Tag / MLS

by Frank Maduri

MLS Expansion Update: The Quest For 30 Teams

After multiple attempts to achieve acceptance into Major League Soccer (MLS), St. Louis was awarded one of the final remaining spots (28th franchise) as the league moves towards their goal of expanding to 30 teams in the next few years.

The St. Louis bid to land a spot in the elite soccer circuit in North America was marred by issues over the past three years regarding the political support for the stadium proposal. The former Governor of Missouri had pulled the state funding from the original stadium proposal which cost the city an earlier bid for entry into the league.

St. Louis and MLS had mutual interest because the city had at that point in time recently lost the Rams NFL franchise to a relocation (the Rams moved to Los Angeles) and MLS saw an opportunity to capture fans with less competition for sports dollars in that market. St. Louis also has a rich soccer tradition and a history that dates back to the origins of the sport being played in America.

The original ownership group had some issues as well, and that coupled with the uncertainty of the financing for the stadium project doomed their initial attempts at landing a franchise (see my previous article on this situation). However, the city and their business community remained committed and resilient and they reformatted the stadium proposal to a privately-financed structured plan targeting land near Union Station, the public transit hub of St. Louis.

They also recalibrated their ownership group with the Taylor family (Enterprise Rental Car owners) and Jim Kavanaugh (owner of the St. Louis minor league soccer club) and it will be the first franchise to be majority owned by female investors. The land for the stadium site has to be formally transferred over so construction can begin, but that is considered a done deal at this point.

The franchise will begin play in 2022, with the announcement of the name of the club, and the team logo to follow in the coming months. In the meantime, some other cities are set to make their respective MLS debuts: Nashville and Inter Miami will join the circuit in 2020, and Austin will join in 2021.

Nashville SC will begin play in the NFL stadium used by the Tennessee Titans for a couple of years while the construction of the largest soccer specific stadium in the United States is being assembled at the Fairgrounds site. That project seems to be on target and that city will be an intriguing addition to the league.

Inter Miami, the 5 -year quest by David Beckham, is a whole other story. In an earlier piece I detailed the plan for the team to build a soccer stadium at the Freedom Park site in the downtown area. That site has encountered some significant environmental issues with contamination from when that site was used for waste incineration.

The remediation of that site is going to be costly and is going to potentially set back the time frame for the opening of the facility. The initial plan was for that facility to open in 2022, and the team has another stadium project underway for a temporary site. The Miami club is the only expansion bid with two stadium projects: the other one being the construction of a temporary stadium and new practice facility in Fort Lauderdale at the Lockhart Stadium property.

The club will play in Fort Lauderdale in 2020 and 2021 before moving to the Freedom Park stadium (if it is operational by then) but Lockhart Stadium was very old and it required a full teardown and a rebuilt stadium to conform with current construction codes. The original Miami MLS team, the Miami Fusion, played at the old Lockhart Stadium, but it folded due to low attendance.

This reboot of MLS in Miami should be concerned about having to play longer than two years in Fort Lauderdale because it is so far from downtown Miami and has no public transit options, it was part of the reason why the Fusion failed to gain momentum in the market. The timeline is also very tight, they have to be ready to play games at Lockhart Stadium in five months or so.

One of Beckham’s partners, Jose Mas, gave a press conference recently where he stated that both projects were progressing well. Mr. Mas felt that the Freedom Park land issues would be resolved and that everything will stay on track. He also stated that the team plans to have some sort of test event at Lockhart in February, so they are ready for opening night. I guess time will tell.

The Austin franchise is progressing forward with their marketing and promotional efforts while preparing to build their new stadium on the site of a former shopping center in North Austin. They recently announced the addition of Austin native, Matthew McConaughey, as a minority partner investor in the team.

The announcement of St. Louis as the 28th franchise leaves the league with two final spots for expansion. The two most likely candidates are Sacramento and Charlotte. The Sacramento bid is a topic I have covered in various articles over the past four years. They are the group that keeps getting passed over and have had some financial issues with the ownership group that have left them at some points treading water in the race to the MLS approval. The addition of Ron Burkle, the billionaire investor who also saved the Pittsburgh Penguins of the National Hockey League from relocating to another city, has bolstered the chances of Sacramento gaining a successful bid.

Burkle is known to be very methodical in his approach, and this is a huge commitment in dollars with $200 million for an expansion fee and the private financing of a stadium being around $300 million that is a tremendous amount of capital to invest, so it will take time. The Sacramento bid is looking at 2022 as a launch date anyway, and it has a proposed stadium site at the Railyards in the downtown area.

Charlotte has come from out of the woodwork to emerge as a really legitimate bid for the 30th and final spot. The group is led by billionaire David Tepper and Tom Glick who ran the NYC FC franchise in MLS for a period of time. Mr. Tepper also owns the Carolina Panthers of the NFL, and the plan is for the team to play in the NFL stadium, Bank of America Stadium.

MLS has some reservations about that part of the bid, but they have also seen success with Atlanta and the Seattle Sounders both playing in NFL stadiums and drawing large crowds on match days. I think the market demographics and the ownership group will be the deciding factor in Charlotte eventually gaining acceptance into the league at some point in the future.

It is an exciting time for soccer in America, and it is a very exciting time for fans around the country to get the opportunity to have MLS soccer in their city.

by Frank Maduri

Follow Up: Sacramento MLS Bid Adds Burkle

In a follow up to multiple earlier pieces on this topic, the Sacramento bid for a Major League Soccer (MLS) expansion franchise took a positive step forward on Wednesday with the announcement that billionaire Ron Burkle has agreed to become the lead investor.

Mr. Burkle is a co-owner of the Pittsburgh Penguins of the National Hockey League, so he brings capital investment, financial long-term stability, and sports franchise ownership experience to the Sacramento bid. The Mayor of Sacramento and Mr. Burkle will be travelling to MLS headquarters in New York in February based on the reports today by The Sacramento Bee regarding this significant news.

The Sacramento bid for entry into MLS was once seen as a “sure thing”, and in the years since it has fallen onto difficulties which have prevented the capital city of The Golden State from gaining access into the premier soccer league in North America.

The lack of a bona fide billionaire investor concerned MLS to the point that Nashville and Cincinnati were chosen as expansion cities before Sacramento. The support of the community, the politicians, and the business community has never wavered and that will serve the investors of the Sacramento MLS team well once it is successful in gaining a new franchise.

The news today also included that Mr. Burkle has purchased the land for the proposed new soccer stadium in the downtown Railyards district as well as the adjacent 14 acres that will be developed into mixed-use retail, entertainment, and other options for fans prior to and after the matches held at the stadium.
This proposed stadium has been approved and supported locally for a couple of years and the Sacramento Republic minor league team still has remarkable attendance from a loyal fan base. These are all positive factors, that combined with Mr. Burkle’s expertise and financial backing, should result in Sacramento being named the 28th franchise in league history at some point in 2019.

The city attracted the attention of MLS executives by the large attendance numbers they have logged consistently over the past approximately five years. The league could also benefit from having another team in California with a rivalry built in with the Bay Area’s San Jose Earthquakes and the proximity of Sacramento with the Pacific Northwest franchises in Portland, Seattle, and Vancouver.

The city is also a mid-way point for teams in Southern California: LA FC and the LA Galaxy and can be a stopping point for Midwest and East Coast teams on road trips from LA to the Pacific Northwest. The logistics for Sacramento strengthens the bid for expansion as well.

The question now for those who have followed the expansion of MLS from the beginning is whether or not the league office will approve another round of future new franchises. The league had previously identified 28 as the number it wanted to grow to in this round of expansion.

However, in recent weeks, MLS Commissioner Don Garber has indicated that the league may decide to go beyond the 28 team number it had identified in the past. The front runners now besides Sacramento appear to be St. Louis and Phoenix. In my opinion, I think that the Phoenix bid has some issues that need to fixed before it can move forward.

Sacramento and the fans of the Republic FC have certainly been on a roller coaster ride with this team, but in the end it looks like the pieces are in place for them to finally get a seat at the MLS table.

