Atlanta officially granted MLS team for 2017, because $70m, that’s why

Atlanta was officially awarded MLS’s 22nd franchise* yesterday, with the as-yet-unnamed team set to begin play in 2017 at the new $1.2 billion stadium being built by the Atlanta Falcons (with the help of about $560 million in taxpayer subsidies), whose owner Arthur Blank will own the soccer club as well. And given that Atlanta is currently home only to a minor-league team named for a now-deceased zoo gorilla that has only recently been able to draw more than 3,000 fans per game and once sold the rights to host a home game in exchange for cash, this has led to one of the most damning-with-faint-praise headlines of all time:

Despite what everyone tells you, an MLS expansion team in Atlanta will work

And sure, it might. In addition to its moving iris roof, the new Falcons stadium is supposed to have movable seats that will allow for a realignment to more soccer-friendly dimensions, and Atlanta is as sizable a market as plenty of other MLS home cities. And there is something nice about two consecutive new MLS teams being summoned into existence without requiring new stadiums to accompany them — I’m as much of a fan of soccer-only stadiums for viewing purposes as the next person, but there’s something to be said for making use of already existing facilities, especially for a team that isn’t that sure a bet to exist for very long.

Still, it’s another indication of MLS’s ongoing strategic shift from “Build us a soccer-specific stadium and show us you have some fan support” to “Give us enough money and a team is yours.” (Blank is coughing up $70 million for his expansion franchise.) It’s a defensible strategy, but it’s also one that could yet blow up in the league’s face if it works out as well as the NHL’s Sun Belt strategy. MLS will still always have that $70 million, though.

* Before anyone says anything about the reports calling it the league’s 23rd franchise: David Beckham hasn’t officially gotten his Miami franchise yet, just the option to buy one if and when he gets a stadium deal. So back off.

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24 comments on “Atlanta officially granted MLS team for 2017, because $70m, that’s why

  1. Just have to add that half of the NHL’s eight sun belt teams hit 90% capacity this season and the Coyotes hit 90% for their playoff push (last 8 home games). And that’s with only four of the eight sun belt teams making the playoffs.

  2. This announcement makes me all the more convinced that

    1. MLS is really just a borderline Ponzi scheme, whose the operations are bankrolled, in large parts, by near-annual expansion
    2. NFL increasingly has got the MLS by the balls (worth noting that Don Garber himself was hired away from the NFL)

    The second point is all the more ironic, because a large % of MLS fans want absolutely nothing to do with the NFL. Meanwhile, Arthur Blank has become the fifth current and former NFL team owner to buy into the MLS (after Kroenke, Kraft, Hunt family, and Paul Allen).

  3. All we’re seeing right now is MLS turning itself into the NASL circa 1978, albeit on a slower time scale. The SilverBlanks will never generate enough revenue to warrant playing in either the GeorgiaDome or its replacement, and they’ll probably end up somewhere in west-central Canada, which is where all Atlanta sports franchises ultimately go.

  4. Of course, four out of the bottom five in attendance are Sun Belt teams, and the fifth is another poor expansion candidate. Several of the teams basically try to give tickets away, and a couple are functionally bankrupt. You have to have a strategy to lose that kind of money in professional sports, especially after you’ve had a strike to “set things right” financially!

  5. The shift is about moving away from the suburbs and families to moving to 20 somethings (who grew up playing) and urban centers. I say that, however, while not actually knowing where the new Atlanta NFL stadium is.

  6. No team in the NHL is bankrupt. The Blackhawks and Bruins had two of the lowest attendance averages less than a decade ago. The Canadiens, for Pete’s sake, were under the threat of relocation due to low revenues twenty years ago. It’s just a down cycle.

  7. Most of those NHL teams are getting operating subsidies and regular bailouts to mask the fact they are a failing business! Those are the facts.

  8. The NFL considered setting up a soccer to put MLS out business around 2008, until they realized Lamar Hunt and Kraft were already owners of MLS teams. Also there at least a couple NFL owners who own soccer teams in Europe.

