MLS announces expansion process, including timeline and fees
Major League Soccer Commissioner Don Garber announced plans Thursday for the league’s expansion to 28 teams, including a deadline for owners to apply and a new franchise fee.
The fee for the two teams expected to be granted next year is jumping to $150 million. Garber also set a Jan. 31, 2017, deadline for interested potential owners or ownership groups to apply.
The league has expanded to 22 teams with the addition of Atlanta United FC and Minnesota United FC, which will debut next season.
The Los Angeles Football Club will join the league in 2018 as the 23rd team. The league announced it is “making progress” on plans to add a team in Miami — the high-profile bid that includes David Beckham — that would bring the league to 24.
Garber was not specific about the Miami team on a conference call with reporters Thursday, but said: “We are very focused on Miami being our 24th team.”
Minnesota paid a $100 million franchise fee. In contrast, Toronto paid a $10 million fee in 2006. The fee does not cover the entire cost that owners will incur in starting up a franchise, like coaching staff salaries and stadium costs, which Garber said would bring the total cost “well north of $300 million.”
Following the meeting Thursday of the MLS Board of Governors in New York, Garber said the two new expansion teams, slated to start play by 2020, would be announced in late 2017. The timeline and fees for the two additional franchises were not yet set.
“Since announcing plans to expand to 28 clubs late last year, many potential ownership groups have contacted us, and numerous public officials have stated their desire to bring an MLS expansion team to their city,” Garber said in a prepared statement. “We look forward to reviewing expansion applications in the coming months and conducting formal meetings in 2017 with possible team owners.”
Current MLS owners approved the expansion process. Garber said some of the factors that will be considered include fan support, market size, geographic location, level of corporate support and stadium suitability.
Ten markets have expressed interest in an MLS team, including Charlotte, Cincinnati, Detroit, Nashville, Raleigh/Durham, Sacramento, St. Louis, San Antonio, San Diego and Tampa/St. Petersburg.
Sacramento is considered one of the strongest candidates. The USL side, the Sacramento Republic, hosted Garber for a rally in April to demonstrate the city’s enthusiasm for a top-level team.
In November, the Sacramento City Council approved a proposal for a development project that would include a soccer stadium.
“There are clearly markets that are further along than others,′ Garber said. “We’ve been in discussions with Sacramento for years.”
Republic FC managing partner Kevin Nagle said the Republic is well-positioned.
“For over two years, Sacramento has methodically built our case as an MLS-caliber city. We’ve proven the strength of our market. We’ve delivered a truly shovel-ready MLS stadium plan. And we’ve assembled a world-class ownership group,” Nagle said. “At last, all of that hard work will bear fruit. We look forward to the MLS application process and to demonstrating once and for all that Sacramento is ready for MLS.”
Another strong bid is expected from St. Louis. The potential ownership group for SC St. Louis includes former Bain Capital managing director Paul Edgerley and Jim Kavanaugh, owner of St. Louis FC of the USL.
“We’re in an excellent position to be awarded one of the two new MLS franchises in 2020, given St. Louis’s reputation as a great sports town as well as being the traditional home of soccer in the United States,” Edgerly said in a statement. “Combine that with the strong investor group we’ve pulled together, our plan for a new multipurpose downtown stadium, our geographical location and television market, and I like our chances.”
Another possible contender is Detroit. Quicken Loans Inc. founder Dan Gilbert, along with Detroit Pistons owner Tom Gores, first announced a bid for a Detroit MLS team in April, with plans for a $1 billion mixed-use stadium.