Why Major League Soccer is wrong about New York 2, or am I wrong? Part 1

So twitter is a fun an interesting place, recently while questioning the moves of the TV networks who cover Major League Soccer to focus only on large market teams and by passing matches like Real Salt Lake vs. Sporting KC, I mentioned that I believe one of the big reasons for MLS to be so single-mindedly focused on NY2 as the next team to enter MLS is it will give them another big market team for TV. Note, Orlando is the 19th largest TV market, Minneapolis is #15, and Las Vegas is #42.

So out of that comment started the debate about New York 2, now I need to clear up one thing I don't care if NY2 happens or not, my biggest issue is with MLS throwing their attention, staff, and finances behind a potential franchise in New York City over all the other potential markets. I think it is unfair, and I think it is a bad business move. Yet, everyone who supports the idea tells me that it is a sure deal, that a team located in the City proper would do gang busters like the Cosmos used to do. To me that is just an awful point to make for a number of reasons. So I thought to be fair I would create a post with my concerns and questions about a potential MLS going to New York City proper, and to make it more informational I sent my questions to Mike Firpo of SoccerNewsday.com to get his insight on why a second team in New York makes good sense for Major League Soccer.

Now this conversation is a lengthy one, so it will be published in 3 or 4 parts so it is easier for you to read, as well as so we can create further conversation via comments about particular questions and concerns

So I am going to start with an easy one:

Why should Major League Soccer give a potential NY2 an advantage over other markets?
By hiring full time staff and spending money on finding a location, funding, and potentially building a stadium when none of the potential investors/owners are willing to do so? Everyone in favor of NY2 says it is a no brainier, a sure fired success, but in the investment capital of the world, then why hasn't a single person or group stepped up? If this is such a sweet deal that MLS and their owners are willing to sell a portion of SUM to finance this, why isn't a single outside investor willing to do so? AEG the company behind the LA Galaxy and almost everything else isn't interesting in this project, when I see that nobody is willing to step up and do this one their own, it makes me ask why? Nobody at MLS had a full time job helping Dave Checketts find a stadium location, nobody at MLS invested $100 million to building it for him. He put his money at risk, as did the owners of all the other teams to join MLS since 2005, but nobody is willing to risk their money on NY2 unless MLS does it first. Yeah that instills a huge amount of confidence in me.

After the jump, Mike's responses to this question(Mike's comments will be in italics so you can keep our thoughts separate) :

Why should Major League Soccer give a potential NY2 an advantage over other markets?

To be as succinct as possible given this complex and possibly divisive proposal ... New York matters more than most markets in the North American sporting landscape. Without the Yankees in baseball, I'm not sure that league either carries on as it does today or survives. As Commissioner Garber has stated numerous times, New York City is a major market and currently the Red Bulls don't attract or represent the city, for numerous reasons. NYC also accounts for a good deal of the headquarters of not just US corporations, but the world's. The United Nations, the world government, is based in New York City not New Jersey. Thierry Henry came to the United States due to his love affair with New York City. David Beckham named his NYC-conceived son Brooklyn. At about 10% of the population of the entire USA, the NYC metro area is big, full of soccer fans, wealthy, a hub for media and ultimately - the most important city that Major League Soccer could hope to be in. Imagine the Roman Civilization was around and all the provinces and cities had gladiatorial arenas, except Rome.

MLS and its uber-successful businessmen who make up the ownership group, like the LA-less NFL, realizes the inescapable fact that a national league in the USA devoid of either Los Angeles or New York, is not quite an American national league.

Since Don Garber has become commissioner of MLS, he has led the league to stability when the league was in peril and realistically could have went out of business without the help of a handful of owners (Anschutz, Hunt & Kraft). He believed in giving the game back to the fans and get MLS in sync with the authenticity and history of the way the sport is played internationally. He helped convince new owners to join the league and made sound judgment on expansion clubs, ownership groups, stadiums, broadcasting deals, etc. In a nutshell he and the owners that makeup MLS today have done most right. Not everything, but looking at what this league was like in 2000 and staring collapse in the mirror, to what it is today, is a Herculean effort and turn-around by Garber and all of the owners who are being questioned here.

