Quakes moving: Is it AEG's fault?

Discussion in 'MLS: General' started by pc4th, Dec 15, 2005.

  1. Earthshaker

    Earthshaker BigSoccer Supporter

    Sep 12, 2005
    The hills above town
    Club:
    San Jose Earthquakes
    Nat'l Team:
    United States
    Yes, AEG stepped up to the plate, but instead of trying to get on base they just sat there, fouling off pitches. The city should get the biggest blame, they have never cared about the team, and they didn't take AEG's threats seriously until it was too late. Spartan Shops is part of the equation, but to a much lesser degree. The team still needed its own stadium, since soccer revenue alone is not going to make any team profitable.
     
  2. Fulham Fan

    Fulham Fan New Member

    Apr 26, 2004
    Bay Area
    Re: Death Spiral

    Don't forget De Rosario's immortal free-kick goal. As you say, entertaining soccer and all that success. The league's best rivalry. And proof that you don't have to spend a lot of money. If Chivas improve, a second set of big ticket games next season. It's amazing how all of this is either gone or will have to start all over again.
     
  3. cpwilson80

    cpwilson80 Member+

    Mar 20, 2001
    Boston
    Club:
    San Jose Earthquakes
    Nat'l Team:
    United States
    Are they solely at fault? No. But I voted yes, as they clearly played at least some part in the Quakes' departure.
     
  4. PJohnson

    PJohnson Member+

    DC United
    Dec 16, 2004
    South Dakota
    Club:
    DC United
    Nat'l Team:
    United States
    You may be right about that. I don't know. I suspect that AEG was simply not making any progress with the local Politicians. And without political support a stadium project will never happen. As to how hard AEG tried to get this done I have no clue. But it's logical to assume that AEG made a serious effort. Because it was in everyone's interest, including AEG, for the Quakes to succeed. And with a new stadium in place AEG would have owned an appreciating asset. I just don't see them walking away from that potential until they had exhausted all of the possibilities.
     
  5. bsman

    bsman Member+

    May 30, 2001
    MadCity
    Club:
    San Jose Earthquakes
    There's a lot of this story that many of you don't know that shows that AEG WERE responsible, were not negotiating in good faith, and intended to move the Quakes all along. SVSE, along with at least two other groups/individuals had the money, were willing to buy the Quakes, and were willing to play at Spartan and absorb the losses until a new stadium could be constructed. AEG were unwilling to sell the team on those terms - they insisted the sale could not be completed until a stadium deal was fully negotiated, and that part of the deal would give AEG the right to operate (and profit from) the stadium. In other words, AEG wanted to have their cake and eat it too. So, instead of having the team in San Jose, playing at a college stadium on grass and owned by local owners, AEG will own a team in Houston, playing on field turf in a college stadium. No credible owners group have stepped up in Houston, and there are no plans for a stadium.

    Tell me why we shouldn't be bitter and why AEG should not be blamed? AEG can eat me, and so can MLS. IF we get an expansion team, and Frank Yallop coaches it the first year, I MAY be interested in supporting MLS again, but until then, it's USMNT, Serie A, & the Bundesligas and Premiership. I will not watch, attend, buy merchandise, or otherwise support MLS in any way. This deal was way beyond the pale of sound, or above-board business practices, and the only reason this hasn't come out yet and names haven't been named is because organizations such as SSV have been cowed into not burning bridges by the (almost certainly) false hope of an expansion team by held out by AEG (I mean MLS, I think) spokes-liar Don Garber.

    We earthquakes fans have every right to be pissed at MLS and AEG, and any of you who say otherwise can eat my shorts.
     
  6. PhillyMLS

    PhillyMLS Member+

    Oct 24, 2000
    SE PA
    Yes, you are right. Most of us don't know what happened behind the scenes and what AEG's motives were. However had they decided "screw it, we are done with the team" they very well could have done that. And you know where that would leave you? Most likely the same exact place you are right now, teamless. You've had no one to run the team outside of AEG for the last few years so I'm pretty much sold that you would have lost your team anyway. Would it have been moved? Maybe not, but I'm almost certain w/o an I/O they would have folded the team instead of bleeding money unnecessarily. Unfortunatly I belive that any way this went you would have lost the team. Just hope that now the city is serious about bringing you guys back into the mix. But like another poster said I'm first and formost a fan of the MLS and DC follows behind them. Without DC I still have soccer that is relatively close to home to follow, but w/o MLS I have nothing.
     
  7. bsman

    bsman Member+

    May 30, 2001
    MadCity
    Club:
    San Jose Earthquakes

    They could have sold the team to the group who had made the offer, had the funding, and were ready to take over. What part of that don't you understand?
     
