MLS still set to announce two new teams in December, unless it needs the stadium leverage

MLS has been dead set on announcing two expansion franchises this December, with two more getting the nod next year. But on Thursday, commissioner Don Garber hedged on that timetable just a bit:

A league spokesperson later texted, according to ESPN, that “MLS remains on track to name two teams in December, with an announcement ‘likely around Dec. 19-20.'” But that’s still hedging, in a way that could probably best be taken as We’re planning an announcement the week before Christmas, but we reserve the right to change our minds.

What could be going on here? Soccer Stadium Digest thinks that MLS wants to be sure that David Beckham’s Miami franchise will actually get stadium approval in time to begin play next year — the stadium won’t be done by then, mind you, but MLS will award a team so long as it has a stadium deal in place — or else award a franchise to a fallback city in order to keep an even number of teams. That’s certainly possible, though MLS has operated with an odd number of franchises before, so it could always just push back Miami’s entry another year or three if necessary.

Equally possible is that MLS may want to wait out the legislative process in some potential expansion cities to see what they can shake loose in terms of public stadium funding. Of the four frontrunners declared by Soccer Stadium Digest, Detroit Pistons owner Tom Gores and Cleveland Cavaliers owner Dan Gilbert’s $300 million plus free land and I’ll build Detroit a new jail to replace its already half built one plan still needs both city and county approval, Nashville S.C.‘s $75 million subsidy demand requires approval of the regional Nashville Metro council, F.C. Cincinnati‘s gambit for that city to pay for half of a new $200 million stadium hasn’t seen much action in recent months (other than a new Cincinnati citizens’ group petitioning Garber to let the team move up to MLS while still playing at Nippert Stadium, where it’s setting attendance records), and Sacramento F.C. has already started clearing land for a new stadium, though with actual construction not scheduled to begin until 2018 the team owners can always slam on the brakes if they don’t get awarded an MLS franchise by then.

That’s a whole lot of uncertainty, and could easily be a reason why the league doesn’t want to set an expansion announcement date in stone. When running a bidding war, it’s a fine line between wanting to scare the participants with a countdown clock, and wanting to make sure they always have enough rope to up their bids.

MLS commissioner doesn’t rule out non-soccer-specific stadiums while watching soccer in one

Don Garber went to an MLS match on Saturday, which makes sense since he’s the commissioner of MLS, at as the match was at Atlanta United‘s new stadium which is also the Falcons‘ new football stadium, he was asked whether he thought maybe demanding soccer-only stadiums as a condition for expansion teams wasn’t entirely necessary. His reply:

“It’s interesting; it’s a great question. The good thing about being new and trying to figure it out as you go along is you have a specific plan and then there are times when you have to modify that plan,” Garber said. “I think good business leaders and good businesses, ya know, don’t just get stuck in their previous strategies but try to evolve and see how things develop…

“We really wanted a soccer stadium here and Arthur said, ‘Hey, this stadium I’m going to build is going to be the best in the world, it’s going to be world class, we’re going to fill it up.’ And he did,” Garber said. “So, I don’t know that that changes our point of view in any other market, but certainly when I see what’s happening here and in Seattle I’m happy that we have stadiums that can have 70,000 people in ’em.”

So here’s the thing: Garber’s “soccer-specific stadiums only” demand has never actually been a strict rule, as witness not just Atlanta, but also NYC F.C. playing at the new Yankee Stadium. (Is it still new now that it’s eight years old? It’s certainly not the old Yankee Stadium.) MLS is always willing to make exceptions when it’s willing to make exceptions.

The problem is that then you have cities thinking, Hey, they’re willing to make exceptions. Like Cincinnati, where WCPO spun out a whole article last night on how Garber’s statements mean maybe there’s a chance for F.C. Cincinnati to get an MLS franchise while still playing at Nippert Stadium, where they keep breaking attendance records.

There’s a tendency to take sports league operators’ statements as policy dictates, when really they’re leverage gambits: Garber isn’t saying he wants new soccer-specific stadiums because his stomach roils at the notion of watching soccer anywhere else, he’s saying it because it’s the best way to get new soccer-specific stadiums. Which is fine, that’s his job — but trying to parse his every statement as if reading missives from the Politburo and not just listening to a guy trying not to paint himself into a corner is probably a bad idea.

