News: San Jose Earthquakes Owner Hires Bank to Sell MLS Club

If Sac is such a bad market why were they “#1 on the list”? :thinkingemoji

They were #1 on the list because they were one of the best options at the time before San Diego, Las Vegas, and others emerged. As time passes things can change.

The Bay Area certainly has the potential but I don’t see big-time local sponsorships flowing in (El Camino Health, Avaya, Intermedia? lol). And so far other than Fish / Wolff the only prospective buyer we’ve ever had that I know of is Tony Amanpour. Womp womp

 

If an ownership group from Sac emerged, and offers for the Quakes were not forthcoming from buyers committed to keeping the team in the bay, Sac could get a team w/o paying an expansion fee.

Let me ask you this. Would you buy the Quakes for $600M and keep them in a market where they're losing $10M a year, the brand awareness is nearly nonexistent, the brand perception of anyone who knows it is very poor after years of failure, local sponsorships have been hard to come by (not for lack of trying), and the stadium is insufficient to compete, as described by the guy who built the stadium?

 

As I've pointed out before, the old guard / original MLS franchises struggle. New franchises flourish. I think a new (relocated) MLS franchise in Sac would flourish. It's gonna be a grind in the bay. Heck, Sac's USL team draws almost as much as the Quakes do in a typical home game.

Again, I'm not predicting this will happen as the most likely scenario by any means. Do I think it could happen? Yes.

 

Columbus's per capita GDP is about 30% lower than Sac's, and Columbus's franchise valuation is 9th in MLS. Quakes are 22nd.

 

But why would anyone bother in a location with such poor "GDP per capita" and lack of "Fortune 500 companies", which takes the wind out of the sails of your previous point.

They [Sac] aren't such a great market for corporate sponsorships at the level MLS would want, with zero Fortune 500 companies headquartered there.

 

But why would anyone bother in a location with such poor "GDP per capita" and lack of "Fortune 500 companies", which takes the wind out of the sails of your previous point.

They [Sac] aren't such a great market for corporate sponsorships at the level MLS would want, with zero Fortune 500 companies headquartered there.

Bottom line is - an MLS franchise could succeed in either the Bay Area or Sac. A prospective owner could emerge for either location. We don't have a great track record for drawing interest from potential buyers who'd want to keep the team in the bay, excepting Fish / Wolff. Tony Amanpour, there you go . Sac has a prospective MLS ownership group (The Stronach Group?). I don't know if it's still viable. Finally, Fish is not likely gonna want to wait around too long to find the perfect buyer.

 

Surely you remember the story. The league was going to bless Precourt's relocation until the move was challenged in court to buy time, which tells us, in no uncertain terms; the league would have no problem sanctioning a Quakes purchase to an ownership group that moved the team (they've already done it once!). Also, a move from SJ to Sac is a rounding error compared to Columbus to Austin. It's literally a "neighboring MSA" to the bay area.

On October 17, 2017, Precourt announced intentions to relocate the franchise to Austin, Texas, if a downtown stadium could not be secured in Columbus.[61] Following the news, fans and supporters of the club began a campaign and movement known as #SaveTheCrew. Many had been present in the city's council building on behalf of the cause. Later in the month, it was revealed that Precourt had a clause in his purchase of the club that would allow him to relocate the franchise, but only to Austin.[62]

On November 15, 2017, Precourt and MLS commissioner Don Garber met with Columbus mayor Andrew Ginther and civic and business leaders about the Crew's future in Columbus. After the meeting, both sides issued press releases detailing the meeting. Per the delegation from Columbus, Precourt and MLS refused to take the relocation threat off the table.[63] Per Precourt and MLS, Columbus leaders did not present any plan for a downtown stadium.[64] On the issue, the mayor stated it was "obvious that Don Garber nor PSV (Precourt Sports Ventures) had any commitment for the team to stay in Columbus".[65]

In the annual state of the league conference, commissioner Garber addressed more on the potential move. He had stated the difficulties there has been present with the market over the years. Discussing in 2008, when the league began its initiative to end having ownership groups owning multiple franchises in the league, there was no success in finding a local ownership group in the market of Columbus, with an interested group wanting to purchase the team but with a very low value. It was then when the league's executives hired a different company banker and expanded its search regionally where Anthony Precourt was involved. Garber stated that had Precourt not acquired the club, there was a possibility that Columbus would have ceased operations and ultimately folded. As to why the issues were not stated publicly, Don Garber stated that the league is a "private business" and what's been happening has been seen in other major sport leagues in the country.[66]

