Where does the Money Go? (Take II)

MWN said:
For the heck of it, I spent a few minutes trying to understand this post. Its Saturday and I'm taking a break from drafting a contract.

Near as I can tell, you have at the top of the food chain the Licensor of the "Slammers" name:

1. Slammers Futbol Club (Newport Beach), a Public Benefit corporation. Registered with the California charity registry. Owns slammersfc.org website. Principal officers Terry Mazura and Diane Levin. Income of about 1.5M. Slammers Futbol Club then has/had 3 licensees, which means these 3 licensees were "INDEPENDENT" corporations with separate board of directors, etc.

A. South Slammers FC (Santa Margarita) - South Slammers F.C., Inc., a public benefit corporation (formed on 4/22/2009). Greg Gluchowski (Chairman). Gross Revenues of about $400k.

B. CDA Slammers FC (Yorba Linda) - Strikers FC, Inc., a mutual benefit corporation (formed on 5/22/2012) is the corporation and holds a registered d/b/a for CDA Slammers FC (filed 5/2/2014).

C. Irvine Slammers FC (Irvine) - Before November 2016, Irvine Slammers was a licensee and its operating company was F.C. Blades, Inc. formed in July 2000. Earlier this year FC Blades entered into an agreement with LA Galaxy. The license agreement with Slammers was terminated. The Irvine Slammers website now states that Irvine Slammers is being operated directly by Slammers Futbol Club (Slammers FC (Newport Beach) aka the Licensor and owner of the Slammers name).

So as we had it before Irvine Slammers became LA Galaxy OC, the "Slammers" brand consisted of 4 different corporations/entities (aka Clubs):

1. Slammers Futbol Club (Newport Beach)

2. "CDA Slammers" (Patterson and Camargo), with "branches" (internal business units) in Cerritos, Fullerton, Huntington Beach, Tustin and Whittier.

3. South Slammers FC (Gluchowski / Fawcett)

4. Irvine Slammers (Mazura/Levine/Khoury)

After the Irvine Slammers changed to the LA Galaxy banner, its now 3, with Newport Beach offering to bring in those coaches/teams that don't want to move.

Generally, each team plays under one of these business units (aka Club). The parents do not sign up with a team, rather the Club. Now, if a coach with CDA Slammers decides to move to Slammers FC and wants to take his players, he can but the funds sitting with CDA Slammers stay, and CDA Slammers goes and hires a new coach because these are two different organizations. Generally speaking, the funds belong to the Club, not the parents, unless there has been an express agreement to refund those fees/funds if a player leaves (highly unlikely given the transitory nature of coaches in club soccer).

The email from Patterson not-so-clearly states that the coaches of the CDA Slammers Tustin branch and CDA Slammers Yorba Linda branch have resigned from CDA Slammers and are now employed by Irvine Slammers (aka Slammers FC).

Where things get a little confusing is some of the previous posts are mixing up names. There is no club "CDA Slammers of Orange" its Slammers FC aka Slammers Futbol Club aka Irvine Slammers. The "CDA" names belongs to the corporation out of Yorba Linda (Patterson and Camargo).
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I think you just got yourself hired to represent somebody in this case.

"Did you order the code red?"
"You're g-damn right I did!!!!"
 
MWN said:
If the coaches at CDA YL/Tustin took CDA funds to Slammers FC, then this would likely be improper.
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Fantastic Breakdown MWN

If the coaches and teams did resign but are not going to Slammers FC but moving over to CDA Slammers Orange (OJSC) how does that effect the funds in your opinion.
 
Penalty Kicks Stink said:
Fantastic Breakdown MWN

If the coaches and teams did resign but are not going to Slammers FC but moving over to CDA Slammers Orange (OJSC) how does that effect the funds in your opinion.
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Appreciate that I'm just trying to figure out "who's on first" based on some easily accessible public documents. What I don't have access too is the license agreement between Slammers FC and Strikers FC (aka CDA Slammers).