The meeting in February will provide more insight into the future for the Sacramento bid. Then, the question of when they will join the league will be the final answer for soccer fans in that city.

by Frank Maduri

MLS Expansion Update: Soccer In North America Continues Growth Trend

The expansion process for Major League Soccer (MLS) is a topic that has been featured consistently over the years here at Frank’s Forum as the league progresses towards the stated goal number of 28 franchises. The league has no shortage of interested cities, which has prompted MLS Commissioner Don Garber to publicly admit that the expansion process could go beyond 28 teams in the future.
The 2019 MLS season schedule was released on Monday, and Cincinnati will join the circuit as the newest expansion franchise with their first match set for March 2nd against the Seattle Sounders. Cincinnati will be the 24th team in MLS with Nashville and Miami both expected to join the league in 2020 ; which would bring the number of franchises to 26.

The developments in Austin have been detailed in previous pieces on this forum regarding the situation with the Columbus Crew owner trying to relocate the team to Austin. The courts in Ohio got involved and the Crew are staying in Columbus with a new ownership group, and as part of the settlement, Anthony Precourt will get an expansion team in Austin which will begin play in 2021 as the 27th franchise in MLS.

This leaves one spot remaining for the “race to 28” and several competitive bids for that spot. This has caused speculation that the league office will look at going to 30 teams, but that is still an unsubstantiated rumor. It should also be mentioned that a group of residents in Austin has started a petition against the soccer stadium construction, but the local news sources there do not think the maneuver will deter the project from meeting the 2021 timetable to join the league.

The bid by Sacramento, which seems like it has hung around forever, would be the most likely to gain approval in the immediate future. The group has a stadium plan in place with government support, they have a minor league team with an established base of loyal fans, and according to The Sacramento Bee, they will have an announcement of a new high-profile investor.

The lack of a well-heeled investor to back the franchise for the long term was the sticking point in the Sacramento bid in the last round of expansion. That allowed Nashville and Cincinnati to move ahead of them in the process. The other attribute that works in their favor at this point being a bid from California is the failed bid from San Diego. The referendum vote against the soccer stadium in Mission Valley sealed the demise of the San Diego attempt at an MLS franchise.

The league would probably consider moving beyond the 28 franchise total if Sacramento and St. Louis get their pitches solidified. The St. Louis bid, in a previous piece I wrote, was considered dead in the water because they lost the tax funding needed for the public-private stadium construction project that was central to their bid in 2017.

The St. Louis expansion attempt received new life when the Taylor family which owns Enterprise rental car (which is based in the city) joined the investors group. The plan now is for a privately funded stadium proposed for a parcel of land next to Union Station downtown with excellent public transportation access. This development, should it be approved, would give St. Louis a leg up in the competition because of the rich soccer tradition in the city as well as the relocation of the Rams football team. It is an interesting bid.

Phoenix has gained a lot of momentum of their own in recent months. That desert destination has assembled a large group of deep pocketed investors interested in bringing MLS soccer to a very large market. The issues with the bid are notable: they have no tangible stadium plan and they have no minor league team to drum up interest or fan loyalty.

The league would have to weigh the addition of another market in that part of the country balanced against the market size and demographic reach. The other factor as mentioned before with cities like St. Louis who have less competition for fans because they lost the Rams to relocation; Phoenix has several major pro sports teams which will have an impact on fan retention as well as corporate sponsorship opportunities. That certainly is a lot of risk.

Raleigh is another long-shot type bid for expansion that might end up gaining some traction due to a variety of factors: Steve Malick is the visionary behind the bid and he is well respected within MLS circles – so they have their big money investor, the city has an established minor league team with a fan base, and they have desirable demographics for an MLS franchise.

The main issue with Raleigh is similar to other bids: the stadium plan is not formalized. The proposal from Mr. Malick is to build a 22,000 seat soccer stadium on a piece of government owned land in downtown Raleigh. The original plan, according to The News Observer, was to privately finance the project.

However, an alternative plan is being discussed where some public funds could be used through the county and city levels as well as an increase in a hotel tax to help pay for the facility. Another scenario could put into place a government board to oversee the facility and have the MLS team lease the stadium from the board, which is a similar arrangement to how the arena in Raleigh, PNC Arena, is managed currently. The Austin MLS expansion plan for that stadium is a similar arrangement, but with a wrinkle, the team is going to “gift” the stadium back to the city of Austin in exchange for a sweetheart lease agreement.

The political will is going to be the driving factor in Raleigh because Malick is passionate about getting a team in the city. The political changes from the elections in November could alter the public contribution to a stadium. If the stadium proposal gains approval they have, in my view, a better shot than other analysts think. The opposite is also evidently true, if the stadium plan and the land use agreements get thwarted, their bid is dead just like in San Diego.

Detroit had a bid that looked like a “sure thing” at one point because of the billionaires involved in the investors group there, and their quick pivot away from the original stadium proposal which I have covered in previous pieces. The latest developments have Detroit on the outside looking in, so the saying goes.
The condensed version of the scenario is this: Detroit had a stadium proposal for land downtown where a jail is currently located and the investors were trying to work out a land swap with the local government to have a new jail built on a piece of land in another part of Detroit which the investors owned. The plan fell through, and the bid pivoted to add the Ford family as partners and use Ford Field, the home of the NFL’s Detroit Lions as the home venue for the MLS team.

The bid pointed to the Atlanta United using an NFL stadium and being very successful. The MLS officials that toured the site had some concerns and suggested that artificial turf is not desirable for the league games and that they would improve their chances at Ford Field (a domed facility) if they converted to a natural grass playing surface.

The investors attempted to propose to the Ford family, the city, and MLS a plan to convert Ford Field to natural grass and to change the roof of the facility to a retractable roof so that the grass could be maintained properly. That plan to retrofit would take place in the football offseason months, but the plan was defeated due to cost and other concerns.

MLS does not seem interested in Detroit using Ford Field with the way it is currently configured, so the bid is essentially on the last legs.

Tampa/ St. Petersburg had a strong bid at one point, but it has taken on some tough twists and turns in the past few months. The original investor, Mr. Edwards, sold the minor league team, the Tampa Bay Rowdies, to the owners of the MLB Tampa Bay Rays. The baseball team owners then appointed a group to run the Rowdies and oversee the MLS bid.

The investors from the Rays have indicated that they are considering keeping the Rowdies as a minor league team in the USL. The move to MLS would be complicated because the team would have to get permission from Orlando City FC because they share the same media market. This bid has an outside chance but is unlikely to move ahead.

Charlotte is an intriguing bid now that David Tepper, owner of the NFL’s Carolina Panthers has reinvigorated the investors there and has a plan to use the NFL stadium for soccer games. The previous investors had focused on attempting to get a taxpayer funded stadium built, and that proposal failed to gain public support, so Charlotte was passed over during the last expansion round.

Tepper is a billionaire with a bold vision for soccer in Charlotte, a city with so many transplanted residents from the Northeast and Mid-Atlantic that it makes sense for MLS to want to be there as well. In fact, when I wrote my last article on MLS expansion I received messages from fans in Charlotte about how excited they are with the bid because it reminds them of Atlanta with the Falcons owner getting involved.

Charlotte has some momentum here, and the stadium is not an issue as the team would play in the football stadium, and the demographics could work well for a successful bid.

Indianapolis is another bid that is certainly in limbo at this point. The positives for the bid are the strong support for their USL team, Indy Eleven, which has the second highest attendance figures in that league last season (next to Cincinnati). The three big issues for the bid are: the Crew staying in Ohio, Nashville & Cincinnati getting approved bids for MLS teams, and the stadium financing.

They have a billionaire owner already who owns Indy Eleven and owns a construction company. The Crew staying put means that geographically there is not a need for a team in Indianapolis, but if they had moved to Texas it would have put Indy’s bid into play.

The close proximity to two teams: Nashville and Cincinnati will probably make MLS think about putting a franchise elsewhere in another less represented region to grow their overall footprint.

