One week after MLS commissioner Don Garber said the Vancouver Whitecaps needed a “better lease” or else it’d be a shame about those paratroopers, the Vancouver city council and team owners have signed a memorandum of understanding to “explore” a new stadium and an entertainment district around it at a recently closed city-owned racetrack. And while there are still a lot of details to resolve — the MOU only establishes an exclusive negotiating period until the end of 2026 — the basic principles seem to have been worked out: The Whitecaps owners will build the stadium and arrange for the surrounding development in exchange for getting discounted access to public land.
Under the terms of the MOU, the Whitecaps would be financially responsible for building the stadium, while receiving the land at a below-market rate on a long-term lease.
However, the real change to the face of Vancouver wouldn’t come from the stadium — but a new “entertainment district” that the Whitecaps would receive continual profits from.
“If you have to build a stadium in Vancouver and it’s only the stadium, then the cost … will not put you in a financially better situation than we are now,” said [Whitecaps CEO Axel] Schuster, who has said a better long-term business model for the Whitecaps outside of B.C. Place was necessary to attract new investors.
“If we want to build a successful future for this club here, we have to get to a better and financial sustainable situation as a club … so we have to develop a whole plan around this.”
The MOU actually says that the project will pay “fair market value rents,” but also that such rents (and any property taxes and/or payments in lieu of them) will be “determined by the Parties as part of the negotiations,” so these are numbers that are going to be haggled over, not calculated by an independent assessor. Which, if the goal is to put the Whitecaps in a “better and financial sustainable situation” (sic), makes sense: You don’t make windfall profits by leasing city land at market rates, you do it by getting a sweetheart deal on the property and then keeping all the revenues for yourself.
The Whitecaps are indeed one of the less profitable teams in MLS, though calculating profit in that league has always been dodgy thanks to its single entity structure and reliance on inflated sale prices relative to actual income. Why the profits of the owners — Greg Kerfoot, Steve Luczo, Jeff Mallett, and (yes that) Steve Nash — should be the city’s problem is another story, and is probably why the owners have leaned heavily on threats that if they don’t get their way on a stadium, they could sell the team to out-of-towners:
“There are interested parties that would like to buy the Whitecaps,” said [Vancouver mayor Ken] Sim. “There are interested parties who want to take the Whitecaps out of the city of Vancouver if we do not create an environment, or if there’s no opportunity to have your own stadium or you have your concessions in the economics around it. There is no viable option for anyone who wants to keep the Whitecaps in the city of Vancouver.
“Let’s just call it what it is, there’s probably absolutely no path for the Vancouver Whitecaps to remain in Vancouver without this MOU.”
What makes all this especially interesting is that soccer is the only North American sport right now that isn’t a monopoly: The USL is moving ahead with forming a top division by 2027 that would compete with MLS as a tier-one league, even adopting promotion and relegation like European leagues use (and U.S. soccer fans are bitterly divided over). This means that even if the Whitecaps were to move, Vancouver could always apply for a USL team — or even a new MLS team, knowing that MLS would have to worry about their rival league staking a claim to Vancouver if MLS abandoned it. (Given the new promotion/relegation structure of the USL, it wouldn’t even have to be a top-tier team, but could be a lower-level team at first that could work its way up to the top by winning its league on the backs of relatively large-market revenues.) This changes the dynamic in a small but significant way, and arguably makes it even more unseemly for Vancouver’s mayor to be levying move threats on the team owners’ behalf rather than trying to cut a hard bargain with them.
In any case, whether this ends up a bad deal for Vancouver taxpayers will depend on the details of what gets hashed out: There’s a big difference between getting a slight discount on city land and getting it virtually for free, and we (and possibly even the city negotiators) don’t know which it will be yet. Vancouver residents, the next year will be important for keeping your elected officials’ feet to the fire, at least in terms of being transparent about what’s being agreed to before it happens — don’t be like your neighbors to the south on this one.
It’s silly to think USL’s proposed D1 league is a true competitive threat when they are proposing eventually paying players $70,000 a year.
