This happens with some of the academies around here too. They have Red, White and Blue teams, 3 different levels. Or Elite/Premier.
Our club doesn't have these, they just cut kids from the top flight teams, and the coaches are paid. They are thrifty though and have managed to keep costs down relatively, despite hiring coaches from Europe to do this (mainly UK, Spain, Ireland, Portugal). This is our first year with them and now I'm starting to see some of the extra $$ seep in. For instance, they are "sponsored" by Adidas, but the uniform package is incredibly expensive. Also, when 2 kids were ID'd from the team (one was my own) to go to a regional tryout for the regional team (by region, I mean Buffalo, Rochester, Syracuse and Southern Ontario), they asked all the players (20 total) to purchase a $60 training jacket with our sponsor's patch (Bayern Munich). Is that really necessary? Luckily, the 9 ID sessions only cost an extra $40, which isn't bad at all.