Las Vegas soccer stadium developer says he knows a guy who says he can get an MLS team

Justin Findlay, the guy who is working with Cordish Companies to build an MLS stadium in Las Vegas so that Cordish can keep its expiring option on downtown land open, says that he can so totally get an MLS franchise for Vegas if he only gets a stadium. How does he know? The MLS deputy commissioner totally winked at him:

He was encouraged after entertaining MLS Deputy Commissioner Mark Abbott this week in Las Vegas. Abbott met with Las Vegas Mayor Carolyn Goodman and other city officials, toured downtown and got a sense of how MLS would work in Las Vegas.

Although league officials won’t comment on expansion possibilities, you can argue the MLS brass wouldn’t have traveled to Las Vegas if it wasn’t in serious consideration.

“Hearing right from the horse’s mouth, this is really a possibility,” Findlay said. “We just have to convert on our plan. There are no reasons why these big, big dreams can’t happen.”

On the one hand, MLS brass are likely fine with touring pretty much anyplace that’s potentially going to build them a stadium, because why not? (It’s also not like anyone ever passes up a business junket to Vegas.) On the other, MLS is clearly willing to throw teams at pretty much any city with a stadium, and with only one more franchise left to be assigned in the league’s planned expansion through 2020, might as well get the bidding war heating up. Worse comes to worst, if you have too many cities (and owners) offering to throw money at you, there’s nothing stopping you from expanding beyond 24 teams — or maybe seeing if David Beckham would like to settle in Vegas instead.

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24 comments on “Las Vegas soccer stadium developer says he knows a guy who says he can get an MLS team

  1. At this point, I would almost expect MLS to careen right past its self-imposed limit of 24 teams, and to keep handing out big-boy cards to any team owner (or potential investor group) that wants them. So long as the league can keep getting expansion fees, subsidies for stadiums, and a big TV contract before that bubble pops, why fiddle with the status quo?

  2. MLS is locked into a new TV contract for next 7 years. Expansion is more about expanding their TV footprint as opposed to expansion fees. Is it their fault they have a waiting list of billionaires and cities wanting in, outside of Miami.

  3. I am all for expansion and having billionaires invest into MLS. My hope is that they pick markets that already have a fan base and an interest in soccer. I haven’t heard a large cry from soccer fans in Las Vegas saying they want a team, as was the case in Vancouver, Portland, Orlando, and Philadelphia.

  4. No, history actually ISN’T repeating itself.

    It only appears that way if you don’t actually LOOK at what the history was.

    The NASL expanded by 15 teams in 5 years (and grew 33% in one off-season), while MLS will have expanded by 14 teams in 16 years when this round is said and done.

    The NASL expansion owners were – largely – speculators capitalizing on a fad, who didn’t create any infrastructure and who mostly bailed when they didn’t reap instant profits.

    There was very little vetting of NASL expansion owners, who – largely – weren’t as well-heeled as MLS’ expansion owners and (again) had no stadium solutions whatsoever.

    So other than MLS expanding far more slowly, deliberately and pragmatically and creating stadiums, signing lucrative television deals and attracting the best American players (of which there were almost none in 1980), yeah, it’s EXACTLY repeating itself.

  5. Billionaires “want in” because they see an MLS expansion team as an easy way to boost their net worth. They can easily recoup the money they paid to get a team by simply sitting on their investments, while feeding on TV and expansion money, and by occasionally raiding city coffers for money to renovate (or rebuild) their stadiums.

    It’s not an accident that most of the MLS team owners are better known as NFL or MLB owners (Kraft, Kroenke, Blank, Paul Allen, Steinbrenner etc), not to mention the brains behind the biggest sports/entertainment marketing outlets in the world (e.g. AEG, Maple Leaf Sports).

    On another note: The TV contract by itself is set to pay out $90m per year, and USMNT games figure to take a sizable bite out of that pie. NYCFC alone paid out a $100m fee to enter the league. If a sustainable business model based around the TV footprint is their objective, then they need to start working on it quick — starting, obviously, by overcoming their addiction to expansion fees in the first place.