  8. Aljarov

    Aljarov Member

    Sep 14, 2004
    fmnorthamerica.com
    Club:
    Tottenham Hotspur FC
    Nat'l Team:
    England
    Not unless fans actually expected AEG to fully fund a stadium in San Jose (one of the most expensive real estate areas in the US).

    It's not a good situation, I hope it ends well.......and it still could if the 'bluff' pays off.
     
  9. Earthshaker

    Earthshaker BigSoccer Supporter

    Sep 12, 2005
    The hills above town
    Club:
    San Jose Earthquakes
    Nat'l Team:
    United States
    Excluding the vice-mayor Cindy Chavez, our politicians were pathetic, incompetent fools who had no interest in trying to save the team. Here is how galling it was: on the front page of the city website they had a link for their pipe dream, "Baseball San Jose", but not one for Soccer Silicon Valley. It was obvious AEG did not want to be here, but they did nothing to make their asset attractive to buyers. They let a fan group basically be their sales force to find a buyer.
     
  10. Arisrules

    Arisrules Member

    Feb 19, 2000
    Washington, DC
    AEG did not lose $20 million dollars. You guys are telling me that SJ was losing nearly $7 million a year?

    They probably lost $6 mil over the past 3 years, a much more reasonable figure.

    Te $20 mil. figure is what AEG "spent" in the are; basically MLS and AEG's spin to try to make the situation seem untenable.

    IF what SJ fans are saying is true; that there was a group ready to step in..then shame on AEG.
     
  11. Khan

    Khan Member+

    Mar 16, 2000
    On the road
    MLS is a Real Estate Business

    Let's ASSume that your supposition is correct for a moment: That SVSE et. al had the money to buy the team and were willing to play at Spartan. [Your statement about SVSE absorbing the potential losses is pure bullshyte, as it is well-known that SVSE demanded some money to offset losses until they found a suitable stadium, BTW...]

    The fact of the matter is that in a decade, and after 4 I/Os, there was still no progress towards finding a suitable place to play. Selling the team to a local owner without a commitment in brick and mortar would undercut any negotiating leverage that the new owner would have:

    Hypothetical scenario if SVSE now was the I/O in San Jose:
    [City of San Jose to SVSE] So, you thought you'd move the team, huh? Well fvkc off, SVSE. You'll play in Spartan and like it!
    [SCVSE to San Jose] Uhhh, well there MIGHT be another city in the Bay Area that may someday take the team away from you. I know it hasn't happened in a decade, but uhhhh....


    Because of the structure of SUM, [all I/Os sharing in profits or losses] AEG, and the Hunts, and all the other I/Os would STILL be on the hook for further losses in San Jose/Spartan due to SUM! So, AEG was well within their RIGHTS as a reluctant owner and their RESPONSIBILTIES to their shareholders/their business parters in MLS to stem further financial losses as much as possible.

    Therefore, without some way of operating in the black in the Bay Area, selling to SVSE was a non-starter, because of SUM. [This is similarly true for the need for Harrison to stem losses for both AEG and all the other I/Os, as is the case for DCU.] Hence, due to SUM, operating losses effects ALL I/Os in MLS, NOT San Jose alone.

    In far-more-affordable Houston, with what is likely a better lease in which to operate. Not an ideal situation, but there's plenty of land down there in Texas, and several under-used stadia to chose from! In addition, the cost of operating is likely far more affordable in Houston; This would then turn the OCEANS of red ink emanating from San Jose to become, at a minimum, to mere lakes.


    Here's another point that [some] Quakes fans don't seem to master: The "E" in AEG refers to "entertainment." Recall, its not "ASG" or "AFG," its "AEG." Thus, AEG is involved in more than just soccer. Because of the business realities of soccer in this country, MLS is not a "soccer" business. Its a real estate business of which soccer is a part. This is true, so that the operating profits of other events at a multi-use facility can offset the real operating losses generated by MLS. Fortunately, or unfortunately, this is the deal as professional soccer is right now in the US: Merely part of other businesses, and not yet able to stand alone for profitability.

    As I understand it, there are already several outdoor venues in the Bay Area of ~20,000 capacity. [The types of places that that host concerts, Bible-thumping conventions, Star Trek Conventions, tractor pulls, X-games, and the like.] Thus, the competition for venues in that [highly expensive] market remain a huge hurdle. Clear Channel has the "in" for those types of events, AEG [and, by extension, any other potential I/O] must rely on far fewer dates to drive profitability.


