Director of Sacremento Sports Commission: “[MLS] is very interested in Sacramento.”

San Jose and Sac essentially bookend a "megaregion" of 14 million people. The bulk of those live in the 120 miles (shorter as the crow flies) between the cities. It's not a small market, just a fragmented one which acts small several times.

 

Do they also have a tendency to masturbate to photos of Ayn Rand?

 

Apparently they're down to negotiating the different amount of Beer Brands they can sell at the snack bar.

 

You talking about me.....Tampa is not my city, I never lived there but used to support the Mutiny and when I lived in Miami I went to Fusion games. And by the way my City, Orlando, will have an MLS team. So take your quote back Buddyboy. I call myself Mutinyfan because i been on these boards since the late 90s.

 

I live in the East Bay. If there's multiple team's for one pro sport there's a division, whether 49ers vs Raiders or A's vs Giants. Then you Alameda/Contra Costa County supporting the Raiders/A's for the most part and those on the peninsula supporting the 49ers/Giants. But when there's one team for a sport, like the SJ Sharks, the whole area supports the team if they're a fan of the sport and still consider it a Bay Area team.

Much like Mets/Yankees in NY. There's a split between those on Long Island and those in the city, yet if you took one of those teams away and only had one MLB team for the NY area, most would support that team as there's one option and one team representing the area.

In the East Bay many consider the Sharks our NHL team, whether or not it's technically in another metropolitan area. It's the only option. Likewise, SJ operates in the East Bay as well as down in Santa Clara. Youth affiliates are up here in the East Bay in Danville. When living here there's not the division others might think there is.

BTW, we see this with Sacramento fans as well who don't have an NFL or MLB team up there. They travel the 90 mins down I-80 to go to games. Same with fans in Marin/Santa Rosa. They're still considered teams which represent NorCal even if in different metropolitan areas.

 

2015. When Orlando joins MLS, the only American-based owner of the current Orlando City team has expressed a desire to bring the club to Louisville. Would love to catch some games...it'll be interesting to see if they could play at Lynn stadium, which is currently being built (5,300+ capacity) for the University of Louisville.

Edit:
http://www.courier-journal.com/article/20140107/SPORTS/301070100/Louisville-could-land-Orlando-s-USL-Pro-soccer-club?odyssey=tab|mostpopular|text|SPORTS&nclick_check=1

 

Per the Ives article:
“I’m sure there are other cities that would love to get the franchise, but I will say I’m the only other owner of the team — of Orlando City — that lives outside the Orlando area but in the U.S.,” Estopinal told the C-J. “If you’re going to relocate the franchise, the fact that I’m here … provides some comfort.”

Guess I initially took that to mean the only one to live not only outside of Orlando, but the whole U.S.

 

I personally set the bar a bit higher than that. I'd consider everything less than about 2.5 million to be a 'small market', Orlando and Sacramento included.

Now, by that standard, if the league wants a typical-US-sized roster of teams, it's going to have some teams in small markets (either that or it would have to have more teams in the big markets than is customary). But for whatever it's worth there are markets that are twice that size or that are growing a lot faster that are currently unserved.

I think it's worth asking what kind of ceiling a market like Orlando or Sacramento has for the league. I think Orlando is coming in partially because of the high 'floor' it comes in on, in terms of starting out with a pre-existing fan base. MLS hasn't added a franchise without a pre-existing fanbase in a long time, probably since Real Salt Lake. NYCFC won't have one, but then again that market is gi-normous. Miami won't have one, but that market is pretty big, and a major hub for Latin American business to include Spanish language TV networks, and a desirable place for name players to play.

That's a weird sort of 'agreement,' as he's painting a portrait of contraction as a result of failure, and you're painting one more likely of relocation based upon success.

The league was in a vastly different position in 2004, though. I very much doubt they'd accept the same bid today--which is not to say they'd reject SLC, but I feel pretty confident they'd want an owner with a whole lot more cash, a stadium deal already signed, sealed and delivered, and quite possibly more proof of demand in the area.

I've offered the theory before that (although it is perfectly wise not to take any statement from Garber about a pause at face value, because it's likely being made in order to stimulate a perception of scarcity) MLS expansion could nonetheless, at some point, more-or-less 'peter out.'

We're at the point where a $70 million dollar expansion fee is not 'profitable' for the league--it does not cover the cost to owners collectively of giving over a share in the National TV contracts. At a value of let's say $100 million (between US English deals, the Canadian deals, and Spanish rights), a 25th team takes an income stream of $4 million from the rest of the league. The present value of an annual income stream of $4 million in perpetuity is roughly $84 million. That's assuming you don't think TV payments will go up over time, an ahistorical view as we look back at what the league has done so far. If you assume that TV contracts will go up by just a couple of percentage points per year in value, they become worth more than twice the current $70 million fee in short order.