  9. They said the same thing about Toronto, salt lake city, Philly, KC, and Seattle. But those teams are all a success. Seattle averaged about 2k a game before they made jump to mls. They now avg. 40. The league is only 17 years old, it took football and basketball 40 years to make money, while being put on a national pedestal. People bash Atlanta as a sports town and that’s why no one is giving this venture a chance. But the owner is Arthur home depot Blank!

  10. People bash Atlanta as a sports town because pro sports have not done particularly well there. It is a college sports town. I don’t think this is a problem–people can spend their money as they like–but it is hard to justify large stadium subsidies for demand that doesn’t seem to be there (and UGa seems to do fine on their stadiums).

    Boston and Chicago had low attendance briefly due to the NHL labor issues and a fan protest against crappy owners. Phoenix and Miami have suffered from poor attendance for years and several teams (to include NJ) are barely surviving. Not an endorsement of the product.

  11. “Most of those NHL teams are getting operating subsidies and regular bailouts to mask the fact they are a failing business! Those are the facts.”

    [Citation omitted.]

  12. Sam: It’s an MLS expansion franchise. Nothing against MLS, which I’m a fan of, but the entire league is still a proof of concept at this stage.

  13. That profe of concept has NFL owners and some baseball owners competing with each other to get into the league.

  14. Arthur Blank waited 10 years before buying into league. He conducted research and found out only 3% of football fans were also soccer fans. That was a huge eye opener in buying into the league.

  15. Sure, because $70m is a cheap chunk of change to gamble on something that could turn into a much more valuable property. Or turn into a pile of nothing, but that’s what high-risk investments are about.

    Second-tier (i.e., not Big Four) leagues are a fascination of mine, and I’ve watched a lot of them struggle with their business models, and read the histories of those before my time. MLS is doing about as good a job as could be expected of trying to break into the top echelon, but to suggest that an Atlanta MLS team is as sure a thing to still be in place in 30 years as the Atlanta Braves or Falcons are would be just nuts.

  16. Would the braves or falcons be around without government and media support and subsidies? If every HS in this country was built with a cricket field and hockey rink, instead of a baseball field and football stadium would those two sports even exist. The big there benefit from a built in gov. Sponsorship that gives them a huge advantage over competing sports.

  17. It’s interesting that MLS appears to be suddenly abandoning the business strategy that they’ve been pursing for the past 10 years. Allowing teams that normally draw 10-20k fans to play in 80k+ seat stadiums under usurious leases killed two franchises and almost took down the league as well in the early 2000s. I guess huge upfront payments make for compelling arguments.

  18. MLS contracted the two Florida teams because they couldn’t find owners and had nothing to do with lease problems if any existed. MLS doesn’t enforce it’s SSS policy when all other variables to stability and success are in place. The league needed to be in the south to really be considered a national league. This was the only option they would have in Atlanta. The rejected an NFL option in Miami. In Minnesota both the Vikings and twins are competing for a team but the twins are pushing for a SSS while Vikings want to use their new stadium. Many fans understand Atlanta decision but if league goes with Vikings many will be very upset.

  19. Neil, a question about one of your comments above: When you say you’re a fan of MLS, do you mean the competition on the field or do you mean the business and governance structure?

    Or are you referring to it more casually, as a shorthand for saying you follow professional soccer in this country?

  20. I mean I go to Red Bulls games and enjoy them. Except for the part where they get stomped in the playoffs every year.

  21. Given Atalanta’s history in supporting teams, what is the over under on years before relocation?

  22. All Major League Soccer wanted to do was to bring in an expansion or relocated team to replace an NHL team that left (The Atlanta Thrashers)…Now MLS wants to fill a void in cities that have three or less of the big 4 (NHL, NBA, MLB and NFL), as well as cities that lost the PGA tour or NASCAR or INDYCAR. Atlanta is the former, Detroit the latter (No PGA Tour event since 2010.) Good luck succeeding where the Atlanta Thrashers failed…

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