Latest Soccer Silicon Valley newsletter (Friday, 7/1/05)

I believe! I believe! I believe! I believe! I believe! I believe! I believe! I believe! I believe! I believe! I believe! I believe!

And no, that's not random!

Hang in their friends, I think I hear the cavalry saddling up right now!!

GO QUAKES!!

- Mark

 

You watching Shrek over there Mark?

 

IF AEG and CA have reched an agreement in principal, the agreement may very well be--in fact probably is--as follows:

"If these guys here don't pull the trigger, the Quakes are yours."


Which means nothing has changed in a year from AEG's stand point. AEG is not stupid--sure they would love CA's clout to tap into the Hispanic market, but they can get that through expansion WITHOUT the negative publicity of franchise movement and WITHOUT abandoning one the country's highest profile reason. They know its best for the league to have the Quakes succeed in northern California. And least you think they will be embarrassed at someone else making it a success, you are underestiamting their ability to take credit for 'sparing the franchise' until the ownership could be sorted out.

 

It's already July and as noted something might be brewing by the end of this month. One hopes that someone can buy this team, keep them here, and then try to give CA an expansion outfit. Otherwise, if CA buys this team and is relocated, then the investment group would have until 2007 to put together the "new" Quakes.

However, keeping the team is the most viable option, but at this stage, who knows? No one wants a season of no games here, but if that gets to be the case, and an "expansion" team returns then despite that, it's "somewhat" acceptable. We'll see how this plays out. Keep the faith.

 

I was surprised to see the fairgrounds mentioned in this letter. I had thought that option had been dead for a while. Hmmmm.

 

I hope that a local investment group buy's the team.
I would hate for you guy's to lose them.

 

Maybe Club America bought them and made them change their name.

 

You know, there's an issue here that some of you are overlooking. Just because SSV haven't revealed to the public who their "investors in the wings" are, doesn't mean that AEG doesn't know. In fact, I'd bet money that the investors have been talking to AEG for sometime. AEG isn't going to give SSV any sort of hard financial data about the club, they would want to give such information directly to the potential investors, with a non-disclosure agreement attached.

And SSV have referred to more than one group of investors. I wonder if AEG hasn't tried to get the investors to join forces to make a stronger bid?

Of course, they would have to be compatible investors. It's hard to say. My crystal ball is clouded on this point.

But in any case, I'm sure that AEG knows who SSV are talking too. I'm also sure that AEG wants the sale of the Quakes settled right away.

OH, and we Don't want to hear about the investors or the deal until the week of July 18th. I'm still going with my belief that the announcement will come in the week leading up to a Quakes home game (if SSV pulls this off). Otherwise, they will make the announcement that the team has been sold to freaking CA while we are on the road. So right now, I don't want to hear anything!!

GO QUAKES!!

- Mark

 

You're on the right track. Keep going.

 

No speculation on this point is necessary. Once again, from SSV's latest:

 

Oh, duh!

Thanks for pointing out my foolishness.

GO QUAKES!!

- Mark

 

Was just watching the D.C/Columbus replay on FSC..the announcer just said that "San Jose deserves to keep their team, especially after all those vocal fans showed up for the Galaxy game!".

Nuff' said................

 

[First post after a vacation, man I've had a lot of catching up to do. Missed the last three games. Spent the first part of my trip in Japan and didn't have access to the internet, so it was very difficult to find out what was happening. Finally, in Hawaii, I could see from a USA Today that the Quakes beat LA (by the standings) but was dying to know what the score was and what happened with the LD thing. Anyway, lots of good news , but some more unfortunate injury stuff.]

Anyway, my point related to this thread is, what does "agreement in principle" really mean? I haven't read the news reports that make this claim, but I seem to remember this same statement or something similar coming out last year. It could simply mean that, "Hey, you have a soccer team for sale and we'd like to buy it and relocate it to Houston". And AEG saying, "Yeah, we could do that." That's certainly something new. It's a scenario we've heard about for what, a year and half now.

