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Don Garber dropped a bit of a mini-bombshell last night, revealing some interesting information about MLS’ “ongoing” talks with the Crew. Anyone who reads this site already knew they were talking, given that the Court has basically ordered that MLS (and PSV, but I’m going to set them to the side for now) to cooperate in a potential settlement of the Modell lawsuit.
Jeff Carlisle grabbed a handful of juicy quotes from Garber (and one plum of a quote from the head of the Columbus Business Partnership, Alex Fischer). What I want to focus on is the long-game; where is this headed?
As I noted on Twitter, it’s easy to see why MLS is more…let’s call it cooperative. Losing every motion/argument can wear on a defendant. There’s also the risk of discovery going forward. But that aside, if we’re to take Garber and Fischer’s comments at face value, MLS may be looking for a way out of this situation. So if the vote in Austin passes on August 9, what does a settlement look like? I see four (big) things that need to be resolved.
1) Determining if we’ve got bona fide local investors who will make a suitable offer: All background signs point to yes. While I don’t know the name of the investors, background information indicates they are there. As to a “suitable offer,” the Modell law is silent as to that, but under this theory the parties settle, so that’s not an issue. The going expansion rate is $150 million (for now); Precourt purchased the team for $68 million. Pick a number ($115 million?). And setting that aside, is there going to be a problem getting the local investor(s) to buy into the MLS structure? Are they sufficiently capitalized? More on this later.
2) Determining if a stadium package can be approved concurrently with the new owners (probably w/public assistance): It appears there may be some willingness to work something out, but we’re obviously a ways out on this point. But maybe we shouldn’t be. The lease at Mapfre is only good for another five years, and I think even the most die-hard STC fan would agree that the odds of getting a local ownership group to agree to a purchase where the team stays at Mapfre past that point is extremely unlikely. There’s been some suggestions about sites where a new stadium could be located, but for purposes of this, we’ll assume that new local owners will have much better luck working with the local municipalities to get something done. So much irony here: In an age where public financing of stadiums gets increasing amounts of scrutiny, MLS may succeed in getting assistance while losing a lawsuit designed to keep them there, based on accepting public assistance.
3) Corporate support/sponsorship: Presuming 1 & 2 are secured, this seems doable. But MLS will likely want some strong commitments. Having spoken myself with some MLS-types, I can assure you this is high on MLS’ priority list (though I may not be telling you anything you don’t already know). But with a new owner/stadium, one would assume this could be locked in. They may want to work on getting a better local television deal though.
4) Expansion: If Austin secures the deal, PSV (under my theory) goes there to set up a team. If 1-3 above are secured, Columbus is therefore in a position to #SaveTheCrew. So you’ve got two cities, with two teams (one existing; one expansion). But with any divorce, it’s always a question of: who gets what?
Based on what I’ve been reading and what I’ve heard on background, it’s pretty clear that Garber wants to send Precourt to Austin with the Crew infrastructure, if not the name/history. It is pretty fair to say that the City of Columbus and its fans would prefer to keep everything associated with the Crew, and Precourt can start his expansion team in Austin. All things being equal, sending Precourt on his way with an expansion team makes more sense, but I see three issues.
- At this point, it would be impossible for PSV to get an expansion team up and running for the 2019 season, since they seem dead-set on having Austin in the league next year. The solution would be to have Precourt come in when his stadium is done, but that leads into…
- …the fact there are going to be a number of angry cities if Precourt gets a shiny new franchise, whenever they would come in. Not least of all, a city just to the South, who all but threatened to frog-march Garber and company down there for a fraud investigation. I’m not sure if San Antonio officials would renew their investigation should Austin come in and leapfrog them with an expansion team that they never applied for, but Judge Nelson Wolff seems like the type of guy who would try. Either way, MLS would have to explain why a team who couldn’t put together an expansion bid gets to jump to the front of the line.
- Practically speaking, this drops the number of slots MLS (allegedly) has available to one. And it could cost them millions in expansion fees, since the number could go up from $150 million to $200 million or more. If they’re giving one to Austin or Columbus at a cut rate, one can image MLS investors won’t be happy.
Of course, none of this is of particular concern to the folks in Columbus, but it is an issue that will be to be resolved before any settlement is reached.
So what happens next? The Austin City Council takes of the PSV/Austin term sheet on August 9. I expect it to pass, and probably pretty easily (If the vote were today, I’d say it’d pass 8-3). Before today, I’d have guessed that the next step (after MLS finally -officially- announces the move) would have been an injunction filed by the plaintiffs, but these comments by both Garber and Fischer give me a bit a pause. Of course, Garber could be playing both sides as usual. The bottom line right now is that there is still too much information we don’t know, but if there is a settlement to be reached the above (broadly speaking) are the things that need to be resolved.