The idea makes for good headlines. It’s not realistic.
Most likely what’s going to happen is the whole league collapses due to the D1 gambit. Lots of teams are just going to fold if they get relegated as well as they don’t really have another source of income than ticket sales.
You both make good points. However, it is not all that long ago that the roster filler players at the bottom of the MLS remuneration structure were trying to survive on less than $20k a year.
Similarly, any USL D1 team will not have to float an expansion fee in the hundreds of millions.
It’s true they won’t have much income beyond ticket and concession sales, and venues will be as much of a challenge for them as they were for MLS in the first two decades of it’s existence. It all depends on how well funded the proponents of the expansion are.
If there’s one thing Lamar Hunt taught us (twice), it’s that if you have enough money to keep going for a decade or two, you can build a following for new sports leagues. And many, many other startups (which I would argue a new USL league really isn’t) have proven that if you don’t have enough cash stockpiled to last 5-10 years while you build a following, you are doomed.
If they can find 10-12 fully committed and well funded owners, they have a chance. If they only find 5 or 6, though, will any of them want to be in a partnership with others who may be forced to bail out sooner rather than later? I guess the new league could always insist on first right of refusal on any sale, but owning multiple teams in poorer markets gets expensive.
Both MLS and the USL throwing teams at every conceivable market seems completely unsustainable in the long run, but right now they’re still fighting for dominance, even if it only means who ends up getting to set the terms of surrender during the inevitable merger at the end. (Cf. The last ten years of streaming services.) But in the meantime, throwing big public money at a franchise in either league seems even more short-sighted that doing so for a Big Four franchise where at least you’re buying a seat at the cartel.
Agreed. The only real difference between MLS/USL/other small leagues and the likes of the WHA, USFL (I) and WFL are that the MLS owners appear to have the political connections to tap into massive amounts of public money via stadium (and other) subsidies.
The other leagues never really could (maybe free or reduced stadium rent or something, but no stadium subsidies for a start up team in a start up league like we have with MLS/USL etc).
I suspect that (if the human race survives) volumes of economic or social priority studies will be made on this period a century or two hence.
Either that or techno feudalism will have fully taken over and 98% of the population will be making do without horseless carriages, the internet or shelter from the elements.
The racetrack loses casino money that helped keep purses viable right about the time the soccer team goes looking for a venue.
That is as classic of a rug pull as you’ll ever find. Or an amazing coincidence.
Only (North) America would have a soccer league pyramid so convoluted and dysfunctional that two different entities would claim to be at the very top of it. And even if MLS is clearly the more well-established of the two, many of its member franchises*, if not most of them, are miles behind other local teams in terms of attention and adulation they get locally — “inch wide, mile deep,” if you will.
I just can’t buy into the idea that MLS teams are truly worth fighting for to this extent, regardless of how much a city’s self-worth/perception is tied to its sports teams. Would Vancouver really disappear from the map altogether if the city ultimately doesn’t meet the Whitecaps’ demands and the consequence was that the team would f— off to another town? Smaller markets than Vancouver have lost more prominent teams in more prominent leagues without cratering into the abyss.
* There’s no bigger misnomer in American sports than MLS teams being referred to as “clubs” imo.
Ken Sim never met a deal he didn’t like… but whatever.
Not surprised this happens right after they sign Thomas Muller (and reach the MLS final, where curiously they substituted their most effective player off at the 60′ mark and then went into the tank and lost….).
As a non resident it’s hard to say, but the whole push for the playoffs (something team management hasn’t really showed a desire to reach in the past) seems like a negotiating tactic. Maybe it’s just a coincidence, but it will not surprise me if they decide to go back to a lower payroll the second this deal is signed and stay there.
IF (and it’s a big if) it’s only discounted land in Hastings near the PNE coliseum and if they actually develop it (at no cost to the city, but generating tax revenue for the city) it could be a decent deal.
But as you say, if they are paying all/most of the costs and sharing some of the revenue, it’s hard to see how it is better than cheap rent at BC place (which is not an ideal venue for the team, I will admit).
Still skeptical