The final issue is the stadium plan because the original proposal for public-private development of a site downtown failed to gain full political support. The fund created by the State of Indiana to fund Lucas Oil Stadium for the Colts is currently basically out of money. The potential for playing all of their games in Lucas Oil Stadium (Indy Eleven uses it currently for special games) could be a way that this bid adapts to try to stay alive, but the MLS has come down on Detroit for a similar proposal. The other factor is some within the media in the city suggesting that they stay in USL like the Tampa Bay Rowdies and just grow their presence in that league now that Cincinnati is moving up to MLS. In my view, I think the bid is dead.

San Antonio is the final city in the group of bidders remaining for MLS, and as I have covered in prior pieces on the coverage of the Crew relocation to Austin debacle, they lost the most momentum of any other expansion hopeful.

San Antonio rebooted their MLS bid when the minor league team in the city changed ownership to the same group that owns the NBA’s San Antonio Spurs. The Spurs are the most successful small-market team in NBA history, and probably in all of professional sports history.

The Spurs owners then appointed a team of experienced people to run the minor league soccer team and prepare an MLS bid. The new bid would change direction away from the prior investors plan of expanding the minor league stadium on the outskirts of the city, instead focusing on getting a stadium built in the downtown core of San Antonio, which MLS traditionally favors that type of location.

Then, the attempt at moving a team to Austin took place and MLS took so much heat for trying to move the Crew out of Ohio, yet the people in Austin spent money and energy on the proposals there, that MLS felt compelled to have to give Austin an expansion team down the line.

The San Antonio bid was dead once the Austin expansion deal was announced. The county that San Antonio falls within, Bexar County, has conceded that and has closed down all proceedings related to bringing MLS to the city. It is sad for San Antonio who had followed all of the proper channels for expansion and got beat by an “end around” by Anthony Precourt and the Austin politicians.

In the end analysis, MLS has a great deal of interest remaining in all of these potential relocation cities. The league has to be careful to not make the same mistake as prior American soccer leagues which met with failure because of over expansion.

The league has a plan for 2026, that they want to be fully expanded by that point. The speculation is that number could hover between 30 and 32 teams. In my view I think that the 32 number is too many franchises for the league to remain profitable and sustainable.

The three bids I see as having the best chances after covering this topic for the past six years are: Sacramento, St. Louis, and Charlotte. I could envision the league in those three cities doing well and that would bring MLS to 30 franchises. It will be fascinating to see which direction the league will go in the next round of expansion and if they go beyond the 28 team number or not.

One thing is certain, MLS is certainly gaining in popularity and shows no signs of slowing down anytime soon.

by Frank Maduri

Addendum To MLS Expansion – Election Day Results Impact The Process

An addendum update to the post yesterday on Election Day referendum ballot measures and the impact on the Major League Soccer expansion process:

San Diego residents voted against the Soccer City proposal of the referendum overwhelmingly. The vote all but ends the bid by Landon Donovan and his partners for landing an expansion franchise in that city. The biggest issue that I perceived with that proposal was, although the stadium and other development was going to be completely privately financed, the public was unsure that an affirmative vote on the land use for that purpose without any guarantee by MLS of them getting an expansion team was a sound choice for the land.

However, the football stadium for SDSU did get approved as well as the campus extension for the school to include the “Innovation Zone”. The public evidently understood the need for the campus extension and also understood the need for a place for the school’s football team to have an updated and appropriate venue to host games. The SDSU football team is already in the city and has a tradition going back decades, it is a safer play to vote that proposal through to the next stage. It also should be noted that the taxpayers have been paying for repairs and upkeep on the enormous Qualcomm Stadium since the Chargers moved almost two years ago. It is time to tear down that facility and replace it with a smaller, less costly venue on that site.

This vote by San Diego residents gives both Phoenix and St. Louis a better shot at landing the one remaining expansion slot left for MLS.

In Miami, the voters approved the ballot measure to allow Beckham and his partners to negotiate the lease and terms of the development of the stadium in the Freedom Park project. The issue remaining is two-fold: the group has to get approval by the city council and can have only one dissenting vote so they need 4 of 5 votes cast to approve the development moving forward. They also must face the reality that the site will not be ready for 2020 opening day and will have to explore temporary stadium sites in the area if MLS wants the team to launch in 2020.

Many moving parts, but the vote yesterday in two cities brought some clarity to the process.

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)

by Frank Maduri

Miami MLS Saga: Freedom Park Proposal

The five plus years saga that has been David Beckham’s quest to find a site suitable for a soccer stadium for his planned Miami MLS expansion bid has certainly been unbelievable at points.

The former soccer mega-star and his partners received permission recently to have the latest attempt (site number six for those counting), a development known as Miami Freedom Park, included on the November ballot as a city-wide referendum question. The voters will decide whether or not Freedom Park is a positive project for Miami to undertake.

The land that the proposed Freedom Park sits on is currently a public golf course. The opposition of the planned proposal for the stadium and other retail/hotel/office space construction will be those who want to save the golf course and those who want open space. The other consideration will be traffic impact because the land sits next to Miami International Airport.

Beckham has seen the other attempts to build a soccer stadium for his planned new club come apart for all sorts of reasons. The Port of Miami site received almost instant backlash from the cruise industry due to traffic concerns on weekends when they embark and disembark the most ships.

The site next to Marlins Park failed for a variety of reasons, and the Overtown proposal seemed like it was moving forward (see my earlier article on it) but that proposal relied on a parcel of land that was owned by the county. The sale of that land dragged on for a protracted amount of time until it was finally approved.

However, Beckham brought in new partners, the Mas brothers, and they did not want to move forward with the Overtown site. That area of Miami is notable for violent crime and they may have had concerns over putting a stadium and retail development in that neighborhood.

The issue with the golf course site that is now being dubbed Miami Freedom Park is that, according to reports in the Miami Herald the site has environmental contamination. The land at one time was the site of a large trash incinerator nicknamed by Miami locals as “Old Smoky”.

The disruption of the ground to build a 25,000 seat soccer stadium, a 750 hotel rooms, 600,000 square feet of retail space, and 400,000 square feet of office space is going to require a massive environmental cleanup of the site. The cost of getting the land properly remediated is going to be a tremendous outlay of money. The question of who pays for that is going to be central to this site plan.

MLS has longed wished to return to the Miami market because they see it as a missed opportunity from the failure of the Miami Fusion franchise early in the history of the league. The Fusion played in Fort Lauderdale, far from the downtown area of Miami, and removed from any direct public transportation access.

Miami had tremendous TV ratings both for Spanish language and English telecasts of the World Cup from Russia which took place this summer. MLS has given Beckham a deadline of October 2019 to be the latest point for his group to break ground on a stadium. The league strongly prefers the expansion bids to include a soccer specific stadium because it allows for maximized control of the revenue streams generated compared to renting a facility used by an NFL or MLB team.

The league gave Beckham a sweet clause in his player contract to own an expansion franchise in his retirement by only having to pay a fraction of the expansion fee that other teams have been required to pay upon entry into MLS.

The speculation is that Freedom Park could provide some outstanding enhancements to that neighborhood of Miami that would also benefit the whole city and region by having an MLS team back in South Florida.

The detractors think that the project is too ambitious, and others want to save the golf course. It is being rumored that a golf course, range, and training center are being added to the newest Freedom Park renderings, potentially as a compromise as residents will decide at the polls.

Beckham deserves some credit for sticking with the Miami opportunity for over five years. His bid was not tied to any specific geographical area. He could have pursued a new bid in San Diego, Tampa, or another area where MLS is seeking to potentially add a franchise. He stuck with Miami despite numerous setbacks and uncooperative political and community support at points.

The counterpoint there would be that Beckham stayed with Miami because the market has the most potential financial upside. The demographics of the city coupled with the size of the TV market and the weather all combine to make that an attractive site for a future expansion franchise.