On March 5, 2018, Ohio attorney general Mike DeWine and Columbus city attorney Zach Klein filed a lawsuit against Precourt, citing a previously untested 1996 state law (the Modell Law) that prevents sports teams that benefited from public facilities or financial assistance from relocating to another city without a six-month notice and attempting to sell the team to a local ownership group.[67] The bill was originally passed after the controversial relocation of the Cleveland Browns to Baltimore.[68]

 

There's no track record because the team has never been available in the relevant era. (2005 when there was no stadium and the league had 12 teams and the team was owned by a disinterested multi-team owner is not a relevant era for a current MLS ownership transaction.)

 

And yet someone could have stepped up and bought the team for relative pennies, and no one did, unless you count Tony Amanpour (and eventually Fish / Wolff). AEG was purportedly looking for a buyer, and IIRC Soccer Silicon Valley was also trying. Zilch, unless you want to count Tony Amanpour. I think 11th hour SVS&E had some interest in the negotiations with the city.

Now it's a much more established league but the truth is that none of us know how successful the "search for the real owner" will be. I know that I wouldn't pay $600M for a team that loses $10M annually, has awful brand perception and awareness, has been largely unsuccessful securing quality sponsors, and a stadium that is considered "non-competitive" by the guy who built the stadium. That's a hard pass for me, but I'd be happy to be proven wrong and there's an armada of Joe Lacob kind of guys lining up to buy the Quakes and keep them in the bay.

 

Big news, but agree, have to be careful what is wished for.

If the team stays at Paypal, upgrades are needed and if seats are needed, the endzone may have to be filled in to get capacity up or more luxury seating if say the new owner wants to compete in the new MLS world.

Keeping BAY fc there should be a priority also.

If they wanted a new stadium downtown near the train station, that would give you access by light rail, commuter rail, Amtrak and high speed rail in the future....not many stadiums would have that kind of access any where in North America .



BAY FC could stay at Paypal -- Not sure they really can find a place in SF for a stadium. They seem to draw ok at Paypal.and the Quakes could put the reserve team there as well to be closer than Moraga(?) or wherever they play now.
Also, isn't the Quakes practice facility near Paypal?

 

Tony Amanpour was a fraud, there's no need to mention him in every sentence. None of this is relevant to a 2025 MLS transaction. It's like going on for pages about how things were going when Eddie DeBartolo bought the 49ers. Maybe interesting history but not pertinent to how things are going now.

Unless you're a secret billionaire, what you would do is also entirely irrelevant.

 

It is not irelevant to a 2025 MLS transaction because it demonstrates the relative lack of local interest in investing in the team. 2005 is not "the same" as 2025 but it is not nothing either - it showed us the relative lack of serious local interest in the team. Tony Amanpour was a fraud but I mention him because he is symbol of the futility of that buyer search. How much has changed since then, I'm not sure, other than that the team is now 30x more expensive and they have a stadium that is considered "non-competitive" by the guy who built it. :facepalm

And we don't need to look just at those isolated periods where the team was for sale to gauge local interest. The team sits in a cornucopia of corporate wealth but has struggled since its rebirth to attract any corporate sponsorships that are not just more or less embarrassing. PayPal is maybe the one exception. And I don't believe it's for lack of trying. Then there's Fish's quest for minority ownership. As far as I know,...crickets. At the end of the day it only takes one, but in my 20+ years of Quakes fandom I have never gotten the impression that the local corporate wealth class is interested at all in the team.

It's not irrelevant. I describe the high-level financial considerations of the deal not because I would literally have the abiiity to buy the team but because I'm a rational being who can evaluate those parameters, FWIW. This is like saying that I'm not allowed to critique a Quakes player because I'm not the coach. ¯\_(ツ)_/¯

I know we're not allowed to do hypotheticals because they "don't matter", but let's do something that no one's ever done before and play pretend for a moment. If you were a billionaire, would you buy the Quakes for $600M, with annual operating losses of $10M, and with a stadium considered inadequate by the guy who built it?

 

No it does not. Not as a present tense sentence.

