The battle of 12 cities for a MLS expansion team will reach a close in December when two contending cities will be selected.
In December 2016, Major League Soccer Commissioner Don Garber announced the expansion of Teams 25 and 26 to be introduced in 2017 — at an expansion fee of $150 million per team — and will begin playing by 2020. After the MLS announced its ultimate intention to expand to 28 clubs, many ownership groups and public officials have contacted them with the intention of bringing teams to their cities. Cities interested in expansion for teams 25 and 26 were to submit applications by January 31, 2017 and had to submit accompanying documentation to qualify.
The expansion of new teams means a possible expansion draft which would have an impact on current MLS teams. MLS holds a draft for expansion teams in which the expansion teams select players from existing teams to build out their roster. In 2016, MLS held an expansion draft for Minnesota United FC and Atlanta United FC. The current MLS teams were allowed to protect 11 players they definitively wanted to keep on their team to prevent them from being selected by the expansion teams. Homegrown players (those signed locally from their own development academies) and Generation Adidas players (signed collegiate underclassmen and youth national team through joint program with Adidas) are also exempt from the draft.
The expansion teams go back and forth selecting players, with the first pick chosen by the team who wins the coin flip. Only a single player can be drafted from a club. So, once a player is selected from one team, the remaining players are exempt. This is different from 2014, where Orlando City and New York City FC each drafted 10 players with some existing MLS teams losing two players on their roster.
The draft will continue in 2017 with LAFC in the same format as 2016. The 2017 MLS Expansion Draft will occur on December 12 where LAFC may select five non-exempt players from existing teams with the limitation of one player per team being selected. With the upcoming announcement of two more expansion cities, another expansion draft is anticipated, which will likely maintain the same format as 2016 and 2017.
The MLS Board of Governors are set to meet December 14 with the decision of the two cities chosen to be announced between December 18-20. The MLS have yet to announce when the 27th and 28th expansion cities will be announced.
The qualification documentation each team submitted focused on (1) ownership, (2) stadium, and (3) financial projections, corporate support and soccer support. Most importantly, the MLS is looking for:
- A committed ownership group with a passion and deep belief in Major League Soccer and the resources to build the sport in the respective local market.
- A market with a history of strong fan support for soccer and other sporting events, a desirable geographic location, and attractiveness to television partners and corporate sponsors.
- A detailed stadium plan for fans and players, while also serving as a destination for soccer within the community.
The Twelve Expansion Bids
New owners of the twelve expansion teams aren’t buying franchises, as MLS is a single-entity business. All teams are owned by the league and the players are its employees, rather than being employed by their club. Owners of the expansion teams pay an investment fee to MLS for the ability to operate a team in that specific city. Those owners become league shareholders, not franchise owners.
Twelve ownership groups in twelve different cities submitted applications for an expansion bid. Those cities include Charlotte, Nashville, Indianapolis, Detroit, Phoenix, St. Louis, Raleigh/Durham, San Antonio, Sacramento, Cincinnati, Tampa Bay/St. Petersburg, and San Diego.
Kevin Nagle, CEO and chairman of Sac Soccer & Entertainment holdings, submitted the bid with the addition of Meg Whitman (CEO, Hewlett Packard Enterprises) and Dr. Griff Haersh (professor of Neurosurgery and otolaryngology, Stanford University Medical Center). Also a part of the ownership group are local investors in the Sacramento Kings and Jed York of the San Francisco 49ers. The ownership club submitted a plan for a 20,000 seat stadium that has already cleared regulatory approvals.
By September 2017, the group behind the bid started pre-construction at the site of the potential 19,621 seat stadium. By starting early, this would allow the stadium to be finished by 2020, the target date for the MLS team to start playing. The Mayor of Sacramento, Darrell Steinberg, stated “I hope this serves as a statement of high confidence of where we stand with Major League Soccer.”
Sacramento has long been seen as a front runner to be chosen for expansion due to the Sacramento Republic having the second highest attendance in the USL. In addition, Sacramento has already secured deposits for more than 10,000 season tickets and has secured a jersey sponsor.
Nashville Mayor Megan Barry and members of the Nashville MLS Organizing Committee, John Ingram (chairman, Ingram Industries), Bill Hagerty (ex-commissioner, Economic Development for Tennessee), and Will Alexander, submitted the bid. In addition, the ownership group has added the Wilf family (owners of the Minnesota Vikings) to their bid.
In October 2017, Megan Barry joined John Ingram to announce a $250 million, 27,500 seat stadium on the Nashville Fairgrounds, contingent on authorization from Metro Council and the city’s MLS expansion bid. Stadium funding would come from multiple sources, with private funds and revenues generated equating to 90 percent of the outlay. The proposed timeline states a stadium opening in 2021.