Freedom Park, as the name suggests will ironically have its destiny determined by a democratic voting mechanism known as the referendum. The people will decide whether or not the site should remain a golf course and green space, or whether it will become the site of the next MLS franchise.

In either case, the remaining issue at hand is that Beckham, the Mas brothers, and his other investment partners are running out of time to get this Miami team up and running. It may result in five years of futility for Beckham, and it will leave MLS with no choice but to go in another direction as they look to expand the league.

by Frank Maduri

MLS Expansion: Cincinnati Named 26th Franchise With An Assist From The Uncertain Future of Crew SC

The domestic soccer world learned on Tuesday that Cincinnati has been granted admission into MLS (Major League Soccer) as the 26th franchise in the top circuit in North America. The “race to 28” which is the expansion plan by the league to get to 28 franchises by the year 2020, has long been detailed here on Frank’s Forum.

The Cincinnati club will begin play in 2019 and will fill a void in that area of the map for MLS as they look to expand their reach into new markets for soccer. The bid was successful based on a variety of factors: they have an established fan base as the current USL team there has shattered attendance records averaging over 24,000 fans per game and frequently selling over 30,000 tickets to home matches, they have a stable investment group of local business leaders, and they have plans for a new stadium with government support.

However, in my view, the Cincinnati bid for expansion was fast-tracked because of the uncertainty surrounding a current MLS franchise (an original franchise no less) the Columbus Crew SC. Some fans of MLS may already be aware, but for those who are unaware, the situation in Columbus is this: the franchise operator Anthony Precourt wants to move the team to Austin, TX and they are in the middle of a lawsuit in Ohio with a group that aims to keep the team from relocating.

The desire to relocate to Austin was not pulled out of the ether, the impetus for the move was due to a common theme in pro sports in America: a dispute over a new stadium. The Crew play in the first soccer specific stadium to be built in MLS in Columbus, which was a key component of their bid back in the mid-1990s to get one of the original bids for franchise ahead of Cleveland, which had no plan for a dedicated stadium for a soccer team.

However, that facility in Columbus is now viewed as outdated compared to other state of the art facilities that have been constructed by other MLS franchises in the two decades since the Crew SC were born into the league. The plan hatched by Mr. Precourt was to use Austin as leverage against Columbus and see which city gave him the best deal on a new stadium; which is a move that has been used by other owners in other sports for years.

Columbus officials felt that the residents would not approve any measure allocating public funds (tax revenue) towards the construction of a new soccer facility for the team. They countered with a plan to renovate the existing stadium to make some enhancements that would benefit both the players and the fans.

Mr. Precourt balked at the renovation, and according to reliable news outlets, began privately ratcheting up his negotiations with Austin public officials stating that he intends to move the team to the Texas capital city. This brought about the court action which has taken several twists and turns in the past few months. It also angered the investment groups bidding for expansion teams in other markets because they were seen to be ahead of Austin in the running for a spot and saw this maneuver as Austin trying to “cut the line” and gain a team without going through the full expansion process.

In my perspective, the circumstances surrounding Crew SC provided the conditions for Cincinnati to gain an expansion bid ahead of other cities because MLS was looking at the prospect of having no franchise presence in Ohio. The population demographics and the geographic location of Ohio makes it a critical market for any professional league from a business standpoint.

The Cincinnati entry into MLS next year “covers their bases” if Precourt moves Crew SC to Texas. The bid for Cincinnati had a leg up on other bids because they do not have to wait for a stadium to be built – they are going to play in their current home, Nippert Stadium on the campus of the University of Cincinnati for a few years. This enables the club to join and begin play seamlessly in 2019 because they are not rebranding the USL club colors.

This is to take nothing away from the investment group in Cincinnati or the Mayor or other public officials there who put together a very organized bid compared to other cities who have struggled (Sacramento, Detroit, and St. Louis jump to mind). The plan for the West End stadium is very bold and innovative and will seek to achieve what so many other MLS stadiums have been commissioned to do in the past: turn around a blighted neighborhood of a major American city.

The league now will have a presence in Ohio regardless of what happens in Columbus which will appease the major national sponsors and the league’s TV partners: ESPN, Fox Sports, and Univision. FC Cincinnati will have a natural rival with the new Nashville expansion team which will be joining MLS soon as well, so if Columbus does lose the Crew, the regional rivalry can be easily ramped up with Nashville.

The demographics for Cincinnati and Austin are similar, both are attracting young professionals starting their careers or under 35 years old: MLS targets this demographic and covets it. The officials in Austin have big plans for a stadium there for soccer and they would have built-in rivals with FC Dallas and Houston Dynamo both playing in the Lone Star State currently for MLS.

The court action has damaged the business for Crew SC this season, with bad weather and fan apathy playing a part in dwindling home crowds for the matches held there so far this season. I was watching past games via the ESPN+ app which has the streaming rights to all the MLS games, and the home match I saw with Crew SC had camera angles showing an nearly empty stadium.

The court proceeding has played out very publicly in Ohio throughout the media. The latest tactic by the group in Columbus was to attempt a court injunction using the “Modell rule” which was adopted after Art Modell moved the Baltimore Colts NFL franchise in the middle of the night to Indianapolis. The rule seeks to prevent a current team owner from relocating a team without first providing another group in the team’s current local area from putting together a competing proposal to purchase the team.

The counterpoint argument by Mr. Precourt’s attorneys was very smart. I have written in the past that MLS is a single entity model structure which means that MLS owns all of the teams and the local groups are “operators” of the franchises. The legal argument was that MLS was the owner of Crew FC, not Precourt Sports Group, and MLS owns many teams in many states, so as operator of a franchise Mr. Precourt was essentially just following orders.

In the end the court will decide and that ruling could be appealed to a federal court because it is considered interstate commerce and a bunch of other legal jargon being thrown around will serve as a distraction. It will serve as a distraction from the fact that MLS wants to be in Austin because they think it provides a better long- term demographics forecast in the future than Columbus. The translation: they can make more money in Austin and play in a new facility with better revenue controls than the deal they have in Columbus.

Those factors all benefitted a Cincinnati group which was a little late to the expansion table, to get a seat ahead of other entrants who have been working for many years to put all the pieces together for a successful bid. The MLS walks away a winner because the Cincinnati team will be very successful at drawing fans because they have proven that already, they potentially gain access to the untapped Austin marketplace without giving up an expansion spot to another city, which means the league will still be able to add two more teams to get to 28 franchises.

The situation in Columbus is fluid as are the developments in Detroit with the land swap deal with the site of the jail, Sacramento and their quest for a stable “operator” to join the investment group, Phoenix trying to get their act together overall, and St. Petersburg trying to convince MLS that a third Florida franchise makes long-term business sense.

The league is growing, my own view is that I hope it does not grow too large that it collapses due to over expansion, only time will tell.

by Frank Maduri

MLS Expansion: LA, Miami, “Group of 12”, Future of Soccer In America

MLS Commissioner Don Garber announced recently that the newly rebranded Los Angeles Football Club (LA FC) which are the initials they will be known by in the future, will be entering the league alone in 2018. This is a deviation from a trend of expanding the league by two teams at a time, and it also casts some doubt on the state of the Miami expansion bid.

It was anticipated that the Miami bid spearheaded by former soccer superstar, David Beckham, would also begin play in 2018 with LA FC. The Miami bid has had numerous setbacks, most notably with securing land for a stadium as well as securing total private financing for the stadium.

When the calendar flipped to 2017, the news out of Miami was, that after striking out on their attempts at obtaining land at the Port of Miami, Museum Park, and a plot of land across from Marlins Park; Beckham had secured land in the Overtown section of Miami. The group does need to acquire the adjacent lot which is owned by the county for municipal vehicle storage.

The Overtown section is north of Miami’s main downtown and is notably a high crime and economically depressed area with a very diverse population from several countries. The Beckham group proposal has the jobs generated from the stadium and team being located there as the primary piece in his pitch to the government.
The plan for the stadium, according to local news sources and the MLS site, is for a 25,000 seat venue that will cost around $200 million in the final estimates. The Beckham group is currently reported to be seeking out additional minority investors to help come up with the rest of the financing needed to get the stadium facility built successfully. The target date now is for Miami to join the league in 2019, but all parties involved caution that those parameters could change in the future.

