The Columbus Crew suffered a tough defeat at the hands of the New York Red Bulls Sunday evening, ending their 2018 season after losing 3-1 on aggregate in the Eastern […]
The Columbus Crew suffered a tough defeat at the hands of the New York Red Bulls Sunday evening, ending their 2018 season after losing 3-1 on aggregate in the Eastern Conference Semifinals. But the good news for fans of the club is that the 2019 season is just around the corner, a fact that a year ago was far from assured.
After months of seemingly little hope, it now appears that the Crew could be staying in Columbus after all. On October 12th, MLS acknowledged that the league was in talks with a local investor group led by Dr. Pete Edwards, Jr., and Dee and Jimmy Haslam, the owners of the Cleveland Browns. The statement fell short of saying that a deal was done, and until the parties have signed on the dotted line and the new owners—investor/operators, if you want to get technical—are holding up Columbus Crew scarves in front of thousands of adoring fans, it could still fall apart.
It was a point made clear in speaking with multiple sources involved in the litigation, as well as the negotiations to purchase the MLS operating rights to the Crew in Columbus, as the parties attempt to finalize a deal to keep the team where they are.
Though there hasn’t been much news on the lawsuit since the parties had oral arguments on September 4 over MLS and Precourt Sports Ventures’ motion to dismiss, it is clear that MLS continues to believe that the Modell law is unconstitutional. Further, sources with knowledge of MLS legal strategy argue that they have complied with the law in full.
“What the law requires is that local residents be given the opportunity to purchase the team,” a source with knowledge of league’s thinking on the lawsuit said. “However you read those things, what is clear is that the league and PSV have provided whatever opportunity is required under the statute. That obligation has been met, and was probably met quite some time ago.”
That argument extends to the statutory requirement to provide six-months notice of intent to cease playing at Mapfre Stadium, which MLS believes they have long ago provided to the necessary parties. The issue regarding constitutionality has yet to be resolved, but the position from MLS here is notable. If MLS were to successfully argue that this negotiation with the Edwards/Haslam group constitutes “opportunity to purchase,” they would likely argue that they have complied with the law in full, even if those negotiations later fall apart. It is unclear how Judge Brown would rule in that situation; it may depend on the reason the negotiations fail, if there were other groups interested in purchasing the team, and when these negotiations started, given the requirement to give six-months’ notice of intent to cease using the facility.
To be sure, the plaintiffs do not share the position that the ongoing negotiations between the Haslam/Edwards group and MLS satisfies the “opportunity to purchase” component of the Modell law. “We are optimistic and pleased regarding the recent developments to #SaveTheCrew,” said Dan Tierney, spokesman with the Ohio Attorney General’s Office. “However, at this stage, it is premature to judge MLS’ compliance with the law. Because discovery is stayed and because MLS asked the prospective purchasers to sign a non-disclosure agreement, we do not have sufficient information available to us to evaluate whether a reasonable opportunity to purchase has been given.”
The City Attorney’s office echoed the sentiments of the co-plaintiffs, arguing that any conclusions regarding the Modell law are premature. “Notice has not been given,” said Columbus City Attorney Zack Klein. “Legal determinations are made by Judge Brown.” Only when an agreement is reached to keep the team in Columbus, will the case be resolved. “The litigation is not going away,” Klein said.
Finally, it’s unknown whether Judge Brown will issue his ruling on the motion to dismiss while the parties are negotiating. MLS believes that it’s possible (thought not necessarily likely) the Judge issues a ruling during the settlement process. It would seem unlikely, as a decision either way could drastically impact the negotiations. However, nothing at this time prevents the judge from issuing a ruling, which provides some incentive for the parties to finish their negotiations. Attorneys for both the plaintiffs and defendants agreed that Judge Brown could issue his ruling at any time. “[Judge Brown] could issue his ruling while we’re on the phone.” Klein said.
That concerning note aside, it’s clear the parties are hopeful that a settlement is reached. A source with knowledge of the plaintiff’s case previously indicated that the deal is “largely done.” According to the same source, the deal will likely include the purchase of MapFre stadium, the current home for the Crew.
League sources continue to maintain that there are three necessary issues to resolve to unlock the potential of the market: local ownership, a stadium solution and increased corporate support. “It wasn’t that the league had given up on the market; it just didn’t think it had the dynamics in place to be successful” the source said. “It really was about what the league needed to do to make Columbus be successful.”
