Major League Soccer is borrowing $25 million from a group of Black banks in a deal that people involved hope will set an example for other professional sports leagues and corporations.
The loan, which MLS will use for general purposes, came from a syndicate of Black banks led by Atlanta-based Citizens Trust Bank and New York-based Carver Federal Savings Bank.
It’s the first time that a U.S. pro sports league has gotten a loan financed entirely by Black banks, said Ashley Bell, co-founder and general counsel of the National Black Bank Foundation. The Atlanta Hawks basketball team reached a similar
Bell expressed hope that the Major League Soccer loan will prove to other leagues “what can be done when Black banks work together” with executives who are open to trying a new approach. Corporate executives will find that they can get the “same level of service” and expertise available at bigger banks, he said.
“It’s important to think about giving Black businesses, including Black banks, a chance to compete, especially those industries that make a majority of their money off of Black and Brown talent,” said Bell, who is also a partner at the law firm Dentons.
The loan comes nearly two years after George Floyd’s murder by former Minneapolis police officer Derek Chauvin, who was convicted and sentenced to 22 and a half years in prison. In the wake of Floyd’s death and the subsequent widespread protests, major banks and corporations such as Netflix
Sola Winley, who became Major League Soccer’s first chief diversity officer last year, said the loan deal grew out of a conversation he had with National Black Bank Foundation board member Bernice King. King is the daughter of Martin Luther King Jr. and the CEO of the King Center, which seeks to make the world more just, humane, equitable and peaceful.
As part of Major League Soccer’s own efforts to help seek economic justice, the league wanted to “amplify the importance and historical nature that Black banks” have had in their communities and recognize their tie to sports, Winley said.
Jackie Robinson, who broke Major League Baseball’s color barrier in 1947, later founded Freedom National Bank in Harlem.
That bank closed in 1990, part of a long running decline in Black-owned or Black-led banks in the United States. The country had 19 such institutions at the end of last year, down from 48 in 2001, according to Federal Deposit Insurance Corp. data, partly as a result of mergers but also because of struggles in accessing capital.
The capital that has
Several corporations have announced initiatives to place deposits at Black banks, but Bell said loans like the MLS deal make a bigger impact since they generate income and help Black banks diversify their loan portfolios.
Loan income also boosts the banks’ capital, Bell said, enabling them to make more mortgage loans and offer more credit to small businesses in communities of color, which are often underserved by banks.
“Credit is like water. Wherever the credit flows, things grow. If it doesn't flow, things don't,” Bell said. “So this will continue to open up the spigots of credit and access to opportunity for the underserved in those communities, and Black banks are the economic engines that will power that.”
Major League Soccer said that it is partnering with Black Players for Change, which is made up of current and former MLS players and coaches, and other groups, and is dedicated to increasing awareness of Black banks.
The league has also built a supplier diversity program and is partnering with other groups that are working to tackle the country’s long-standing racial wealth gaps.
“Systemic change requires there to be a sustained energy, a sustained focus and sustained commitment,” Winley said.
Major League Soccer has been growing rapidly, expanding from 20 teams at the end of 2016 to 28 teams today.
In 2021, the Institute for Diversity and Ethics in Sports gave the men’s pro soccer league an overall grade of B on its Racial and Gender Report Card, which was the same score given to the NFL. Among other pro sports leagues, the WNBA and the NBA both received higher overall grades, while Major League Baseball scored lower.
At least five other Black banks participated in the MLS loan, according to a spokesperson for the National Black Bank Foundation. Those five banks are Alamerica Bank in Birmingham, Alabama; Carver State Bank in Savannah, Georgia; Columbia Savings & Loans in Milwaukee; Mechanics & Farmers Bank in Durham, North Carolina; and Unity National Bank in Houston.
