The Carolina RailHawks introduced Steve Malik, the executive chairman of Cary medical software company Medfusion, as the team’s new owner and chairman Friday, ending months of uncertainty about the team’s ownership.
The announcement comes after the team’s previous ownership company, Traffic Sports USA, was tied to a U.S Justice Department sting that indicted 14 world soccer figures in May.
Malik, 50, fits the profile of what fans have clamored for over the past few years.
The fourth owner in the RailHawks’ nine-year history is local. He lives in the Triangle, is a North Carolina native and graduated from Kinston High and UNC-Chapel Hill.
He also has a vision for growing soccer in the area and a willingness to increase spending. Fans had decried Traffic’s lack of investment in marketing and payroll compared with other North American Soccer League teams.
“I’m in it for the long run. I’m not looking to flip it and sell it for more. I think the area has a lot of potential for soccer, and I want to see it achieve it,” Malik said. “I think we have the opportunity to take soccer to the highest level with the demographics we have and the growth we have.”
Malik did not disclose how much he spent to buy the RailHawks from Traffic Sports USA, which had been hoping to divest itself of the team for the last two years. Traffic bought the team’s trademark on eBay in 2010 for $14,999 to save the team from dissolution.
Malik sold his Cary medical software company, Medfusion, to Intuit for $91 million in 2010. In 2013, he bought back the company for an undisclosed sum.
Malik notes that the Triangle – because of soccer’s popularity at the youth level, the international demographic and many young professionals – matches up well with other cities around the country where soccer teams draw great support.
Long term, he wants the RailHawks playing “at the highest level of soccer” but did not commit to saying the team would pursue Major League Soccer.
“There are a lot of paths to (the highest level of soccer), and we’re going to explore all those paths,” Malik said.
In the short term, he does not expect to profit.
“I think this is going to take a tremendous amount of investment,” he said. “We’re going to put a pretty big divot into the investment side before we start making money.”
At his first job out of college he worked at Dataflow in Durham. Malik said he “got to go into businesses, learn their problems and solve them with technology.” He kept that up with his own businesses, and now he hopes to fix the RailHawks’ problems, starting with marketing.
“I think the team has an awareness challenge,” he said. “If your kids played soccer recently, you’ve seen the RailHawks brand all over the state with the success CASL (Capital Area Soccer League) has had, but if you haven’t, not a lot has been spent on marketing. We need the community to embrace us to be successful, and some of that’s on us to spend a little more to have more of a presence.”
I think the team has an awareness challenge.
RailHawks’ new owner, Stephen Malik
The next problem is payroll.
“The investment level needs to be radically amped up,” Malik said. “We’ve had great players and we’ve had great coaching, but we haven’t quite kept up with the rest of the league in that regard. ... That’s what made me feel like there was room for growth and opportunity.
“I don’t think you’re going to see our players quitting and going to law school,” Malik said.
During the 2014 season, two players – including leading goal-scorer Zack Schilawski – left the team midseason to enroll in law school.
Aaron Davidson, 44, CEO of Traffic Sports USA and the face of the RailHawks’ previous corporate ownership, was indicted by the U.S. Justice Department in May, accused of racketeering conspiracy, wire fraud, money laundering and obstruction of justice, among other charges.
After Davidson was indicted, RailHawks fans held protest signs before games and one of the fan supporters’ groups, the Triangle Soccer Fanatics, changed its website to trafficout.org as part of a campaign for new ownership. The website is back to being trisoccerfan.com.
Jarrett Campbell, founder and president of Triangle Soccer Fanatics, said he had been hoping for an owner who was part of the Triangle community and had a vision for soccer in the area. Malik fits the profile perfectly, Campbell said.
“I couldn’t have asked for anything more. He checked every box that TSF was asking for,” Campbell said. “We’re over the moon with Day 1. Let’s see where it goes from here.”
This time, the process to find a new owner felt different than in 2010, Campbell said.
“I never had concerns that the team wouldn’t be here next year,” Campbell said. “I did have some concern that we would end up in league ownership in limbo state for the next year or two because I didn’t know this was the kind of thing that could happen in five months or a year.”
Malik is the fourth majority owner in the RailHawks’ history. Chris Economides, Frank DuRoss and Steve Donner were the franchise’s first ownership group in 2007. Brian and Selby Wellman followed in 2009-10, and Traffic Sports USA bought the team in 2010, saving it from dissolution after its fourth season.
The RailHawks have played in three second-division pro soccer leagues. Although the team has not won a league championship, it has won two NASL Supporters Cups (for overall points), been regular-season and postseason runner-up and had success in the U.S. Open Cup against teams from MLS.
Most notably, the RailHawks reached the semifinals of the Open Cup in its first season, 2007, and defeated Landon Donovan and the Los Angeles Galaxy in the Round of 16in 2014.
The RailHawks will wrap up their season Friday night.
RailHawks team president Curt Johnson will add general manager to his title, Malik said. The team also announced the re-signing of fan favorite and top midfielder Tiyi Shipalane on Friday.
“It’s a huge deal and it’s also symbolic,” Malik said. “There’s a statement there that we’re going to put the resources out (in order) to ascend to our rightful place.”
Staff writer David Bracken contributed to this story.
Previous RailHawks owners
2007-2009: Chris Economides, Frank DuRoss, Steve Donner
2009-2010: Brian and Selby Wellman, Bob Young
2010-2015: Traffic Sports USA
2015: Stephen Malik