Editor’s note: Steve Malik, founder and second-time owner of Cary-based Medfusion, is now the owner of the Carolina RailHawks soccer team. So why did a successful tech entrepreneur and investor decide to buy a sports franchise? Neil Morris provides the answers.
CARY, N.C. — The new owner of the Carolina RailHawks embodies both the potential and predicament of the Cary-based professional soccer club in the Triangle marketplace over the past decade. He’s a UNC-Chapel Hill graduate and local tech industry millionaire who is also a lifelong soccer fan. He played the sport in high school and now financially supports area amateur teams. On weekends, he watches the English Premier League and his favorite team, Swansea, and he’s been to WakeMed Soccer Park many times for college matches.
And before last summer, he’d never attended a Carolina RailHawks game.
Stephen Malik acquired the RailHawks last fall from Traffic Sports USA.
The Raleigh entrepreneur is the club’s fourth majority owner in its 9-year history, and the sale closes a dark chapter that began just five months ago when the revelation of a federal investigation into FIFA corruption inculpated Traffic Sports USA and its president, Aaron Davidson.
Malik took notice, and when he was approached soon thereafter about the possibility of buying the RailHawks, it piqued his long-held dream to own a sports team. While Malik has not read “Soccernomics,” he does subscribe to the success theories of Malcolm Gladwell, particularly being in the right place at the right time.
“When people used to ask me why I was working so hard,” Malik says, “I’d say, ‘I want to bring a Major League Baseball team to Raleigh.’ My interest in baseball has waned over the years, and I know we’re not going to get an NFL or NBA team. So I think soccer is a natural fit for this area. And I was excited when this opportunity presented itself and started moving on it.”
Malik has seen every RailHawks home game since his first in June, and over the summer he engaged in a protracted course of negotiations and due diligence to purchase the club, a member of the North American Soccer League (NASL). He discovered a dedicated core of staff, coaches, players and diehard fans.
“I went to a game [this year] in a monsoon,” Malik recalls, “and there were 2,500 people here in ponchos getting poured on, cheering their heads off for the team.”
He also saw the untapped potential of a pro soccer team in an otherwise soccer-savvy market.
“We’ve had a very slim marketing budget, and there’s an awareness issue,” Malik acknowledges. “If you’re a kid who plays youth soccer, you certainly know about the RailHawks, and when you’re here you certainly see how much suburban families make up of those who come watch the games. But in the general community, we have to do a much better job.”
“Who we are cannot be separated from where we’re from.”― Malcolm Gladwell
Malik’s measured, deliberate diction still drips with an unshakeable eastern North Carolina drawl. When he was age 3, his family immigrated from Wales to America, settling in Kinston, NC. After Malik’s father, a chemical engineer with DuPont, died when Malik was 12, his mother—a native of Swansea—was left to rear her three children.
In the late 1970s, soccer was an afterthought in a rural high school sports landscape dominated by baseball and football. Fueled by an affinity for fútbol impended in his DNA, Malik played right wing for the Kinston High School soccer team, but only after helping solder pipes to construct the goals.
Malik says his class at UNC was the first to utilize personal computers, and that he earned a summer internship at BB&T “because I was one of the few people in the building who knew Lotus 1-2-3.” After graduating from college in 1985, Malik dove into the burgeoning information technologies industry. Latching onto startups took he and his family from Durham and Greenville, North Carolina, to South Carolina, Maryland and Utah. In 2000, Malik founded Medfusion, purveyor of online patient portals and other related services for healthcare providers.
Malik says he’s been a strong backer of Tar Heels athletics “as long as I’ve had money.” Asked how long that’s been, he quickly replies, “2010.” That’s the year he sold Medfusion to Intuit for a reported $91 million. Three years later, Malik re-acquired Medfusion, where he currently sits as Executive Chairman. The Cary-based company currently has over 100 employees.
Bill Peterson, the commissioner of the NASL, met Malik for dinner over the summer during the recruitment process for a new club owner. Peterson, who originally hails from nearby Smithfield, NC, was struck by Malik’s keen connection to the Triangle and surrounding areas.
“He’s a very impressive person, very passionate about the Triangle area and the people,” Peterson said. “What struck me first is that he’s a very good businessman and had a complete initial assessment of where the RailHawks were and his thoughts and ideas going forward.”
“If you think advantage lies in resources, then you think the best educational system is the one that spends the most money.”― Malcolm Gladwell
Malik has a firm reply to what elements of the RailHawks’ organization require immediate attention.
“The simple answer is all.”
Changes began before the ink was dry on Malik’s purchase agreement. RailHawks President Curt Johnson will now also serve as the club’s general manager. More notable for fans is that the club has re-signed Tiyi Shipalane to a multi-year contract. The speedy Shipalane, whose first stint with the RailHawks began in 2010, has six goals and eight assists this year and is widely regarded as one of the most potent offensive threats in the NASL.
