Wednesday, March 1, 2017
Major League Soccer Expands
Wall Street Journal - "The MLS Is Growing in Teams—Just Not Profits"
"Paul Edgerley, a mostly retired Bain Capital executive who leads a St. Louis group, said he thinks of owning a soccer team like being a farmer. “You don’t make money in an individual year but you make some return on the land,” said the Kansas City native, who also owns a piece of the Boston Celtics.
Edgerley’s group is planning to build a $200 million stadium near St. Louis’ Union Station and hopes to gain support for about $60 million in public financing. He says demographic trends suggest soccer will be the third most popular sport in the U.S. in 20 years, even if the near-term financial outlook remains unclear. “Who knows when that actually results in the cycle of better television revenues and better players and a better product?”
Bill McGuire believes his leap of faith is already paying off. The former chief executive of UnitedHealth Group was part of an investor group that in 2015 committed $100 million for a Twin Cities team without a fully developed plan for a stadium and a commitment to play outdoors in a region where winter sometimes lasts until May.
Two years later, Minnesota United will have to begin play in 51,000-seat TCFBankStadium at the University of Minnesota since its 20,000-seat stadium possibly won’t be ready for two years. Nonetheless, the asking price for franchises is roughly 50% more than what his group paid.
“It’s clearly gone up,” McGuire said. “It ain’t the NFL, but it might be.”
Even the league’s biggest boosters would hesitate to predict that. There are easily a half-dozen soccer leagues around the world that are considered significantly higher quality.
John Ingram, who leads the group trying to bring a team to Nashville, remains unbowed. Ingram runs his family’s conglomerate, Ingram Industries, which has interests in publishing, technology, shipping and other sectors. Ingram said his main motivation is for a soccer team to further expand Music City’s reputation as a place that punches above its weight. Besides that, he sees the team as a legacy for his children, including his high-school age son who is an avid player.
“I wouldn’t say the investment angle is the primary reason, but no one wants to make dumb investments and I think this would be good over time,” Ingram said. “No business person wants to be stupid, but first and foremost it’s about loving the opportunity.”"