  6. Lol, ….. Vegas did have higher ratings than most cities outside the east and west coast, however Miami and Sacramento are better candidates.

  7. The NASL went out of business for many different reasons, including rapid expansion into non traditional soccer markets. Like the present day NHL, except that the NASL business model wasn’t built on operating subsidies.

  8. I really think an up an running supporters section (example : Sons of Ben existed before the Philadelphia Union) should be a pre-requisite. Closest thing to a guarantee potential owners will have to filling seats.

  9. Sports leagues get most of their revenue from TV deals, any league not focused on TV ratings is being run into the ground. Don Garber was well trained at the NFL.

  10. Level of play in the league already isn’t great (much better than it was a decade ago, but it’s still a couple of notches below good leagues). Trying to build an audience in even more markets while you also dilute the product by expansion (and how many more competent right backs are there willing to play for $50K are out there?) doesn’t seem like a super-sound growth strategy.

    MLS needs to up the cap. They’ve about reached the limit of what DPs can do. And frankly those are mostly stars that are well past their prime coming over for a decent paid semi-retirement.

  11. Here is news of a competing bid to bring MLS to Las Vegas…

  12. Michael: Talent dilution will be a real issue going forward. Some have argued it already is.

    Garber’s standard answer to that is that, unlike traditional North American sports, the world is full of very good (code for ‘better than our standard’) players. While true, that ignores the fact that nearly all of those very good players can make more money playing in the Danish Second division than they can in MLS.

    So yes, the more teams they add the more the cap needs to go up to allow them to fill rosters with better players. But that has a downside too. The purpose of the league (apart from making money) is to provide a vehicle for US player development. That’s hard to focus on if you are raising the cap and increasing the number of foreign players allowed per team. How is US soccer in a better state if, say, 250 US players are spread across 30 teams instead of 20? I’d argue it is probably worse off, since fewer of them will be playing along side each other in league games.

    Unless they plan to make MLS a split league (20 team first div and 12 team second?), I struggle to see how expanding beyond their current level will improve either television ratings or the product on field. There are some ‘natural divisions’ possibly when considering the so called legacy MLS franchises and the elite clubs (financially, not competitively – thanks to the artificially low cap there aren’t any of those).

    Someone mentioned the NHL example earlier. The NHL could lop off it’s bottom 4-6 teams and be in a better financial position than it is. Almost no-one would stop watching if Columbus, Florida, Nashville and Glendale (or a couple of others) ceased to exist. Add to that the fact that losing a few dog franchises would increase the number of games played between teams that people will actually pay to watch, and that the product on ice would improve if the least capable 90 players in the league were no longer in the league, and you’ve got some serious business and competitive improvement happening.

    And while such a move would affect their footprint, I don’t see advertisers running away en masse absent those weak franchises.

    There is really no path to significant improvement for MLS that doesn’t involve spending a great deal more money on playing talent (probably 2-3x the current level). Will they do it?

  13. John,

    Two things:

    1) To your last bit… Spending 3x the current level means the cap still only goes up to about $9M. The current CBA runs through 2014. If the players can’t manage a significant jump in the cap, they have failed miserably. If franchises are worth $100M, then certainly labor, which is really the product in this case, is probably worth more than 3% of that annually.

    2) Garber has repeatedly said there will be no relegation/promotion. I think that’s a mistake. However, I don’t see how you ever implement it simply because of point 1 above. How do you go to franchises that bought in and say, “Hey, that team you paid $100M for? We’re going to institute a system that might make that worth about a quarter of that.” That risk wasn’t priced in when franchises were sold. Can’t see owners ever agreeing to it.

  14. On relegation/promotion, the leagues in Europe and South America would get rid of it as well if they could, but it’s too engrained at this point. The owners of the big teams hate it and in Argentina the league was forced to change it’s policy when the equivalent of the New York Yankees, the Boca Juniors, were threatened with relegation (they went from a 1 year to a 4 year average for deciding who gets relegated).

    The punishment for a team dropping down a division is honestly too harsh since the revenue in terms of TV deals is so different that when a team drops down from being in the top division for more than say 3 years, they’re pretty much forced to have a fire sale of all their players and it takes them years and years to recover.