The league has issued statements of support for Miami, which also happens to boast the highest overall TV ratings for soccer in the U.S. (which is a huge reason why the MLS has been so patient) and a demographics mix that is favorable for supporting a soccer club for the long term. In my prior coverage of the expansion of MLS, the media rights deal for the television packages both regionally and nationally has come into focus.

The league wants to grow their presence in large TV markets so they can increase their revenue capture in the next TV rights deal. The addition of Atlanta and Minnesota as expansion clubs this season and the second team in LA in 2018 as well as potentially Miami in two years, will be a huge bargaining chip for MLS to get more revenue dollars out at the negotiating table.

The second LA team mentioned earlier, LA FC, has a star studded ownership group and is the rebranded entry for the disbanded Chivas USA which shared the Los Angeles market with the Galaxy for a period of years in MLS history. The Chivas experiment was a complete failure, as the club never gained real traction in L.A. and shared a stadium with the Galaxy, which did not help their marketing attempts.

LA FC will have their own modern stadium which is under construction currently on the site of the former LA Sports Arena which is just south of the LA Memorial Coliseum. The location is very good and very convenient for fans, and the league will be releasing information on the expansion draft to help them construct their roster in the near future.

Group of Twelve

The addition of LA FC in 2018 will bring the league to 23 teams, the first time in a while they will have an odd number of teams, which will be a scheduling headache for the league office. The Miami bid looks like it is eventually going to get done as the 24th entry to MLS, which has a stated goal of expanding to 28 teams.

The remaining four spots for expansion will be decided among what is called the “Group of Twelve”, the twelve cities that submitted proposals for consideration for an MLS expansion franchise. The group consists of: Tampa/St. Petersburg, Cincinnati, Detroit, Indianapolis, Nashville, Charlotte, Raleigh-Durham, Phoenix, Sacramento, San Diego, San Antonio, and St. Louis.

I have produced individual articles on some of these cities and their quest for an MLS expansion franchise in the past, I have also completed larger summary articles on each of these bids as well as others which were not included in the “Group of Twelve”. It should also be noted that MLS executives intend on reducing down this group to a smaller number, potentially as early as this summer.

In my view, and I have no indication from the league on this part of the process, it would make sense to cut the group down from twelve bids to eight, since only four slots are available. Then it could either be cut again to six bids, or the four approved bids could be announced.

The summary of each bid can be found below:

Tampa/St. Petersburg – see my full article on this emerging and popular bid. The Tampa Bay Rowdies have an established fan base, a passionate owner, and plans to renovate and expand their existing stadium on the St. Petersburg waterfront. The stadium plans do not require any changes to the city street grid or any “fill” in the bay to complete which is a big positive with local government and the residents. MLS executives are intrigued by the stadium site and the size of the market for TV purposes. They also have a very organized social media campaign.
The negatives would be that the Tampa Bay area is already part of the territorial rights for the Orlando City FC franchise and they would have to agree to another franchise joining MLS from the same region. Orlando City would also have to be compensated for the alteration to their territorial rights, which could get very sticky and expensive.
Some analysts see that territorial issue and the fact that the league had a team in Tampa which folded in the early 2000s as two major issues with the bid. I think it is still very much in play because of the size of the market, the fan base of the team, the ownership, and the stadium.

Cincinnati – The bid has many strong points such as an established fan base for their current minor league club, strong attendance figures at those matches, and a committed ownership group with great resources. The Midwest is an area of need for MLS expansion when looking at the current footprint of the league.
The negative point for the Cincinnati bid is a big one: the stadium. Their current stadium for their minor league club is too old and too small. The successful bid for this city would need to include a new stadium plan that is actionable. The government seems supportive of that concept and the stadium is a vital component to an MLS bid because the league needs full control of the facilities that their clubs play in for scheduling and maximum revenue generation purposes.
Some analysts feel that this bid only needs a vote on the new stadium and it is going to be one of the approved bids out of the this “group of twelve”. I am not so sure because the spots are limited and MLS executives are very high on the presentations by St. Louis and Detroit and may think those two cities will be an adequate representation of the Midwest at this point.

Detroit- The bid for Detroit is also a process which I wrote a separate article about several months back, it has risen from a long shot to a very real possibility for one of these last four spots on the MLS franchise expansion list. The strong points are: an ownership group that includes two billionaire professional sports owners, one of the largest untapped TV markets for MLS, a diverse population with a history of supporting soccer, and it is the second most populated metro area after Phoenix in the “group of twelve”.
The downsides to this bid: they have no high level minor league presence in the market. Detroit City FC is essentially a fifth tier team that is supporter funded, though they have done a great job on a small scale with marketing the club.
The other main issue is the stadium site. Dan Gilbert and Tom Gores, the two principle potential owners are eying a site in the rapidly redeveloping District Detroit, where the other sports stadiums are located. The site is a few blocks from Ford Field / Comerica Park and is currently a failed municipal construction site for a proposed jail. The budget money ran out and the site has been abandoned for some time. Mr. Gilbert and Mr. Gores have proposed essentially a land swap where the jail would be moved to another area in the city and they would acquire the former jail site to build the soccer stadium. The city is mulling the proposal, and if they turn it down, there is no contingency plan for a site for a stadium. There are some analysts and soccer media people who feel that the stadium site could sink this deal, and others who believe that MLS is so interested in reviving Detroit that it could still move forward with a successful bid.

Indianapolis- This city which I have visited several times is one of the most underrated sports cities in the nation. The downtown is very easy to walk and all of the stadiums are in the same area which makes it very convenient. MLS favors the downtown urban setting for the stadiums for their franchises and the league has appeal with millennials, who also favor the concept of living in a downtown area with access to sports as well as entertainment options.
The city has an upper tier minor league team called “The Indy Eleven” which play in Carroll Stadium and have garnered some impressive attendance numbers. The support of this club is seen as a very strong aspect to the bid. The club has a very wealthy and well connected owner that is very driven to get into MLS.
The city also has robust support from the local and state governments, which just created a tax zone for the area that the proposed new stadium would be constructed. The tax revenue from gate receipts (ticket sales), concession sales, and tax revenue from those that work at the stadium would comprise the public portion of the new stadium funding. The proposed site is near the Colts NFL stadium downtown.
The negative aspects to this bid are that the minor league club does not have an established history, the Midwest could get crowded if the league decides to grant access to St. Louis and Detroit as well, and the last negative is the stadium. The proposal for the tax zone may not gain passage before MLS decides on the last two bids for expansion. In the event that the financing plan for the stadium is uncertain, this bid will fail. I view this as more of a long shot bid.

Nashville- A bid that has gained some traction in recent months is the proposal from Nashville to join the largest soccer league in North America. This push is being spearheaded by the Ingram family worth billions of dollars and enjoys outstanding governmental support. The city is the smallest metro area of this group of twelve applicants, and it has never supported a soccer club on any level.
The stadium site has gained some clarity now that the Nashville Fairgrounds has been zeroed in as the proposed area for development of that facility. The city has a large millennial population and a growing diversity in their population which MLS executives have noted as strength areas.
The fact that they have a strong ownership group and substantial potential corporate sponsorship support are the positive aspects to this bid.
The negative aspects are that they have no attendance figures or history of supporting a soccer club, the size of the metro area, and the lack of a definitive stadium plan puts this bid in jeopardy of being passed over for one of the final spots in this process.

