MLS commissioner doubles down on giving teams to whichever cities cough up stadiums

MLS commissioner Don Garber has issued his latest missive on the league’s never-ending campaign to create an endless carpet of soccer teams across the United States (and an endless carpet of expansion fees), and it has several points:

  • St. Louis and Sacramento are the frontrunners to become the league’s 28th team, with a verdict to be handed down by the end of this year. And the price of admission is clear: While a stadium subsidy package got preliminary approval from St. Louis in December, “It would really help their bid if they had stadium naming rights and a jersey sponsor in place,” Garber told the St. Louis Post-Dispatch. “So there is a specific level of financial corporate support.”
  • Other cities, of which the commissioner specifically named Charlotte, Las Vegas, and Phoenix, will have to await the next round of expansion, which league officials have previously indicated could be completed by 2026.
  • Detroit is apparently out of the running for now, with Garber saying, “I’ve been in regular conversations with them. And we still struggle with their stadium plan. … We think that in order for us to be successful in that city, we need a soccer-specific stadium. And the options that we’re presented with today are only at Ford Field.”

This is all in keeping with MLS’s long-established business model: Keep handing out new teams every year or two, at a pace geared to ensure a steady flow of expansion fees while still keeping enough cities interested that the league can levy demands — namely, for new publicly subsidized soccer-only stadiums — in exchange for granting franchises. (Lucrative naming rights deals, apparently, will be the new tiebreaker.) At least, except when it’s presented with owners it craves enough to be worth waiving that rule, which was the case with NYC F.C. and Atlanta United but not with Detroit for some reason.

If anything, the main advance made by Garber is that he pretty much just straight-up admits the game he’s playing now:

Garber called the competition good for the league.

“Life is good when you have options,” he said. “I believe that there are many cities in our country today that can support an MLS team. We’ve got to get this last one over the finish line and then sit down and figure out what happens to those cities that were not part of the 28 that we set out to finalize a couple of years ago.”

“Life is good when you have options.” That one really needs to go alongside Jerry Reinsdorf’s “A savvy negotiator creates leverage” in the sports shakedown Hall of Fame.


31 comments on “MLS commissioner doubles down on giving teams to whichever cities cough up stadiums

  1. Ahhhh, Garbo is still calling this next expansion franchise “the last one” and talking about the finalized expansion plan… It takes total commitment to get into the USSF hall of fame, clearly…

    “…But don’t worry all you cities that have been so cruelly left out of this, the final round of expansion MLS will ever undertake… there could, just maybe, if the perfect deal comes along and I mean it would really, really have to be perfect, be the slim chance that the original 28 franchises – which are sacrosanct let’s not forget – (minus those we wound up, but we don’t talk about those amirightboys?) would vote to allow a new member in.

    I can’t make any promises of course. It will be up the expansion committee and the existing partners, obviously. But…”

  2. I might have asked this before, but what does MLS expect to happen if (when?) it gets to about 40 teams and is not only still finishing in the red every year, but is starting to discover that investors in cities like Buffalo, Jacksonville, Wichita, and Fresno are unable (or unwilling) to pony up an expansion fee that may well have risen to a quarter of a billion dollars by then?

    • That’s a legitimate concern. The problem with making expansion THE major cash producer for your league is at some point that train stops. Near as I can tell, their plan is to use expansion to drive up visibility and hopefully secure a far better TV deal. Honestly, that’s not the worst business idea ever but the reality is there are sports that can draw quite well live that simply never really takeoff on television.

      The other issue that has been threatening is shortage of talent. At some point you get so many teams the level of play suffers significantly and there aren’t any easy (or cheap) fixes for that. The temptation would be to offer more and bigger contracts to fill in with talent from overseas but that would run totally contrary to their successful economic model.

      I give them a lot of credit for how far they’ve come but sustainability is the part that looks to be a real gray area for them.

      • I don’t see this as a TV deal play — you really think ESPN is sitting there thinking, “We’d pay big money for MLS games, but I dunno, you don’t have a team in El Paso yet”?

        It makes the most sense as simply a way to get cash via expansion fees. Which isn’t the absolute worst plan — there are clearly more billionaires interested in buying pro sports teams than there are people interested in buying tickets to MLS games — but it does run into sustainability problems along about the time that prospective owners realize they can just buy a struggling existing team and move it.

