the team,” said Bell, 46, who had to sell his interest in a couple of race horses in order to help finance the Sockers. “Every time, it became a matter of the team needing money to survive, so I put it in.

“It sounds corny, but to see those kids wanting autographs after a game is very special. I was an average, run-of-the-mill jock, but athletes had a big impact on my life. I was always a sports fan. I see the enthusiasm of our fans. I help create that for them and that makes up for the money I lose.”

But it doesn’t make up for the money Bell’s 14 limited partners and three other general partners are not making.

“I take pleasure and pride in how the team has played on the field,” said Ness Tiano, a limited partner, “but it’s a fact that the team hasn’t generated any profits since we became investors (in March, 1984).”

That is why Bell’s future as managing general partner of his team appears to be in jeopardy.

Monday, Bell said two people who became limited partners in January recently invested the $300,000 that he needed to raise by mid-April to cover operating costs.

If Bell did not come up with the money, he would have had to go to his limited partners for it, and they already had told him earlier this year that they didn’t want to further their investments. In November, 1985, Bell received an additional $800,000 from his limited partners in return for part of his ownership. Bell has gone from owning 95% of the club in 1980 to owning 17.5% today.

If Bell had not come up with the $300,000, the limited partners might have had the impetus to force Bell to relinquish even more of his ownership and possibly his position as general managing partner.

Since Bell says he came up with the $300,000, his next obstacle is to meet certain financial goals set by his partners before the season began. According to both Bell and his partners, they will have to wait until the playoffs are completed before they can analyze the situation.

Sources would not define these financial goals and Bell would not specifically identify them, but the consensus among the general manager and his partners is that the Sockers have to play every home playoff game possible in order to turn a profit this season. That isn’t leaving Bell much leeway.

“If the team has fantastic success in the playoffs,” said a limited partner who asked to remain anonymous, “he could be there. But if the Sockers don’t play the maximum number of home playoff games (10) and don’t average in five figures for all the games, I would be shocked if he (Bell) could hit the numbers.”

To play the maximum number of games, the Sockers would have to lose two games in each of the first two best-of-five playoff series and three games in the best-of-seven championship series.

“I felt we’d be close to breaking even this season,” Bell said. “I still hope we can break even. If we perform badly in the playoffs, would they (limited partners) ask me to leave? I can’t answer that.”

Performing badly can mean either on the field or at the gate. Beginning with their first of four straight indoor titles in 1981-82, the Sockers have averaged 10,848; 11,610; 11,857 and 10,216 fans per playoff game.

The Sockers’ financial difficulties can be attributed to a decrease in attendance, a lack of radio and television revenue, escalating player salaries, the $550,000 MISL entrance fee (of which Bell said the team has paid “most of it off”) and the debt they are still harboring from the very unprofitable outdoor game. When the Sockers gave up playing the outdoor game following the 1984 season, they had a $2 million debt. Average attendance at San Diego Jack Murphy Stadium during that final outdoor season was only 5,800.

“It’s sad that a man as nice as Bob Bell is in this position,” said a limited partner, “but he is dealing with a lot of sharks who are not in there because they love Bob Bell.”

Bell does not appear ready to fight for his postion if his limited partners try to oust him.

“We’ll all sit down and talk after the season,” Bell said. “If despite five championships (if the Sockers win this season) and all I’ve done, they feel I’m not the guy to represent the Sockers, I won’t do it.

“Actually, I wish I could have gotten out and become a silent partner three years ago. I’m not really fit to do this. I don’t enjoy it, but I haven’t been able to afford to have some high-powered executive running the club.”

When asked if his limited partners would like to be more active in the running of the team, Bell said: “They don’t want all that liability. They are not crazy like I am. Since 1978, I have watched around 50 soccer teams and 50 groups of owners come and go.”

Bell has been involved in professional soccer since he purchased a minority interest in the Las Vegas Quicksilvers in 1977. The Quicksilvers moved to San Diego in 1978. In 1980, Bell bought out his three partners for $1.5 million, and after the 1980 season, he devoted his entire time to running the Sockers.

There have been times, however, when Bell considered giving up the team.

“I’ve thought of selling the team 20 or 30 times when I got disgusted,” Bell said. “I had offers to sell the team to Phoenix and Los Angeles. I’ve had several offers over the years which I’ve considered and turned down. . . . I never thought I’d lose $9 million. I thought at the maximum it would cost me $1 million.”

