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

Fisher is only selling a controlling interest in the team. He's going to retain some fraction of the team. Also, there are two or three minority owners.

So maybe he sells 75% of the team? Maybe 80%? But it won't be all. So the price will be less than $600M.

He should be able to find someone at that price point, and control of the team will come with the purchase.

And I don't see a new stadium coming. Maybe some modifications and improvements to the existing stadium, which could be done in phases.

In any case, we should be chuffed!!

Go Quakesfans!!

 

To me, that is the most likely outcome that maximizes the price that Fisher can get.

 

Hey Don, what is your opinion of SJ Mayor Matt Mahan? I’m surprised anyone is pushing a sports and entertainment district when the economics and politics are staring down the double barrel of a major depression/recession and worldwide apocalypse. Not to mention NOTUS cutting funding everywhere, leaving the states (esp CA) and local govts to fend for themselves.

E.g., Did anyone notice that Santa Clara County homelessness increased 8% last year?

 

Not allowed to talk politics.

He is a genuine Quakes fan, so I'm told. Comes to games with his family. He's had the idea of a "Downtown West" stadium for awhile. Surprised he went public with it.

 

One factor in going public with it is that he doesn't want the team to leave San Jose. So it's "Hey, prospective buyer, if you want to upgrade the stadium at some point, we have a downtown location for you here in San Jose. Just sayin'."

 

Around here, we usually call him Shithead.

 

This topic will inevitably include some discussion of politics.

It was tough to get the current stadium done, I can’t envision a new stadium. Also, we’re talking about spending a billion or so dollars. Let’s say that the controlling interest in the team goes for $575. A new stadium would run another couple of hundred million at least, probably closer to $400M, and I’m assuming a not world class stadium. Then we need to get a training facility done, And spend more money on players.

We’re easily over a billion dollars.

So we’re hoping for a young billionaire? I can imagine huge upgrades to the existing stadium much more easily.

And how much will the city be involved? And mass transit?

It’s lots of OPM we’re talking about, and for some, your tax payer drachmas.

Right now, I’m just hoping for a rich soccer fan or three to buy the controlling interest and run the team like they care.

Go Quakesfans!!

 

?

 

Haha text me instead.

 

Encouraging development, interested to see where this goes.

An improved stadium, just down the road, would be nice. PayPal ain't cutting it.

 

Yeah, requiring Fish to retain part ownership could be a disincentive for anyone to buy. How did that "minority ownership" quest go for him?

 

Fisher has said that he is selling a controlling interest in the team. BUT, no deal has been struck yet. So it could 51% up to 95% or whatever RottenFish owns. But he can’t agree to sell the minority stakeholders 2% or 3% or whatever it is. BUT, no deal has been struck, or even offered. So maybe the minority owners bail out too? We just don’t know.

If the sale is less than 100%, then probably the new owner will only have to spend $500M to $575M or thereabouts. That was my main point.

I wouldn’t be surprise if RottenFish sells all of his stake, but I expect that he’s going to want to keep 5% or even 10%, which might make getting the deal done tough. Fisher is a dick, and his ego is involved here. But a new owner probably wants him gone completely, before the value of the team escalates even more.

Go Quakesfans!!

 

I don't.

First of all, not sure you are correct that he owns 100% of the Club. I recall that he sold some shares to minority owners a while back, And it is common for Board members to own a tiny fraction of the business. But, I would agree that he owns at least 95% of it. And he controls all the key decisions.

But, despite the claims that Fisher is a "terrible person" and therefore is not interested in the Club, I don't share that view. I have never met the man other than a brief "Hello" at games. And the few occasions fans have interacted with him (I recall someone recounting that they chatted with him about the emblem on his jacket once), he seemed pleasant enough.

And the man attends the games form the upper deck. He does NOT slouch away in his Suite. He joins the fans above the fray so he can see the game properly. So he is interested.

I think that he enjoys soccer and at least helped us build a stadium.

