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Contraction factor MLS perfect record of stability remains in jeopardyPosted: Thursday January 03, 2002 1:01 PMUpdated: Thursday January 03, 2002 3:52 PM
By Ridge Mahoney, Soccer America Economic uncertainty, fearsome leases and the stigma of league-run teams draining millions of dollars per year sparked talk of shrinkage. For the past few years MLS executives occasionally declared their pride in having moved or folded no teams. That perfect record is in great jeopardy. In November and December were held the most serious discussions yet regarding contraction. Decisions were tabled until the very last days of 2001 following a season of modest gains in attendance that did little to mitigate what have become annual losses. The departure of operator-investor Stuart Subotnick -- who with his billionaire partner John Kluge sold the MetroStars to Phil Anschutz -- further clouds the future.
The operator-investors have declared their commitment through 2006, the number of teams to be decided. Regardless of whether MLS goes forth with 12 or 10 -- or even eight -- nearly every team is plagued by problems of market, stadium, structure, finances or all of the above.
Deepest in troubleCOLORADO. Simply being part of the Anschutz empire is no guarantee. The Rapids survived six seasons at Mile High Stadium and have worked out a moderately better deal at the new Invesco Field at Mile High. They would pay about $20,000 per game to rent Invesco but would receive a share of ancillary revenues, which they didn't get at Mile High. No team except Columbus receives a share of ancillary revenues, but most pay double or triple in rent. So why is the Anschutz Entertainment Group complaining about the lease? Sources say it's an excuse to fold the team. The Rapids have used concerts, fireworks shows -- and two coaching changes -- in a futile effort to establish a fan base. It would be ironic -- and perhaps forebodingly symbolic -- if the first team owned by Phil Anschutz was the among the first to fold. Several AEG executives have reportedly advised Anschutz that the Denver market is too tough despite an attendance average of 16,481 per game (fifth best in MLS) in 2001. TAMPA BAY. MLS shrouds its finances in secrecy, yet its executives have admitted the coffers are drained most drastically by league-run teams. The owners must collectively cover the losses at the local operating level -- losses that siphon away funds and resources at the league level. A source said each league-run team costs the owners between $3 million-$4 million per year. For years, MLS officials have been flirting with the Glazer family, which owns the NFL Buccaneers, who share Raymond James Stadium with the Mutiny. Unless an operator can be lured, Tampa is toast. MIAMI. An array of spectacular stars coached by one of the most quotable men in sports play in a cozy stadium. In support is a bare-bones organization that costs next to nothing to run. The operator-investor shows up for nearly every home game with his son, and they seem to have a great time. Unfortunately, that operator-investor is the poor man of MLS. Ken Horowitz has already lost more than $30 million, and every year his ability to continue comes under scrutiny. The Fusion posted the league's best record but its attendance increase from 7,460 to 11,177 still left it well short of the league average (14,961). Before AEG bought the MetroStars, there were discussions about it taking over the Fusion. That still might happen. Anschutz is supposedly tired of Horowitz's constant complaining. But if league-wide losses can be cut -- i.e. league-run teams get the ax -- Horowitz might stay on. Unfortunately, some MLS execs believe this market may never work.