Charlotte- The bid by Charlotte is one of two from the state of North Carolina (Raleigh-Durham is the other) and MLS Commissioner Don Garber has stated that the league would like to expand their presence in the Southeast. There was some confusion between the potential owners and the city council because of the timing of their request for public funds to build a soccer stadium on the site of the old American Legion Memorial Stadium. The municipal government felt it was rushed, and that is because essentially Charlotte came late to the MLS expansion party and had to apply prior to the deadline.
This bid will most likely be for one of the final two spots in the process because other cities are at a more advanced stage at this point. The positives for Charlotte are the location and the passion of the potential owners, the powerful Smith family of NASCAR fame and wealth. The political support is a bit split with the mayor on board and the county level officials on board with the bid and the stadium plan, and some city level officials that are seeking more time to evaluate the use of funds for an elite level pro soccer team.
The stadium site is fairly convenient as it is close to Charlotte’s Uptown area, which is where the NBA’s Charlotte Hornets have their arena. However, in recent weeks there seems to be some uncertainty being reported by the local media around the stadium plan and the financing for the project. That is obviously never good news when it comes to the prospects for an MLS expansion team. The other positives include the corporate sponsorship presence, the size of their media market, and the support of their other sports teams.
The Independence are a minor league affiliate of the Colorado Rapids of MLS, and they play in Charlotte currently. The support for the team will be part of the evaluation of the bid as will be the robust support that the residents there provided to the U.S. Men’s National team games held in the city recently. My view is that the demographics and some other metrics make this bid interesting, but if the city council blocks the stadium deal, this bid will be eliminated.
Raleigh – The other Southeast bid is from Raleigh, which has a successful minor league team (Carolina RailHawks re-branded recently as North Carolina FC) a dedicated ownership group led by businessman Steve Malik, and a demographic mix of highly educated professionals transplanted from the Northeast as well as millennials starting their careers.
The corporate presence is a bit lacking in major Fortune 500 types, but several large multinational corporations have a presence in the “Research Triangle” area. The bid proposal stressed the fact that the area has just one major pro team, the NHL’s Hurricanes, and that the population can support an MLS team. It also stressed the teamwork between the owner, the local government, the corporations, and the local residents.
The media market size is on the smaller side, but MLS has clubs in small markets that have done very well. The all-important stadium situation is the area where the most progress is needed. They have a design concept, a mid-20,000 seat stadium with a translucent roof. The renderings look amazing, but the site is still not determined. The North Carolina FC club plays currently in a small facility in Cary, which is outside of Raleigh. MLS prefers downtown urban stadium locations with access to public transit. The stadium will be mostly privately financed.
Raleigh is an interesting bid, I still think if Charlotte gets the stadium plan voted through it may have an advantage. Many analysts close to the league feel that North Carolina will get one of the four teams. Then, others feel that Atlanta and Orlando are so dominant in the Southeast that the league may look to hit other areas where they need a presence.

Phoenix- The entry of this city into the group was a surprise to some because the market has not done particularly well supporting their lower tier minor league team through the years. The market is the largest metro area without an MLS club and they have no competition, the next closest MLS club is over 300 miles away so that makes this bid unique.
This bid by Phoenix is a mixed bag of positive and negative elements. The positives are that they have a current minor league club: Phoenix Rising FC, they have an ownership group, and they have a stadium plan as well as a site. There are groups within Phoenix that believe that the support for the minor league club was not strong because the stadium location is not convenient. The new stadium would be in Scottsdale, an ideal location for accessibility.
The negative elements are that the corporate support for the potential MLS club is tepid, the city has other major sports so competition for entertainment dollars is steep, and the market has limited soccer heritage or history to draw upon.
In my view, the stadium moving to Scottsdale is a key component. The population and TV market numbers are very compelling. I think Phoenix has a strong chance because I think MLS wants to be there just from the size of the market and the demographics of the market, just from that perspective. I do have reservations about the ability of the area to support a team and whether it would work, particularly playing matches in the summer months in Arizona.

Sacramento- The soccer world was anticipating this expansion bid to be a virtual “lock” based on the progress that this group made in all phases of the process. The events of the past few months, however, have put the Sacramento bid in a degree of jeopardy. The capital city of California has been working tirelessly over the past four years to obtain an MLS expansion franchise. The demographics are ideal for MLS, the market size has some attractive attributes, and there is little competition with only one pro sports team in town: the NBA’s Kings.
The other main positive to the bid is that the minor league club, Sacramento Republic FC, has been a huge success in that market. The club has set attendance records in their league and was the initial reason behind the interest level for MLS being so high in potential expansion to that market. The branding of that club clearly has connected with the community and it “checks all the boxes” as far as MLS criteria for a minor league club presence and established fan support base.
The stadium site is also a positive attribute to their quest for one of the last four spots in MLS. The new facility is designed and the project is shovel ready in a tract of land in the Railyards section of the Sacramento downtown, which is part of a huge redevelopment project being spearheaded by the city.
The ownership component is a bit tricky because Kevin Nagle, who is leading the MLS bid process did not have the rights to the branding of the Republic name, logo, and colors. Those rights are controlled by Warren Smith who runs the operations of the minor league club. The two men caused the issues with the bid alluded to earlier in this section because at the time the bid was due to MLS, Nagle submitted it without the Republic being a part of the submission. This created concern within the league over whether the local ownership was fractured. In the end, an agreement between Nagle and Smith was made about four days later, and the MLS process will move forward with the Sacramento Republic being the name and branding used for the potential expansion team.
The other issue with Sacramento is the emergence of San Diego as an exciting candidate for expansion, which raises the question of whether MLS would add two more teams in California.
In my view, this bid is still very solid and MLS cannot ignore the unbelievable success pattern that Sacramento Republic FC has had over the past few years. The ownership situation appears to be solidified as far as the transition of the branding for the minor league club. This bid seems more reliable than others in the group.

San Diego- This city, along with the two bids from North Carolina, are the most recent additions to “the group of twelve”. The San Diego attempt at MLS expansion gained a huge amount of momentum when the city’s longtime NFL franchise, the Chargers, relocated to Los Angeles in January. The city officials, seeking to fill a void, moved quickly to facilitate a comprehensive proposal to obtain an elite pro soccer franchise for San Diego.
The proposal has several positive attributes from the outstanding climate, the proximity to other franchises in the league for rivalry purposes, and to the favorable demographics. San Diego has a growing millennial population and has strong potential corporate sponsorships available as well.
The other positive attribute is the stadium proposal which calls for a comprehensive redevelopment of the Mission Valley site that was home to the Chargers football stadium. The old stadium would be torn down and a new smaller venue for soccer and college football would be built there along with other housing, office, and retail space for the university.
The downside is that the San Diego bid is up against some stiff competition with cities who have been honing their MLS bids for years. The government is supportive but the league also currently has teams in California and may want to use the expansion slots to grow the game in other areas of the country.

San Antonio- The bid from this city is interesting because the support for the minor league team is solid, and that club was just recently purchased by the same group which owns the San Antonio Spurs of NBA small market success. The ownership group is the strongest aspect of this bid. The renovation and expansion plan for the facility where the minor league Scorpions club plays currently is very unclear, and thought to be the negative that could eliminate this bid from the whole process.
San Antonio has the right demographics and millennial population, but it is in a similar predicament as San Diego. MLS has two clubs already in Texas and may not want to add a third franchise there, especially when FC Dallas has struggled to connect with the fan base in that market over many years.

St. Louis – The bid is similar to San Diego, this city also lost their NFL team (Rams) to a relocation to Los Angeles. The plan is to build a soccer stadium on land near the Union Station railway hub downtown. I wrote a separate article about this city and the quest to gain an MLS spot. The ownership is dedicated and passionate and the city has great soccer heritage as well. The downtown site is ideal.
The city has hosted some high profile soccer matches which were well attended recently. The expansion there would fill a hole in the Midwest on the MLS map.
The negative aspect is the unproven aspect of being able to support a team long term from both a sponsorship and fan base perspective. The other red flag on this bid is the stadium proposal. The Governor of Missouri has pulled the state level financing, and the city has amended a bill to try to gain tax revenue for their portion, but the use of tax revenue is going to be decided by the voters.
Commissioner Garber was in St. Louis on Monday ahead of the vote on both propositions for the proposed stadium, trying to drum up support. The long and short view of this bid is that MLS wants to be in St. Louis, but they have to iron out the financing of the stadium or this bid will not be approved. The option to privately finance the stadium project is still on the table but ownership is already reportedly going to pay $150 million in an expansion fee to MLS, then they committed another $80 million toward the stadium costs plus the overruns. They would need private financing of another $80 to $100 million to get the project completed.

