MLS expansion race: Nashville jumps to front of the line
- by Paul Kennedy @pkedit, Nov 8, 2017
In announcing the details of the timetable for the next wave of expansion, MLS commissioner Don Garber said last December there were some positives about the market but Nashville was not as far along as some other bidders.
Nashville didn't form an MLS steering committee until August 2016, but it now finds itself in the running for one of the two expansion teams MLS is expected to award in mid-December.
On Tuesday, Metro Nashville's council voted 31-6 to approve a $275 million plan for a 27,500-seat soccer stadium at Fairgrounds Nashville.
Of the 12 MLS expansion bidders, Sacramento began the race with the
inside track on one of the two expansion bids to be awarded in 2017, having had its stadium deal in place since 2016. That hasn't changed.
Earlier in the year, St. Louis and San Diego
were tipped as hot prospects with ambitious stadium plans. But St. Louis' funding plan was rejected by city voters in April, and San Diego's city council pushed the Soccer City plan off until November
2018 when it is slated to go before voters.
The MLS2Nashville group led by local businessman John Ingram achieved what no other expansion group could do: secure funding for a major
soccer-specific stadium.
The deal. Stadium funding (assuming Nashville gets an MLS team) will come from a combination of
sources:
-- $225 million in revenue bonds to go toward the construction of stadium;
-- $25 million in cash from the MLS2Nashville group to go toward the construction of stadium;
-- $50 million in Metro general obligation bonds (still to be approved) to pay for infrastructure work.
The annual debt of $13 million on the revenue bonds will be repaid as
follows:
-- The MLS group will pay $9 million a year over 30 years;
-- Sales tax revenue from stadium events and a $1.75 ticket tax will go toward covering the remaining $4 million
a year.
The catch: Metro Nashville will be on the hook for shortfalls in revenues. In amendments submitted on Tuesday, MLS group will be responsible for construction overruns on the
stadium and infrastructure work.
The Metro
Nashville vote was a big victory for Ingram and Nashville Mayor Megan Barry and what they accomplished in less than a year.
-- Ingram bought a majority interest in Nashville SC,
which will begin play in the USL in 2018.
-- Nashville turned heads when it hosted two international matches and drew 47,662 fans for a USA-Panama Gold Cup match
and 56,232 fans for Manchester City-Tottenham in the International Champions Cup at Nissan Stadium.
-- Ingram brought in brothers Mark and Zygi Wilf and cousin
Leonard -- owners of the NFL Vikings -- as minority owners of Nashville Soccer Holdings. (Mark Wilf and Ingram serve together on the Vanderbilt board of trustees.)
-- Barry, whose
22-year-old son, Max, died from a drug overdose in July, oversaw an aggressive approval schedule. Ingram's first presentation to Metro Council in August was met with skepticism from council
members who asked about MLS's financing.
John Ingram. "The vision to bring Major League Soccer to our city moves one step
closer. Of course, the final decision on the team won't be ours, but tonight Nashville checked off the final item that MLS needed to see."
Nashville Mayor Megan Barry: “The Metro Council should be applauded for joining the majority of Nashvillians who say YES to Major League Soccer in
Nashville. Their vote tonight puts Nashville in a very strong position to be awarded a franchise later this year by MLS."
What part of Phoenixs privately funded stadium don't you understand? They've had that most of this year. No public money needed.
$9M to be repaid by MLS group in 30 years; typical tax payer con job.
Not that this isn't a subsidy, but it's 9 million per year * 30 years = 270 million. Plus a $1.75 ticket tax that might generate another 750k if they're doing it reasonably well. That's about 75% of the cost, minus the down payment, which was 11 percent. So the 88% left unpaid by the down-payment times the 25% unpaid of the y.o.y. principal plus interest is a end-rate effective subsidy of 22%.
This is true whether the sales tax pays the remainder or not, it just affects what kind of subsidy you end up using. (Though there's an argument that the opportunity cost of the sales tax is lower, if you're assuming that not much else is going to be built on the site or not very soon.)
The thing about the deal that really makes it a give-away, though, is most likely the 10 acres of land the MLS owners will get to develop nearby.
Here is the Bundesliga magic sauce:
"The 50+1 rule is part of what makes German football special." "This is the rule that ensures that more that 50 percent of a club must be owned by its members, " says Benjamin McFadyean of the Borussia Dortmund London Fan Club.
"The football clubs in Germany are institutions."
"They exist to support the community. They are run for the benefit of their members. I think there's something very right about the way German clubs are run, certainly in comparison to the way that English clubs are run, for the benefit of industrialists and capitalists who, frankly are taking English people to the cleaners. It's our game, it belongs to us, our children and our grandchildren."