And he thought he’d be back in the investment business before his five-year plan (1980-1985) ran its course.

Instead, he is still trying to get out of debt. Even before the summer of 1984, the Sockers were in considerable financial difficulty.

“The burden became so substantial that I took in partners,” Bell said. “I was pleasantly surprised that I only had to talk to about 18 people to get the original investors (12 investors). I don’t think the figures I showed them were anything dazzling, but there is a certain excitement to the investment and a community spirit.”

In addition to Bell’s 17.5% of the Sockers, his three general partners own a total of 7.5% and his 14 limited partners own 72% (unequal shares). When the limited partnership was originally formed, the 12 investors had purchased 24% of the club. Since then, they’ve contributed more money and Bell was been forced to give up a percentage of his ownership.

Carl Berg, the former owner of the Golden Bay Earthquakes, has a share as a limited partner and an additional 3% as a general partner. Berg received that 3% from Bell in lieu of cash when the Sockers bought Steve Zungul, Branko Segota and Fernando Clavijo from the Earthquakes before the 1984-85 season.

Finances have created a stormy relationship between Bell and his partners.

“Bob originally told the limited partners that he would never have to borrow money from them again,” said one of the limited partners. “Then he (Bell) came for more money and that infuriated the partners. The key mistake was not telling the partners the truth.”

Once they became familiar with the running of the organization, a number of the partners believed the team should be run as efficiently in the front office as it is on the field.

“Why can’t Bell run the front office the way Ron Newman coaches the club?” asked a limited partner.

Newman said Bell’s concern about his position seems to fluctuate.

“I have seen people with a lot more money than Bob fold up shop,” Newman said. “Bob got himself in too deep, both financially and in his passion. But who has done more for this team or city than Bob Bell? I just wish he could enjoy what he does more. If you can’t enjoy this franchise, what can you enjoy?

“It hurts me when the fans boo him at the arena. If you love the game or love the Sockers, don’t boo Bob Bell.”

Said Chicago Sting owner Lee Stern: “Bob is a true sportsman and is always the first person in the locker room to congratulate the other team.”

So why has Bell continued to shoulder these financial hardships? Why has he stayed in a league that had to pay ESPN cable network to telecast league games this season?

Admittedly, Bell gets a rush of adrenaline when he sees his team play the indoor game at its highest level, dominating its league and winning championships.

However, adrenaline also brings headaches.

Bell recently had to obtain a $100,000 advance from the San Diego Sports Arena to help handle a cash-flow problem.

What’s more, he has been called “cheap” because he sold Juli Veee, Alan Mayer and Martin Donnelly to the Las Vegas Americans before the 1984-85 season and sold star forward Steve Zungul to the Tacoma Stars in February.

Bell received about $200,000 from Las Vegas for Veee, and then reacquired the popular player when the Americans folded after last season. It turned out to be a good business move.

In February, Bell said that one of the reasons he sold Zungul was because the Sockers were considerably over the $1.2-million salary cap he felt would be part of the new union agreement. Friday, the MISL players and owners ratified a three-year collective bargaining agreement, including a $1.275 salary cap, that goes into effect next season.

At times like those, Bell feels vindicated. And he seems to remain optimistic in spite of all the hardships.

“I’m proud of what our organization has accomplished under tough conditions,” Bell said. “We are the best team in the world at our sport and we did it from scratch. I’m always asked if the Sockers are going to continue to be here. For the first time ever, I believe 100% that the Sockers will continue to be a viable sports franchise in this city.

“The league, the sport and the Sockers--relative to where we’ve been--are in the best shape ever. But that’s not to say it’s where I’d like it to be or hope it to be.”

Bell isn’t the only MISL owner with problems.

Said Chicago’s Stern: “I’ll lose over a million dollars this year even if I go to the finals. And this is one of my better years.”

Cleveland Force owner Bert Wolstein, whose franchise reported a profit the past two seasons, said: “Even we have to reach the semifinal round in order to turn a profit. If I had San Diego’s team here, I’d be near capacity all year.”

That comes from the owner of a team averaging 12,009 fans per game and outdrawing Cleveland’s pro basketball franchise. The Cavaliers of the National Basketball Assn. have averaged 9,496 fans per game in their first 37 home games this season.

