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Major League Soccer Expansion Analysis - Does SoccerCity San Diego Still Have a Shot?

Major League Soccer Expansion Analysis - Does SoccerCity San Diego Still Have a Shot?

Written by Kyle J. Kepner.

San Diego soccer fans watched with interest last Tuesday as FC Cincinnati of the United Soccer League (USL) was granted an expansion franchise with Major League Soccer (MLS). In a round of growth for the United States’ top-flight pro soccer league that began with 12 formal applications from 12 markets across the country, Cincinnati gobbled up the second of four expansion slots slated to begin play by 2021.

January 31, 2017 was the application deadline on which the cities of San Diego, Sacramento, Phoenix, San Antonio, St. Louis, Detroit, Nashville, Indianapolis, Cincinnati, Tampa/St. Petersburg, Charlotte, and Raleigh were identified as the candidates. MLS vowed to award two franchises by the end of 2017, and two more by the end of 2018.

It hasn’t worked quite that way.

By the end of 2017 (December 20, in fact), only Nashville, formerly a dark horse candidate at best, had emerged and been formally announced by MLS. Indianapolis and St. Louis saw their chances evaporate early on, in very different but very discouraging local votes. Raleigh and Charlotte had their own difficulties landing stadium deals.

Tampa/St. Petersburg saw an overwhelming vote in favor of its stadium improvement plan, but the bid remains outside the favorites. Phoenix, similarly, appeared to have the financing in place for a private stadium and land deal, but was ultimately not considered a 2017 finalist because at the time, the ownership group lacked a lead investor to match the wealth of the frontrunners.

Sacramento’s bid, the success of which was once regarded as not “a matter of if, but when,” by MLS Commissioner Don Garber and others, stumbled out of the gates, when it was revealed that the investors in the MLS bid were not entirely unified with the existing USL club’s leadership. That situation appears to have been rectified, but the bid is still in search of a lead investor to shoulder the multiplying costs of entry to MLS.

After the event in Cincinnati on Tuesday, Garber was asked about future expansion and quickly threw cold water on the expectation that two more such announcements are forthcoming in 2018.

 MLS Commissioner Don Garber (credit Major League Soccer).

MLS Commissioner Don Garber (credit Major League Soccer).

Indeed, it seems as though the list of contenders and the timeline for choosing from among them are suddenly nebulous, unimportant subjects for MLS.

Garber said, "No specific details on the teams or even the timing of the next round. What I will say is we started with 12 and now we’re down to a handful of markets where we still have ongoing discussions. Very productive discussions with Sacramento, as well as in Detroit where we’re working with that ownership group on possible modifications of Ford Field that could, perhaps, make that city more MLS ready than it is today.

"There’s a lot of engagement going on in San Diego. Recent news out of Las Vegas, who has a thriving USL team and their mayor reached out to us very recently. San Antonio remains on our list and we have great respect for what the NBA ownership team has done there. So there remains a lot of interest in MLS and we’ll continue to get back to work and figure out what the next steps are."

There’s plenty to unpack in the Commissioner’s statements, but perhaps most interesting is the inclusion of Las Vegas, a city that was dismissed by the league just three years ago, and thus did not submit an application with the current round’s crop of 12. “Unfortunately,” said a 2015 letter from Commissioner Garber to Las Vegas Mayor Carolyn Goodman, “given the timing of your expansion rollout and the uncertainty as to when we might be able to move forward in Las Vegas, we are no longer considering Las Vegas as an expansion market until after 2018.”

The success of Brett Lashbrook’s Las Vegas Lights FC USL franchise, whether because of or in spite of its bizarre marketing, has clearly attracted the attention of Garber and the MLS board of governors. Certainly the way in which Las Vegas has embraced the Golden Knights NHL team cannot be understated, and suddenly Sin City, with its sun-drenched weather and ever-expanding revenue base, is a sexy possibility once again.

 Las Vegas Light jersey.... unveil... (credit LV Lights).

Las Vegas Light jersey.... unveil... (credit LV Lights).

Adding intrigue to the Cincinnati decision is the ongoing struggle between the City of Columbus, Ohio, MLS, and the owner of charter MLS member Columbus Crew SC. Just 110 miles from FC Cincinnati’s home field at Nippert Stadium sits MAPFRE Stadium, home to Crew SC since 1999, and perhaps not much longer.

