MLS ready to pick FC Cincinnati as next expansion team just as soon as someone coughs up a new stadium

The MLS season kicks off next weekend, which means the league almost certainly won’t meet its self-imposed deadline of having a second expansion team selected by then to go along with Nashville S.C. But league officials don’t sound concerned — rather, they sound an awful lot like they’ve already settled on Cincinnati as their favorite for the second slot, but are holding off on a decision to improve local owners’ leverage to extract a stadium deal:

“Although we haven’t finalized any deals and all of the finalist markets remain under consideration, we’ve made the most progress in Cincinnati,” MLS president and deputy commissioner Mark Abbott told SI.com on Friday…

“We don’t have, and don’t need to have, a fixed deadline, and we will wait until all of the necessary elements are in place before selecting the next club,” Abbott said. “Whether the announcement is in a few weeks or a couple months is dependent on finalizing the details, but I don’t anticipate that it will be an extended period of time.”

Cincinnati team president Jeff Berding is still making the rounds of three potential stadium sites — Cincinnati’s West End and Oakley neighborhoods, and Newport, Kentucky — in hopes of landing approval for a new stadium (and the $70-75 million in public “infrastructure” spending they’re hoping for), so that’s clearly what MLS is waiting on.

On the one hand, this is perfectly reasonable: May as well wait until local ownership has all its ducks in a row before assigning a new expansion franchise. On the other hand, if Cincinnati is a viable market and local ownership wants to make a go of it in MLS, the league could just approve a franchise and let it play at Nippert Stadium, where F.C. Cincinnati is currently breaking USL attendance records, and figure out a new stadium later. So it looks like MLS is trying to split the difference on the “pick the best city” vs. “pick the spendiest stadium subsidy” decision: Give a nod to its favored choice, but indicate to city leaders that it’s not really official until there’s a new stadium deal in place, capisce?

Which is standard operating procedure for the Big Four U.S. sports, so no surprise there, but it sure ain’t the way it’s done in international soccer, where new teams are promoted from the next level down based on their performance on the field. Which is one big reason why you’re never going to see promotion and relegation in MLS — at least, not until cities and owner groups stop being willing to pay big bucks to be part of the ever-bigger big league.


15 comments on “MLS ready to pick FC Cincinnati as next expansion team just as soon as someone coughs up a new stadium

  1. The great Major Ponzi League is driven by GREED. And when it fails it not going to be pretty. I watch American Greed on tv and I see it. Promises of a great return, no worries, They do all the work, cities just sit back and collect.
    The cities just hand the money over. And when it goes bad they so ashamed they tell no one about what happened and how they got took. And the league moves on to another city and another sucker to buy a team.
    Was it the Phila Union that is valued at 160 million, that 10 million over the entrance fee and they have a stadium. Are there any teams worth under the $150 million?

    • I doubt it would ever completely fail. But inevitably there has to be a shake out at some point. Even long established North American sports have had their boom and bust cycles.

  2. Neil, I logged onto Field of Schemes this morning hoping to read your commentary on the new missive from Anthony Precourt:

    http://mls2atx.com/update-from-precourt-sports-ventures-on-austin/

    How did he arrive at the 400 million $ figure?

    • “Let’s see, we’re spending $200 million, then apply a multiplier of two, that’s … carry the four … hang on, let me get a calculator.”

  3. “… never going to see promotion and relegation in MLS…”

    Certainly the concept of promotion and relegation between different leagues in a pyramid administered by a national federation in the US is unlikely… for one thing, the control the USSF has over professional leagues is miniscule compared to the control other countries federations/associations are able to exert over their national leagues.

    But I’m not convinced there will ‘never’ be anything like promotion and relegation in the US game.

    One reason for this is the imbalance between differing markets and revenue generating capability (just as in other nations/sports). For example, while all ‘partners’ in MLS are notionally equal, at some point that equality will become a major obstacle to recruiting new owner/operators for franchises (think about how much Seattle or City Football Group have invested in their operation as compared to Columbus, Chicago or DCU).

    All major sports leagues have similar issues in this country, but not all have owners with backgrounds in other systems. Further, most of the other sports are the top level of competition across the world (NFL, MLB, NBA, NHL). That is not the case with MLS… and some MLS clubs could compete at a higher level absent the restrictions imposed on them effectively by the minnows in their own league.

    City Football might be fine with spending the kind of money they did when they are to be able to compete regularly with RBNY, LAG Toronto and Seattle. They almost certainly see less value in scheduling games against Columbus, Salt Lake and Colorado.

    Coupled with the ever expanding footprint of the league (which may not ever stop selling franchises so long as there remains someone who can come up with the fee and get some kind of stadium deal – or, not…), this creates a model in which the very reasons ‘bigger’ franchises entered the league (IE: playing against other big clubs by MLS standards) are either watered down or removed completely. As MLS approaches 30 teams, NYCFC and LAG/Seattle will meet less often… it is easily possible to envision a divisional future in which east and west clubs do not have interlocking games every year.

    City Football did not buy an expansion club to play 2 or 3 games a season against Colorado, Philadelphia, Minnesota or Columbus in half full stadia and only see Seattle or LAG every other year… As the second tier clubs grow to outnumber the majors, it is likely that some scheduling adjustments will be needed.

    When that happens, will it take the form of unbalanced schedules in which the larger clubs play each other more often than they play the minnows?

    Will it be some MLS version of the “split” as practiced in Scotland and other leagues?

    Or is it more likely that MLS will take a good hard look at the growing gulf between the have and have not camps among it’s member clubs and decide to realign from a single league with regional divisions to a 16 team elite league and a 10-16 team MLS “2”?

