MLS Launches Historic Partnership With Black Banks; Here’s Why It Matters
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Black Players for Change formed in response to nationwide protests following the murder of George Floyd by a police officer in 2020. An independent organization of more than 170 players, coaches and staff in Major League Soccer, the BPC aims to “bridge the racial equality gap” in American society.
On Thursday, MLS announced one of the organization’s biggest wins yet, a $25 million loan from a syndicate of Black banks. The landmark deal will help bridge that racial economic gap in ways never done before in American professional sports.
A tangible contribution—and one step of many—to closing the racial wealth gap in the United States.
— Major League Soccer (@MLS) March 10, 2022
The loan was facilitated by the non-profit National Black Bank Foundation (NBFF) in collaboration with Black Players for Change, the Black Bank Fund and Bernice A. King, daughter of Dr. Martin Luther King Jr. who is the King Center CEO and a board member of the NBBF. King, who has been the Golden Spike hitter at Atlanta United matches, set the deal into motion back in February 2021.
“This transformative partnership between MLS and Black banks around the country is evidence of what can happen when leaders courageously stand up and decide to participate in equitable change,” Bernice King said. “I brought MLS and NBBF together because I saw an opportunity to create a partnership with the power to transform lives in Black communities and change hearts and minds throughout our nation. This deal undoubtedly marks an important moment in the continuing struggle for civil rights in the United States.”
This is a landmark moment – in sports history, in Civil Rights history, in American history.MLS Launches Historic $25M Transaction with Black Bankshttps://t.co/BaQ6LHOxMf#MLSXNBBF #TogetherThereWillBeChange
✊✊✊✊✊ @BPCMLS @BlackBankFund @MLS @100BlackMen @nc100bwinc pic.twitter.com/ZbttVsbA9V
— UNITY National Bank (@UNITYNationalB1) March 10, 2022
What Does MLS Black Banks Loan Do?
So what exactly does this loan do? What’s the point of taking out a $25 million loan in a league that requires expansion fees 10 times that amount? A broad look at the numbers explains why it’s necessary and how it will affect Black communities.
Why MLS Black Bank Loan Is Necessary
In 2020, the Federal Reserve said the median wealth gap between Black and white families was $161,000. What that means is the typical white family had $184,000 in wealth while the typical Black family had $23,000 in wealth. (Note: When we say white families, we’re referring to non-Spanish-speaking families.)
Additionally, 82 percent of Black families have less wealth than white families. This number is significant because that number was 85 percent in 1963 at the height of the Civil Rights Movement, meaning little progress has been made in nearly 60 years. Furthermore, Black families are about twice as likely to be denied loans than white families and about half of Black families are unbanked or underbanked compared to 15 percent for white families. When you add in expensive banking alternatives like check-cashing services, payday loans, money orders and prepaid credit cards, this can cost Black families upwards of $40,000 over a lifetime.
It doesn’t take a math genius to realize those numbers shouldn’t be so far apart, and that’s just touching the surface. Plus, the racial economic gap has been exacerbated by Covid-19. You’d have to be racist to not be worried by this immense wealth gap.
We don’t have the time nor the expertise to go through all the reasons for this gap, but centuries of racist economic policies (think education opportunities, redlining and good old-fashioned racism) have contributed to this significant disparity.
Ashley Bell of the National Blank Bank Foundation walks me through what this means for the Black community https://t.co/BJZRJ3GgGP
— Drake Hills (@LiveLifeDrake) March 10, 2022
How MLS Black Bank Loan Will Impact Black Communities
The racial economic gap makes investment in Black communities all the more important, and this MLS Black banks loan will do just that.
The loan was made with seven Black banks across the country, including in Atlanta, New York, Birmingham, Alabama, Milwaukee, Durham, North Carolina, and Houston. Through fixed fees and interest rates, the banks’ capital cushion will increase, allowing the banks to provide more credit for home or business loans in Black communities. Essentially, for every dollar these banks make off this deal, they can reinvest $10 into the Black businesses and families.
This means Major League Soccer’s $25 million loan could have an economic impact of $250 million.
“Through securing deals like the one we celebrate here today, we directly address and establish a platform to overcome the undervaluing of Black participation in the economic ecosystem,” said Quincy Amarikwa, a BPC Founder and 11-year MLS veteran. “Creating opportunities like this demonstrates that we are moving in the right direction. We welcome the opportunity to continue this positive forward momentum in partnership with MLS and others.”
I’m so proud to be an MLS owner of LAFC! The MLS officially announced a new partnership exclusively with Black banks allowing the banks to create additional lines of credit for loans in communities of color. This is an important moment in sports history and in American history. pic.twitter.com/orKiEDyTW1— Earvin Magic Johnson (@MagicJohnson) March 10, 2022
While some prematurely declared racism over in America following the Civil Rights Movement of the 1960s and others said it ended when Barack Obama was elected president in 2008, a true look at the country shows otherwise. The racial economic gap is just one of the many ways racism continues to impact people of color, especially in Black communities.
While this deal won’t erase racism and its myriad problems, it’s an historic investment into Black communities with no parallel in the sports world (the Atlanta Hawks have a similar deal through the NBBF, but this is the first league-wide agreement).
Since 2020, Major League Soccer has been committed to combatting racism and advocating for social justice. By bringing the Black Players for Change to the table, the league has been able to make positive changes both on and off the pitch.