        • Unless MLS is looking into booting up a third franchise in NY and/or LA, or a second franchise in a major media market with an existing one — which, given the machinations that are already required to obtain and to maintain the visibility of the league in those cities, would be comically bad decisions. Either way, it really is difficult to figure out what the endgame is of adding teams like their lives depended on it… then again, that actually might be the explanation for it.

        • Curious what you think their strategy is if TV money isn’t part of it? Their current expansion fees are reportedly $150 million. That’s going to take a long time to pay off relying on ticket sales/merchandise/concessions. (Numbers from the Wall Street Journal a year or so back suggested most teams are making around $15 million per year.) They’re clearly promising SOMETHING to these new owners because “Give me $150 million today so in 10 years maybe you’ll be even” isn’t a great business pitch. Is doubling or tripling attendance realistic? TV money has got to be a major hope.

          • “This is way less than you’d have to spend on an NHL team!”

            Seriously, there is no way that rich people who buy sports teams are doing so on the basis of prospectuses that spell out future revenue streams or anything. I’m sure MLS claims that it’ll be wildly profitable someday, but so did Elizabeth Holmes.

      • It’s not just a shortage of talent, its attractiveness to talent that MLS has to worry about.

        Currently, the top players in the world want to be on UEFA Champions League quarterfinal-level teams or better–with serious talent concentrating in about 4-6 teams. China has signaled some willingness to pay top dollar for young talent, but hasn’t nabbed much yet.

        MLS offers very nice stadiums, some world-class cities, and a brand that at best is a stage for young players to move to Europe or for older legs to move to from Europe. That’s not a great formula either for a popular league or for justifying crazy money. So either they say “we’re a selling/developmental league” (not popular with US fans unless going to a minor league game) or you have to attract media stars to give the veneer of “cool.”

        Known, ticket-selling foreign talent, if they come to the US, want to be in NY, Chicago, Seattle, the Bay Area, LA, Miami, and maybe a few other locations (Vegas, Atlanta, DC come to mind). As nice as some of these places are, Sacramento, Cincinnati, St. Louis, and Detroit are not going to make a dent in MLSs challenge. Smaller European cities often have the same challenge (Liverpool is an exception). I’m not sure what Garber is doing other than cashing checks at this point.

  3. The MLS is already the biggest FIFA affiliated league in the world based on the number of teams. I suspect it will be broken into 2-3 separate leagues that will compete with Mexico, Brazil and Argentinian leagues in a Western hemisphere Champions League-type tournament. The logical and time tested thing would be to have relegation. That’s ain’t going to happen with owners shelling out big money for expansion fees.

    • Relegation is totally contrary to the model they’ve been selling from the very start. If they even mentioned the possibility of looking into relegation they’d have owners filing lawsuits the next day. Realistically, it’d take an MLS collapse and for the successor league to be looking for new ideas for relegation to ever happen.

      • The USL is now three-tier and hasn’t ruled out promotion and relegation. So if MLS really does turn out to be an actual Ponzi scheme and not just a metaphorical one, maybe there’s one route.

        • People going to USL games for the most part likely aren’t going with a big eye to the standings. A “drop” for a team averaging 2k a game probably isn’t going to bite too hard, but teams that actually do draw aren’t going to stay interested in that competition for long.

          https://soccerstadiumdigest.com/2018-usl-attendance/

          Sort of comparable in a way to a lot of smaller leagues in Europe. Take Portugal–three teams of European fame who draw well (and have allegiance all over the country). A couple teams doing ok, and lots who are just hanging out. Even I can see that promotion and relegation don’t really make much sense.

          https://www.worldfootball.net/attendance/por-primeira-liga-2017-2018/1/

    • CONCACAF champions League already exists… and since the South American teams already have two (at least) continent wide club competitions I doubt they would be interested in freeing up cup or other dates so they could make a mid Feb trip to Columbus or Kansas City.

      • I have actually been to a CONCACAF game, Red Bulls vs some team from El Salvador. I believe the announced attendance was around 10,000, but there couldn’t have been more than a thousand or two in the seats.

