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MLS: Sweet Scenario in Seattle
by Ridge Mahoney, February 4th, 2008 6:37PM
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TAGS:  mls


Entertainer and producer Drew Carey is the most famous member of the group investing in a Seattle MLS franchise, yet two other members also bring business clout and a love for soccer to the table.

So, honestly, how can a Seattle MLS franchise possibly fail?

There's a ridiculously rich, powerful and passionate ownership group, a modern downtown stadium designed to showcase the sport and a fabulous lease deal that virtually guarantees success, decades of soccer tradition in the city, and a tsunami of season tickets sold since the official announcement in mid-November.

On the day of that announcement, investor/comedian/entertainer/producer/photographer Drew Carey came to the George & Dragon Pub to talk soccer and unveil his plan to sell shares in the team by which fans become members with voting power and could, if they wanted, vote out the general manager. The feel-good factor soared off the charts as fans cheered, video cameras rolled, and in the corner, de facto general manager and co-investor Adrian Hanauer laughed at pointed remarks from those nearby.

More than a year before its competitive launch in the spring of 2009, MLS Seattle is way ahead of the curve. It sounds perfect, and of course, it isn't. But it can't be that far away.

"I'm pretty conservative," says Hanauer, whose family is part of the ownership group along with entertainment mogul Joe Roth; Vulcan Sports and Entertainment (VSE), owner of the NFL Seattle Seahawks; and Carey. "I hope for the best but expect the worst. Nothing's easy and nothing's a guarantee, but at some point the risk-reward equation becomes good enough where you're willing to give it a shot, not to mention the fact that it's something you're absolutely passionate about and want to be spending your long days doing."

Vulcan was formed by Paul Allen, the co-founder of Microsoft, which bought a company - aQuantive - partially owned by Hanaeur's family last August for nearly $6 billion. Also involved is Tod Leiweke, brother of AEG president Tim Leiweke. Tod Leweike is CEO of First & Goal, Inc., the company that manages Qwest Field.

No coaches or players have been signed, yet that's a solid lineup.

DRIVING FORCE. Hanauer grew up playing the game in the Seattle area and religiously trekked to watch the NASL Sounders, who regularly attracted crowds in the high teens and occasionally sold out Memorial Stadium, then consistently topped crowds of 20,000 in the massive Kingdome. Yet he hadn't needed a whiff of the pro game to spark his interest.

"My mom tells stories about me being 2 and a half years old out in the backyard with a soccer ball, barely able to walk and kick it along," says Hanauer, who eventually would blossom into a "crafty, slow midfielder" and still plays at every opportunity. "The original Sounders were a really important part of my childhood. I went to all those games at Memorial Stadium, and went to the parties after the game and got the autographs, and went to the camps and got to see the players.

"The buzz that existed in the city and going to the games with my family, that really got me. Then it sort of went dormant, you know. I kept playing, but I went to college and got on with my adult life."

Pro soccer went dormant, too. The Sounders folded after the 1983 season - a year after losing the Soccer Bowl to the Cosmos, 1-0. The entire league followed suit after the 1984 season and while amateur and semipro leagues tried to fill the void, indoor pro soccer held sway throughout the decade.

Hanauer, then in his early 20s, began running the family businesses in 1989, broadening its range from hard goods - manufacturing bedding and pillows, and selling picture frames - to technology investments such as, aQuantive and others.

By 2001, he felt confident enough to take a small chunk of the family's money and plunge it into the Sounders, at the time struggling to stay afloat in the second division of American soccer. And once financially committed, albeit philanthropically, he felt the same need to find out what he'd bought as he did with his profit-driven investments. His late father, Gerard, had generously patronized numerous causes in Seattle, and he brought to soccer this charitable spirit, to a point.

"The Sounders, differently than MLS, we always thought of as a community asset and probably closer to an arts organization than a business, something that's good for the city," he recalls. "But I couldn't go to my family or friends or potential investors in good faith, and tell them this was a good investment and we're going to make money on it. We all kind of agreed to throw some money at it to help keep it alive, because it was losing a lot of money.

"Then I started trying to figure out what the problems were and operationally get my hands dirty. One thing led to the other and pretty soon I was running the Sounders."

WHAT'S IN A NAME? Last October, Seattle won its second USL-1 championship in the past three seasons despite uncertainty of what will happen to the team once Hanauer and Co. launch the MLS operation. Officially, Hanauer contends that nothing's been decided and all possibilities are being explored, including keeping the Sounders' name and fielding reserve and youth teams under the same banner.