Based on this letter: http://assets.ngin.com/attachments/document/0111/6720/OJSCCDASlammersWelcomeLetter.pdf

OCP affiliated with CDA Slammers and is becoming CDA Slammers Orange. Does this mean that OCP has merged its assets into Strikers FC (CDA) or is there just some sort of partnership or affiliation agreement? What is the agreement between CDA Slammers Orange/OCP and Strikers FC/CDA Slammers? I don't know, but based on public statements no merger occurred.

Assuming CDA Slammers and CDA Slammers Orange are two separate entities, then the same analysis applies. What we know is that this does not appear to be the case with regard to the coaches/teams of CDA YL and Tustin, which apparently moved to Slammers FC and not CDA Slammers Orange/OCP. Based on this FAQ, the two organizations remain separate: http://assets.ngin.com/attachments/document/0111/6718/OJSCCDASlammersFAQ.pdf

Moreover, given the "affiliate" relationship this implies no merger, rather, two separate entities working together under a common brand (CDA Slammers) with Strikers FC/CDA Slammers in a paternal role. If this is true, then I can't image funds would not be willingly transferred from the parent organization to the child organization to support the affiliation, but it would be up to Strikers FC/CDA Slammers to transfer those funds to OCP/CDA Slammers Orange.
 
MWN said:
Appreciate that I'm just trying to figure out "who's on first" based on some easily accessible public documents. What I don't have access too is the license agreement between Slammers FC and Strikers FC (aka CDA Slammers).

Based on this letter: http://assets.ngin.com/attachments/document/0111/6720/OJSCCDASlammersWelcomeLetter.pdf

OCP affiliated with CDA Slammers and is becoming CDA Slammers Orange. Does this mean that OCP has merged its assets into Strikers FC (CDA) or is there just some sort of partnership or affiliation agreement? What is the agreement between CDA Slammers Orange/OCP and Strikers FC/CDA Slammers? I don't know, but based on public statements no merger occurred.

Assuming CDA Slammers and CDA Slammers Orange are two separate entities, then the same analysis applies. What we know is that this does not appear to be the case with regard to the coaches/teams of CDA YL and Tustin, which apparently moved to Slammers FC and not CDA Slammers Orange/OCP. Based on this FAQ, the two organizations remain separate: http://assets.ngin.com/attachments/document/0111/6718/OJSCCDASlammersFAQ.pdf

Moreover, given the "affiliate" relationship this implies no merger, rather, two separate entities working together under a common brand (CDA Slammers) with Strikers FC/CDA Slammers in a paternal role. If this is true, then I can't image funds would not be willingly transferred from the parent organization to the child organization to support the affiliation, but it would be up to Strikers FC/CDA Slammers to transfer those funds to OCP/CDA Slammers Orange.
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Very good break down on the relationship between the organizations, but I think the analysis is missing two things.

First, what happens to club dues if a player or team leaves is a matter of the contract between the parents and the club and not as a general matter of the relationship between the new club and old club (although I suppose if there is an argument that the new club and the old club are one and the same, then the players' argument could be that the club still has to provide them what the contract says the dues cover (coaching through x date, y number of tourneys, etc., fields for practice, z number of skills sessions, etc.)).

Second, the poster seemed to say that rather than actually being club dues they were contractually required to play the club, the funds at issue here were "team funds". As a general matter (at least at all the clubs we've been at) "team funds" are different than club dues--"team funds" are generally a voluntary (in the sense they are not required to be paid to the club by the contract) pool of parents' money collected up front as an administrative convenience rather than paid-as-you-go to cover many of the expenses of the team are not covered by club dues and that the club does not provide for--for example tournaments, coach's per diem where applicable, ref fees for non-league games, etc.

Without the burden of seeing this club's contract but based on how things work at most of the other clubs we've been at (it's always fun to just assume the facts rather than have to figure them out), I would be pretty confident in saying any club dues are entitled to be kept by the club while it's probably even more clear that any team funds are the parents' money and not the club's to keep (and I wonder why/how the club even has the team funds).
 
TheyBothPlay said:
Very good break down on the relationship between the organizations, but I think the analysis is missing two things.