When Nashville first submitted its bid, it was thought to be a long shot to receive an expansion team. Nashville has made progress with necessary documentation and local support and now has the addition of the Wilf family’s professional sports experience.
As of this month, Nashville is now seen as a top contender after the Nashville Metro Council voted 31 to 6 to approve a $275 million plan for the potential stadium. Of that, $225 million will come from revenue bonds and it’s been reported that a hotel, restaurants and shops could be built on the site next to the MLS stadium.
FC Cincinnati Owner, CEO and chairman Carl H. Lindner III delivered the expansion bid. In June 2017, FC Cincinnati released stadium renderings for a stadium to cost around $200 million and could begin construction in 2018, if chosen as one of the two clubs for expansion. However, the ownership group is only willing to invest $250 million, which covers the $150 million expansion fee and $100 million for the stadium, leaving taxpayers to cover the rest. Then in November 2017, FC Cincinnati president Jeff Berding stated that a stadium plan should be finished shortly and wouldn’t include new taxes on local residents.
FC Cincinnati currently plays on the campus of the University of Cincinnati and has sold 10,000 season tickets for the 2018 season. The team continues to draw large crowds, leading the USL in attendance, which is an advantage for Cincinnati when it comes to the expansion selection.
Three potential sites for a $250 million, 25,000 seat stadium have been assessed and are engaged in financing. Berding is confident that there will be progress on this front by the end of November. As of Tuesday, Berding announced that FC Cincinnati would no longer ask for $100 million in public funding and will now drop the stadium size from 25,000 to 21,000. This also leaves out $75 million that was wanted for infrastructure such as parking and roads.
Maybe Teams 27 and 28
United Soccer League club Phoenix Rising FC submitted its expansion bid featuring letters of support from more than 45 political and business leaders in the area and a plan to privately fund the construction of a soccer stadium. The ownership team is headed by the club’s governor, Berke Bakay, and includes a group of investors who purchased Arizona United Soccer Club.
Phoenix has done its part in selecting a stadium site with its USL team already playing in a temporary venue. Bakay has organized a deal to privately finance and build a stadium and complex on 45 acres with the Salt River Pima-Maricopa Indian Community on tribal land. Goldman Sachs has already been hired to structure the stadium financing for the 23,000 seat climate-controlled venue.
Tom Gores (owner, Detroit Pistons) and Dan Gilbert (owner, Cleveland Cavaliers) submitted the expansion application with a stadium plan for a 23,000 seat stadium in the center of Detroit’s sports and entertainment district.
In November 2017, it was announced that the Ford family, which runs the NFL’s Detroit Lions and their multi-use stadium Ford Field, joined the ownership group in support of the MLS Detroit expansion. The amended application includes that Ford Field is the preferred site for the soccer team.
MLS has pushed back and insists that expansion teams have plans to play in their own stadium with smaller seating venues than Ford Field. While the ownership group feels that playing in Ford Field allows them flexibility for seating and fan interest, MLS seems to find the lack of a separate stadium a compelling interest for a decision come December.
San Diego, CA
San Diego’s ownership group includes Steve Altman (former Qualcomm president), Massih and Masood Tayeb (co-founders of Bridgewest Group, Peter Seidler (managing partner, San Deigo Padres) and sports media executive Juan Carlos Rodriguez. San Diego’s bid included a stadium plan for a privately financed 30,000 seat facility on the Mission Valley site where Qualcomm Stadium is located.
In May, the ownership group submitted more than 100,000 signatures to put the privately financed proposal in front of the city council to go up for vote in November. The San Diego City Council then voted 8-1 against doing a special election in November. This would mean that San Diego would likely not be able to secure the site of Qualcomm Stadium until the general election in November 2018.
Following a request from San Diego to postpone the vote, MLS released a statement reaffirming their plan to announce the expansion teams in December 2017. With the MLS set to pick the two teams by December 2017, this likely pushes San Diego out of contention for this round of expansion.
Tampa Bay/St. Petersburg, FL
The Tampa Bay Rowdies delivered their bid, which included more than 200 letters of support from politicians and local celebrities. The Rowdies also included renderings of a privately funded renovation and expansion plan for Al Lang Stadium.
In March, The St. Petersburg City Council approved ordinance language to upgrade Al Lang Stadium, which led to a May referendum to give residents a chance to vote on the use of the stadium. If approved and Tampa is awarded a MLS club, they would then begin working on the change of the stadium.
