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Expansion players counting their chips
by Ridge Mahoney, December 12th, 2008 7AM
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[MLS]Other leagues are trimming staff and cutting expenses as they buckle down for a bleak winter amid dire economic climes, but at MLS headquarters, the leaders are ready for another game of Expansion Poker. Commissioner Don Garber uttered mostly positive comments about the prospects in Portland, which is seeking a good chunk of public money to launch an expansion team in 2011 at a renovated PG&E Park. He made those comments while visiting the Rose City earlier this week, and so the statements should be liberally salted before being consumed. He also had effusive praise upon visiting Vancouver during his trip to the Northwest.

What else would be expected from a commissioner under pressure from his employers, the influential and wealthy men who've invested in MLS, to spearhead expansion and generate the eight figure fees that are helping said men recoup their investments? Well, none of this would be worth noting if he'd been so gushy following his visit to Miami a week after MLS Cup.

Rather than wax poetic about the irresistible allure of Barcelona, aka Business Partner, Garber expressed misgivings about the market, a new stadium at Florida International University that is the proposed venue, and a few other items.

"They want better press boxes, more amenities, and they had questions about the artificial turf, which we told them is the best turf there is," said Bolivian businessman Marcelo Claure to the Miami Herald. Claure is the communications mogul who has formed an alliance with Barcelona president Joan Laporta in this ambitious project.

In an interview with Soccer America the day before MLS Cup, Claure said that hammering out an agreement with FIU to use its football stadium made a lot more sense than starting at the bottom of the Miami political ladder. "Once I talked with the politicians it was such a mess, I said, 'Forget it,'" said Claure. "The only way I would do it is to have a stadium so we don't have to go beg for money.

"We have a great deal. It's a five-year deal. They spent $54 million to build a stadium and they play only five home games. It might not be the most beautiful stadium, but it's a B-plus."

Amid massive layoffs, industry giants going bankrupt, and upheavals spreading rapidly throughout the domestic and global business community, why praise some bidders and not others?

Garber is confident MLS can weather this fierce storm, in part because of its stake in Soccer United Marketing (SUM), and its various soccer properties, including games played in the United States by the Mexican national team, the SuperLiga tournament, etc.

"We're well-diversified," he said. "That's one of the good byproducts of Soccer United Marketing, we're not tied to one business, so we have the ability to weather these tough times better than a one-dimensional sports industry. But these are trying times, without a doubt."

Some warning signs have been spotted in the sports marketplace. The NBA laid off 80 employees in October, the NFL is trimming 150 positions - about 14 percent of its workforce - this month. Arena Football League owners are on the verge of canceling the 2009 season.

During his annual "State of the League" press conference two days prior to MLS Cup, Garber announced Montreal had withdrawn its expansion bid. Whereupon Joey Saputo, owner of the USL Montreal Impact and MLS expansion applicant, held his own press conference to refute Garber's version of events.

Saputo said because his group had proposed paying $45 million Canadian (about US$36.2 million) rather than the US$40 million expansion fee proposed - but not formally approved - by MLS, the league, not Montreal, had terminated the bid.

A few days after MLS Cup, representatives of the Vancouver bid hedged somewhat regarding the price they were prepared to pay. Attorney Jeff Cooper, who is heading the St. Louis bid, has yet to publicly identify his partners, the ones with the real money. Garber's lavish praise regarding the bid of Ottawa, widely regarded as the longest of the longshots, was interpreted by some observers as a ploy to speed up the process.

There's another snag with Miami; Claure insists the offer is good for 2010 only and apparently not for the league's projected date of 2011 to add two more teams. Should major problems surface regarding construction in Chester, Pa., for a stadium to house the 2010 Philadelphia team, Claure would surely reiterate his insistence to get in a year early.

"Otherwise, we're not interested," he said. Claure may be bluffing, but with the backing of Barcelona and Laporta, a brand-new stadium he didn't have to pay for, and perhaps the most revered soccer brand in the world, he's pushing huge stacks of chips into the pot.

To call that bluff, Garber needs not one, but two strong hands, and there's no guarantee he can find them in the deck, much less play them. Yet he's prepared to stare down anybody, for a while at least.

That $40 million figure hovers like a specter above the table. It's approximately how much Ken Horowitz lost, counting a $20 million expansion fee, by going all-in with the Miami Fusion from 1998 to 2001. Horowitz was simply under-funded, but there's a lot of that going around.

"It's hard to look beyond even 30 days now and really know what the state of the economy will be," says Garber, who nevertheless adds, "at this point I'm confident that we'll have two more teams by 2011. So far, so good."

 



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