      • Yep, I think that’s pretty standard. Even allegedly impossible to discourage Toronto fans stay home when UANL Tigres or LD Quito come to town (I’d guess 7-8k in the stands, but an announced sellout of course….). Part of the problem in the latter rounds of the CCL is that the weather in North America is particularly awful come semi final or final time.

        What I’m not sure of is how the MLS clubs’ away leg attendance is? Are Hondurans or Salvadorans or Peruvians still showing up in numbers to see these odd teams with three stars and some ‘amateurs’ play them?

  4. Looks like Sacramento is being used, again, to get what MLS wants in St. Louis. If MLS had wanted Sacramento, then it would have admitted it already. MLS always needs to set up a competition among cities to improve their bids. Sac has done everything it can do, and still no team. If Sac doesn’t get the 28th team, then it should drop out of the competition for the 29th and 30th team. Enough is enough.

    • From your mouth to God’s ears!

      The “no public money” promise from the city government has changed to “the city will build the infrastructure needed” and “here are some tax subsidies” and “here are some incentives” and … and … and …

  5. I know we are America, but it still sounds funny to hear that a bid would be strengthened is someone would sponsor the shirt of a non-existing team. Good way to spend money!

    Relegation isn’t long for most soccer leagues that people actually watch, other than small teams getting shooed off by the big boys.

    • That was a strange line in the story for me, too. I’m not doubting they could find a jersey sponsor after they were a real team but what would be the incentive to make a commitment this far out, before a team is even guaranteed? It’s not like you can market off the idea “Hey, we’re going to have our logo on some soccer jerseys someday. Maybe.” Most businesses would balk at signing a binding agreement that wouldn’t even have a set start date. And if the deal isn’t binding, it doesn’t do any good for MLS.

    • In a landscape where people who failed to secure the game worn items they actually wanted at the online memorabilia auction end up winning the competition for a pair of game worn socks from a third and long pulling guard just so they don’t go home empty handed… I fail to see why selling the rights to something that doesn’t yet exist would be problematic.

      In what way is it less likely than getting a dozen potential cities and owner/operators to bid on the “last” expansion franchise MLS will offer?

    • Maybe not that far-fetched. Farmer’s Insurance sponsored a nonexistent LA football stadium.
      [vimeo 47682305 w=584 h=329]

      STL team would start selling shirt immediately after expansion announcement. They are already selling expansion merchandise. https://shop.utspromos.com/mls4thelou/shop/home
      Advantage for the sponsor could be to get in early, while their is still excitement. (before people see the actual mls games)

  6. I strongly disagree that promotion and relegation will be abandoned by the bigger leagues in the world… it is a fundamental part of the game. I could potentially see a system develop not unlike Liga Mx, where your Blackpools or Derbys who cannot possibly hope to survive for more than a season or two (and generally will have to take on some long term and hugely damaging contracts just to make a credible showing in the PL before going back down again) might be given the option of selling their spot to one of the relegated larger teams (and still getting the £50m in PL rights money)…. but even that muddies the competition waters considerably.

    With respect to MLS, as described before, once the league reaches 32 teams an “internal” promotion and relegation system can be adopted. If it does happen it will almost certainly be through a repechage type playoff tournament (IE: no automatic P/R positions) as was used in Rugby League until this year.

    Many MLS owner/operators aren’t really fond of their partners farming the subsidy while they shell out for 3 DPs and still have to have the sisters of the poor (spending under the cap and no DPs) on their schedule. Many coaches are also not really keen on working for owners who’s main interest is not to finish last because that would be embarrassing (one point above last while turning a tidy profit despite 13,000 empty seats at each home game, however…).

    I won’t go on at length about it, but I believe there is a path to a 20 team MLS-1 (which will be called premier, of course) and 12-16 team MLS-2.

    Owners of relegated franchises are still in MLS and still get a full share of MLS/SUM revenue sharing… but the teams who aren’t willing to spend on attractions will end up playing each other in what amounts to a second division…. which makes their games more competitive (like the Knicks-Lakers in 2019!) and means the best teams can play each other more often.

    Another option would be to do a split like Scotland does, however MLS already has too many teams to make that work.