On shaky groundSAN JOSE. The dilemma of MLS can't be more clearly encapsulated than in this Northern California area wracked by the collapse of Internet industries. The Quakes shook off four years of dreary failure by winning it all in 2001. Winning sells, right? Well, no. A great story, an excellent team -- and a budding teenage superstar in Landon Donovan -- barely moved the attendance needle. The Quakes were last in regular-season attendance at 9,635 -- and not until 16,119 fans came to see the final playoff game did they wake up the locals. Executives of sports agency Silicon Valley Sports & Entertainment, which operates the NHL Sharks, ponder what to do next. SVS&E jumped aboard to operate the Quakes last January. They reportedly lost $15 million in 2000 and can't afford to buy the Quakes. DALLAS. The Burn drew 12,416 per game and again fell short in the playoffs in its first year under Coach Mike Jeffries. As one of those money-sucking league-run teams, Dallas would be on the chopping block except for the prospect of a soccer complex in the northern suburbs that would include a cozy stadium of MLS specifications. General manager Andy Swift is concerned that marketing to the team's Hispanic audience -- which he says accounts for about 40 percent of attendance and 60 percent of local sponsorships -- would be more difficult outside the city limits. Yet the millions lost at the Cotton Bowl can't be readily stanched unless attendance doubles. Columbus and Kansas City operator-investor Lamar Hunt lives and works in Dallas. He is optimistic enough about the soccer complex that he would consider buying the Burn if it's built. Hunt has heeded the lessons of his soccer stadium in Columbus, where it turned a profit in 2001 by staging more than a dozen events in addition to Crew home games. KANSAS CITY. Hunt has declared the Wizards will stay in Kansas City although there are rumors they may not be at Arrowhead Stadium forever. It's too big and too far away from the soccer communities the team is trying to lure. A suburban soccer complex similar to the one proposed for Dallas could be in the Wizards' future. In a post-championship season, they were 10th in league attendance at 10,954.
In fluxMETROSTARS. The Metromedia International empire was hit hard by economic reversals -- stock is down from a high of $18 in 1998 to less than a $1 today -- so Kluge and Subotnick bailed. No team pays more dearly to play than the Metros, who fork out about $80,000 per game in rent plus expenses at the Meadowlands. Political wrangles and the aftermath of Sept. 11 have frozen progress for a soccer stadium in Harrison, N.J. Reviving that project or some other solution is crucial to the league's decree that it must have a competitive, financially viable team in this locale. AEG may be able to get the stadium project moving again, but must also take a hard look at the exorbitant spending of GM Nick Sakiewicz. CHICAGO. As with most elements of MLS, stability is at best relative. The team with the league's best all-time record and a large, passionate following has no place to play. Shoved out of Soldier Field for the next two seasons by renovations, the Fire has negotiated a long-term deal with better terms starting in 2004 at the rebuilt facility. Between now and then it has to either lay real turf onto the infield at Comiskey Park or play on SportTurf at North Central College in Naperville. Where? Exactly. Chicago reportedly lost a few million despite drawing 16,388 fans per game (sixth best in MLS) because of high overhead -- it has one of the biggest staffs in the league -- and a rough lease. LOS ANGELES. With Luis Hernandez out of the picture and Mauricio Cienfuegos at odds with Coach Sigi Schmid, the team's future prospects in the Hispanic market are unclear. The Galaxy is dichotomy personified: a very good team staring at a 15 percent drop in attendance (17,387) from the previous year. Tack on a move to a multisports complex 40 miles from the Rose Bowl in 2003, and you must wonder. The Rose Bowl costs $60,000 to open the doors, and associated expenses are also large. The Galaxy reportedly lost several million dollars in 2001. Construction of the stadium is scheduled to begin in January. Target date for completion: May 2003. D.C. UNITED. Two straight playoff misses and a fired head coach blight this once-proud team, yet AEG is finalizing a purchase after a season as United's operator. Why? Despite another dismal season, United led MLS in attendance (21,518). President Kevin Payne is relinquishing hands-on control to work for AEG as its soccer majordomo. He has hired a technical director -- Dave Kasper of the Kraft organization -- and has promoted long-time team exec Stephen Zack to business manager. AEG is sniffing around for a place to build a stadium. NEW ENGLAND. The Revs are scheduled to open CMGI Field next spring, but operator-investors Robert and Jonathan Kraft hadn't paid their share of a 2001 cash call as of early December. Disgruntled but loyal fans abound in the Boston area. More than a few of them aren't convinced a newer, larger football stadium will add to the MLS experience. The Krafts do control stadium dates, but because of payments to local authorities and staffing requirements their costs are high. An average attendance of 15,654 ranks right in the middle. Sunil Gulati, Managing Director of Kraft Soccer Properties, may end his three-year association with the club to pursue other interests.
Steady as she goesCOLUMBUS. The Crew has the best bottom line in the league, although it is unknown if the team breaks even. But a stadium in the black points the way. Ridge Mahoney is a senior editor at Soccer America magazine .
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