What I'm saying is that the idea that MLS should or does expand principally in order to capture fees is wrong (or it's correct as an assessment of their motivation but a stupid motivation, and I don't think these guys are stupid). MLS has to be looking at what each new team will bring to the league to make it stronger--to improve its national TV standing, or sponsorship, or one that brings in enough attendance revenue to tilt the shared pool in a favorable direction, stuff like that (meaning it would have to be a notch or two above the median for the near to medium term).

A relatively small market can deliver these things--Portland, for instance, does. Orlando could, and the short run downside seems to be low enough that the chance at capturing the upside is more worth it. Orlando is like drafting a player who has a long-shot chance of making the leap to the next level and getting MVP-type performance or a major transfer, maybe not the very best but also not negligible, but who is also ready to give you 2000 pretty solid minutes right now. Naturally, such a player would have a pretty high draft status. (As a matter of fact I think that loosely describes Steve Birnbaum, who went to DC at #2.) The question you have is whether you want to take a small market (ie less upside, other things being equal) if it is also one that doesn't have the fanbase built in yet (isn't as ready). I personally think you don't.

MLS, it seems to me, has been, since 2007 at least, expanding based on franchises that will give the league these things (and IMO has a fantastic record with it). It is possible that the list of teams that can do that will dwindle. In a way I kind of hope that it does, because the league is at something of an inflection point in terms of size, where adding many more causes more teams to have to expect long periods of mediocrity just by the nature of the bell curve. I put some numbers on this in another thread that I will have to try to find a link for to show what I mean.

EDIT: here's the link:
https://www.bigsoccer.com/community/...t-winter-classic.1998721/page-2#post-29314531

Wherein I go over some of the odds of teams staying relatively mediocre for long periods of time as the league grows.

 

2.5 million, eh? Well, the Sacramento metropolitan area has 2.4 million. That figure does not include the adjacent Stockton metropolitan area, which contributes another 700,000. Together that's well over 3 million. Is that big enough for you?

This is an important point. And it's also an obvious point that too many people routinely overlook. You can't have 24 (or 30!) teams without going to smaller markets. Of course, there will never be any "Green Bays" in MLS. There will, however, be plenty of Kansas Cities and Columbuses.

This is the second of two key questions you need to ask in evaluating the Sacramento MLS bid. Neither question can be answered yet. The first concerns the prospects for a downtown stadium. (I think they're relatively good, but it's too early to say for certain.) The second concerns the creation of a pre-existing fan base. That is, I think, part of the reason they're establishing this USL Pro team. They see Orlando as the model. Play in the USL Pro, build up a fan base, jump to MLS when the stadium prospects come online. For now you can only look at season ticket sales, and there the team says they are on track to meet their goal of 5500 by April. (Which I find extra-impressive because I think those season ticket packages are overpriced.)

 

That's another long post buried in a long post already, so I'll cut to the money-stat. In a league with randomized results from one year to the next, here are the odds that every team in that league will finish in the top quartile of the standings at least once within a decade, by league size:

Teams % chance
12 50%
24 25%
32 15%

This means there's a strong likelihood that teams will be spending a decade or more out of contention (and a note from the full post is that the assumption that a league is perfectly random from one season to the next understates the case) as we get to a larger league, and they'll need more and more to be able to sell tickets for teams that are only so-so.

I bring this up to emphasize that other things don't stay equal as you grow, there are certain costs associated with growing the number of teams

 

Stan, how do you propose to obtain a "typical-US-sized roster of teams", which I define as 28-32 teams, without including Sacramento? Its a top 20 media market (please see my above post regarding the difference/inaccuracy of using the CSA/MSA for market size). The larger cities (Nielsen ranking) are Atlanta, Detroit, Phoenix, Tampa, Minny, Miami, and Cleveland. Cleveland is roughly the same size as Sacto, and there is not a big enough difference for the other six on the list to discount the effect of market saturation/competition from other pro sports teams. I AM NOT saying other sports teams in a market are a deal breaker by any means, but it should be considered- and I am sure it is, by people smarter than us.

To contradict your point, there is NO market twice the size as Sac that is underserved by any stretch of the imagination. Sacramento is THE largest underserved sports market in the US. this was discussed over and over during the Kings debacle. Based on the Nielsen numbers, I describe Sacramento as the smallest Midmarket, or the largest Small market, FWIW.

I see your point about the TV contract. IMO, it is one of the reasons Seattle has not obtained an NBA franchise. It would cut into a pretty much maxed out TV contract. Adding Seattle does not change the national NBA footprint much. I don't see the MLS close to the market coverage as the other leagues, and absolutely don't see their media package ($70 million) as even close to maxed out.

Hey Stan,
Check out the fan support for the Sacramento Kings over the past 30 years. The Kings haven't been very good for most of their life in Sacramento, but have the some of the best attendance records in the NBA.