Carolina finished with the best overall record for the 2011 and 2013 NASL regular seasons. The team advanced to the quarterfinals of the U.S. Open Cup in 2013 and 2014, and defeated the LA Galaxy three consecutive years in the Open Cup. But after missing out on the playoffs last year by two points and finishing third in the 2015 NASL spring season, the RailHawks collapsed after news of the FIFA scandal broke and are hovering near the bottom of the league table.
Malik promises additional outlays in pursuit of the club’s elusive first league championship.
“We’re going to spend whatever it takes to win,” Malik says. “If that means we might come in fourth place and give ourselves a shot in the playoffs, I feel like if we’re in the playoffs every year, we have a chance at a championship.”
That said, he expresses confidence in the current coaching staff. He also puts more stock in targeting resources towards such improvements as scouting and statistical analytics. And while player payroll will undoubtedly increase from heretofore paltry levels, Malik doesn’t necessarily subscribe to the need to match skyrocketing sums paid by NASL teams like the New York Cosmos, Tampa Bay Rowdies and Minnesota United.
“If you go in thinking that spending money is what it’s going to take for players on the field, I’ve seen a lot of different sports where it’s hard to buy a championship,” Malik contends. “That’s not what we’re going with. We’re going with a long-term view [on] youth development, smart decisions with the staff, professionalizing the organization and a lot more areas to improve and sustain us for the long-term.”
Off the pitch, Malik lists three overarching areas that need to be addressed and improved: marketing, corporate sponsorship and attendance.
The RailHawks enjoyed tangible improvements in attendance over the past five years. In 2010, the average per game attendance cratered to just over 2,200. By 2013, that average had risen to 4,708, but it has flat-lined over the past three seasons: it’s currently 4,415, third-lowest in the 11-member NASL.
“Because [the RailHawks] haven’t had a local owner, somebody wanting to be the point of the spear, make connections and rally the community, there continue to be a number of opportunities for sponsorship,” Malik says. “Not just somebody putting a banner up in the stadium, but getting their employees out here, helping us pack the stadium and create a different environment and show a commitment to the community.”
Indeed, with his business pedigree and reservoir of contacts, Malik speaks most confidently about recruiting and leveraging corporate sponsorship.
“When I came out here the first time and looked around at all the advertising banners, I knew the leaders and owners of all of those [businesses],” Malik says. “I think it makes a difference when you’re able to say, ‘Hey, we need your support at a greater level. I’m not going anywhere. You know me, and you’ve already done business with me in a number of other ways.’
“It’s great that we have sponsors, but there are some big names missing out there that should be supporting soccer in this community. And we’re going to change that.”
On Sept. 28, Articles of Organization for “Carolina FC, LLC” were filed with the N.C. Secretary of State’s office, listing Malik as its registered agent. It raised the query whether Malik is wedded to the RailHawks brand, which enjoys its 10th anniversary next year.
“I like the RailHawks brand, [as do] a lot of people who have deep passion for the team and have been here going on our tenth year,” Malik says. “At the same time, you’re going to talk to [customers] about how the brand is perceived, and we’ll do some outreach and feedback cycles to make sure we’re branding ourselves as well as we possibly can. That said, I’m not coming in here with a new brand that we’re going to announce Friday. That’s something we’re going to look at.”
Indeed, Peterson believes Malik benefits from the ability to build on a solid existing foundation in Carolina and is already ahead of the learning curve for a new sports owner.
“He’s got his head around the [soccer] business in a way that’s very unique,” Peterson says. “For a person coming from outside of this, I’ve been thoroughly impressed with his quick understanding. He’s very clear on his initial direction of what he’d like to do. He’s a very quick study of this game, and so I don’t think anything will be too daunting for him.”
“Success is not a random act. It arises out of a predictable and powerful set of circumstances and opportunities.”― Malcolm Gladwell
“Malik” is an Arabic name that means “king” or “leader.” As the new leader of the Carolina RailHawks, Malik promises a “top to bottom revamp” of the club’s work environment, from upgraded accounting systems to expanded off-site office space, where Malik says he will maintain a hands-on presence.
“I’m intending to make [the RailHawks] my primary area that I’m working on for the foreseeable future, because I want to learn the business! I’m making a big enough investment that I need to understand what I’m investing in.”
There’s baseline success in a lower division American pro soccer club that manages to survive for nearly 10 years. But Malik’s aims for the RailHawks are much higher. Time will tell whether he will flourish where his predecessors ultimately fizzled.
“Success in business isn’t a mystery to me,” Malik declares. “It’s the voice of the customer, voice of the fan. We’re going to listen to people, listen to our sponsors and make the significant improvements that move the needle. And we’re going to continually get better as an org and reach the potential the Triangle has for soccer.
“I’m in this for the long run.”
Read more at http://www.wralsportsfan.com/new-railhawks-owner-malik-promises-commitment-to-community-winning-product-/15043807/#i4cLkFhPbjm6ubIJ.99