How much did Kroenke pay?

Discussion in 'MLS: General' started by uclacarlos, Sep 25, 2003.

  1. uclacarlos

    uclacarlos Member+

    Aug 10, 2003
    east coast
    Club:
    FC Barcelona
    Nat'l Team:
    Spain
    sorry if it is tucked away deep in one of the numerous threads, but ANY educated guesses as to how much $$ he paid?
     
  2. JCUnited

    JCUnited Member

    Oct 7, 2002
    South Bend, IN
    Club:
    Manchester United FC
    With no info coming out whatsoever, nobody can really make an educated guess. We could guess it is around $10-$20 million, but that is based on what other clubs have gone for in the past and he could have gotten a big discount due to the promise of a stadium. I'd guess between $5 mil and $20 mil, but educated is hard when we only have one fact to go on: Kroenke bought the team.
     
  3. soccerfan

    soccerfan BigSoccer Supporter

    Mar 13, 1999
    New Jersey
    Nat'l Team:
    United States
    i thought that either the Galaxy or United were sold for in excess of $ 35 mil, an established franchise would be worth more then a start up, NO?
     
  4. Andy_B

    Andy_B Member+

    Feb 2, 1999
    Nat'l Team:
    United States
    The price St Phil paid for United don't believe was ever mentioned but I doubt it was anything significant.

    Phil paid a reported $26 million for the Galaxy a few years back and MLS put that is every press release they could make up.

    My guess is the Kroneke paid very little for the Rapids since he will most likely pick up any and all debt and seems to be willing to pay for a new stadium.

    It is safe to say that if he paid anything significant, MLS would have put it in every press release to show how the franchises are improving in value. Since they did not, it is safe to assume that the actual dollars that changed hands was small.

    Andy
     
  5. The Voice of Reason!

    Jan 6, 2002
    Wethersfield CT
    Club:
    --other--
    Nat'l Team:
    United States
    dont forget he bought into SUM too.

    any why would they sell the team for anything less than what they bought it for? you dont give away a team you have spent 25 million on just to avoid paying 1 mill/year in losses. If the team were loosing 5-10 mill a year i could see letting it go real cheap, but this is a team that only loses a mill or so, and with a stadium should profit.
     
  6. Scoey

    Scoey Member

    Oct 1, 1999
    Portland
    He'd sell it for less than he bought it because its sale will eventually make his other MLS teams worth more in the long run. Maybe.
     
  7. ButlerBob

    ButlerBob Moderator
    Staff Member

    Nov 13, 2001
    Evanston, IL
    Club:
    DC United
    Nat'l Team:
    United States
    From what I remember the orginal price for each team was 5 mil. They are now charging 10 mil for the expansion teams. So I'm guessing 10 + mil. I had read that AEG wasn't keeping the fee, but was putting it back into the league coffers. So it's possible that with the sale of San Jose and expansion they could end up with an additional 40+ mil in the bank. That could help build another SSS.
     
  8. Andy_B

    Andy_B Member+

    Feb 2, 1999
    Nat'l Team:
    United States
    The Rapids did not cost $25 million.

    They were an original franchise and as such they cost $5 million.

    Andy
     
  9. uclacarlos

    uclacarlos Member+

    Aug 10, 2003
    east coast
    Club:
    FC Barcelona
    Nat'l Team:
    Spain
    Being that it is SES, then any $$ paid, 1/10th goes right back to his pocket.

    I'm thinking he paid at least $8 mill:
    a. SARS in China gave SUM an $8+ mill added windfall plus ratings will be strong in 2006 b/c the games are on at a decent time. Maybe he'll earn $2 mill from SUM
    b. (modest) transfer fees are providing some pocket change
    c. He's now eligible to get some $$ from 2 expansion fees (technically $20 mill, but probably $16 mill: about $1.5 mill profit)
    d. the league is on the road to profitability, w/ Colorado looking to be profitable soon.
     
  10. anderson

    anderson Member+

    Feb 28, 2002
    Club:
    Houston Dynamo
    Nat'l Team:
    United States
    Well, unless we've read the relevant sections of the LLC Agreement that governs MLS LLC, there's no way to know what portion of the fee paid by KSE goes to AEG or elsewhere. An LLC Agreement can provide for any allocation of such funds among the existing investors (incl. AEG) and/or the LLC itself. It's only a straight proportional allocation (i.e., 1/10th b/c of 10 teams) if that's what the LLC Agreement provides.

    It's also likely that the LLC Agreement was revised to accommodate KSE's entry as a new member of MLS LLC. That revision probably addressed the allocation of funds to and from KSE. In an LLC, those allocations can be the same as other members' allocations - or completely different. It's up to the members to negotiate those terms among themselves. So, unless we've read the relevant provisions of the (presumably, Amended and Revised) LLC Agreement, there's also no way to know what portion of future funds (such as from other expansion fees, etc.) KSE will get.

    And that's just MLS LLC. There's also SUM, which, I believe is also an LLC. The LLC Agreement that governs SUM LLC (assuming that SUM is indeed an LLC) could provide different terms about allocations to/from members than the LLC Agreement that governs MLS LLC.
     