First, what happens to club dues if a player or team leaves is a matter of the contract between the parents and the club and not as a general matter of the relationship between the new club and old club (although I suppose if there is an argument that the new club and the old club are one and the same, then the players' argument could be that the club still has to provide them what the contract says the dues cover (coaching through x date, y number of tourneys, etc., fields for practice, z number of skills sessions, etc.)).

Second, the poster seemed to say that rather than actually being club dues they were contractually required to play the club, the funds at issue here were "team funds". As a general matter (at least at all the clubs we've been at) "team funds" are different than club dues--"team funds" are generally a voluntary (in the sense they are not required to be paid to the club by the contract) pool of parents' money collected up front as an administrative convenience rather than paid-as-you-go to cover many of the expenses of the team are not covered by club dues and that the club does not provide for--for example tournaments, coach's per diem where applicable, ref fees for non-league games, etc.

Without the burden of seeing this club's contract but based on how things work at most of the other clubs we've been at (it's always fun to just assume the facts rather than have to figure them out), I would be pretty confident in saying any club dues are entitled to be kept by the club while it's probably even more clear that any team funds are the parents' money and not the club's to keep (and I wonder why/how the club even has the team funds).
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I think Cal South's "Best Practices" document sums it up:
http://media.calsouth.com/data/Down...b and League Financial Disputes 8 23 2011.pdf

One of the problems with this thread is that we have a few posters providing potentially conflicting information. Did the teams that are leaving take funds or were the funds supposedly earmarked for those teams confiscated by the club?

Mr. Patterson's email letter is also potentially problematic to the extent that the club is ejecting players that don't respond. Patterson writes: "* Please reply within 48 hours or we will assume you have resigned from the club." If anything, it should be the opposite and he should have said "please let us know in the next 48 hours if you intend to resign, otherwise we will assume your player remains committed to the club."

Generally speaking if a single player elected to stay with the team, then the club has a really good argument that all funds related to the team must remain with the club and are not subject to refund or transfer as those funds were expressly intended to be used by the club for the team ... even if that team has mostly disbanded. As long as a replacement coach and additional players can be allocated then all is good.
 
I never understood the concept (other than monetary) of these franchises. CDA Fullerton, YL, Tustin,Orange, etc. North Orange County has plenty of good talent but too many local clubs that come and go (Corinthians, TFC, . My kids joined club last year and the amount of drama in club along with money makes me want to go back to rec or just hang in there until they make it to high school. My advice is look for the more established leagues that have secured fields, plenty of teams, been around for a while, and minimal financial issues over the past 5 years. I can't think of too many that fit this model (LOL) but I would say AC Brea, Chelsea, and a few others fit this model. I also think that Fullerton Rangers will bounce back very soon (if not already).
 
The only difference between Chelsea and rec is about $1500. If you want something more competitive but don't care about playing top competition or on an ECNL team save your money and play in a Signature league. Same as Tier 3 and will cost you $400 for everything
 
Penalty Kicks Stink said:
The only difference between Chelsea and rec is about $1500. If you want something more competitive but don't care about playing top competition or on an ECNL team save your money and play in a Signature league. Same as Tier 3 and will cost you $400 for everything[/QUO

To be honest, you can say the same thing about most Flight 3 or Bronze teams. There's not much of a difference. We shouldn't have that many club teams in Southern California. It's a business and I understand but this is why it's frustrating to see that most popular sport in the world become such a profit center. You could create a business model where Flight 3/ Bronze is just $700 a year. From there, you can charge more for Flight 2/Flight 1. Make Flight 2 and above more restrictive where not all teams can jump to flight 2.

Most parents just want their kids a place to play competitive soccer year round. 1% of these kids will make it to the Pro's and even then, MLS salaries are only $60k a year.
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Here's what I don't get. All of these backroom deals, coaches jumping ship, making kids sign "contracts" and all of the talk about the "big money" of youth sports. People are making these crazy decisions over a few thousand dollars here or there. Not quite pocket change, but people freak out like this is some massive Wall Street scam or like Apple is trying to screw google out of millions of dollars.
If I'm going to sell out my morals and beliefs while screwing over young athletes and their families, it better be for at least 8 figures.
 
