As these bid details are being revealed, I can;t help but think MLs will line them u and gladly take their $100M and let 8 or maybe even 10 of them in. Not all at once, but over course of 6-8 years. Those needing stadiums will have time to do it and do it well and not at frantic pace and cutting corners. Academies can be formed. Supporter groups can grow. This could work real well for those already in NASL or USL - which most are.
$150 million for the next 2, probably more for 27 & 28. And it will only go up from there after 28. As less teams are needed in the league the expansion fee will go up and potential owners will drop out of the running. I think these next four are an important 4, because the fee could get really high to enter the league, especially since the TV contract will be renegotiated in 2022 potentially bringing in more money and even higher expansion fees.
That's my point. Exisiting teams can rake in $1B from expansion fees if they let all teams in. That's a hell of nice return even if they only disperse half that back to clubs - Approx $40M. If I were a current owner, I'd fight to let them all in. A couple might fail because they don't truly have the resources to run a team or just idiots and do a piss poor job at it.
The new teams aren't really paying an expansion fee, they are buying a portion of the league. Expansion teams are actually new Investor/Operators. If you let all those teams in they become co-owners of the league. The existing teams don't want to reduce their ownership by that much. Right now 22 Investor/Operators own MLS (there are a few other investors but it simplifies the math to just talk about the teams) so each I/O owns about 4.5% of the league. When the league gets to 28 teams, each will own 3.5%. That's what the "expansion fee" goes toward. The current owners are selling a portion of the league.
My point is all of these teams wont be able to afford to come in, because the expansion fee will keep rising and scare off some of the owners.
The owners won't want 36 teams. The more owners there are the less they will own of the league. And if the price keeps going up they might be able to get 250 mil or more for 29 and 30.
No chance with markets that are left will someone pay $250m entry + several hundred Mil for a stadium. Big markets with big $$ are already in the league or will be (Atlanta & Miami) soon. I'm telling you owners like Precourt got in when they did because of potential to reap the financial windfall from expansion fees not because they thought they could make $$ from day to day operations. Take a $billion now or only $300-$600m and them hope someone down the road will buck up more? The iron is so hot right now, if I'm an owner I want the $$$ now from those willing and able.
Agreed. Keep in mind despite start up costs and increased staffing the club still turned a profit in year one which is impressive. The odds are the club will turn a profit again in 2017 based on all indicators. They also announced they had two stadium sites within Cincinnati they could proceed on in the expansion bid. The specifics were not disclosed, but point is money is there to build an SSS. They also stated other local groups wanted to jump on board should the jump to MLS happen. Meaning more money on top of the billions the current ownership is worth is potentially be there.
It's just not realistic to bring in more then 2 a year. More then this and you run the risk of reducing the quality of the product. Also with 25 and 26 each owner only gets 12 m total. 12 m is not that much and at some point it won't make financial sense to take the fee, because then each team will own a little less of the pie and will get less tv or sponsorship money.
You probably had the same attitude a decade ago, and if you would have taken 10 owners at that time you would have made less then 1 owner this year...Hell Saputo had an attitude that it wasn't worth it one year and paid almost double a few years after that. Don't doubt the sky high values MLS can likely continue to command going forward. Hell the NHL just got 2 $500 million bids from 2 "lesser markets" in Vegas/Quebec.
I do doubt the further escalation of expansion fees beyond maybe another $50m or so. I stand by my assertion that owners should take as many of the $150m checks as soon as possible. I'll take the sure thing now while demand is high rather than hope for inflationary scenerio down the road every time.
The poll shows 11 of the 12 bids, but it's missing Indianapolis... 21 Atlanta 2017 22 Minnesota 2017 23 LA 2018 24 Miami 2019 25 Sacramento 2020 26 Cincinnati 2020 27 San Diego 2021 28 Detroit 2021 I'm picking them based on the ownership groups... after that I think St Louis and San Antonio get in, followed after a pause by one of Phoenix / Vegas and one of Charlotte / Raleigh. That would put MLS at 32 teams. I don't think Tampa, Nashville, or Indianapolis get in.
What are you NOT understanding???? The $150M expansion fee is for teams 25 & 26. The fee hasn't been set for teams 27 & 28 yet. Here's some news for you, the expansion fee is going to be higher than $150M for teams 27 & 28. Do you know why? The media rights will go up when the new deal is brokered prior to these teams entering, there will be more teams to divide that income between, and the existing 26 teams will be divesting their stake in MLS...... So, again, if you're a team owner, exactly WHY would you let EVERYONE in at $150M when you'll be able to get more down the line......also, why would you want LESS then the ~$5M /year you're getting now from the TV pie??? More teams = less from the current TV pie.....
Trust me I understand. #1 who said expansion fee hasn't been set for 27&28? #2 I haven't said it isnt you g to go up. #3 what was the last expansion fee for the other major sports leagues? Are you suggesting we will get to those levels? (hahaha). #4 how many years did it take for those leagues to expand past 20 teams? #5 more teams in more major TV markets equals more TV $ and more sponsorship $$. #6 in any investment I'll take my guaranteed profits now rather than speculate about future profits.
The poll was made before the Indianapolis bid was announced. I am assuming people who vote other are voting for Indianapolis.
It's a Peter Holt team, for sure. Things happen privately, and nothing is announced until it's ready. "Public excitement" is for when there's something to be excited about, not the prospect of something... if strong public opinion can be brought to bear.
Over a week now and Sacremento is the clear #25. Sand Diego is #26. There is a 3 way battle for #27 & #28 between Detroit, Cincinnati and St Louis.
I think the correct title would be: #24 and #25. I dont think Miami is happening for several more years. #24 Sacramento #25 Detroit I say Detroit because of the recent news: http://www.freep.com/story/news/loc...w-jail-courthouse-swap-gratiot-site/97570484/ MLS desperately wants Detroit. The real battle will be for 26-28.
Cincinnati updates 10,000+ STH for 2017 hitting the desired goal, had 5,500 in 2016 for reference. Now means FCC has highest STH in USL. Have two stadium sites, no plan to ask for public funding, and even stated have additional funds in support building a stadium just in case issues arise.
MLS has stated that Miami is still #24. Until they announce differently this is what we have to go on. #25 or #26 could possibly take the #24 spot if Miami flounders, but in this poll it assumes Miami is #24 until MLS states differently. I am pro Detroit, but this article doesn't state MLS wants Detroit. The article does strengthen Detroit's bid though, but the County still needs to make a decision on the failed jail site. The article shows how serious the Detroit group is which you would think helps there chances.
There is zero chance that Detroit, a huge metropolitan area in a state with no other professional soccer team, two multi-billionaire NBA owners, and a billion dollar stadium development proposal, isn't one of the four expansion teams. What are the locations of these two stadium sites? Are there details? Renderings?
Berding stated that could not disclose specifics at this time. The details would be in the stadium plans proposals submitted to MLS along with the expansion bid. Stadium proposals/ideas are part of FC Cincinnati's submission to join the MLS. I talked to GM Jeff Berding about it today: pic.twitter.com/KalRCDPP9r— Joe Danneman (@FOX19Joe) January 31, 2017
They did not submit a plan B in the bid, but they did talk earlier this summer about being open to other sites if the jail site falls through. If the jail site falls through I bet the Detroit Group announces a new site shortly after... and informs MLS on the change of plans.