In the end analysis, my own view of this situation with expansion of MLS in the future is that it is a very fluid situation. The Miami club will most likely be granted into the league at some point in the near future. The league has spent an inordinate amount of time, money, and resources trying to make Miami a viable situation. That would leave four open slots for twelve teams.

The most likely group that will emerge in my view of the situation are: Sacramento, San Diego, St. Louis, and Tampa/St. Petersburg. The league is really intrigued with those four markets for various reasons. However, in the event that St. Louis cannot get the stadium deal done, Detroit or Cincinnati could slide in as a replacement in the Midwest. That is provided that they get their own stadium deals in place, if the jail site land swap fails, Detroit is out of the running.

I know two California teams seems like a wild concept, but Sacramento is the most ready of all the bids and is such a great fit as an MLS market it makes too much sense for them. The league is really taken with San Diego, and they have a fairly straightforward bid because the city owns the land in Mission Valley and is supportive of the development project there.

In the event that the St. Petersburg group cannot reach an agreement with MLS and Orlando City FC on the territory rights, that could doom that bid. In that case, I think the league would go with one of the North Carolina bids to fill a spot in the Southeast. The stadium issues being resolved either in Charlotte or Raleigh would be the deciding factor in which bid moves forward.

I also understand that many fans and those with interest in this topic feel that Cincinnati has a great bid, and they do, but they are in a small media market. I think a spot opens for them only if one of the spots fails to seal the deal, namely St. Louis. I do not see the league adding two Midwest teams.

The interest in the league is growing and the speculation around how the league will look in the next few years is an exciting prospect. The theme of this whole process is that soccer in America has really gained a foothold and is gaining popularity.

The expansion process will play out in the next several months and it will be interesting to see from the vote in St. Louis, to the land swap in Detroit, to the city council decision in Charlotte, and to the negotiations for the St. Petersburg territory; which bids will be successful in joining the league. The process will play out and the league will have some exciting new cities on the franchise map in the near future.

by Frank Maduri

MLS Soccer Expansion Update

Major League Soccer (MLS) has been in the sports news lately with more announcements regarding the expansion of the burgeoning league to new markets in North America. The league currently sits at 20 teams and plans to get to 28 as a target number at some point in the future.

The first round of expansion sites gained more clarity over the last few weeks with the league announcing that Atlanta will join as the 21st franchise and Minnesota United will join as the 22nd team in the fast-growing top league in America. Both teams will begin play in 2017, which was the long rumored expectation for Atlanta because they will play in the new NFL stadium downtown; but a surprise in the case of Minnesota.

The Minnesota expansion bid had been mired in a stadium land site situation that was finally resolved with the club announcing it will construct a new facility in St. Paul but that project is still in the initial phases. The team will play in 2017 (and beyond until their stadium is ready) at TCF Bank Stadium on the campus of the University of Minnesota. That facility just finished a stint serving as the temporary home of the NFL’s Minnesota Vikings while their new football stadium was being built. MLS has been targeting Minnesota and the Twin Cities market for years to fill a geographical and TV market / media market void and now achieved that goal. The new facility that will eventually open in St. Paul looks amazing.

Atlanta FC, which is owned by Arthur Blank, announced that their franchise broke the MLS season ticket record for an expansion team with sales of close to 22,000 season ticket plans since the announcement. The Atlanta area also represents a huge television market and a growing population that is increasingly culturally diverse and interested in the sport of soccer. That expansion decision looks like it will be a “home run” for the league and they will play at the new downtown domed stadium which will have a system that will cover over the unused seating levels, similar to the system used in MLS currently by the Vancouver Whitecaps.

The Next Round

The next round of expansion will feature the rebranded LAFC and the Miami re-entry with David Beckham and his investors. Both of these bids have had some twists and turns. They are also similar in that they are both in cities where the MLS is currently (L.A.) and was previously (Miami) and they are both essentially reboots from past league miscues.

LAFC as it is currently known is the rebranded replacement for the now disbanded Chivas USA, which was a team that shared the L.A. market with the Galaxy and also shared the same stadium as the Galaxy, and none of that worked or connected with the fans.

Chivas USA was owned by the same group as a major pro team in Mexico, and those owners treated the MLS team like a minor league farm team and invested little to no money in it. The results were very bad for the league and for the on-field product and resulted in a league buy out of the Mexican group and the disbanding of the team a couple of years ago. MLS made a concurrent announcement that they were planning a new rebooted LA team to take the place of Chivas USA at a later point.

LAFC has some big name Hollywood owners and a lot of star power. The owners secured land for their own stadium near the old LA Sports Arena where the Clippers used to play their home games. They will be launching with a whole new look and will no longer share a stadium with the Galaxy. The league and those involved with the new club there look like they will get this right, after the first attempt at a second LA franchise went so completely wrong.

Miami is a whole other story, but a similar narrative. MLS was in that area with a team called the Miami Fusion back around 2000-01 and they played their games out in Fort Lauderdale. That proved to be too far from the city center and the attendance and the whole concept eventually was disbanded. The league has not returned to that city until now, and this bid has been handled very differently.

David Beckham was given a clause in his contract when he came over from Europe to join MLS and play for the LA Galaxy that allowed him to become the owner of an expansion team to play in a destination he chose for a greatly reduced entrance fee. The superstar chose Miami, and the team will play downtown and will look to correct all the issues which went wrong when the league tried and failed with the Fusion.

This Miami bid has had several stadium site selection issues and temporary stadium issues but it is all starting to take shape and looks like it will be a successful venture for the league in an important market for US soccer.

Done Deal

Once Miami and the new second LA team join the circuit that will bring MLS to 24 teams. The next bid that is all but a done deal to be approved is Sacramento. I have covered their quest for a MLS franchise in the past, and the smartest thing that they did is consolidate their bids because, at one point, the city had two groups bidding to land that coveted spot.

Those involved in the Sacramento bid moved forward with the group that operates the Sacramento Republic club, which plays in a minor league currently, but has set attendance records for that league. The city of Sacramento, which fought hard to keep their NBA team from leaving and were successful, banded together to move quickly on a stadium proposal to present to the MLS. The new stadium is planned for the area downtown around the old railroad yards.

The stadium built specifically for soccer is the key piece to any MLS expansion bid because it allows the teams and the league to enhance their profitability through control of the revenue streams. A club which would be leasing a stadium and playing as a tenant would not be financially viable over the long term.

Sacramento has gained some highly reputable investors and has impressed the MLS executives with their persistence in gaining a franchise. They are also in the position of offering a scenario where the league has a natural rivalry with the San Jose Earthquakes in the same region (also important to MLS expansion) and that the team will not compete for fans with another major league team, for the most part, because the NBA season ends in April and the MLS season gets underway in March.

The bid does lack some important aspects such as Fortune 500 companies in the area for corporate partnerships, and the media market is a medium size compared to other bidding cities. However, MLS will have added the second team in LA, the Miami franchise, Atlanta, and Minnesota which are all large media markets; by the time they would consider adding Sacramento. The Kings also enjoy the support of some pretty strong regional corporate sponsors, and the capital city of California has some attractive features because many companies of all types visit there to do a variety of business matters.

The Sacramento Republic minor league team has an established fan base which would remain loyal to the team in their transition to MLS, which is a very important aspect of any expansion bid. I have to give credit to Sacramento they worked together and made took this bid from an outsider to what experts feel is the consensus pick for the 25th franchise in MLS.