    While we're sorry to see your team leave, the rest of the MLS fans that "get it" [including some Quakes fans] say good riddance to those of you who don't. Sorry, life isn't fair, and business isn't fair, either. Without AEG, you don't have a team for the past few seasons, and WE as a nation don't have a league at all.
     
  12. Fulham Fan

    Fulham Fan New Member

    Apr 26, 2004
    Bay Area
    Re: MLS is a Real Estate Business

    This is bizarre. AEG had a responsibility to end the San Jose franchise but not a responsibility to do any of the work that SSV did ... for free. Is that it?
     
  13. Khan

    Khan Member+

    Mar 16, 2000
    On the road
    Re: MLS is a Real Estate Business


    Yes, we all appreciate the passion of the hard core SJ fans, and the efforts of SSV.

    But at the end of the day, neither SSV's efforts nor the passion of SJ fans can change the fact that MLS is a real estate business. No amount of fans showing up for the Californian derby can change the fact that the competition for multi-purpose facilities [the kind that every MLS team needs to survive] is too great in the Bay Area.

    As noble as it is/was for SSV to do so, no amount of searching high and low for a new I/O can change the operating realities for both the franchise and for MLS. No amount of bemoaning whatever AEG did or did not do can change the lack of a proper facility to eventually change this, either. [Perhaps a hostile takeover of Clear Channel, coupled with a demolition of the other similarly-sized outdoor venues in the Bay Area but that's about it...]

    Whether it was SVSE, AEG, MLS LLC, the Krafts, none of these entities can change these unfortunate business realities. AEG did not choose to operate in this market, one that they probably knew was up against it from the word "go." You speak of "responsibility," but if memory serves, AEG were not the group that chose this market, nor were they the ones who chose to operate this team initially. They did so at their own peril, and to the tune of [EDIT] many, many millions of dollars.[/Edit]
     
  14. ThreeApples

    ThreeApples Member+

    Jul 28, 1999
    Smurf Village
    Club:
    San Jose Earthquakes
    Nat'l Team:
    United States
    Re: MLS is a Real Estate Business

    Please don't repeat the $20 million meme, unless you acknowledge that it is the amount spent, not lost, and you have information on how it compares to the financial results of other MLS franchises.
     
  15. Khan

    Khan Member+

    Mar 16, 2000
    On the road
    Re: MLS is a Real Estate Business

    Fine.

    Do you deny that AEG lost money [whatever the amount you choose to believe] in San Jose?

    Do you deny that AEG has done more monetarily than other organizations for this league, and specifically for your former team than other groups?

    Do you deny that MLS is a real estate business? Specifically one involved in the multi-use stadia niche?

    Do you deny that there is already tremendous competition in the Bay Area already for these types of buildings?

    Is there anything that I've posted in this thread that is patently untrue or maliciously so?


    I understand that you lost your team. I understand that Quakes fans have a right to feel a little raw about what happened a few days ago. But to deny what AEG has done, and then to blame them for moving [in light of all the currently-available evidence] is a little off-base, IMO.
     
  16. ThreeApples

    ThreeApples Member+

    Jul 28, 1999
    Smurf Village
    Club:
    San Jose Earthquakes
    Nat'l Team:
    United States
    Re: MLS is a Real Estate Business

    AEG had plenty of reason to no longer want to own an MLS team in San Jose. What I object to is the way they went about trying to get out, making no serious effort toward finding a stadium solution and/or a local buyer, and placing conditions on the sale that made it inevitable that no local buyer would buy. Now that any prospective expansion investor will not have to deal directly with AEG, the chances of getting a local buyer to invest seem much more promising.

    I somewhat think that one reason the MLS owners as a whole approved this move was that in doing so they could both appease AEG, giving their most powerful partner what it wants, and at the same time remove the roadblock that AEG represented in any efforts to find committed local ownership and a stadium in an important market.
     
  17. billf

    billf Member+

    May 22, 2001
    Club:
    Philadelphia Union
    Nat'l Team:
    United States
    Re: MLS is a Real Estate Business

    It seems to me that SJ was doomed before it won the first MLS Cup. Because it won, the league felt it would be a PR problem to move the team so AEG stepped up to and saved them in the hopes it could find a local ivenstor and, I guess, make some money off of a new stadium. A new owner and a new deal didn't come to pass so it appears the inevitable was delayed.
     
  18. Khan

    Khan Member+

    Mar 16, 2000
    On the road
    Re: MLS is a Real Estate Business

    Thank you for acknowledging this fact. [Some] Quakes fans seem to think that AEG had nothing but malicious intent from the beginning. That, incredulously, AEG is in the business [solely] to screw over the SJ fans.