The Force and the St. Louis Steamers supplement their income by renting out practice facilities which they own. Bell said the Sockers are currently involved in the building of a recreational facility in Carlsbad. In June, the Sockers plan to move their executive offices from the Sports Arena to Carlsbad, and they expect to practice there next season instead of the Sports Arena. Bell said the facility in Carlsbad also will provide the Sockers with three fields to rent to schools and youth groups.

“It will be very first-class and professional,” Bell said.

Professionalism has been a sensitive point for those involved with the Sockers, a team which tries to save money by cutting corners whenever possible.

Only recently did the club agree to pick up the tab for championship rings for its players, and earlier this month, the team took a less-expensive MexiCoach bus that broke down on the way to Los Angeles.

There also has been an extremely high turnover in the Socker front office. Bell said it is difficult to keep good people when you can’t pay “top dollar.”

“We have no national revenue to speak of yet,” Bell said. “Therefore, it takes maximizing every possible level of local revenue to operate at a slight profit. This season, our objective was to break even.”

For the Sockers to break even, Bell said he needed to have a paid average of 9,500 fans (12,948 capacity) for the 24 MISL regular season home games. After 22 home games, the team averaged 9,507 fans, of which an average of 8,452 bought tickets. The Sockers’ gate revenue has increased from $62,000 last season to $72,000 this season, and their club-record 4,029 season tickets have brought in $982,000.

The Sockers drew an average of 11,610 fans for 24 regular-season MISL games in 1982-83, an average of 11,415 fans for 16 NASL games in 1983-84 and 9,595 games for 24 MISL games in 1984-85.

There are several reasons to help explain why the Sockers--owners of the best record in the league at 33-11--have not improved their attendance and financial position this season.

- Scheduling: The team played seven home games in January, including five in two weeks, and only one home game between Feb. 14 and March 12. That is not exactly the kind of balance for which a club looks.

The Sockers play three home games each against Western Division clubs and only one or two games against those from the Eastern Division. Their biggest rivals--and best draws--are from the East.

From the Western Division this season, Kansas City drew 8,050; 9,826 and 8,345 fans to the Sports Arena; Los Angeles drew 8,146; 7,094 and 10,233, and Tacoma drew 7,266 and 8,201 before Zungul joined its team. With Zungul, Tacoma drew 9,581 last Wednesday night.

Baltimore, of the Eastern Division, drew 10,372 and 11,852 fans and Minnesota attracted 10,665 and 8,335.

- Broadcast Revenue: San Diego does not receive any rights fees from KLZZ to broadcast 38 games on radio, and the team had only 10 road games televised on KTTY this season. The Sockers sold 80% of the advertising time on the radio this season, which is the best they’ve ever done.

“From a marketing standpoint, we want to control the radio time because we feel we can use it as best fit,” said Randy Bernstein, Socker vice president. “Now we’ve had more corporate interest than ever before.”

Buoyed by ratings on ESPN that often topped those attained by the National Hockey League’s “Game of the Week,” MISL owners are hoping to work out a more profitable cable deal for next season.

- Salaries: Many payrolls of MISL clubs are around the $1.2- to $1.4-million mark. According to a source familiar with the team, the payroll of the Sockers has gone from approximately $850,000 in 1984 to around $1.3 million this year. That is after Zungul was sold and his $200,000 salary was eliminated.

The Sockers will not disclose their payroll, but Bell did say it ranked fourth in the league behind Cleveland, Baltimore and Chicago when Zungul was with the Sockers. Without Zungul, it ranks sixth among the 12 teams.

Bell himself has taken no salary until this year. He said he is earning “somewhere around $25,000 this season.”

- Entrance Fees: When Chicago, San Diego, Minnesota and the Cosmos joined the MISL from the NASL in 1984, each club agreed to pay a $550,000 entrance fee. Bell said the Sockers have paid most of it.

However, when the Cosmos became defunct last season, Chicago, Minnesota and the Sockers were told they were obligated to pay the $200,000 still owed the league by the Cosmos. The debt was to be split three ways. Attorneys are still debating this debt.

“Overall, the worst we will do this season is cut losses down by several hundred thousand dollars,” Bell said. “And we will earn more revenue than we’ve ever had in the history of the club. The Sockers will make money next year.”

The question is whether or not Bell will be running the show by then.