Handicapping the Next MLS Expansion Round: June 2019 Edition

Las Vegas MLS stadium rendering Cashman Field

With the emergence of two potential Las Vegas ownership groups and the launch of a Sin City stadium plan, MLS expansion in 2019 and beyond becomes a much more interesting horse race.

Currently MLS is at 24 teams with the addition of FC Cincinnati for 2019. Three more expansion teams have been announced—Nashville SC, Inter Miami CF and Austin FC—and MLS Commissioner Don Garber now says two more expansion teams (nos. #28 and #29) will be announced by the 2019 MLS All-Star Game. Earlier Garber had announced St. Louis and Sacramento are the last two bids standing to land the 28th team.

And while we can expect an announcement of the next MLS expansion team by the July 31 All-Star Game at Orlando’s Exploria Stadium, what happens beyond just became a little more complicated and a little more interesting with the Las Vegas news.

In case you missed it, Las Vegas became a serious contender on the MLS expansion front with the emergence of not one, but two potential ownership groups. As we’ve been pointing out for years, the quality of ownership groups is a huge priority for MLS, being a membership league and not a franchise league. And two heavyweights are on the docket in Vegas.

The Las Vegas City Council is moving forward with a plan for a new stadium at the 62-acre Cashman Field site, approving a 180-day negotiating period with Renaissance Companies to develop a master plan for a mixed-use development. This sort of large-scale investment anchored by a soccer stadium is particularly loved by MLS officials and owners; it’s the model used for Allianz Field and a proposed Miami facility. The effort is headed by billionaire hedge-fund manager Seth Klarman of the Boston-based Baupost Group and would involve the sale of USL Championship’s Las Vegas Lights.

After that effort was announced, it was reported that Vegas Golden Knights owner Bill Foley is leading an effort for an MLS expansion franchise at the upcoming Las Vegas stadium, putting another Sin City pitch in the mix. Foley has reportedly been in discussions over the last several months about placing an expansion franchise in the Las Vegas stadium that is scheduled to become home of the relocating Oakland Raiders in 2020. Any MLS team in the new Las Vegas stadium would be a tenant and have to engage in discussions with the Raiders on revenue streams, but Raiders owner Mark Davis sounds open to the idea. It’s not clear how MLS would react to this arrangement, as generally the league is not thrilled with its teams being a secondary tenant in an NFL facility that will see plenty of action between NFL and NCAA football games and other events. The last time the league had this choice an MLS expansion team was awarded to a group led by Dr. William McGuire, who promised a new stadium, over a bid from the NFL’s Minnesota Vikings, who sought to place a team at U.S. Bank Stadium.

Now, what happens with team #28 at the end of this month shouldn’t be affected by what happens in Las Vegas: with a Cashman Field study underway and a new Las Vegas stadium opening not happening until next fall, there’s no urgency yet.

After the next two expansion teams are announced, Garber says there will be a break before moving ahead with #30. That gives Las Vegas a chance to work out a plan, and it gives cities still formulating new-stadium plans time to work out a deal. That gives David Tepper time to push a stadium renovation plan in Charlotte, with MLS as a selling point; it would also give Phoenix owners time to develop and finalize a new stadium plan.

It’s pretty apparent there is demand for expansion—and a move toward a 32-team league would make some sense. So whichever group failing to land the next two slots will immediately be the frontrunner for the next round.

That’s why there are plenty of contenders for a future MLS expansion team, as several solid ownership groups have been biding their time in the wings, waiting for the league to move forward. In the short term, we’re still looking at a two-city race to land the 28th and 29th MLS expansion teams, but in the long term we’re seeing some interesting bids take place for the next expansion round.

Sacramento: 1-4 Ron Burkle’s decision to invest in MLS, Sacramento Republic FC and a new downtown stadium instantly catapulted that city’s bid to the lead. Sacramento has been mentioned as a leading MLS expansion market in recent years, thanks to a positive local economy, USL success and a new downtown stadium plan in place. The city is now committed to a stadium financing plan, so the final piece of the puzzle is in place. MLS has been patient in waiting for Sacramento to develop a strong bid; the patience should be rewarded.