The change in tone is noticeable from the beginning of this case, and the acceleration of settlement talks can likely be traced to the involvement the Haslam/Edwards group. “The league has been working behind the scenes pretty hard for a year, and what happened was that it reached a point on Friday where it was far enough along even though an agreement wasn’t final and some questions remained unanswered. All parties felt they were far enough along to make a public announcement,” the source said.
That public announcement has made it easier for people to publicly address some of the outstanding issues, such as the stadium situation and corporate support, which explains recent reports of certain locations being open to selling property to facilitate the construction of a stadium. It’s clear that as progress has been made on a deal, that the parties are working in tandem on these issues. “Collaboratively all groups are working on finalizing the deal; the league, the Haslams, the City, the Columbus Partnership and the Edwards family,” the source said. This includes where the Crew would play going forward.
Specifically on potential stadium locations, while MLS would not comment on whether they had approved any specific sites, they did confirm that there is a list of locations that they agree would meet their requirements. Reports have recently surfaced that Nationwide Insurance, which has property in what is called the “Arena District,” is open to selling property for the purpose of constructing a stadium, though MLS did not confirm if that location was one which they agree would work.
Corporate support has long been cited by MLS as a reason a team was not viable in the market, though MLS maintains that they believe in the potential of the market with a new ownership group taking over for Anthony Precourt. “The Columbus Partnership is playing a direct role here,” the source said. “The Partnership is an organization of the leading corporations in Columbus, and there are some very significant Corporations there.” With an ownership group seemingly in place, and discussions regarding a stadium location and increased corporate support under way, all the ingredients seem to be set for a potential sale of the team.
Which raises the question about Mr. Precourt’s role going forward. First, league sources did confirm that Mr. Precourt continues to operate the Columbus Crew, and will until a deal is in place. If MLS consummates the deal with the Haslam/Edwards group, Mr. Precourt’s operating rights would then transfer to Austin, where he is working to finalize the lease/development deal for McKalla Place.
That lease agreement is set to be finished on schedule. “Latest, sometime early December,” said David Green, head of media relations for the City of Austin. “The Term Sheet was so detailed, that it’s actually made this process pretty smooth from the lawyers’ perspective and they’ve been able to go through and make pretty steady progress.” In any case, Mr. Precourt will continue to run the Crew until a deal to sell his operating rights is finalized. With the Crew eliminated from the 2018 playoffs, and their head coach rumored to be taking the U.S. Mens National Team job, there are no shortage of issues he will be dealing with between now and the start of 2019 preseason.
Whether that means MLS will have a team playing in Columbus, Austin, both or neither remains unanswered at the moment, with multiple separate deals being negotiated. There are essentially two locations where an Austin team could play in 2019: Dell Diamond (Capacity, ~13,000) in Round Rock, or two facilities at the University of Texas and none appear to be viable for one reason or another.
Dell Diamond is a baseball stadium located 20 miles outside of Austin, and has already published its baseball schedule for 2019. “Our 2019 Round Rock Express schedule has been announced, so any outside events that we bring to Dell Diamond would have to work around that,” said Andrew Felts, Manager of Communications for the Round Rock Express.
The costs of using one of the University of Texas facilities appear to be prohibitive (rumors indicate a rental fee could cost around $5 million per year minimum). Additionally, MLS must complete their schedule soon, and without a deal with the City of Austin for McKalla, with Haslam/Edwards for a sale, or with Dell or UT for a temporary site, it appears highly unlikely Austin will see a team playing in 2019, though MLS has not confirmed a decision has been made.
This leads to a potential nightmare scenario for all involved: The Haslam/Edwards deal falls through, the Modell Law is either found unconstitutional or complied with, and there is no ability to move the Crew to Austin for 2019. This would result in Anthony Precourt still operating the Crew in Columbus in 2019 and potentially beyond. MLS has not explored what would happen in that scenario, but it provides motivation to reach an agreement; it’s the definition of the darkest timeline that everyone would like to avoid. “Everybody is motivated to move quickly,” the source said.
With the 2018 offseason effectively under way for the Crew and the majority of MLS teams, the sooner the better for all parties to see this matter resolved.