    And this is fair opinion on your part, but:

    [Some] Quakes fans forget that without the former, there won't be the latter. MLS is in the industry of operating multi-use facilities, FIRST, and then everything else [including soccer] second.

    And this is entirely plausible [from what I've read], but not necessarily unreasonable, given their commitments, IMO.


    For your hometown's sake, I hope you're correct here. We'll see, though... I haven't read any evidence suggesting that MLS can latch onto some property that can give them what they want/need to survive.



    And AEG earned it by rights of their investment into this venture.

    for this part of your statement, though, I'm not too sure.
     
  19. ThreeApples

    ThreeApples Member+

    Jul 28, 1999
    Smurf Village
    Club:
    San Jose Earthquakes
    Nat'l Team:
    United States
    Re: MLS is a Real Estate Business

    Not really. If Miami had won in 2001, it's quite possible that AEG would have bailed them out and made SJ, KC, and Colorado the teams at risk of joining TB on the trashheap, but if LA or Chicago had won, I'm quite certain it would have still been the two Florida team that got the axe. Essentially it came down to AEG and Hunt each choosing to bail out one of the league-owned teams or Miami. Some reasons SJ had the advantage over Miami, irrespective of the playoff results, were that it had an operating group that MLS was trying to court to become full investors, and SJ was doing much better in certain aspects of the business such as sponsorship.
     
  20. dakotajoe

    dakotajoe Member

    Jan 4, 2001
    Medford, OR
    Club:
    San Jose Earthquakes
    Nat'l Team:
    United States
    Re: MLS is a Real Estate Business

    "Do you deny that AEG lost money [whatever the amount you choose to believe] in San Jose?"

    AEG has lost money on every team it has owned in MLS from the beginning. LA has apparently thanks to Motocross competitions made money. According to former Quake GM Johnny Moore, the Quakes lost the least amount of the AEG teams that was losing money. Do Quake fans deny AEG lost money. Obviously not as MLS has lost money.

    "Do you deny that AEG has done more monetarily than other organizations for this league, and specifically for your former team than other groups?"

    AEG=MLS. At one time they owned 60% of the teams so your statement kinda leans towards the obvious. If not for St. Phil, there is no MLS. I for one do not know how much AEG has spent on the Quakes ($20 million was pulled out of that hat by AEG but that does not include revenue made so they didn't lose that much money). I don't know how much any former I/O of the Quakes has spent on the team. I imagine Bob Kraft spent $1 and 98 cents while sending Quake players to NE. Do you have the fiscal reports

    "Do you deny that MLS is a real estate business? Specifically one involved in the multi-use stadia niche?"

    Originally, I think most people thought they were in the soccer business but that business model was an absolute failure, hence the rush for entertainment venues disquised as soccer-specific stadiums. That is why San Jose without a SSS in the works became Houston...without a SSS yet announced.

    "Do you deny that there is already tremendous competition in the Bay Area already for these types of buildings?"

    Yup, real estate prices are really high in the Bay Area...but the City of Santa Clara made it clear they would be interested in a soccer stadium which would not have needed the public vote that was required in San Jose. And if you followed the saga of the Quakes/AEG closely, could you really argue they gave it a fair shot or depended upon a "fan group" to do their work?

    "Is there anything that I've posted in this thread that is patently untrue or maliciously so?"

    Nothing that you have posted is patently untrue. Doesn't make it true or correct...all a matter of perspective, which the truth always is.


    "I understand that you lost your team. I understand that Quakes fans have a right to feel a little raw about what happened a few days ago. But to deny what AEG has done, and then to blame them for moving [in light of all the currently-available evidence] is a little off-base, IMO."

    The evidence brought to light is that AEG got stuck with the Quakes when the previous owners of the NHL Sharks bailed out in 2002 and when there was no one else stepping up to buy the Quakes, they made threat after threat to move the team, cut back on the budget, made other decisions that made observers scratch their heads (move the GM to another team in the middle of a season?) and despite all that, the Quakes had the 4th largest stand-alone attendance last year...that is, the 4th largest attendance for MLS games, not doubleheaders or fireworks. It is a market worth believing in...hence Don Garber's "letter of intent" ploy to get interest in a new Quakes team MINUS AEG's "negotiating" tactics.

    We will see.
     
  21. The Cadaver

    The Cadaver It's very quiet here.

    Oct 24, 2000
    La Cañada, CA
    Club:
    Los Angeles Galaxy
    Nat'l Team:
    United States
    Re: MLS is a Real Estate Business

    4th largest attendence if you manipulate the numbers enough.