St. Louis: 1-2 Another solid ownership group with lots of local ties, and a solid stadium plan. An MLS team would replace the NFL on the local sporting scene, and MLS management has spoken highly about the market in recent years. There’s still plenty of work to be done on the stadium plan, but MLS officials speak well of the market. Some uncertainty about public participation in any funding plan may delay an MLS decision.

Las Vegas: 1-1 With two heavyweight ownership groups emerging, Vegas seems right now to be an inevitability, not just a contender.

Phoenix: 2-1 With a solid ownership group, a solid stadium plan, a great USL track record and a desirable market, the Phoenix Rising bid should be enough to land a team. This bid has been flying under the radar, but it seems to meet everything on the MLS expansion checklist. The sports-business scene in Phoenix is in flux, with the Diamondbacks and Coyotes seeking new facilities. Is this a good thing for MLS? If Phoenix doesn’t land a team this year, you can bet the group will be a strong contender when the next round of expansion opens.

Charlotte: 3-1 This is a very conditional estimate. Carolina Panthers owner David Tepper has said MLS belongs in Charlotte and held focus groups to gauge fan interest. But decisions about a new stadium vs. a Bank of America Stadium renovation may determine if MLS is truly an option. Building a replacement, a la Mercedes Benz Stadium, would give the city a chance to host not only NFL and MLS but big events like Super Bowls and NCAA Final Fours, and MLS would be a big part of that mix. Renovating Bank of America Stadium, however, may dampen some enthusiasm for doing anything but focus on football, especially if there’s little or no public money for the project. Tepper already paid $2.2 billion for the Panthers and has hinted that he’ll be looking for public money for future stadium plans. Adding an MLS team to the mix would bolster arguments for public funding on a stadium project. But, interestingly, neither MLS nor pro soccer were in the mix when the team closed on South Carolina state funding for a new training facility.

Indianapolis: 4-1 This may be the stealth candidate that ends up surprising a lot of people, as Indy Eleven owners snare some key public support for an Eleven Park development that would include a 20,000-seat stadium. Indy Eleven owners are thinking big—and if one thing Anthony Precourt’s pursuit of Austin teaches us, fortune favors the bold in MLS expansion. Indy Eleven has quietly checked off many items on an MLS expansion checklist, including the bolstering of the team’s investment group.

San Diego: 25-1 With a new San Diego State University stadium in the planning stages, officials there have reached out to MLS about adding a team. MLS officials have spoken favorably of San Diego as a league market in the past, and while MLS officials don’t like to see their teams as a secondary tenant, the attractiveness of the market may be too tempting to ignore.

Raleigh: 35-1 Another bid that will depend on public funding of a new development built around an MLS stadium. North Carolina FC ownership put in a request for Wake County sales taxes to fund $11 million annually over 30 years for a new Raleigh MLS stadium. And while the North Carolina FC ownership group will need to bring in some big-buck investors to buy into the league and fund the rest of the project, landing this money would be a good start to the proceedings.

Detroit: 40-1 The decision not to pursue a retractable roof for Ford Field was a big blow to Detroit’s MLS chances: it forces soccer to be an indoor sport in Motown. There are strong owners here, to be sure, but the facilities issue may be too much to overcome. And while there’s also a huge challenge in being a secondary tenant in an NFL stadium, it works in Atlanta with Arthur Blank owning both teams, and it could work in Detroit with the Ford family involved with both teams.

Louisville: 100-1 Local officials want MLS. But the local ownership group says they have no interest in spending the money needed for MLS. Also, the new Louisville USL stadium will need to be upgraded to attract the attention of MLS. With more worthy contenders ahead in line, it would be a challenge to land a team in the next expansion round. Down the line? Yes.

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August Publications