I guess the most pessimistic interpretation is that they have an agreement on basic terms and the lawyers are working on the contract. I would imagine this type of thing could take quite a bit of time, so it's possible they're in this phase. But the language "agreement in principle" is weak enough to suggest to me that the basic terms of a prospective agreement are not yet settled, in which case they may be still closer to the general "scenario" stage referred to in the previous paragraph. That's what I'm hoping anyway.

 

I have no knowledge either but speculate based on what little we know (the Club America quotes, apparent lack of progess by SSV, Lalas' move) that there in an executed Letter Of Intent in place to sell the team. This would be typical for a business sale of this type in my experience, absolutely none of which has anything to do with sports.

The LOI itself would be non-binding but would state the mutually agreed to major business terms (price, date of closure, how any liabilities get handle, deposit $, confidentiality, etc.) and provide the lawyers time to fully negotiate the purchase contract. Either side could back out at this stage, but it is not typical for a seller to do so. The buyer might back out typically for lack of financing or inability to close for some other reason. In this case, inability to find stadium in San Antonio or whereever would seem to be one such reason that a buyer might back out.

 

FWIW, my understanding (via NAS) of the Ajax deal was it was more aimed at something in Florida.

The key is a stadium for you guys. Get that, and an owner can be found (I think.) It is the sink-hole part of not having a SSS that is making things difficult. Frankly, I think that is your litmus test - wherever there is a SSS first (or at least a SS venue - where they had a good tennant situation at least, with the promise of a SSS) is where your team will be. Right now, it seems like CA is fishing for the Astrodome as a temporary home until a SSS can be built, and it sounds like there are two potential sites in Houston for that SSS. Until SSV is ready to counter that, I think there is reason to worry. The notes on the local SSS sound promising.

As I've said before, I'd rather San Jose find a way to keep the team. I'm just sharing things as I see them.

BTW, word out of KC is that they have an old SSS plan that is being updated and that they have investors lined up - not a done deal, but significant progress.

 

In business, when we hear, "we have an agreement in principal," it usually means this is a done deal and the lawyer are just finalizing the details.

HOWEVER, Club America have said in the press, in the past, that it was a done deal. So I'm not sure I believe them now. As we haev heard from SSV, AEG continues to talk to them and encourage them. So we're still in the game.

As to the multiplicity of sites, any investor that buys the Quakes to keep them in the South Bay is going to have to take a leap of faith. So the more site on the table, the better. At this point, we need for the investors to believe that they can close a stadium deal. So the more potential sites, the better their odds of doing a deal somewhere. No one is going to buy the team with the intention of keeping them in old Spartan Stadium as run by Spartan Shops.

Hang in there friends!! I believe that SSV will pull this out for us.

GO QUAKES!!

- Mark

 

In my experience, an "agreement in principle" is what folks say after a meeting when high level terms are agreed upon.

Getting from an "agreement in principle" to a "letter of intent" still takes some work. This typically involves the buyer drafting this "letter of intent", which is usually 2-10 pages, and then negotiating over the points outlined. If both sides are genuinely pursuing a deal, getting from this "agreement in principle" to a "letter of intent" usually only takes a day or two.

So, since it's been more than a few days, I think that MLS has either progressed from this "agreement in principle" to a "letter of intent" with CA, or they are "shopping CA's bid" to a local investor. Shopping a bid is always dangerous if you really want to sell. You run the risk of blowing the offer you have.

 

I think we wouldn't have heard anything yet anyway. Like others have said, MLS likes these kinds of big announcements to come in the days leading up to a big game, ie. the all-star game. That and the "anonymous source" from the Houston paper could be full of crap and just trying to get the people SSV is talking to to put pen to paper in what could amount to a crappy deal for the investor(s) but a great deal for AEG. And I doubt they would have to "shop" CA's bid, since it has been on the table for over a year and any interested parties should be told immediately if said bid was upped.

 

I think you are right. You've obviously thought this through more carefully than me.

 

SSV's silence since the most recent Houston publicity also sounds bad.

 

Just because you weren't listening doesn't mean there was silence.