The city of St. Petersburg voted to allow the expansion of the stadium to 18,000 seats. No public money was needed and it passed by 87 percent of the vote. While the expansion is a large step for expansion consideration, other stadiums are looking at seating upwards of 20,000. A potential roadblock for the Rowdies occurred when it was indicated that the lease wouldn’t be negotiated until political leaders had assurances that Tampa would get a MLS team, while the MLS wants the stadium situation completed before awarding a team to them.
San Antonio, TX
Spurs Sports & Entertainment, owners of the San Antonio FC, submitted San Antonio’s application. San Antonio’s bid then took a large hit when Columbus Crew SC owner announced that it was looking to move the team to Austin, Texas, just 70 miles away from the home of San Antonio FC.
After purchasing Toyota Field for $18 million, the city was figuring out a way to pitch a $100 million stadium expansion to voters. A roadblock has occurred in the bid where the County Judge has instructed the district attorney to investigate whether MLS violated any criminal laws when it encouraged the city of San Antonio to purchase Toyota field.
Better Luck Next Time
St. Louis, MO
Led by Paul Edgerley (part owner, Boston Celtics), St. Louis filed its expansion bid and documents with a proposed 20,000 seat downtown stadium adjacent to St. Louis Union Station.
In February, two measures were passed by the city to finance the stadium and another for a half-cent sales tax to fund an expansion of the public transit system to get people to the stadium. The measures were then sent to a Circuit Court judge to decide if they end up on the ballot for a vote in April. In April 2017, St. Louis voters rejected a stadium financing plan, but the bid for MLS expansion is still active.
Marcus Smith, President and CEO of Speedway Motorsports, submitted the bid for Charlotte to be considered for a MLS expansion team.
By June 2017, North Carolina FC had not submitted a stadium plan and did not want to rush into choosing a location without support. Also, County Commissioners halted a decision on spending $120 million on a new soccer stadium until August, stating that some members do not want to contribute unless the city does. Contribution from the city seems unlikely since the city has already previously voted against doing so in January.
The original plan was for the city to provide $175 million in public funds for a venue at Memorial Stadium, which instead turned into the city providing the ownership group the land but none of the money. The city then reduced its contribution to $30 million, which does not provide for the funding needed. Afterward, developers have expressed interest, but those scenarios result in increased costs and the Mike Burch, chief strategy officer for MLS4CLT, is unoptimistic that much will change.
Ersal Ozdemir, Indy Eleven founder and owner, delivered the application to Major League Soccer with commitments from owners in Indiana including Mickey Maurer (chairman, National Bank of Indianapolis and IBJ Corp.), Jeff Laborksy (president and CEO of Heritage, Mark Elwood (CEO, Elwood Staffing), and Andy Mohr (founder and owner, Mohr Auto Group. The Indianapolis bid featured a proposal for a 20,000 seat downtown stadium within walking distance of shopping, dining and entertainment in downtown Indianapolis.
Indianapolis’ expansion possibility is hurt by Indy Eleven’s unwillingness to fund their stadium, reportedly only willing to chip in $10 million of the $110 million cost. The expansion bid in Indianapolis has seen a stand still since the Indiana General Assembly ended its session in April without passing a measure to fund a 20,000 seat stadium.
North Carolina FC owner, Steve Malik, confirmed an expansion bid was submitted for the Raleigh/Durham area. Raleigh/Durham had a hard time making progress but is still pursuing its preferred stadium site. They are still actively seeking support, addressing concerns and putting together a final package. There are talks to secure the land before becoming super engaged in the expansion process and they are still looking for additional investors.
Garber and his expansion committee have been traveling and viewing the cities up close to narrow down the expansion selection. At the MLS All-Star Game in August, Garber named four cities that were “energized during the expansion process.” With some cities falling out of the running and some encountering difficulties, the 12 were narrowed down to the four cities of Sacramento, Nashville, Cincinnati, and Detroit. As of November 14, 2017, Grant Wahl of Sports Illustrated has reported that when the MLS meeting takes place, it’ll be between Sacramento, Nashville and Cincinnati.
Sacramento has a stadium deal in place, their USL team has had success with attendance, they have secured a jersey sponsor and have 10,000 season ticket deposits. Sacramento seems to be the most MLS ready city in contention.
Nashville is a growing sports market with a $275 million stadium deal in place close to downtown. With stadium plans including nearby hotels, restaurants and shops, Nashville is a top contender.
Cincinnati has a USL team with average attendance exceeding the league, a plan to privately finance their stadium, and a jersey sponsor. Cincinnati is reaching to climb back into the top two slots where Sacramento and Nashville sit.
In a few weeks, the popularity of soccer and the growth of MLS will increase when the two cities are awarded teams.