  11. uclacarlos

    uclacarlos Member+

    Aug 10, 2003
    east coast
    Club:
    FC Barcelona
    Nat'l Team:
    Spain
    Dude, I wuz jus' about to post that...

    Damn LLCAEGKGBFBi SUMmunabee-atch BASTARDS!
     
  12. The Voice of Reason!

    Jan 6, 2002
    Wethersfield CT
    Club:
    --other--
    Nat'l Team:
    United States
    5 mill is BS
    the league has lost 250 mill many have quited. likely more at this point. divide that by 10 teams and this team cost someone 25 mill.
     
  13. JCUnited

    JCUnited Member

    Oct 7, 2002
    South Bend, IN
    Club:
    Manchester United FC
    Actually, MLS claimed to have lost $250 million in the first five seasons of operations. However, it has been reported in various media that since the contraction of the two Florida clubs, that our league has cut those operating losses by more then half (or is it cut in half, it's still very early here). So, the 250 million in losses is not accurate, and it is definitely not any more now.

    The original clubs all cost $5 million from what has been posted here. So why would St. Phil spend five times that amount on Colorado?

    It sounds like 5 mil is the most Kroenke spent, maybe less considering the stadium issues.
     
  14. Naughtius Maximus

    Jul 10, 2001
    Shropshire
    Club:
    Chelsea FC
    Nat'l Team:
    England
    Have you any links about that or any other financial data concerning MLS?

    TIA
     
  15. soccerfan

    soccerfan BigSoccer Supporter

    Mar 13, 1999
    New Jersey
    Nat'l Team:
    United States
    I see that many of you think the Rapids were aquired for $ 5 mil. If that is correct does that mean anyone who has that 5 mil can buy a franchise. ??? It is to simple and little for me to make any sense, there must be a lot more to it then that. What else can it be, lets say a promisse to build that SSS from his own money ? , a commitment to the league for losses up to a certain amount ? Five million is really not a lot of money this days, it can't be it.
     
  16. bostonsoccermdl

    bostonsoccermdl Moderator
    Staff Member

    Apr 3, 2002
    Denver, CO
    I am guessing (stress guessing) that the "purchase" price is just your ticket into the league and own th eright to the team.
    On top of this you have to pay staff, maintenance, players wages, etc...

    and then comes the stadium costs. Which is my question: how much does a relatively SIMPLE stadium (ie NOT like the home depot with other adjoining fields, complexes, etc) cost?

    I am guessing for land,labor,aand materials it is about $20-30 million additional....
     
  17. pc4th

    pc4th New Member

    Jun 14, 2003
    North Poll
    Club:
    Los Angeles Galaxy
    Nat'l Team:
    United States
    I would venture a guess of AT LEAST $12.

    Why?

    Vergera will pay a reportedly $10 millions for a franchise, while the Rapids is an established team. If you are a buyer? would you start a franchise at a cost of $10 mil, or would you buy a winning team with a good lease for $12 millions?
     
  18. Agogwe

    Agogwe Member

    Sep 12, 2003
    Ann Arbor, MI
    Nat'l Team:
    United States
    Curious where you heard that Vergera was paying $10 mil, only because I have heard so little since the story broke.

    Also, don't you think that releasing the details (as in money amount) is something that MLS would not do, since the amount would be so low (in comparasion to other leagues), and instead focus on the fact that there is a new I/O in the league and a SSS for Colorado in the future? I would think that the amount isn't as important as the interest shown in the league by outside investors. Just a thought.
     
  19. soccerfan

    soccerfan BigSoccer Supporter

    Mar 13, 1999
    New Jersey
    Nat'l Team:
    United States
    IF THE AMOUNT WAS SO LOW AND mls WOULD COME FORTH WITH IT, MAYBE THEY WOULD ATTRACT MORE INVESTORS, BUT CLEARLY $ 5 MIL IS NOT IT
     
  20. NACIONAL

    NACIONAL New Member

    Dec 31, 2001
    Medellin, Colombia
    maybe if they say that Rapids was bought for 5 millions, some investors would say that MLS is not a "worthy" League..
     
  21. Fuegofan

    Fuegofan New Member

    Feb 17, 2001
    Chicago
    You are quite right about the approximate cost of a simple stadium. Crew Stadium was built for the rock bottom price of $28.5 million. But any stadium today will likely cost more, for a number of reasons (and I can go into some of them at length if you want). The proposed stadia in Chicago, Dallas, and NY are estimated at $60-$80 million each.
     
  22. Agogwe

    Agogwe Member

    Sep 12, 2003
    Ann Arbor, MI
    Nat'l Team:
    United States
     
  23. bmurphyfl

    bmurphyfl Member

    Jun 10, 2000
    VT
    Club:
    Montreal Impact
    Nat'l Team:
    United States
    Here is a quick Economics 101 lesson: the price of something has little to do with the cost of it. Price is a function of supply and demand; not cost. So, the Rapids are only worth what someone is willing to pay for it; not the league's historical losses divided by the number of teams.

    Always remember that the sandwich at the deli isn't expensive because the rent for the deli is high. The rent for the deli is high because the price for the sandwich is high.

    Murf
     

Share This Page