    It can be done, in other words. And owners don’t need to be relegated right out of the league they paid to join to achieve it.

    • There are two interrelated issues. The first is the financial unpredictability that is caused by the threat of relegation. The second is competitive imbalance in a time of global television rights.

      Big clubs (in their G-14 guise or whatever) have made it clear that they believe it is their right to have the lion’s share of global TV rights of the Champions League, since these are the teams the kids from Thailand, China, and America are paying to see. The latest discussions of the Champions League, in which some teams would gift themselves “eternal CL status” is evidence of that. (While their actions are pretty gross, it is hard to discount the logic).

      The second is competitive balance. Soccer has a tradition of being organized primarily by national federations and often by member-owned clubs. Most of these federations have been dominated historically by just a couple teams (think Scotland), but still have to find enough clubs for a 10 or 18 team league, meaning that there are more than a few weak swimmers in the leagues. Efforts to create regional leagues (Scotland, Nordics, Holland, Belgium) haven’t really had any traction. But again, the big teams are driving a harder bargain on TV rights to stay in their national leagues, which makes the balance problem worse, with the only recourse to be to find a rich guy to give you money.

      In today’s game, big teams are leaving serious money on the table by (for example) Bayern Munich traveling to Mainz, Hannover, or Nuremberg to play rather than to Rome, Milan, Turin, or Madrid (which would be the American model). Germany is relatively healthy–75% of European domestic leagues have teams with very low attendance. Most domestic leagues are pretty boring and everyone knows it (I say this as a member of a German traditional, though currently unsuccessful, club).

      What stops change? First, big teams actually like the idea of winning something every year. Not everyone would be a winner in a relegation-free pan-European league. Second, away fan travel would probably be reduced significantly, which would impact the TV-friendliness of atmosphere. Third, the hard-core fans strongly oppose it, and even though the teams don’t really like them, and they provide relatively little revenue–but still have the voice of tradition behind them.

      None of this would suggest to me that relegation is a system that anyone likes–which makes it unlikely to be adopted in America. If you asked Juventus or Manchester City–they’d rather have a smaller MLS or NFL model than anything Europe currently has to allow concentration of all revenues to just a few teams.

      • 1) “…big teams actually like the idea of winning something every year. Not everyone would be a winner in a relegation-free pan-European league…”

        Exactly. And that’s the main reason why it won’t happen. RM, Man City or Barcelona might still be successful in a pan european superleague (ESL). But many of the other “heavyweights” in their regional/national competitions would suddenly be nowhere. It’s hard for Arsenal or Man Utd to keep the fans happy when they have off years and miss CL. Imagine if instead they were in a Euro Super league and finished an average season with 5-8 wins 20-25 losses and 7-15 draws?

        It’s hard to keep your hundreds of millions of international fans believing they are part of an elite organization when you get your ass handed to you twice a week on global television.

        So, for all but the truly biggest 4 of the big 15, moving to a European super league would be an absolute disaster (much like moving to Newark or Patterson would have been for the NY Yankees… though, as with the Yankees, it was less a plan than a negotiating tactic).

        They might continue to use the threat of an ESL to extract ever more resources from their partners (JUST as Real Madrid and Barcelona have done… iirc they now split 50% of the La Liga TV revenue between them, leaving the other clubs to fight over the rest…), but they are not going to leave their domestic league and face the likes of PSG, Man City, Liverpool, Juventus, Bayern Munich and other top clubs every single week.

        2) Juventus or Man City would ” rather have a smaller MLS or NFL model than anything Europe has”.

        Disagree very strongly here. The MLS or NFL model would not make anything “better” for the big european clubs. They would lose rather than gain revenue.

        Keeping in mind the convoluted (and deeply inequitable) way in which Champions league revenues are shared, and the vast sums that are involved, it is highly unlikely that a shared revenue model like NFL or MLS would be anything but ruinous to prospective ESL clubs (ESL would, of course, effectively replace Champions league whether it continued to run as a standalone competition or not).

        The present method of revenue sharing (CL) actually makes it a near certainty that the top 15-20 clubs in Europe will always be in the Champions League (whether they are confirmed “permanent” members or not)

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