 

You used a very low discount factor (current AAA?) in your PV analysis. Using a more appropriate number, like say the historical BAA rate (average of 7% the past twenty years), this comes out ahead, though your point about future growth is well taken. A little under 1.5% annual growth becomes the break-even rate.

I'm nitpicking above because it swings the analysis in favor of continued expansion when you think about how Sacramento doesn't just add a mouth to feed. It sells a product, partly on behalf of the league, and I don't see the value of that contribution here though you mention it as a consideration. In fact, considering that most of the owners are relatively flush with cash and presumably don't need the working capital to stay in business, I would imagine the cash is something close to a splitting of the surplus between existing and prospective owners.

Whether Sacramento fits into the plan for full (population weighted) geographic coverage of the US, which we all have to assume is the end goal for an ambitious league, is debatable. But I don't see the size of the payment as an indication that expansion will collapse under its own weight, or even just "peter out" unless the strategic goal has been met. My guess is closer to 30 than 24.

So I guess that means we agree on most but not all parts of your comment. Hah.

 

Fair enough. I think it suffices to say that the expansion fee isn't the slam dunk that a lot of people would take it to be. If you've got a team that, 8 or 10 years down the road, is a below-median pull, it probably won't have been worth it.

So it comes back to looking at the market and what it has to offer to the league, in terms of market size, competition, ownership, venue, demand for soccer, and those kinds of considerations. I'm not trying to say that Sacramento fails, just that it's understandable to ask the questions. And it isn't necessarily a matter of pitting it against other cities, because if MLS finds that nobody brings a strong package, they don't benefit by expanding just to expand.

 

iirc he uses a 'risk-free' rate. i don't think any i/o would use such a number, as they view their opportunity cost in much different terms. and that's assuming the i/o relies on that sort of mathematical approach at all.
so in the end the expansion fees pbl are more appetizing than he makes them out, both analytically and at gut level.

of course a key reason for expansion is also the positive effect on the whole league. and yes, the question then comes down to 'what will sacramento do for us?' this is debatable on either side, but it's pbl not unreasonable to state some bullish case. after all, a successful franchise is a successful franchise, and the proponents for sacramento in mls aren't disqualified on account of city size. the city, fwiw, already has a major league 'seal.'

then there's 'are there inherent drawbacks to a large league?' but this doesn't apply to sacramento any more than to anybody else, so it takes the debate in a somewhat different direction.

 

Here's a issue as to why i don't see sacramento getting a MLS team. When MLS hits 24 teams alignment most likely could be changed to balance out the schedule and no matter how they split it with being 3 8 team conferences or 4 6 team conferences would not work out with 7 teams on the western coast and it would be not a wise choice to split up the colorado RSL rivalry.

 

Ewww.

MLS does not need more Western teams

 

A genuinely curious statement, this. The conferences are already unbalanced and the league will be adding two more East Coast teams next season. This means that in 2015, 9 teams out of 21 will play in EST with 4 more playing in CST. That means that a grand total of 13 out of the 21 teams will play in either a Central or Eastern time zone. That leaves only 8 "true" Western teams.

 

The league would never reject an expansion bid for this reason. It can come up with a conference alignment for any number of teams, which will be temporary until the next change in the league.

 

I think this is yet another important and frequently overlooked issue.

Yes, I believe the Sacramento MLS bid has a lot going for it just in itself. But I also think it would benefit the overall competition of the league. You can't keep adding East Coast teams. You've gotta put more Western Teams somewhere. I can name a few candidate cities in the Pacific and Mountain timezones, but there really aren't many. And of them all, Sacramento is probably the best candidate at the moment.

This is also one reason why the oft-floated move Chivas USA to Sacramento idea doesn't really work. Do that and you still have a very unbalanced geographic alignment. Sooner than later, MLS will need more West Coast and Mountain time zone teams.

 

9 west coast teams to where you have to split up the rivalry between RSL and Colorado just to get it 8/8/8/ or have to play one of the west coast teams to make in another conference to make it 6/6/6/6.

Sacramento makes zero sense to me for expansion where team #24 would be better off in Minnesota, San Antonio or even St Louis if that city somehow even gets things straighten out.

 

Once we get to 24 teams it can be split to 8/8/8 or 6/6/6/6 depending on what the league decides we do not need more west coast teams.

 

None of that matters. Who's to say they don't just keep it at 2 conferences without divisions? And if they don't, so be it. They figure something out. Like how they split up Dallas and Houston currently. Every league in this country has or used to have awkward alignment situations and they live with it because it's a minor issue compared to the need to have stable franchises in good markets. A good expansion bid is a good expansion bid, and a bad expansion bid is a bad expansion bid.

 

It has to do with balance schedules. with a 8/8/8 you go back to the home and and away in your own conference then split the other two conference half home half away and that would give you 30 games. 30 games would give us a less crowded schedule with CCL, open cup and fifa dates.