Rhinos President Frank DuRoss recently did a Q&A on PaeTec Park. Here is his comment on when they plan on having PTP be "MLS-Ready": http://www.soccersam.com/news/
So is Rochester going to be a last-minute expansion choice to join Toronto if no other city can get its plan together for the 2007 season?
So DuRoss couldn't do it by himself? I was under the impression that he was gun-shy, not lacking in funds. Is this incorrect?
I think it's a little bit of both. I don't believe that DuRoss and company have pockets deep enough to pull off a move to MLS under the same conditions that say Chivas USA and Real Salt Lake entered the league and that Toronto and MLSE are planning on entering the league. I also believe that they look at it from a business perspective and it doesn't make a lot of sense to move from the USL 1st Division to MLS under the same conditions that Chivas USA, Real Salt Lake, and Toronto have had. I think the most likely move would have been DuRoss and company working with HSG and moving Dallas or KC to Rochester with HSG still having a lot of the financial burden of owning the club with DuRoss and company operating it for HSG. But, that obviously isn't going to happen now with Dallas and it's looking unlikely to happen with KC. Maybe Toronto will flame and move just across the border in about 5 years?
Whether DuRoss needs an deep pocketed angel to get into MLS is up for debate. - He doesn't need to pay for a stadium - He probably can be at least break even at a franchise level in yr 1 - The expansion/franchise fee of $10-$20 mm doesn't sound insurmountable. - The big uncertainty is the cost of league operations vs. the revenue of SUM and with RedBull moving to Harrison, tv rights coming on, the Adidas deal, SUM revenues from the World Cup, etc. I think the overhead is probably plummetting fast. I know the owners prefer other billionaires. Maybe they intend to start spending big money on salaries, marketing and buying rights fees through SUM, etc. But, it's not obvious that you really need to have that kind of money. But clearly, 2007 looks like Rochester's key window of opportunity either through expansion or the Wizards. After that, the aproaching viability of St.Louis, Philly, Milwaukee, might squeeze them out.
That could be a pill that is too big to swallow. They already have a $6 million loan on the construction of the stadium. Add in a $15 to 20 million loan to acquire an MLS franchise and the debt service may become more than they can handle. Rochester doesn't have the corporate base to generate ad revenues like most MLS markets can. And in the end, that could be what hurts Rochester the most. Unfortunately, that is something that is completely out of the hands of Rhinos ownership and the fans.
I always thought the idea of Rochester being the "Green Bay Packers" of MLS was almost too perfect an idea to be true. I know Green Bay is "owned" by the fans in shares of stock or whatever (I believe this is true) and the Rhinos are owned by what's his name, but the rest of it: medium sized town, local passion for the sport and team, history, tradition, tradition of winning, etc., all added up to potentially something special, or so I thought. I hope it comes to fruitition one day, and is good for all concernred.
I really don't think so. I suppose it's possible all these cities will build stadiums for MLS. But it's just as likely that NONE OF THEM will. Or that the business deal to share a MLS stadium with, say Rowan Univ, could put a Philly MLS team in WORSE financial shape than the 'Quakes were at Spartan Stadium... Number of American cities that have built a stadium for MLS before the league moved there: ZERO. And if DuRoss waits five years to enter MLS, that could mean a savings of $2 mil a year that could be put towards expanding PaeTec and/or an expansion/franchise fee.
I'll stand by what I said. If DuRoss aspires to MLS, the time is now, while stadiums are scarce and revenues are low. If he's not willing to find a partner so he can invest $2mm/yr into operations he's never going to own a first division team. MLS franchises are still cheap. What makes owning a team in MLS expensive is the stadium construction. DuRoss brilliantly got this stadium done on a bare bones budget and limited $ out of his own pocket. As you point out, everyone else is trying to figure out how to get someone else to pick up the tab on $100 mm stadiums. It's stupid. But over the next 5 years, tv rights revenues will pickup, the bad leases with oversized NLF stadiums will disappear, MLS starts breaking even and franchise values start to rise. And then a Rochester is just another 2nd division city. And I'm not saying DuRoss isn't smarter about his investment than the rest of the MLS owners. He probably is. I'm just saying, I think it will only get harder and less economical to get inot MLS down the road.
The only way franchise values will rise is if the $2.5 million in yearly payments to cover operating losses for franchises with bad leases go away and franchises only have to worry about themselves when trying to become profitable businesses. While that will make the initial investment to get into the league rise, that may also make it easier for a person like DuRoss to enter the league. I'm betting that it will be far easier for DuRoss to sell Rochester working in MLS than trying to sell that other owners are getting their stuff toghether as he has to right now. A $25 or 30 million entry fee may be tough to swallow, but maybe DuRoss could pull a group together that has enough cash in hand so that the loan payments are managable over the long run. But, I still think the most likely route might end up being a partnership with HSG with regards to a relocated KC franchise. Or, HSG could just use Rochester as leverage to finally get the deal done in KC........................
It has never been revealed who the out of town bidders for the KC Wizards are. Difficult to see who else it could be besides Rochester.
Except that MLS doesn't allow this type of ownership group. There needs to be one main investor. Althought that concept sounds nice, it's really that workable into todays market place.
That would be the case now definitely but the bid I'm referring to goes back to last summer when the Quakes were very much on the market.
Last summer, wasn't the out of town bid from the NY taxicab medallion guy who said maybe stay, maybe move?
Andrew Murstein was the medallion man in question. Way I remember it he dropped out of it quite quickly and Lamar Hunt later was saying he'd had bids from local bidders and also one from elsewhere and he'd give the local ones time to try to get an SSS deal and failing that would deal with the out of town group. There are not many places with a suitable stadium at this point.
please restrain from quoting Jamie Trecker on these boards. Tha douche bag deserves little or no attention
Rochester deserves an expansion club as much as anyone. it disgusts me that MLS isn't trying to accomodate potential owners by possibly offering a discounted fee where appropriate. what can a healthy club like Rochester do beside help the league? any expansion fee is good for MLS and so is a SSS-sporting club with an established fan base. ya'll are getting ********ed just like Miami did.
MLS as an organization has been ********ed repeatedly by investors who couldn't hack the long haul financials. As an MLS investor, you are asked to help carry the burden of some massive debt. And expanding to Rochester doesn't help that. The revenue generated by Rochester would be almost NOTHING. When AEG and Hunt only own one team again, fine - bring in the Rhinos. But until then, what's the point? Rochester = no tv revenue, no big time sponsorship deals. Why not make the USL a solid, consistent 16-team league, instead of playing whack-a-mole with cities every 4 years.
That cool $30mil gets you part of SUM as well. And Garber has said that SUM makes enough profit to help derafy some of the red in the MLS. And while this is only supposed to be a short to medium term solution until teams make it in the black, it wouldn't be fair for new investors who don't want to invest in SUM to be able to buy into the league and still get the returns from SUM. I hope in the future they can relax their standards and untwine SUM and MLS more. But that might be a little ways off still.