Charlotte won’t get county money for MLS stadium, expansion race now bigger mess than ever

The Mecklenburg County commission voted 5-3 on Wednesday to hand over the site of 83-year-old Memorial Stadium to the city of Charlotte for a new soccer stadium for a potential MLS team — but no money for building it, which is what the ownership group had been hoping for. Commissioners said they wanted to see a soccer stadium built, but, you know, by the city, not them:

“They manage stadiums and they have a division in the city that deals with pro sports teams,” [Commissioner Jim] Puckett said. “They have a dedicated tax revenue stream that’s for entertainment and can be used for pro sports. They have the expertise and funding stream to deal with that.”

The team’s original plan was for a $175 million stadium where $101.25 million of the costs would be paid off by the county, with the team repaying the public via $4.25 million a year in rent payments. (Note to readers who can do math: No, $4.25 million a year is not enough to repay $101.25 million in bonds unless you get a 1.5% interest rate, which I know they’re low but get serious.) Now they’ll instead have to try to hit up the city of Charlotte alone, which has already indicated that its maximum contribution is $30 million.

That would leave the team to shoulder $145 million of the cost, plus MLS’s nutso $150 million expansion fee, which is a hefty chunk of change. On the other hand, the team wouldn’t have to make those rent payments, so maybe it could just go to a bank and borrow the cash, and make mortgage payments instead? Or maybe the rich NASCAR track heir who wants to launch the MLS team would rather have somebody else on the hook for loan payments if his team, or MLS as a whole, went belly-up at some point as a result of its pyramid-scam spree of handing out expansion franchises like candy to anyone who wants to pay $150 million for candy? Yeah, probably that.

If you’re keeping score, the MLS expansion candidates are now:

That’s a whole mishmash of stuff indeed, and I don’t envy the job of the MLS officials tasked with having to pick two winners this fall (and two more next fall, because they can’t cash those $150 million expansion-fee checks fast enough). You have to wonder if commissioner Don Garber doesn’t think to himself sometimes, maybe it’d be easier just to stick the expansion franchises on eBay and take the highest bids. It would mean giving up on the pretense that they’re actually selecting the best soccer cities or something, but get real, nobody believes that anyway.

Cincy soccer team exec: We’ve never asked for subsidies before, so give us $100m as thanks

The owners of the USL’s F.C. Cincinnati are listening to Alexi Lalas and moving ahead with plans for building a new stadium as they prepare to apply for an MLS expansion franchise, and blah blah blah, here are some places they may want to build it, where’s the bit about who’ll pay for it? Here we go:

[FC Cincinnati President Jeff] Berding said FC Cincinnati is committed to spending $250 million of its own money — $150 million for MLS franchise fees and $100 million toward the stadium. Berding wouldn’t say how much public money the club wants, but he did say FC Cincinnati’s contribution would cover more than half of what’s needed to build a stadium. So it figures it could be asking for less than $100 million in public aid.

That’s a little on the vague side, but it does sound like “almost $100 million” is probably in the ballpark. Though as usual, until a funding plan is actually revealed, there’s no way to tell whether that’ll be almost $100 million total, or almost $100 million in direct construction subsidies, plus tax breaks and operating subsidies and what have you.

And either way, that’s a significant chunk of public change for a team that may or may not win an expansion franchise regardless of whether it gets a stadium built. (Or, looked at another way given MLS’s relentless expansion frenzy, might get a franchise eventually even if it played in a hole in the ground. Not that they play in a hole in the ground currently — F.C. Cincinnati currently plays at University of Cincinnati’s Nippert Stadium, where they outdraw several MLS franchises, either a sign that they have the kind of fan base that can support a new building, or that they don’t need a new building, because the old one is plenty popular already.) A new group called No More Stadium Taxes has been formed to oppose the plan, as well as plans to spend public money on expanding Cincinnati’s arena, with attorney Tim Mara, a veteran of the Bengals stadium subsidy battles, on board.

The best part of this whole story, though, is Berding’s explanation of why team owner Carl Lindner III, son of the late billionaire Reds owner Carl Lindner Jr., deserves public funds to help build his private soccer stadium:

Berding also suggested public investment would be a payback to the Lindner family for its largesse over the years.

“Carl Lindner and his family have brought thousands of jobs to the city for decades and never asked for help,” Berding said.

