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MLS fans in several cities wait nervously for contraction decision.
By Robert Wagman
WASHINGTON, D.C. (Thursday, December 27, 2001) -- For Major League Soccer fans on both coasts of Florida, and in Denver, Kansas City, Dallas, San Jose and even Chicago, 2001 is ending on a nervous note. Rumors abound that the 12-team league is about to "contract", probably to 10 clubs, either by folding franchises or allowing them to go on "hiatus."
An announcement had been expected before Christmas, but MLS commissioner Don Garber has twice issued terse written statements saying no final decisions would be reached until the new year.
The roots of the current situation trace back two or more years when the league's owner-operators or investors, whichever term you prefer, aligned themselves into two camps.
One camp, represented by multi-team investors, Philip Anschutz and the Lamar Hunt family, believed that considerably more money, intelligently spent, must be invested in the league to guarantee long-term viability.
The other group, represented by New England’s Kraft family, the MetroStars' Stuart Subotnick in New Jersey, and the Miami Fusion’s Ken Horowitz, believed the league needed to move strongly to, at minimum, eliminate operating losses, and at least some teams needed to start showing a profit.
The two sides entered into a somewhat uneasy truce prior to the 2001 season, reaching a compromise to freeze team budgets with the single-entity league, which negotiates all player contracts and acquisitions, abstaining from buying new, expensive players. At the same time, some additional funds would be devoted to marketing in an attempt to improve attendance and television ratings.
Still, 2001 turned out to be a rather flat year for MLS with, at most, modest gains at the gate and even lesser in TV viewership. So at meetings after the season ended, the investors started to talk seriously about making significant changes.
A particularly great drain on MLS resources have been the league-operated teams in Tampa, Fla., and Dallas, given the league's financial structure where the investors are both partners in the league as a whole and individually operate franchises. The league champion San Jose Earthquakes are also owned by the league as a whole, but operated inndividually by a group without an ownership stake in MLS.
The individual operators of each of the other nine franchises assume half of the operating costs (read losses) with Major League Soccer LLC taking on the other half. For the Tampa Bay Mutiny and Dallas Burn, the MLS partnership as a whole is responsible for 100 percent of the operating cost.
It is important to note that these costs do not include player contracts which all are the property and responsibility of MLS LLC.
All attempts to find owners for Tampa and Dallas have failed, so the initial focus this offseason was eliminating or possibly moving one or both of these teams. These discussions apparently opened the floodgates to a number of issues, triggering a chain reaction of events.
Subotnick, and his MLS and Metromedia International Group partner John Kluge, lost their enthusiasm for a long-term commitment to the MetroStars and building a new stadium in northern New Jersey, not to mention starting an expansion franchise with a new facility in New York -- probably Queens. So they accepted a standing offer from Anschutz via his Anschutz Entertainment Group which lusted to add the MLS trophy club to teams in Chicago, Los Angeles, Washington, D.C., and Denver.
Then there is Silicon Valley Sports & Entertainment, owner of the National Hockey League’s San Jose Sharks which has been operating the Earthquakes without being a partner in league ownership. The current dire economic conditions in Silicon Valley provoked SVS&E to having severe second thoughts about renewing its operating agreement with MLS.
At the same time Horowitz, who was introduced to MLS by Subotnick as a minority investor in the MetroStars, told the other MLS principals he was no longer willing to lose money operating the Fusion in Fort Lauderdale and would shutter the team while remaining a partner in MLS LLC.
Add to this the major stadium problems of the AEG teams in Chicago and Denver. The Colorado Rapids, who have coexisted with the National Football League’s Denver Broncos at Mile High Stadium, have been unable to negotiate a lease to Anschutz’s liking a the Broncos’ new Invesco Field. Demolition of the old Mile High could begin as soon as January 10.
The Chicago Fire has been stymied in trying to find a temporary home for two years while Soldier Field is being rebuilt, leading to speculation, however faulty, that the team might have to leave town temporarily, playing someplace such as Milwaukee or St. Louis.
With nothing but denials from MLS officials, rumors began to fly.
According to several well-placed league sources, this is the direction of the current talks. A reduction of teams is a strong possibility, but of no more than two teams lest the league lose credibility. For a time, a popular option was to shut down Tampa Bay and current Dallas Burn, but move the Kansas City Wizards team and operation to Dallas and rename it the Burn. This would leave the Hunt family, with strong ties to Dallas, running the Burn which would be the beneficiary of a new stadium which is part of a new massive soccer complex to be built in McKinney, a northern suburb.
Family patriarch Lamar Hunt announced that the Wizards would stay in Kansas City, even though some of his fellow owners chafe at the terms by which his NFL Kansas City Chiefs rent Arrowhead Stadium to MLS. In San Jose, it appears that AEG is investigating a rescue of SVS&E and a partnership to run the Earthquakes.
Where the Fire will play remains a major problem. AEG has league permission to relocate the team for two years in Milwaukee or St. Louis, but now a deal appears close for Cardinal Stadium at North Central College in Naperville, Ill., to become the temporary home. It’s current capacity is 5,500.
Horowitz reportedly has rejected at least one offer, probably from AEG, of $18-20 million, to buy him out, He says he has invested about $40 million in MLS in the form of about $20 million for his expansion fee in 1998, $5 million to renovate Lockhart Stadium in Fort Lauderdale and about $15 million in operating losses.
With MLS ready to throw in the towel, the city of Miami stepped forward, with negotiations that are ongoing, trying to find a way to bring the Fusion to the Orange Bowl where the league originally wanted to place a team in the first place.
In Tampa, one last -- and probably futile -- attempt is being made to interest Malcolm Glazer, owner of the NFL Bucs in taking over the Mutiny.
In Denver, AEG is edging closer to a deal to play at Invesco. Meanwhile, the future in Dallas might rest with the what happens in Miami. If the Fusion folds, the league might decide to keep the Burn intact to keep the league at 10 teams. The Hunt family has apparently pledged to work diligently to bring in local investors.
So as New Year’s Day approaches, it is not yet clear what form MLS will take in 2002. On the other hand, a new television deal with ESPN, brokered by Anschutz, has Garber pledging the league’s future is solid for at least five more years.
Still, in addition to the contraction of teams, it does seem certain that budgets will be tighter than ever with a number of big-name players being asked to accept salary cuts, no new expensive new players being added and rosters frozen at 18 players. This should not have a particularly negative effect on the quality of play, however, because surviving teams whould be strengthened in the case of a dispersal draft, each picking up a couple good players, possibly even a star, already on the league payroll.
Many of these questions need to be answered soon considering the league must finalize
its schedule, secure stadium dates, put the finishing touches on the TV deal, hold its
"Superdraft" and prepare for a particularly early start in March considering a month=long
slow period during the World Cup.
Managing editor Gary Davidson contributed to this column.
Senior correspondent Robert Wagman's "It Seems To Me . . . " appears regularly on SoccerTimes. He can be
e-mailed at email@example.com..
Managing editor Gary Davidson contributed to this column.
Senior correspondent Robert Wagman's "It Seems To Me . . . " appears regularly on SoccerTimes. He can be e-mailed at firstname.lastname@example.org..