The team being 30x more expensive is the numerical and financial quantification of how much has changed since then.

 

Obviously I meant that it demonstrates the historical lack of local interest in investing in the team. It's a data point, along with the other data points I presented - the lack of meaningful sponsorships, and (as far as I know), the lack of interest in minority ownership. We use historical data as predictive factors for current / future occurrences, but of course they are not deterministic.

Again, it's a data point. Is the investment 30x more valuable? Maybe? When it's still bleeding $10M a year? Maybe. When it has a stadium but the stadium is considered inadequate by the guy who built it? Maybe. Someone will have to decide that it is, or the price comes down, and / or maybe the intent to keep the team in the bay starts to slip.

 

Just a hint, never believe owners' claims about sports team financial losses unless you can review the books. Public claims are devised to make the losses look a bad as possible in order to get sympathy in the court of public opinion when they are in negotiations with the union or trying to get cities to build them things. They set up separate holding companies for revenue streams like the stadium that don't get counted in the team's profit/loss, and for MLS owners there is also the money they make from SUM that is completely outside the team's profit/loss.

It comes down to this: letting this sale lead to a move would mean MLS is writing off the Bay Area for a generation or more. MLS has to approve any sale and any relocation, and the people who run MLS have plenty of faults, but they are not morons, so they will not allow this to happen. Now continue rehashing the worst possible spin of everything about the Quakes' situation to make endless doomposts about something you admit is not likely.

 

I'm simply suggesting that we shouldn't take for granted that a relocation of the team cannot be a consquence of the team being up for sale, but you insist that it's not possible, so I continue to make the case. It takes two to tango. If you'll admit that it's a potential outcome then we can move on.

 

You've posted the same thing 40 times, I'm done with it.

 

If I’ve posted “posted the same thing 40 times” then you’ve posted the same response 40 times, and I'm done with it also.

 

I think you are just being an overdramatic doomer (maybe understandably so given the history of the MLS Quakes). In 2005 MLS was still basically a minor league sport struggling to survive and it probably didn't matter as much that the Bay is one of the top markets in the country; now, it would be unthinkable to jump ship only because Fisher (already widely known for intentionally wrecking another franchise's value) has failed to invest in the Quakes' market penetration. A viable modern owner would need to make the team competitive as well as make a real effort to grow the fanbase, and probably upgrade the stadium sooner or later. These components would be key to any half-serious investment thesis, you can't run this club as a small market team.

I fail to see the relevance of Sacramento also. It's in a different media market sharing basically none of the tappable consumer / capital / sponsorship resources, and there is no RSN deal to recycle. Are you supposed to somehow take over the Republic, merge/consolidate the clubs, take over the stadium project, and expand it?

 

As I've pointed out, it's just not so easy to ratchet a level up for the original MLS franchises. The Bay Area is a harder market to crack than people think. A better team is not going to result in a big jump in attendance, and besides, every MLS team tries to be a "better team" but it doesn't always happen, even if you spend more money. This should be well understood by now. And pumping more money into marketing, again, the product is very stale in the market. These things are not so easy. If it's a new team in a new location, it's a different story. The shiny new object. That's why new MLS franchises are starting off with a bang.

There's this narrative that Fish is a terrible owner and that's why the franchise hasn't been more successful. But I don't think it's that simple. Not a great owner, sure, but he did build a stadium for the team, and he's tried to find a winning formula - hiring Matias, hiring Jesse, hiring Bruce, etc. and we might be lower 3rd in payroll but not last. The marketing team does a good job putting on the big marquee games (Stanford and Levi's, etc.). It's not all bad.

I think it was Jamon Moore who said that he's spent time on other teams' forums, and it's almost universal that the fans strongly dislike their owners. We have this sort of "wicked witch" narrative where if we get rid of Fish it'll be off to the Emerald City via the yellow brick road. Maybe, or maybe not. It's a period of uncertainty and we'll have to see how it plays out.

I just threw it out there as a possiblity, but people insist it cannot be a possibility, so I'm pushing back. Last I heard there is an ownership group in Sac trying to get an MLS franchise. Would they be interested in buying the Quakes and moving them? Maybe. Might be cheaper than paying an expansion fee, and could be a way in if Graber is reluctant to offer them an expansion franchise. Would the league be OK with it because it's barely a relocation and keeps a team in NorCal? Possibly.