Tag / Columbus Crew

by Frank Maduri

MLS Update: Columbus Crew Saved From Relocation Austin FC Moves Forward As Expansion Team

This is an update to an earlier piece on the potential relocation of the Columbus Crew franchise in Major League Soccer (MLS) to Austin, Texas. The whole situation has taken, over the past week, some dramatic twists and turns.

My earlier piece on this topic focused on the politics and business anglings of Crew “principle operator” Anthony Precourt and his company Precourt Sports Ventures (PSV). The article centered upon the process of getting a soccer stadium approved for the McKalla Place vacant plots of land in North Austin.

That measure passed the City Council and the plan was for Precourt to relocate the Crew to Austin and rename the club Austin FC to begin play in 2019. The plan calls for PSV to pay for the construction of the stadium which the city of Austin will take ownership of and then lease back the stadium to the team for games.

However, the Crew relocation is being held up by court litigation in Ohio which has certain laws on the books, one notably known as the “Modell Rule”. This was named for Art Modell, the owner who notoriously and ingloriously moved the Cleveland Browns to Baltimore, where they became the Ravens. It was put in place to have a mechanism to protect professional sports franchises in Ohio from future similar circumstances.

The campaign started by the fans and other interested parties in Columbus was called #SaveTheCrew and it gained traction both in the courts and in the consciousness of the people of Ohio. Then, it gained national recognition because this attempted relocation by PSV of the Crew, which are an original MLS franchise, would have gone down as the most significant violation of fan loyalty in the history of American soccer. It could even be seen as one of the worst moves by an owner in American sports history.

The City of Columbus won the bid for an MLS franchise in the 1990s after being up against Cleveland for the rights to be the league entrant in the region. The tipping point in favor of Columbus at that time was the commitment by the city to build the first soccer specific stadium in the United States at that time.

Unfortunately, Crew Stadium as it was known then (MAPFRE Stadium as it has a corporate sponsored name now) was built on the outskirts of the city limits and has nothing else nearby. It lacks certain amenities for fans and does not have really any luxury boxes or other premium seating which could be used to increase revenue as well as provide a better fan experience.

The #SaveTheCrew movement attracted the attention of Jimmy Haslam, the owner of the Cleveland Browns of the NFL. Haslam assembled a group of investors from his network and they are deep in negotiations to keep the Crew in Columbus. They are actively working with a group called the Columbus Partnership on a new stadium proposal as part of retaining the team in the city.

The new stadium would most likely be located downtown with plenty of accessible public transit options and be close to other points of interest for fans and visitors attending a game. The future use for their current stadium is unknown, but it should be noted that many fans do not like the location of the current stadium.

The news that the Crew are most likely staying put in Ohio led to the inevitable question: what happens to the Austin FC proposal and all the work that people from the league office, Austin officials, and PSV put forth to get a stadium plan for McKalla Place done?
It appears likely that MLS will use an “investor transition” option in this situation. If you recall, in my earlier articles on this topic, I explained that the MLS franchises are not owned by individual men or women or ownership groups like the other sports leagues. MLS is structured as a single-entity meaning that the MLS owns the teams and they have interested investors assigned to each one.

That was the loophole that MLS tried to take with the Ohio lawsuit, arguing that Precourt did not “own” the Crew outright, so they could not sue him. The league is now looking to make the Haslam group the investor for the Columbus Crew, and then they will transition Precourt / PSV to be the investor of a new team in Austin.

That essentially means that Austin FC will still be joining the league in 2019 as an expansion franchise, and that the plans to build a stadium in McKalla Place will move forward as scheduled.

The MLS got what it wanted in the end, it kept an original franchise with a dedicated and established fan base in Columbus and will get a new downtown stadium for the Crew to increase revenue in that market. In addition, they will get access to Austin, the largest U.S. metro area without a major pro sports team, and they will gain that market with no competition for dollars.

In a pure business sense, it was all orchestrated well, but it has an effect on people in both cities as well as in the expansion process. This situation has both winners and losers, like any other situation of the type.

The winners here are MLS, Columbus, and Austin as well as the fans in those cities. The losers are those who are not in favor of building a stadium in that part of Austin, and the other entrants in the expansion process and their fans. The entry of Austin as an expansion team rather than a relocated team, means that only one spot remains in the expansion phase that the league identified to get to 28 teams.

The cities of Phoenix, Sacramento, Charlotte, Raleigh, San Antonio, Indianapolis, Detroit, and Tampa/St. Petersburg are all under consideration for what we all thought was going to be two expansion slots. Those bids each have issues which I have covered in past pieces here on this site.

The Sacramento bid stands out as having the most to lose by Austin now grabbing that other spot. Sacramento was once favored to get a team and is constructing a new stadium downtown but they had some partners leave the investor group. The league has stated that without a big financial investor they will not be awarded an expansion team.

San Antonio also likewise has a doomed bid because the league will never put another team that close to Austin and put a fourth team in Texas. They come out on the losing end due to these developments.

The Tampa/St. Petersburg bid just had an investor change to the group that owns the Tampa Bay Rays of MLB, which is a deeply resourced and financed group. It remains to be seen if that helps their bid for the last seat at the table.

In the end, the precedent set by the team and the league working together to keep the Crew in Columbus is a good one for MLS. The last situation they need as a league is for teams to start moving around the map. They need stability in their franchises. It is great for the fans and the Crew employees and staff to stay in the place they know as home.

