Shooting to score

Can Atlanta Silverbacks owner Boris Jerkunica score a hat trick with his new ventures?

Charles Molineaux

December 4, 2007

Boris Jerkunica laughs when he admits he's still waiting for vindication.

"It's just the way my makeup is," he says. "Everybody said, ‘God, you made it to the championships. You had a great season!' And I said, ‘yeah, but you didn't see the P-and-L that was reported to me right afterwards.' Wow, that was a big check!"

In 2007, his Atlanta Silverbacks soccer franchise found on-the-field success, making the United Soccer League (USL) playoffs and impressing sellout crowds with impressive showings against two of Mexico's beloved fútbol powerhouses. Ostensibly a glorious time for this Croatian immigrant with a lifelong soccer passion, but seven years after Jerkunica bought the team, its cleats are still sloshing through a sea of red ink. "The vindication moment for me will be when we aren't losing money."

As a high flying Internet entrepreneur who hit the jackpot pre-tech bubble, then got out in the nick of time, Jerkunica says successfully riding the trends is part luck, part instinct, especially in what he calls the "tricky" world of pro sports. "For me, it's mostly my gut. You do some back-of-the-envelope type of calculations," he says. "‘If you can get this many people, you get that much revenue, sponsorship,' you can pretty much figure out when you get there." He won't reveal any current numbers but he sees professional soccer as a long, long, term project, in which the Silverbacks could take decades to turn a profit.

Jerkunica's timing of business cycles appears both dazzlingly and ruefully right. When he acquired the Silverbacks in 2000, he says he figured he was buying years too early. His plan at the time had been only to build a soccer club complex in Dekalb County, near Doraville. But the Silverbacks' then-ownership approached, offering to sell. Jerkunica, while leery, went for it. "We weren't really ready, but we decided ‘you know what? If we don't buy now, we might not get this opportunity five years from now.'"

His "gut" was more on-target earlier in 2000 when he sold his Internet startup, NetZip, to RealNetworks for $268 million in one of the last big buyouts before the tech boom imploded.
Boriscredit
"We didn't know how right we were," he recalls. "We didn't see that it was going to be a bubble burst." Jerkunica says the wild speculation and inflated stock prices had gone too far. "We were looking at all the statistics and we were thinking ‘these can't be sustainable. There's no way. With growth projections like these, you'd have to have people in the backwoods of China signing up.' We started saying, ‘okay, things are going to slow down. Let's exit out.' We didn't think it was going to slow down three months after we sold!"

While he's still dribbling toward that winning goal in pro soccer, Jerkunica is enjoying more entrepreneurial success with his day job, his fast growing voice-over-Internet (VOiP) phone company Vocalocity, which helps smaller businesses set up Internet based company switchboards. "We looked at the Internet in '94 and said, ‘this thing is going to be humongous. Let's do something here.' That's the same thing we're doing with Vocalocity. We said, ‘this thing is going to be humongous, voice over IP.'"

CVocalocity's evolution embodies, as did NetZip before it, one of Jerkunica's cardinal rules for starting a business: Find your market; move and change with it and don't fall hopelessly in love with your original idea.

NetZip started as a zip application, then became a way for downloading files, then downloading music, then became an iTunes-style download service. Jerkunica tries an analogy: "Imagine a missile with a moving target. The target shifts and the missile changes course until it connects."

Called ZivVa when he started it, Vocalocity began as a business that relayed phone calls on the Internet so customers anywhere in the world could get cheap cellular service using a single phone number.

The market simply wasn't there, so Jerkunica tried a new niche, small businesses customers. "Say you have 10 employees. We'll send you 10 phones, already configured to our servers. You just plug it into your into your wall, into your network connection and you're up and running."

In 2006, ZivVa bought telephony solutions company Vocalocity, acquiring its name and the software needed to make the online mini switchboards work.

