The Winners and losers in MLS’ relentless expansion game

The Winners and losers in MLS’ relentless expansion game

Major League Soccer told Sacramento its time was coming. Commissioner Don Garber all but told fans in 2016 the city would be getting a franchise.

“We hope and expect Sacramento will be an expansion team very soon,” Garber told thousands of fans at a rally.

Instead, Minnesota got the franchise. Los Angeles got a second MLS team. Miami and Nashville joined the party. But Sacramento? They’re still playing in the USL, a division down from the big boys in MLS.

The league has exploded with new teams in the last decade, rising from just 12 teams in 2006 to 27 in 2021, with two more on the way. There are glittering stars like David Beckham in ownership groups, and the price of creating a new team keeps going up.

But it’s been called a Ponzi scheme. Because past those gleaming new stadiums and billionaire ownership groups is an underlying truth: Cities like Sacramento and Columbus have been used as props to play the oldest game in sports, getting subsidies for sports teams. This storyline holds true for hopeful cities across the country: for example, Sacramento still doesn’t have an MLS team, and hope is fading.

Let’s take a deeper look at the winners and losers on both sides of the MLS expansion game. 

MLS winners

Don Garber: You have to give the commissioner credit. He has gotten things done in his 22 years atop MLS. Teams have gone from playing in football stadiums to playing on soccer-specific fields, allowing soccer teams to keep all the revenue for themselves. And with billionaire ownership groups the norm across the league, the future of soccer as a significant American sport seems secure. 

David Beckham: The longtime English soccer star worked a savvy clause into his contract when he joined MLS as a player in 2007: he could pay $25 million to found an expansion MLS club of his own, Inter Miami CF. Of course, other owners were miffed he was getting such a deal (the expansion fee rose to $200 million by the time Beckham’s team started play in 2020). 

Longtime owners: The real money in team ownership isn’t in ticket sales; it’s about the value of the team going up. Forbes said in 2019 that the least-valuable team in MLS, the Colorado Rapids, was still worth $190 million. Chicago Fire, founded in 1998 for a $20 million expansion fee, was estimated to be worth $335 million in 2019.

Soccer fans in 29 markets: To be sure, there is ardent fan support for MLS teams. Stadiums are routinely filled to capacity in Los Angeles, Seattle, Portland, and Vancouver, with MLS attendance running on par with attendance at NBA games. Supporters can expect to watch their teams play for years to come.

MLS losers

The last owner to buy a franchise: Expansion fees have exploded to a whopping $325 million for Charlotte, F.C. What kind of return will owners get for their money? The real money, as all sports teams will tell you, is in TV deals. TV viewership is static, with the MLS Cup final treading water in the ratings. And while the league finally has consistent coverage on ESPN, per-game viewership is essentially the same now as it was in 2006. How will team valuations float higher if ratings don’t improve?

Columbus, OH: The city already had a soccer-specific stadium, built-in 1999 for the Columbus Crew, but MLS and the team’s ownership said it wasn’t good enough. The league and team spent a year threatening to send the Crew to Austin before reaching a deal: the city will contribute at least $50 million to build a new stadium for the team, with state and county money bringing the total public contribution to at least $140 million

Sacramento, CA: Garber stood in front of Sacramento soccer fans in 2019 and told the story of how for years he had told people it was just a question of when, not if, the city would get an MLS franchise.

“Well folks, ‘when’ is today. Your ‘when’ has arrived,” Garber told the roaring crowd.

Only that didn’t happen. Billionaire Ron Burkle, who found the spare cash to buy Michael Jackson’s Neverland Ranch for $22 million last year, decided the price was simply too high. Stadium costs spiraled upward. The entry fee was $200 million, not the $150 million Burkle expected to pay. Now, Garber and backers of the city’s MLS bid talk about the city like you talk to your ex: Maybe there’s a chance things work out in the future. Keep the flame alive.

“There’s still a lot of energy in Sacramento, it’s a good soccer market,” Garber said in April. “Mayor Darrell Steinberg is very focused on trying to put another ownership group together. We’re going to work with him to see what can be achieved, if another group can be put together to reach an agreement with the city and others. But right now there are other markets we are looking at … and we’ll see who can be our 30th team.”

For the right price, of course.