  15. Relegation/Promotion is never going to happen in a league that forces competitive balance – it can’t exist because you’d end up with years where the marquee franchises get relegated which is stupid.

    On the talent dilution issue – I don’t think this is much of a concern in the US. From a development perspective, the US actually has a pretty big problem finding enough places for good (not elite) talent to get sufficient playing time. That’s why there’s been a huge push for NASL and USL Pro leagues to get up and running – to pull promising 18-22 year olds away from college where their development is stunted.

  16. A new group of NYC billionaires have appeared to compete with the current group in Vegas. The Money guys really like the MLS business model.

  17. Relegation “from” MLS to some other league won’t happen. But it could happen within MLS (and no, European/SA leagues wouldn’t get rid of it if they could… the relegation fight adds drama to the schedule of clubs that couldn’t otherwise find any, given that they are not big enough to compete for the league title and have long since been knocked out of the major cup competitions).

    If you are relegated from MLS 1 to MLS 2, your team doesn’t lose any value. It’s still an MLS franchise, and whether it finishes 19th in a 20 team division or 2nd in a 12 team tier 2 has no bearing on it’s value. An MLS club’s intrinsic value is clearly not based on their on field performance. It is based on the artificial scarcity created by the league, and by the distributed revenues that SUM allows MLS to share amongst it’s member clubs. As for the financial impact of “the drop”, so long as MLS continues to share it’s revenues more or less equally, there wouldn’t be one.

    I do agree that MLS’ enforced parity would have to go, but then, that’s what Michael and I were discussing as a point of fact earlier. It has to go. And when it does, the question that will have to be answered is, what do you do with the Columbus, Dallas and Chivas’ (and a few others) of the MLS world?

    When NY, Seattle and LA have to play half their schedule against Albuquerque, Las Vegas, El Paso, Chivas and Columbus, the league is losing money. It’s the marquee games that attract the casual fan (which is where the only real new money comes from in any sport).

    With all due respect, I think some of you are looking only at the negative aspects of P/R. The only reason the PL has trouble with it is because of the size of the drop. And who is responsible for that? The PL itself….

  18. Steven: The money guys like the MLS business model because it’s basically like a sports equivalent of a get rich quick scheme.

    John: MLS will never adopt pro/rel because it wants no part of being the first league to abandon the franchise system… not to mention the guarantees of a national TV windfall, rising team valuations, and the option of a stadium extortion threat that comes along with it.

  19. Lol…..looks like UNLV is looking for public money for their campus stadium. Guess they want to be first in line.

  20. Let’s see, a billionaire needs to invest 2 to 300 million to set up team and build stadium. He will maybe break even or make a modest profit until the league can make some serious TV money. This will take at least 10 years.

  21. I would just let one of my hedge find buddies invest my 300 mil in one of those insider deals that go on everyday on Wall Street and have my money plus 25% back before the end of months. Must already be rich to invest in MLS, and there’s nothing quick about that investment…

  22. Kei: As I think I made clear, MLS doesn’t have to abandon the franchise selling business to adopt a form of promotion and relegation.

    I am not suggesting that it absolutely will happen in MLS, just that the idea that they have to completely throw out their business model to do it is false. They could keep all that and have a two tiered league as well.

    If they keep expanding to second tier markets, I’d suggest that it would ultimately be the owners of the major clubs that are the driving force for creating a two tier league. Nobody wants to pay $100m for a franchise and then end up playing cities no-one cares about (which does happen now, and will happen even more in a 24-28 team MLS). And like the PL, the handful of truly elite clubs never really face the risk of relegation if they are allowed to spend what they can…. a choice an Albuquerque or Columbus likely can’t make.

  23. John: No US league has promotion/relegation and some of the other leagues around the world are moving to eliminate it – I think Argentina and Mexico have both made p/r a multi-year thing to reduce the impact overall. I think it’s far more likely that we’ll see some kind of Euro Superleague form amongst top tier Euro teams than we’d ever see p/r in the US.

    Owners certainly don’t like p/r and with nearly all teams controlled by boards & groups of owners there will be even less tolerance over time. It makes revenues and costs too unpredictable.

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