This time the missile connected. "We're just growing like gangbusters. We just got an $8 million investment from one of the local VCs and we're going to be double this size by this time next year. This is going to be more successful than NetZip was."

Compared to his startup experience, Jerkunica says guiding that missile is much tougher in the world of pro sports franchises. "When you're running your own company, you're right in the thick of it. You can just say, ‘well this is obviously where we need to go.' As a franchisee, you're one of 12 owners. So getting everybody together on the same page is a little more difficult."

And while falling in love with the big idea may be unwise in most entrepreneurial projects, Jerkunica suggests that, for the time being, personal fire and a big money supply from elsewhere are essential for running a fútbol franchise. "Today it takes somebody who has a passion for soccer. It's not quite there yet where it can run as a stand-alone business."
Boris-sitting
Still, seven years into his project, Jerkunica sees signs soccer's long unrealized promise may finally be on the verge of paying off. "Soccer as a business model has finally hit the map where you can actually make a profit. There are several teams in our league that are in the black. Even in the MLS, one or two teams now are in the black."

As both a sign, and a generator, of the sport's new buzz in America, Jerkunica looks to the high profile importation of international soccer names, especially the 2007 signing of Brit uberstar David Beckham to play for the Los Angeles Galaxy.

At the same time, metro Atlanta is generating its own grass roots soccer fandom infrastructure. Jerkunica's original plan for an amateur soccer community has materialized into a constant stream of adult and youth players at his Silverbacks Park, where booking a field will likely involve odd hours or a waiting list, such is the demand. He also plans a year-round bar and restaurant in the complex to better cement the club, even during the off-season. "We're getting over 600,000 people that go through there a year, so the Silverbacks as an organization is definitely viable."

And while Jerkunica complains the pro team is still virtually ignored by the local media, at least "the gringo media" as he puts it, he says the Silverbacks are steadily building a devoted following in the region's large immigrant community, especially among the young and the children of immigrants.

"The Mexican guys," he observes, "they're still fans of the teams they grew up with in Mexico, but now they're having families and they're wanting to take their kids to a game, and so that's starting to bring them out."

The franchise's Latin connection was strengthened, and vividly demonstrated for sponsors, by two exhibition matches in July. The Silverbacks took on Mexico's Rayados de Monterrey, then Cruz Azul. They were standing-room-only sellouts with scalpers reported selling tickets for up to $300 apiece, notwithstanding pouring rain the night of the second match. Atlanta tied Monterrey and lost to Cruz Azul after dominating much of the game, but Jerkunica counts both as triumphs.

"The Latinos didn't realize how good our players were," he recalls. "The atmosphere was unbelievable. Cruz Azul is one of the top teams in Mexico. We won a lot of fans that night. People were saying, ‘wow, you guys are pretty good. This is a good standard of soccer and we want to come back.'"

After that, Jerkunica says attendance picked up for the rest of the season, and so did inquiries from sponsors eager to reach Atlanta's Hispanic community.

In 2008, he's planning more exhibition play, four matches this time. Maybe five.
As for that elusive trip into the black, Jerkunica seriously hopes to start breaking even within the next three years with several initiatives "coming down the pike," including one biggie – selling the naming rights to the team's stadium for what he says will be $750,000 a year.

In the meantime, he's grateful for the steady growth at Vocalocity, as his soccer quest teeters somewhere between entrepreneurship and philanthropy.

"It really is a labor of love ... and pain. It's still, ‘I'll just keep spending the money.' The bottom line on it is I'm not really ready to do charitable stuff, but this is a form of charity. To be able to build a park and have all these people enjoy playing soccer and bring in a professional team into town. There are 3,000 to 4,000 people who consistently enjoy it. It's a form of community giving. I get a lot of pleasure out of that and it's a lot of fun for me."

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Shooting to score

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Can Atlanta Silverbacks owner Boris Jerkunica score a hat trick with his new ventures?

Charles Molineaux

December 4, 2007