    As a matter of fact, if you ignore all the people who bought tickets to other teams' games, Quakes would be number one in attendence. :rolleyes:
     
  22. Earthshaker

    Earthshaker BigSoccer Supporter

    Sep 12, 2005
    The hills above town
    Club:
    San Jose Earthquakes
    Nat'l Team:
    United States
    Re: MLS is a Real Estate Business

    Yes, but aren't doubleheaders also a manipulation of a team's attendance? Those figures in no way reflect a team's true support and fan base.
    But, why are we talking about this still? The Quakes are gone to Houston. Let's just hope an expansion team with committed ownership, playing in a new stadium, will attract enough fans.
     
  23. The Cadaver

    The Cadaver It's very quiet here.

    Oct 24, 2000
    La Cañada, CA
    Club:
    Los Angeles Galaxy
    Nat'l Team:
    United States
    Re: MLS is a Real Estate Business

    No. They are called "promotions." The legitimate question is, why were such promotions not used in San Jose? That might be a legitimate criticism of managment. Trying to distort history through bogus manipulation of numbers is not legitimate, Ann Killion to the contrary notwithstanding.

    We are talking about this because certain SJE fans keep throwing this falacy up as if repeating something enough times gives it some credibility. God forbid that Houston might actually have fireworks....
     
  24. ThreeApples

    ThreeApples Member+

    Jul 28, 1999
    Smurf Village
    Club:
    San Jose Earthquakes
    Nat'l Team:
    United States
    Re: MLS is a Real Estate Business

    It's not bogus manipulation to look at the numbers and see why certain teams had higher average attendance than others and determine if the figures are skewed by outliers. That's ordinary statistical analysis. If you are trying to use attendance figures as an indicator of interest in the MLS team, doubleheaders are the biggest thing that skew the numbers, because so many of those in attendance at those event buy the tickets to see an entirely different soccer game, involving no MLS teams. No analyst, knowing all of the promotions involved, would look at the game-by-game attendance figures of, say, Chivas USA and San Jose and conclude that Chivas did a better job of selling tickets to MLS games than the Quakes, even though their official mean average was higher.
     
  25. Esco

    Esco New Member

    Aug 1, 2005
    Long Beach
    Club:
    Liverpool FC
    I found this one of the NEWS Boards and the guy makes some good points:

    JD said on 12/20/2005 Rant warning!!!:

    I have gotten sick and tired of people in the press and elsewhere throwing bricks at San Jose State University for what has happened with the Earthquakes. SJSU has been more than patient with MLS and AEG, putting millions of dollars of stadium renovations in the behest of MLS/AEG (and in the process completely changing the character of the stadium from what it is designed to be - a college football stadium), and for their trouble they're getting painted as some sort of "villain" in this piece. Well screw that, folks. As far as I am concerned, AEG and MLS can go find a nice corner of a round room and pound a big pile of sand up its a$$. They wanted lighting improvement, they got it. They wanted field widening, they got it. They wanted removal of concrete hand rails in favor of steel-and-cable hand rails, they got it. On and on. And in the process, Spartan Stadium has been progressively chipped away from its original purpose and intent - SJSU football. AEG and MLS were RENTERS, not owners. If I had tenants like AEG and MLS have been, I either would have kicked them out of the house or burned the house down for the insurance.

    News flash for all of you: San Jose State University is not in the business of making money for AEG. AEG obviously has access to plenty of capital, what with the ownership of HDC in Corona, three or four other MLS teams (depending on who is counting), an NHL team, an AHL team, an ECHL team, and city-subsidized projects in Kansas City, the Chicago Suburb, and the NYC/NJ suburb.

    And yet, with all that going on, AEG has made a deliberate attempt to drive down the value of the Earthquakes (the "transfer" of Landon Donovan and the Alexi Lalas shift are just the tip of that iceberg), have slammed the stadium and the university in public, and then turn around to San Jose and cry poor-mouth-save-us, then threaten for two years to move the team to Houston where the AEG president claims it will be getting one of the "best teams" in MLS.

    So the City of San Jose and SJSU looked at all this going on and decided - rightly IMHO - that AEG had plenty of money to build its own damned stadium in San Jose if it wanted to, but the issue was made fairly clear to all that were paying attention that it NEVER WANTED TO. So, because SJSU decided not to play AEG's little pity-pity-poor-poor-me game, they're getting painted as the bad guy in this.

    The closer football team analogy would be the Oakland Raiders and Al Davis' various depredations of cities throughout California. The only difference is that AEG is far more efficient at getting money out of cities then Davis is.

    Fuggem. They're garbage, all of 'em.
     

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