Precourt Sports Ventures, owners of the stadium and the franchise since 2013, have been in a years-long effort to obtain a publicly-financed downtown stadium for the team, escalating to an acrimonious public shouting match with the City, and the unplanned revelation that PSV’s preference seems to be a relocation to Austin, Texas. Fans in Columbus and beyond were incensed at the proceedings and the apparent support of MLS. All of this adds up to a growing sense that MLS would not be interested in Cincinnati unless the Crew SC move to Austin was assured. This, in turn, nearly guarantees the exit of San Antonio from contention.

Why, then, did Garber mention San Antonio in his comments last week? USL’s San Antonio FC, a part of Spurs Sports and Entertainment (SS&E) of National Basketball Association fame, has an interesting bid of its own. The team plays in the gorgeous 8,300-seat Toyota Field, a soccer-specific stadium that opened in 2013 and was designed with an eye toward expansion to an MLS-appropriate capacity of 18,000.

The stadium was acquired in 2015 from its builder, the philanthropist Gordon Hartman, by the City of San Antonio and Bexar County, with a lease issued to SS&E for 20 years. SS&E will incur a penalty of $5 million if they do not deliver MLS within the first six years. Just over three remain.

With a stadium in place, a committed, deep-pocketed ownership group, and excellent attendance to its USL matches, the hold-up for San Antonio FC’s bid seems to be less about its viability and more about the bids that appear stronger to MLS and its stakeholders.

What makes a strong bid?

Beyond the existence of a fan base (or the perceived potential for one), sufficient money and community buy-in, the whole thing is a little murky these days. Garber’s most recent statements suggest that geography will be more important going forward, which could mean anything, but likely hints at a movement toward untapped pockets of the country.

MLS is very interested in the Midwest. Indeed, the league hosted a very public bidding war between the NASL’s Minnesota United FC and the Wilf family of the Minnesota Vikings, which was eventually won by United. The Wilfs invested instead in the successful Nashville bid. Moreover, the historic soccer city of St. Louis was virtually guaranteed a franchise if the stadium project there had passed a very challenging ballot initiative.

Detroit’s position on the map, halfway between MLS cities Chicago and Toronto, in addition to the financial might of the bid group led by Tom Gores and Dan Gilbert, make it one perfect stadium away from claiming entry to MLS. However, its first-choice stadium site at an unfinished jail project stalled, giving way to the addition of the Ford family and its cavernous downtown football stadium. While that’s supposedly not an ideal situation, MLS has shared stadium situations still in its membership, notably in Atlanta and Seattle, which happen to lead the league in attendance. Garber’s latest statements make clear that Ford Field is still a possibility.

Despite the obvious attention given to the Midwest, there’s little evidence beyond persistent internet cynicism to suggest that MLS is finished in California. Indeed, expansion Los Angeles FC, which kicked off earlier this year, was already in motion during the greatest spell of optimism around Sacramento. The unified Sacramento Republic FC bid remains its own greatest cheerleader, however, and the Cincinnati announcement casts reasonable doubt on the MLS board’s desire to wait for more money to arrive in California’s capital.

 LAFC's home opener vs Seattle Sounders

LAFC's home opener vs Seattle Sounders

All of this could open the door to San Diego, whose bid was dealt a discouraging blow last June when the city council voted not to stage a special referendum on the stadium deal until 2018. Locally based FS Investors, strengthened on the campaign trail by minority bid partners and former U.S. Soccer greats Shannon Mac Millan and Landon Donovan, collected more than enough signatures to allow the city to vote on allowing FS to purchase the Qualcomm site in Mission Valley from the city.

The expansion project in San Diego included a unique value proposition that enabled the MLS investors to share the site with San Diego State University, splitting the cost of constructing a new stadium to house the MLS team and SDSU Football, and then gifting its half of the ownership back to SDSU.

The Aztecs appear uninterested in sharing however, and with the vote put off until November of 2018, it was unclear whether MLS would wait or look elsewhere. Halfway through 2018 and halfway through the expansion process, it looks as though America's Finest City is in with a strong shout to secure a slot in MLS once they win the right to buy the land where they would build their home.

Major League Soccer currently stands at 23 teams, with Cincinnati set to begin play in 2019, Nashville in 2019 or 2020, and Miami undetermined.  

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