But more than history and tradition are driving the decisions, and a lot of principals are chucking their ideas on the table, according to Roth, who is searching for a house in the area and plans to split time between residences in Southern California and the Northwest once he officially becomes the majority owner of a pro sports team.

"It's the raging debate," says Roth, who'd been discussing an MLS investment with Tim Leiweke for years and says he woke up one day last summer and decided it was time. "I'm in the movie business, where titles are so important.

"There are eight or nine of us and it goes on. We can't have a meeting without having this debate, and with each successive debate, people are consistently changing sides. So it sort of depends on the day you ask me."

Roth's credits as director, producer and executive producer number more than 40 films, including "Daddy Day Care," "While You Were Sleeping," "Major League," and "Bachelor Party." He also produced the Academy Awards TV broadcast in 2004.

He played soccer as a youth on Long Island and one year of college ball at Hofstra before going Hollywood, so he wants to serve the game's best interests as well as the needs of corporate America.

"Sounders, on the positive side, are the oldest brand in the country, have a terrific 10,000-fan following and honor the past," he says. "The other side of it is, with another name you'll incorporate the Sounders people anyway, and you may extend yourself out to a larger fan base. I can support either side vociferously, depending on the moment."

Roth says about 7,000 suggestions for a nickname have come through the Internet, one of which - the Emerald City Greens - triggered virulent ridicule in a local blog.

Fortunately, the investors have many moments to get it all squared away. The Seahawks are taking season-ticket deposits, which as of mid-January had exceeded 11,000. Roth says executive hirings could be announced by spring, with decisions about coaches coming during the summer.

Hanauer will be the general manager, pending decisions on what is to be done with the USL team. Current Sounders coach Brian Schmetzer, a veteran of playing days in the NASL and MISL, will be retained by the organization in some capacity, but not as head coach.

TURF, AND TOO BIG. No matter how many right decisions are made, and a sweetheart lease deal at Qwest by which Vulcan will reportedly cover all rental and operational costs, there's been a backlash from some fans about MLS, once again, backtracking from its stated adherence to natural grass and soccer-specific stadiums.

Like BMO Field in Toronto, Qwest Field is artificial turf, and unlike BMO, it seats 67,000. A Real Madrid-D.C. United exhibition in 2005 filled the place, and so did a 2003 Manchester United-Celtic match.

During a "State of the League" address in November during MLS Cup, Commissioner Don Garber flatly stated the combination of potent ownership group, affiliation with the NFL Seahawks, market demographics and downtown location of a modern stadium ideally configured for soccer took precedence.

Seattle is the 23rd largest population center (573,911) in the country, yet will be the seventh largest MLS market. It also gives the league an additional West Coast city as well as a regional rival for Real Salt Lake.

For many reasons, the league is bullish on Seattle. Ironically, had Hanauer's family been more flush and he'd had more backing from potential partners, he might have entered the league instead of operator-investor Dave Checketts and Real Salt Lake for the 2005 season. Checketts already had his own sports organization in place and had plunked down a $1 million non-refundable deposit.

"We did have a group, although it certainly wasn't the quality of the ownership group that we have today," says Hanauer. "MLS really only knows how close we were and at the time I thought we were pretty close, but it's not clear to me if we were legitimately competing against Checketts and their group for Real Salt Lake or if they were the league's preferred choice to begin with."

The sell-off of aQuantive, coupled with Roth's decision to call Leiweke, pushed Seattle over the hump. Leiweke called Garber, who admitted, "At the time, I had no idea who Joe Roth was." Soon enough, the Board of Governors knew who he was, and with Roth's commitment as lead investor, a requirement under MLS regulations, VSE and Carey joined Hanauer as minority investors.

The group ponied up a $30 million expansion fee but with a stadium already in place isn't on the hook for all the costs incurred by designing, financing, and building a stadium. Allen's net worth is estimated at between $18 billion and $21 billion. (Not a bad bankroll for a minority investor!) The Hanauer family isn't quite so well off, but before Gerard Hanauer died last month, he donated $15 million to the Seattle Opera.

"This has been my passion for a long time and I pushed my family pretty hard three years ago to pay attention to MLS, when not very many people saw that the trajectory was definitely headed in the right direction and clearly from a franchise price standpoint, it was a good time to get involved," says Adrian Hanauer.

"On the other hand, I do believe if we had launched three years ago, we sure as heck wouldn't have over 11,000 season-ticket deposits two and a half months in. It's the momentum that's been built up over the last three years that's allowed us to launch with this success so far."

(This article originally appeared in the February 2008 issue of Soccer America magazine.)




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