Gateway to the West

St. Louis has long been known as the “Gateway to the West” and they have a long and rich tradition for soccer in America. The city has drawn upon that deep history coupled with an opportunity that arose out of a separate situation which was initially very negative, to put together a bid for an MLS expansion team. The St. Louis bid is said to have impressed the MLS executives with decision making authority so much that reports state that their bid is on a fast track for approval.

The roots of professional soccer began in America in the early 1900s, most people do not realize the hotbed that St. Louis is for the sport in our country. The city has been host to a number of professional teams through the years for both indoor and outdoor soccer. The St. Louis Stars played in the old NASL for ten years from 1967 to 1977 before moving to California.

The St. Louis Steamers were an indoor soccer team which set attendance records, and the city is currently home to St. Louis FC which plays in the USL Pro minor league system. The city has attempted to bid for an MLS team in the past and failed, most recently when the league expanded by two teams in 2010.

St. Louis submitted a bid, but due to some issues with the stadium plan and lacking a viable ownership group, it lost out to Portland and Vancouver. MLS at that time did not like the idea of their team sharing a facility with the Rams or playing at Bush Stadium and sharing that with the Cardinals. The plan back in 2010 for a new soccer stadium had several issues.

The three keys to a successful MLS expansion bid are fan support, a stadium solution, and local ownership. The St. Louis bid is building their fan support through the USL Pro team, they have multiple local ownership groups with some prominent people from the sports and business community involved, and the stadium solution is taking shape.

The stadium plan for the St. Louis bid is probably the biggest issue they have right now overall, but as I wrote earlier, they are taking a negative situation and turning it into an opportunity. The negative situation was that St. Louis lost their NFL team, the Rams, who relocated to Los Angeles this spring. The opportunity is that the city officials and those involved with the push for an MLS franchise are planning to use the land that had been initially set aside for a potential new stadium for the Rams as a site for a soccer specific stadium.

The land is on the riverfront adjacent to the Gateway Arch, which FOX Sports, ESPN, and others have reported that concept for the stadium site appeals to MLS Commissioner Garber. The city is also in close proximity to Kansas City and Chicago to form regional rivalries with those teams, which is another appealing aspect of the bid. It is going to take a significant amount of time to get all of the key elements aligned, but St. Louis is gaining traction toward the goal of adding a MLS team now that the city lost the Rams. It is a really interesting bid.

Motor City Gains Ground

The Detroit bid for MLS expansion has gained some serious ground in the race for the final three spots if you believe that Sacramento is basically in as the 25th franchise. The league has kept close tabs on Detroit for years regarding potential expansion because it fills a void in their national footprint in that region, it is a large television market (which enhances the value of future media rights deals), it is ethnically diverse which fits for the fan base of the “global game”, and it has excellent potential for corporate partnerships compared to other cities.

The latest in the Motor City bid is they are grooming a fan base with their minor league club, they have deep pocketed business leaders (billionaires Dan Gilbert and Tom Gores) interested in getting a seat at the MLS table, and they have a plan for a new soccer stadium in the same downtown area as the new Red Wings hockey arena. This bid bears watching as it continues to gain traction.

Charging Through

The San Diego bid for an MLS franchise is in some ways similar to the St. Louis bid because it is tied to the fate of an NFL team, in this case, the Chargers. In the event that the Chargers fail to get a new football stadium deal approved for the downtown waterfront district on Election Day, then I think the parties involved on the city and county level will turn their attention to getting the MLS into San Diego.

The bid is a lower priority in compared to keeping the mega bucks potential that the NFL provides the city, which is much the same way it played out in St. Louis earlier this year. In the event that the Chargers relocate to Los Angeles, the most likely course for a soccer stadium for the MLS bid would probably be a massive rebuilding and reconversion of the old Qualcomm Stadium in Mission Valley to seat around 30,000 and convert the other space for alternative use.

The trend in MLS has been toward stadiums in a downtown or centralized area in an urban setting, but that cannot always be the case for every city in the league. The downtown concept gets tricky with the San Diego bid because the city does not own the land.

The Mission Valley scenario is a more viable option because the city owns the land and businessman and former San Diego Padres owner, John Moores, got the exclusive rights to bring professional soccer to the area when he signed the deal allowing the team to change hands when they moved into their new downtown baseball stadium.

San Diego could be a destination city for MLS with the great weather, the proximity to the other teams in California, the diversity of the population base, and the commitment of local ownership. The issues with the bid are that the stadium would most likely not be downtown, and it is very close to two other teams in the league in Los Angeles which could be seen as market oversaturation.

The Outsiders

These cities have bids that are, at this time, equivalent to the outsiders looking in: Phoenix, Nashville, Cincinnati, San Antonio, and Austin. These bids would stand a better chance if MLS eventually determines they have enough financially viable markets with sustainability in place to expand beyond the 28 team target to 30 teams.

The league would undeniably be interested in Phoenix because of the size of the metro area population and the role that soccer could play in that marketplace. The issue right now with their minor league team is that it plays way out in the Valley suburb of Peoria, which MLS stated will not work for their league.

The local ownership could be a problematic scenario as well as getting funding for a soccer stadium in downtown Phoenix. I think this bid has too many issues to be a serious candidate until some of these issues can be resolved. The local government does not want to pay for improvements to be made to the MLB Arizona Diamondbacks stadium, so I get the feeling they are not going to jump to publicly finance a portion of a soccer stadium.

Nashville could be a really good fit for MLS and they would run mostly opposite the NFL’s Tennessee Titans schedule, so the overlap would not be a big issue. The bid has many potential owners interested but it lacks corporate sponsors and is not a very large media market, which are detractions. The stadium site and financing plan also could bear out some major concerns. This situation would take several years before the bid could merit serious consideration.

Cincinnati is a whole other story even though it is relatively close in proximity to Nashville. The “Cinci” bid has one very big positive that the MLS brass in New York have noticed: tremendous fan support for a market of that size. They have had great turnout which is the first part of the three traits I covered earlier. The other two components: local ownership and a stadium plan are the two areas which need details to be worked out. The corporate sponsorships have better potential than other bids and some of those business leaders may step forward and head an ownership group. The government support seems good but not great in so far as the stadium and other hurdles that need to be cleared.

San Antonio has long been a rumored destination for MLS expansion with the minor league team, the Scorpions, being the best selling point for the bid. The MLS execs do not like the location of the current stadium (which would need to be expanded and renovated anyway) and reports indicate that they want a downtown site near The Alamo before they consider this city for expansion. The stadium is a huge piece of the bid for an MLS team because it is the main revenue driver.
The league was also not thrilled with the Scorpions management but they were just sold recently to the owners of the NBA’s San Antonio Spurs (one of the best run franchises in all of sports). The Spurs management should be able to successfully market that team and present a pretty compelling pitch to MLS executives for expansion to that growing market.

I must state, in full disclosure, that I am a proponent of the MLS expanding to San Antonio, I think it would work really well because it is a growing population base with the right age and cultural demographics. However, I have read that the league views this as more of a long shot, especially if they favor two other bids from other markets. San Antonio could be left without a seat at the table.

Austin is the final market I will touch upon in this feature piece on MLS expansion. It is certainly an interesting market because it fits with the overall millennial/youthful targeted marketing for MLS at this point. It is also a high growth area for jobs and the team would have good corporate support. The team would be the only professional sport in the city, which the MLS looks at very favorably because they are not competing for dollars with other teams.

The team would have political support both locally and regionally, but it lacks a viable ownership group at this point in time. It would also be the smallest market in MLS if it gained entry, which will be a concern and leave some to think that San Antonio might be the more sustainable option in that region for expansion.

Austin does have a USL team currently but it would need a stadium plan for a new facility that is up to the standards of MLS. I think that is too many variables and hurdles to put together to have a viable bid for expansion even by 2020.

It is clear to me through my research and covering this topic in the past that MLS soccer is growing in popularity and has a significant number of interested cities for potential expansion. The downside to that scenario is what the league and the current owners must be wary of, and that is that rapid expansion was the main culprit for the demise of prior major professional soccer leagues in America. MLS must remain cognizant of this fact if they do not wish to meet with similar peril.