Just got wind of this- I know late to the party. CDA team work this way. They have separate club accounts and pay the club a fee and then a fee to SCDSL. The club does not own the money the individual team does even if they store the money in a club account.

What's interesting to me is that the contract is with CDA Slammers not Slammers FC. I think the parents have a legit legal case to get their funds returned
 
What many of the above posts are missing is that the teams were CDA teams BUT the DOC decided to switch to Slammers FC. Many of the coaches are choosing to stay with a CDA affiliate. That is where the legal challenge is solid for the parents.
 
galaxydad said:
Just got wind of this- I know late to the party. CDA team work this way. They have separate club accounts and pay the club a fee and then a fee to SCDSL. The club does not own the money the individual team does even if they store the money in a club account.

What's interesting to me is that the contract is with CDA Slammers not Slammers FC. I think the parents have a legit legal case to get their funds returned
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Then how did the Club access the funds if they are separate? The Club or A representative from the Club would have to be named on the account.
 
galaxydad said:
What many of the above posts are missing is that the teams were CDA teams BUT the DOC decided to switch to Slammers FC. Many of the coaches are choosing to stay with a CDA affiliate. That is where the legal challenge is solid for the parents.
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Wasn't the DOC it was the Executive Director giving up his license and moving to Slammers FC
 
Kicker4Life said:
Then how did the Club access the funds if they are separate? The Club or A representative from the Club would have to be named on the account.
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During Our first year in club soccer we belonged to a smaller CSL club. There, 2 of us parents were asked to go to a specific bank and open a bank account with our 2 names yet under the club umbrella which was a non profit. We were given a special signed letter from the club giving us permission to do so. All club, uniform and tournament fees came to us and at specific times we paid the vendors or coach. The account was therefor under the non profit EIN but had our names on it. As someone who runs both for profit and non profit businesses I found the whole setup a little weird. I am very thankful we are now with a club where as a team manager our responsibilities are not attached to collecting club fees.
In the above circumstance though I can see how one could have gone in and had access to the moneys. Not sure if legalities but I could see from the bank stand point how the access would have been made. when we left to a larger club at the end of that year, another parent simply went in and had their name added as the cosigner. I never had to go in and do anything to be removed from the account which means my name didn't really mean anything compared to the letter and owner of the EIN number.
 
@galaxydad and @Carpediem

You both raise valid points. After my analysis (who's on first), I was contacted (PM) and informed of an additional corporation in the mix (CDA Futbol Club). After digging a little deeper here is what the public documents reveal:

(1) Strikers FC Inc., a mutual benefit corporation (formed in 2012) - Registered Address is 3917 Diamond Hill, Yorba Linda, CA 92886. CEO: Steven C. Patterson, Secretary: Kory Lynn Patterson, CFO: Danny Ray Patterson, all at 3917 Diamond Hill. Hereafter, the Patterson corp.

(2) CDA Futbol Club., a mutual benefit corporation (formed in Nov. 2015) - Registered Address is 18501 Parkvalle Ave., Cerritos, CA 90703, CEO: A Oscar Camargo, Secretary: Walter Camargo, and CFO: Pamela Rothwell, all at 18501 Parkvalle Avenue, Cerritos, CA 90703. Hereafter, the Camargo corp. The Bylaws of Camargo corp. vest all power in the 4 Board Members and not the members (3.1 of the Bylaws). The bylaws also state that at least 49% of the Board must be made up of non-interested persons (i.e. not compensated), including their relatives (there are red flags here because both father and son on are the board and would consititute 50%)

Neither corporation is registered with the California Attorney General's Public Registry of Charitable Corporations because neither corporation "holds funds or assets in trust for charitable purposes." This means the corporations are primarily operated to benefit the members of the corporation. This is odd because Camargo Corp. holds itself out as a 501(c)(3) and appears to be recognized by the IRS as a public charity. Because Camargo Corp. is new, its IRS Form 990 does not appear online yet, that said, it received its IRS ruling in May of 2016 and may now need to register.