But he is a "business guy" first and a sports (soccer) fan second. I really have no clue if this is accurate or not, but I suspect that he nurtured an interest in soccer some years back, was already a sports team owner and saw a business opportunity with MLS. So, his buddy and real estate partner Lew Wolfe dragged him into buying the "expansion" 'Quakes in '07. His goal was likely to invest a small amount to acquire the team and to build an "economical" stadium in return for some real estate "incentives" later on that would pay for his initial, reasonably small ($20M) investment.

So, we end up with a "new" team in '08, eventually a stadium, and a business owner who maintains a minimum cash outflow in exchange for an equity growth opportunity. And that's exactly what happens.

Through no fault of his own (nor with his help) MLS expands significantly and his equity position in the team grows, much to his surprise and pleasure. As a business venture, the 'Quakes are a complete winner for him. Sadly for us, however, our interest is not in growing equity, it is wanting a competitive Club. But, here we are.

So now, let's imagine that the Club is, indeed, worth $600M. One hell of a return from his initial $20M + $120M (Stadium) investment. And, I estimate (wildly) that his cashflow losses on an annual basis were, say, around $10M/yr.. So, he has spent ~$140M + $170M ($10M*17 years) = $310M so far. Still a great investment.

And now he needs cash. He can't sell a big minority chunk, say $200M, as there would be no buyers. Why would anyone invest that much in the Club (that has struggled) without wanting a controlling position? So, Fisher decides to sell his controlling interest in order to produce some cash for his A's Vegas Venture. Don't know how much cash need needs but I would think that his enjoyment of the Club is something he wants to hang onto.

So, his best bet is to sell a controlling interest in the Club. This is a much more attractive option for a potential buyer. Someone who, hopefully, truly is a proper Soccer Fan, buys in for less than it would cost for a new franchise, say $400M and gets ~65% of the Club and the ability to control all aspects of it. Fisher gets to retain, say 30% (the rest to minority partners) and we have a deal that makes everyone happy.

And, with the cash left over from NOT buying the remaining 30% the majority partners now have those funds to be used for improving the stadium and investing in the team.

This is just my imagination running wild, of course, but the whole scenario makes sense to me and I can well imagine that Fisher is not committed to selling the whole team. I think that he'd like to retain an interest in the Club and will be looking for a majority partner who get him the best deal.

 

When you sell an investment to rake gains, it's usually wise to hang onto some portion of it. Thankfully, that is an axiom that I followed when I sold not all but just half of my Apple stock years ago .

Everyone seems giddy about Fish putting the club up for sale, but TBH it makes me nervous. It could very well be a good thing, but I don't have confidence in the prospect of local monied interest in the club based on our history of having difficulty in finding interested owners / investors or even non-embarassing sponsors. The bay is predominatnly tech money, and it just seems that the tech guys, who were already work-obsessed, are so wrapped up in the AI arms race these days* (or worse - politics) that not much of anything else is on their radar.

* Case in point - I just saw this, and it reinforcces my point. Of course it only takes one to want to own the team, but such is the nature of tech these days...

 

I’m not giddy, as I previously made clear on this thread.

 

As I said, "I recall...". I do not have any citation one way or the other. It is likely that Board members have slivers of ownership as that is common practice for Board members.

It does not affect my point that I believe that it is not only possible, but, perhaps, even likely, that Fisher retains a minority share.

 

OK, no minority owners. Pretty sure that there were minority owners some years back, but that’s neither here nor there.

In that case, yeah, he’ll try to sell all of the team, or the new owners will insist that he sell all of the team. I agree that one of those two outcomes is most likely. (I really thought that there were minority owners.)

I’m not sure that makes the sale more attractive. Certainly, it will be more expensive. So we’re talking $600M or more even, because RottenFish is a greedy bastard. Interesting (in a bad way) that he wants to keep the A’s rather than the Quakes.

Whatever, I want to be shut of that wanker.

Go Quakesfans!!

 

This is another reason to wait to pop the champagne. First we don't know if anyone who wants to keep the team in the bay will be interested, and second, if someone is, there's no guarantee that person can't be a worse owner than Fish.