    Doing the latter will certainly mean that new franchises can no longer be sold for $150-200m. However, some of us wonder how many more franchises can be sold at that price anyway. At some point isn’t MLS better off selling MLS 2 expansion franchises for less money, then charging an additional fee annually when the MLS2 club is promoted to the elite league (though a good part of this fee might end up funnelled straight back to the relegated club or clubs)?

    This also provides an opportunity for big clubs which have had unusually bad years to buy their place back into
    MLS 1 if they are relegated… which happens in several leagues around the world (whether one agrees with it or not, and I do not…), or for small clubs promoted to sell their spot in the higher league if they are not able to meet the basic requirements of the higher league (the PL has facility requirements that many clubs in lower leagues would struggle to meet if they were promoted… some have ended up spending far more than they could really afford to upgrade their grounds just to meet PL specifications – with sometimes disastrous results post relegation).

    Several of the league’s coaches have gone on record with comments to the effect that the lack of a relegation threat means their ownership won’t invest money in players (and why would they? The shared revenue model means their costs would increase while their revenues may not significantly increase if they spent more).

    For the top 6-8 clubs (which generate most of the league generated revenue that MLS distributes), changes to the model will be necessary in order for them to ever compete internationally (CCL or Club World Cup, eventually). LA, NY, Toronto, Seattle, Atlanta and a couple of others already have outsized influence within the league. If their needs aren’t being met because of an existing league structure (that appears to favour clubs who spend nothing other than the initial expansion fee), what alternative do you think they might pursue?

    I’m not saying that the implementation of P/R is just around the corner, but I believe that the league will be forced to seriously consider some form of it within a decade. And you will start to hear about that right around the same time that MLS finds they can no longer sell new franchises for record sums. If they don’t start catering to the bigger franchises needs and wants, I think you’ll start hearing about a breakaway league that will include only the biggest 10-12 clubs…

    Why stay shackled to a corpse just because Hunt and Anschutz (understandably) needed a method to control costs in 1996? Ultimately, MLS will have to liberalize it’s spending rules or it will lose it’s best member clubs.

    • I agree with a lot of what you say here. If every top 50 market feels they can support a team, MLS might be better going to a two tier system, or face competition from another league. It would seem difficult, but the ABA, AFL and WHA caused considerable headaches for the established leagues.

      • MLS will almost certainly never have relegation. “Owners” like the idea of promotion but are 100% against their own team being relegated.

        The advantage of the US market is a relatively uniform national TV market (for now). While it seems absurd at this point, MLS wants to be a league that has national visibility through television. It is not going to be able to have lucrative contracts for a second-tier league, which means that the financial penalty of relegation will be extremely high. No owner wants his investment ruined for “sporting reasons.”

        Given the strange state of “ownership” in MLS, I would say it is more likely that MLS basically expects some teams to fail with their “license to operate a sports team” model. The big teams will get their late-in-life Steven Gerrards and the Cincinnati’s or the world will struggle to stay in business. MLS can always sell the license to someone “more worthy” when a team fails.

        • Fair points, GDub, but MLS does not have and will not have lucrative TV deals so long as they remain very much a second tier property…. which I would argue they will remain so long as the higher revenue teams aren’t free to build the talent pool their revenues and fan base could support.

          Much of the distributed revenue comes not from legitimate MLS earnings, but from SUM and it’s control of various other tv property rights.

          Although reading it back I may not have made this clear, all “32” MLS owners would still share equally in that revenue under the MLS 1/MLS 2 model. They just wouldn’t play interlocking games and share direct gate revenue between leagues (Columbus etc are still partners, they just aren’t necessarily on NY’s schedule). So the 2nd div clubs do not lose the kinds of revenue streams they do when they drop from the PL to the championship, for example.

          • Right, it would still be a “closed league” but with upper and lower divisions. And at this point, they earn more money through selling franchises than TV deals, so they really can’t stop expanding. El Paso and Albuquerque, you wanna buy MLS-2 teams for $50 million? OK that’s $100 million. 10 million more than we make on TV. Welcome aboard.

          • It would be a creative way to solve a real issue. However, if I were an MLS owner my question would be “why work three times as hard to sell 3 x licenses for $50 million when I can sell one for $150?”

            Plus, this whole MLS2 thing would make the Soccer Culture crowd mad, who seem to take an inordinate interest in the status of the USL, NASL, etc.

          • One of the benefits to MLS of doing some sort of split would be that the other (struggling) leagues would probably go away. I suspect that if MLS2 were ever to happen, MLS3 would not be far behind. At some point (below MLS2 likely) the shared revenue would have to stop, or there wouldn’t be any point in being an MLS 1 owner anymore.

            This would give MLS even more control over USSF policy than they have now, which has to be a good thing from their perspective.

            Absolutely right on the “why sell three cars for $10k each when I can sell one for $30k” bit… but I’m not sure they can sell many more franchises at $150m. And, there are still people who buy bargain basement commuter cars in large numbers despite the fact that much nicer $30k cars exist.

            Even if there are many more potential owners out there willing to pay $100m+ for an MLS franchise, the “numbers” and scheduling problems the league is creating for it’s top franchises will just get worse the more they expand.

            I see many different currents coming together to push MLS to make some major changes. I’m speculating on what that change might be, but I’m fairly certain that if they don’t make some kind of major change soon they will create problems that might be insurmountable… Like Ponzi schemes everywhere, expansion franchise drives are all about momentum.

    • But MLS needs the Sacramento threat to keep the Miami group moving forward with their stadium issues, right?

      (looks at the March 1st FoS article)

      OK, I got nothin’.

      • Yeah, I’d say Sacramento was never really a threat.

        MLS is really good about making each city they abuse feel very special about itself. They always will be.

        Will they still love you tomorrow? Probably not.