Patterson Corp. is older and appears to be the legitimate licensee of the "Slammers FC" name because the "Slammers" name was licensed by Slammers FC to CDA Slammers FC on or about March 17, 2014 (http://cdaslammersfc.totalglobalsports.com/wp-content/uploads/2014/03/PRESS-RELEASE-CDA-SLAMMERS.pdf). That said, it is entirely possible that there was a different corporation in play (don't know) and/or the license agreement was entered into between Slammers FC and a Patterson/Camargo joint venture or partnership.

The biggest problem with all of this is the public websites of the Slammers licensee's are horribly confusing and potentially misleading to the public. At a minimum, reasonably disclosures are not made and the relationships between the entities are kept secret. How many corporations are actually being used? Are disclosures being made to the parents/players? What is the relationship between CDA Futbol Club and Strikers FC. Are they holding themselves out as a joint venture/partnership (publicly yes, but publicly they don't disclose anything on their website).

Bottom line, this is a huge mess and the failure to disclose by the organizations gives any parent harmed good cause for a refund and/or transfer of funds held in trust to another club.
 
MWN said:
@galaxydad and @Carpediem

You both raise valid points. After my analysis (who's on first), I was contacted (PM) and informed of an additional corporation in the mix (CDA Futbol Club). After digging a little deeper here is what the public documents reveal:

(1) Strikers FC Inc., a mutual benefit corporation (formed in 2012) - Registered Address is 3917 Diamond Hill, Yorba Linda, CA 92886. CEO: Steven C. Patterson, Secretary: Kory Lynn Patterson, CFO: Danny Ray Patterson, all at 3917 Diamond Hill. Hereafter, the Patterson corp.

(2) CDA Futbol Club., a mutual benefit corporation (formed in Nov. 2015) - Registered Address is 18501 Parkvalle Ave., Cerritos, CA 90703, CEO: A Oscar Camargo, Secretary: Walter Camargo, and CFO: Pamela Rothwell, all at 18501 Parkvalle Avenue, Cerritos, CA 90703. Hereafter, the Camargo corp. The Bylaws of Camargo corp. vest all power in the 4 Board Members and not the members (3.1 of the Bylaws). The bylaws also state that at least 49% of the Board must be made up of non-interested persons (i.e. not compensated), including their relatives (there are red flags here because both father and son on are the board and would consititute 50%)

Neither corporation is registered with the California Attorney General's Public Registry of Charitable Corporations because neither corporation "holds funds or assets in trust for charitable purposes." This means the corporations are primarily operated to benefit the members of the corporation. This is odd because Camargo Corp. holds itself out as a 501(c)(3) and appears to be recognized by the IRS as a public charity. Because Camargo Corp. is new, its IRS Form 990 does not appear online yet, that said, it received its IRS ruling in May of 2016 and may now need to register.

Patterson Corp. is older and appears to be the legitimate licensee of the "Slammers FC" name because the "Slammers" name was licensed by Slammers FC to CDA Slammers FC on or about March 17, 2014 (http://cdaslammersfc.totalglobalsports.com/wp-content/uploads/2014/03/PRESS-RELEASE-CDA-SLAMMERS.pdf). That said, it is entirely possible that there was a different corporation in play (don't know) and/or the license agreement was entered into between Slammers FC and a Patterson/Camargo joint venture or partnership.

The biggest problem with all of this is the public websites of the Slammers licensee's are horribly confusing and potentially misleading to the public. At a minimum, reasonably disclosures are not made and the relationships between the entities are kept secret. How many corporations are actually being used? Are disclosures being made to the parents/players? What is the relationship between CDA Futbol Club and Strikers FC. Are they holding themselves out as a joint venture/partnership (publicly yes, but publicly they don't disclose anything on their website).

Bottom line, this is a huge mess and the failure to disclose by the organizations gives any parent harmed good cause for a refund and/or transfer of funds held in trust to another club.
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Well done and agreed. Lawyer up as a group and get your $ back. Dumb move by Patterson to attempt to hold parents hostage. Will more likely lose more families with the attempt to strong arm them
 
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