Saturday, July 30, 2005

What's really important: Investments & Stadiums

The MLS allstars defeated Fulham today 4-1. That's good, because our best players should beat a lower-level Premiership team. But the real news was Thursday, when DC United was sold by AEG to a group of investors lead by Kevin Payne (officially called Global Sports & Entertainment). This means that now there are 7 owners in the 12 team league, which is just outstanding. Just look at the scenario after contraction in 2002 compared to now:


Anschutz-CHI, COL, DC, LA, MET, SJ


Anchutz-CHI, LA, MET, SJ

In addition, SJ should be sold soon to Club America (so they say) and KC is also up for sale, giving us 9 owners for 12 teams. And with expansion likely in 2007, the investor pool is growing even larger.

Even though the league has yet to be profitable, I'm sure these owners are fully aware of how sports franchises have sky-rocketed in value in the past 30 years. George Steinbrenner famously bought the Yankees for $10 million, and now they're worth 50-100 times that. All NFL teams are worth $500 million or more. The cheapest team in the four major sports is the Edmonton Oilers, and they're worth $86 million (link). DC United went for $26 million, about the same as the LA Galaxy price a few years ago, and a record for MLS. The KC Wizards are going for around $15 million, and that's going to be the expansion fee for new teams (it was $10 million for Chivas and RSL). So there's a ways to go, but the potential is there, and soccer is different from Lacrosse or any other up and coming sport in that there are tons of soccer fans in this country, they just don't follow MLS. Once the league is up there in quality, they'll come around. And of course, millions of kids are playing the game.

Any MLS team needs a stadium to be profitable, and the deals they've got in Frisco, Bridgeview and Commerce City are just brilliant. Not just the stage/concert/multiple-use-venue stuff, but just the whole youth fields and "mixed-use development" ideas. I don't think we really realize how brilliant these ideas are. Because by itself, a soccer stadium is unlikely to get built. The Crew lost two votes for a stadium back before Hunt decided to build it himself. But, by combining it with something else, it becomes possible. For example, in KC they are building a youth soccer complex. Since they're building tons of soccer fields, why not put a major league stadium in the middle of that? In Milwaukee, the proposed stadium would cost $40-60 million, but the whole project is $300-500 million. If you have millions to invest, then you can kill two birds with one stone. And while you wait for MLS to become profitable, you can make money with concerts and the like. It's amazing, because we're doing things backwards: Stadiums first, then profitability and high interest later.

Comments on "What's really important: Investments & Stadiums"


Anonymous Anonymous said ... (9:52 PM, July 30, 2005) : 

Great post. I enjoy reading your comments. Keep up the good work.


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