I suppose that’s technically true of Lindner’s ownership of the Reds, since while he owned the team when Great American Ball Park opened in 2003, the bill that authorized it was passed in 1996, when Marge Schott still had possession of the team. (I’m not going to check into whether Lindner’s multiple Cincinnati-area businesses ever asked for tax breaks or the like, though that’d be a fun exercise for both readers and Cincinnati journalists.) But still, “We’ve always run our business with our own money, how about throwing $100 million our way in appreciation of us never asking for help before” seems a little off somehow — but I guess when you’re a billionaire asking for public funds, you need some kind of excuse, even if it’s just “My family has never screwed you over — yet.”

Every concentration of humans on earth now bidding to build MLS stadiums

Nashville is looking to build a new MLS stadium, and Indianapolis is looking to build a new MLS stadium, and San Diego is looking to get a new MLS stadium, and Detroit is considering providing free land for an MLS stadium, and St. Louis is still looking to build an MLS stadium after rejecting it once, and a guy in Charlotte is still looking to have an MLS stadium built for him, and Tampa is looking to get an MLS franchise but already has a stadium.

These are mostly terrible ideas, notes the Guardian, at least where they involve public money. And if the newspaper slightly overstates the case that there’s growing pushback on MLS subsidies (truth is, they’ve never been an especially easy sell as sports subsidies go, mostly because MLS isn’t as popular yet as the Big Four sports), it does contain a classic defense of them from Peter Wilt, the Chicago Fire founder who now heads later headed the Indy Eleven NASL team and wannabe expansion franchise:

“It is about image and plays into making a city cool to live in, a good experience for young professionals, and reducing the brain drain on a community. Things like that are sometimes not taken into account. If Oakland loses the A’s and the Raiders, which is a possibility, then no one will hear about Oakland in any positive terms for the foreseeable future.”

Things like that actually are taken into account in economic studies of teams and stadiums, which overwhelmingly find that if sports teams make cities “cool,” it doesn’t show up in things like per-capita income or jobs or economic activity or tax receipts. Plus you’d then have to explain how a city like Portland, for example, which until recently had only basketball as a major-league sport and famously turned down a domed stadium in the 1960s that would have brought an NFL team, nonetheless became one of the hippest cities in America. (It has MLS now, but the hipness predated that.)

Anyway, with MLS set to announce four more expansion franchises in the next year or so, the league can probably count on some cities stepping up to throw money at new stadiums, so long as they’re not too picky about which ones. (Cincinnati, Raleigh/Durham, Sacramento, and San Antonio are also in the mix.) Bulk-mailing extortion notes is kind of a strange business model, but hey, whatever works.

MLS to double expansion fee to $200m, hopes world doesn’t run out of rich guys

Major League Soccer is preparing to announce another round of expansion — this time to a whopping 28 teams — and is clearly determined to grab all the money it can in the process, as deputy commissioner Mark Abbott says the league is preparing to double its expansion fee to $200 million.

That’s a whole bunch of money for membership in a league whose own commissioner says it’s losing money, and which Soccernomics author Stefan Szymanski has called a “pyramid scheme” that’s eventually going to collapse. Given that the leading counterargument appears to be that “no, no, even if teams always lose money owners will count on making money when the sale value of the franchise appreciates,” it’s exactly a pyramid scheme — the only question is whether it’s the kind of bubble that eventually collapses, or one that can continue indefinitely.

The argument for the latter — and, presumably, the MLS business plan — goes back to the billionaire glut, which posits that there are so many rich people wanting to own a pro sports franchise these days, and such a limited number of opportunities, it’s going to be a seller’s market for the foreseeable future. With that the case, it’s understandable that MLS would want to get everything it can for new franchises while the getting’s good, even if it means becoming by far the largest soccer league in the world. (Most other leagues cap membership at 20 and relegate the teams that do the worst to a second division, something that MLS has resisted because it might limit the number of people lining up to sign expansion checks.) And with a list of prospective expansion cities that includes way more than they can possibly fill in this round — Sacramento, Detroit, Cincinnati, San Diego, St. Louis, San Antonio, Charlotte and Oklahoma City are all reportedly on the list — it makes total sense to weed out the winners from the losers by seeing who’ll balk at a higher price tag.

Clearly this isn’t sustainable in the long run, but MLS isn’t thinking about the long run right now, which is its prerogative. If you’re a city thinking about building a stadium for a new MLS franchise, though, you might want to at least keep in the back of your mind that there’s a decent chance the league could, years down the road, eventually contract again — or at least split into upper and lower divisions — and that your shiny new team could end up without a chair when the music stops.