The City of Austin gets a shot here to have a big league sports team and the impact that will have on the region and on the expansion process for MLS will be felt for years to come.

(some background courtesy of The Austin Statesman, The Columbus Dispatch, and America Soccer Now, MLS website)

by Frank Maduri

Follow Up: MLS To Austin Gets Real – McKalla Place Proposal

It is shaping up to be a real Texas showdown: the MLS and Precourt Sports taking on some factions of the residents in Austin who do not want a soccer stadium or team in their city. The original piece here on Frank’s Forum focused more on the mechanics around relocating a team, in this case, the Columbus Crew of Major League Soccer (MLS) would move to Austin.

The capital city of Texas is an attractive destination for MLS because of the growing numbers of young professionals and young families, two key demographics for the league. The relocation to Austin is not without controversy, as the Crew are an original MLS franchise; causing factions in Ohio to attempt to keep the team, and factions in Texas who do not want a soccer team .

The stadium is the centerpiece for any MLS team, so the potential relocation to Austin hinges on the location and terms of that central component to the operation of a franchise. The executives at MLS league offices in New York and Precourt Sports have been working with officials in Austin for about nine months now on a stadium site.

The two sites that are on the table, so to speak, right now are the Circuit of the Americas or COTA site and the McKalla Place site. The two sites are very different and present various positives and negatives regarding being selected as the site of a soccer specific stadium.

The Circuit of the Americas is a racetrack just outside of downtown Austin which already has infrastructure in place such as adequate parking and space for a stadium. The soccer stadium would help keep the overall operation of the site busier, it would become essentially a year- round cycle of activity between the racetrack events and the MLS season

The entertainment and other options are somewhat limited at the COTA site. The site is reported to have a pastoral feel to it. The reports in local news out of Austin is that Anthony Precourt (operator of PSV which is the operator of the Crew franchise) has no interest in the COTA site even though some within the Austin political structure favored that location.

The more detailed reporting and some excellent journalism on this topic was done by The Austin Statesman so definitely check out their site as well.

The McKalla Place site is essentially the largest piece of city owned land remaining in the greater Austin city limits. It is located in North Austin but within the downtown core, which is preferable to MLS for a stadium site. That location has entertainment, dining, and hotel options nearby. It is not completely ideal, but it is the best location available within the downtown limits.

However, McKalla Place does not have any infrastructure at all, it is basically an open set of lots. It would need lighting, parking, and utilities to be installed from the ground up. The residents who oppose the soccer stadium have been ramping up the pressure and formulating alternate plans to the City Council.

These alternate plans have no stadium development in them and focus on other needs that the city has such as affordable housing, green space, retail space, a hotel, and buildings to support arts as well as music.

The political side to this scenario is that the city is divided over the land use and the vote will be very close. The Mayor of Austin is in favor of the MLS team coming to town and playing at McKalla Place. The council needs 6 of the 11 members to vote straight up or down on the proposal for the land to be used for a soccer stadium.

Those representing the North Austin district on the council are not in favor of the stadium construction. They are adding amendments to the measure that the Mayor, according to local news sources, has called “poison pill” amendments to try to derail the soccer stadium. The meeting Thursday night postponed the vote until August 15th.

The other proposals for the land have not gained much traction. In my experience covering sports business matters of this type, when a proposal has moved this far and the competing proposals have not been mentioned, it is pretty certain that a stadium is going to get approved in one way or another.

The bigger items around the actual reality if a stadium is voted onto the site are a bit murky. The plans for the site show a mass transit station hub there which is estimated to have a cost around $12 to $15 million. One of those amendments seeks to attach the cost of the transit station to have PSV be responsible for it.

The lease terms for the stadium and how much PSV will pay to rent the facility are on the original terms sheet. The rental fee that PSV will pay is in the range of $400 to $500,000 per year. The city officials put a significantly difficult clause in to block the team from relocating and leaving Austin in the future.

The dissenting members of the council are seeking amendments to the term sheet to double the rent the team would pay to around $900,000 per year and seeks other financial commitments from PSV. The meeting last week contained now debate on those amendments and made no changes to the original terms sheet.

The stark reality here is that Anthony Precourt is a billionaire “operator” of a franchise seeking a sweetheart lease deal without any willingness to commit other money toward infrastructure or mass transit improvements. He is going to end up looking bad in the court of public opinion and perception, but that is probably viewed by both he and MLS as collateral damage in getting the deal that they desire from Austin.

The impact of the vote on August 15th is going to resonate in two cities: it will shape the future of Austin and bring uncertainty to Columbus. The Ohio capital will certainly struggle to find a full-time tenant for that soccer stadium that they are still paying off debt on, and will most likely become a bargaining chip for other cities looking to leverage their current market into a better stadium deal.

In my view, I can understand some of the sentiment in Austin with the residents who are opposed to the soccer club relocating to their city. It will certainly impact the neighborhood in which McKalla Place sits in North Austin, in a way that can be perceived as negative: traffic, environmental impact, noise, and congestion on game dates.

Conversely, the clubs that constitute MLS conduct so much charitable and community service work. These types of efforts would benefit Austin greatly in the years to come, should they become a franchise host city within the league. It may be a “money grab” by Precourt, but I always look at the silver lining in how many jobs it will create and how many people will have positive changes to their lives through sports.

The vote on Wednesday will clarify a very complicated situation and set the course for two cities in the weeks and months ahead. Stay tuned.

(Some background information courtesy of The Austin Statesman, Fox 7 Austin, & Austin Business Journal)