Wednesday, March 4, 2009

Crisis management

Now that Barcelona/Miami is out of the running for an MLS expansion team, we are left with more than just four bids seeking two spots available for expansion.

We are left with questions regarding expansion in general and whether the economic crisis will knock other potential investors out of action.

Barcelona officials pointed to the United States' sagging economy as a major reason why they decided to pull out.

According to this story, Bolivian investor Marcelo Claure, the point man for the Miami bid, the league is asking for $40 million to join, and getting the actual club up and running would cost an additional $60 million.

Are there those sorts of funds out there right now in the United States for professional soccer? It seems difficult to imagine that now, when employers lay off workers by the hundreds on a seemingly weekly basis, when school districts across the country are struggling, when some state governments are scrambling to pass a budget and raising taxes, that there would be $60 million available for soccer.

Stadiums are a must for new teams, and what city would be willing to invest the types of monies necessary for constructing a new stadium for an MLS team?

The expansion bids originally went out to seven teams but three have dropped out. Two of the remaining bids are Canadian, whose economy is not in the dire straits the American economy is. However, the crisis is not limited to the U.S.

Still, season ticket sales are strong in Seattle and the club is anxiously awaiting the start of their own franchise. And the existing teams are seemingly operating as per usual, in the red, trying to increase their own season-ticket base.

Maybe I'm being too pessimistic in thinking that the crisis will expand over to MLS and the expansion teams, but this failed Miami bid has me scratching my head and wondering just that.


Anonymous said...

MLS is asking for too much money. The league expansion fee jumped $30 million in just two years, and that's mostly because the league felt justified to do so because of Beckham. Now there's no Beckham, and on top of that a horrible economy. The league needs to lower the expansion fee, or keep the expansion fee as is and renegotiate it.

Evan said...

Good post Luis; I don't think there are any comforting answers to those questions.

I thought that MLS was pushing forward with expansion too quickly. While I'd really love to see teams in St. Louis (it needs to happen) and Portland (for a northwest derby, and in terms of the calendar, there's no competing major league team playing in the summer in Portland), I think that now is simply not the time.

soy said...

why does canada always have to be included in US sports? we're pretty much the only league that does that.

no offense to canadians, but itd be so much better if yall developed your own league.

Anonymous said...

MLS looks ridiculous as it is. They sold their soul to Beckhame only to get kicked to the curb.
Now they are over charging for a product that is still in the toddler stage.

Steven Cohen is a messiah. His opinions about this league cannot ring truer.

Evan said...

"why does canada always have to be included in US sports? we're pretty much the only league that does that."

Cardiff and Swansea play in English league football, not in a Welsh league.

Gregg said...

I just want to point out that there were questions raised about this bid from the beginning. 1. there wasn't a SSS plan in place and there wasn't going to be one. 2. Trying another team in Florida when one had failed previously not all that long ago. 3. Would Barcelona be actively involved in the building of the team or was this just a way to put their brand name in N. America?

Frankly I'm happy to see this bid fall to the wayside.

The Expansion fee is to large by about $10 Million. St. Louis, Vancouver, Montreal, and Portland were all better bids right off the bat than the Barcelona bid. To bad that Montreal withdrew due to trying to renegotiate the entry fee.

I do find it hard to believe that the expansion fee was raised due to one player. The fee was raised due to current ownership's own greed nothing more nothing less.

RHYbread said...

I think the value of an MLS franchise is not in the next three years, which is about how long it's really going to take for the recession to end and the recovery period to start, but 10 or 15 years in the future. I think something no one is considering is the exact value of the stake each owner gets in SUM either, especially as Mexican teams play more and more games in the US, or as Interliga and Superliga become more mature tournaments.

Anonymous said...

Vancouver and Portland will both cough up the money no problem. There is no issue.