You mentioned Dave Checketts, the original owner of RSL. He and Jorge Vergara (Chivas USA/Guadalajara & Saprissa) were likely the beginning of a major change in MLS and were given bargain deals at that time to join the league. These same two men and the others (many billionaires) who own or manage vast business empires in North America are to put it mildly, astute businessmen. They would not sell 25% of Soccer United Marketing (SUM) - from which they all split earnings - if they didn't believe in this. Checketts now lives in the New York metro area. Don Garber was born in Queens and lives north of Red Bull Arena in New Jersey. Checketts ran the NY Knicks for years in central Manhattan. They both work and know the city. I spent 30 years of my life there, living in all boroughs except the Bronx and even a year or so in New Jersey.

In a nutshell, MLS was not made (or at least not now or the last 16 years) to have a club with the drawing power that the New York Cosmos had in their heyday. If it did, maybe that would help get fans to Harrison, New Jersey - but alas it does not. Most fans of the former MetroStars and now RedBulls, who come to games, are from the state of New Jersey. They are locals. New Jersey is a far flung location to expect most fans in New York City to get to. The Long Island Junior Soccer League (the largest in the USA) would easier board a commuter plane at JFK before they went-watched-returned to a match at Red Bull Arena. Not much less for the tons of hardcore soccer fans that call Queens home. But put a stadium/club of their own with NEW YORK as the namesake and actually play matches in the state (RedBulls/MetroStars almost never have played in New York City or State) and they will come.

New York City is a vast metropolis, spread out, dense in places (NYC), not dense in others and it would be asking too much from modern MLS fandom for fans to go there. If it were plausible it would have happened in the New Jersey clubs 16 years of MLS existence. It hasn't. Owners have come and gone. Coaches. Players. GMs. Ideas. They finally got a great stadium though and that is amazing. Red Bulls could help themselves by removing the corporate image from the name/logo/kit of course, but that is another story.

Funny enough, RedBull NY have stated publicly on several occasions that they support the idea of a local derby with a New York club based over the Hudson River in NYC. That right there beyond the MLS owners' idea for the 20^th club, speaks VOLUMES. Their potential rival wants to help build them up. Ask Celtic in the 1800s if they'd help build Rangers, doubtful you'd have the same support. Yet, they oddly became the "Old Firm", the hated twin couple who feed off each other and the rest of Scottish football feeds from.

Though easy to remember or coin, as a native New Yorker, calling the 20th MLS franchise "NY2" might be a misnomer. They are more likely to become the defacto NYC team and Red Bulls the defacto New Jersey team. Ironically the reinvented NBA franchise from New Jersey just rebranded to the Brooklyn Nets and I can tell you pretty emphatically, even with the presence of the Knicks in midtown Manhattan, the Nets will do well with their new branding and sharing the same "turf" as the Knicks.

Everyone in favor of NY2 says it is a no brainier, a sure fired success, but in the investment capital of the world, then why hasn't a single person or group stepped up?

As you are well aware MLS doesn't share much financial information publicly (deals, salaries, etc). Some, but not all. Commissioner Garber has stated several times in the last year or so since the New York Cosmos group has come and gone and come again, that there are several interested groups. However, he also mentioned that they are not selling right now. The league offices are headquartered in Manhattan and they are using some of the resources from the SUM percentage sale to acquire a stadium deal with the friendly MLS-friendly administration of Mayor Michael Bloomberg.

Again I would not get hung-up with caring about the specifics. The end result is the league owners (Garber doesn't control them, they all share power) believe that this makes sense, and they all share this league. MLS is not small islands of franchises, which happen to work together, rather it is a league and MLS owners who all share the responsibilities and guide the entire ship, just some owners have to guide their individual clubs as well. This is a special situation. It brings so much more experience, collective wisdom and ultimately great decisions by pooling all of their talents, combined business acumen and resources.

I am not a billionaire, but I respect our MLS owners immensely for getting to those levels. We should all give them respect and our patience. Without these men, we would not have MLS as it is today. Maybe a travelling European roadshow, an NFL spinoff, a supped-up indoor league or worse ... the pre-MLS & post-NASL dark days. Instead these owners and Don Garber have given us a league with "concrete roots" which our Australian cousins going thru yet more strife Down Under wish they had with their ill-guided A-League.

When it comes down to it, if a group of billionaires are comfortable selling a pieces of their (SUM is not community/fan-owned it is a private business they own, so is MLS for that matter) business, to finance another segment of it in an investment they feel is sound - well that's good enough for me. Even if they lost the entire $125-150 million of capital from the rumored 25% of SUM, MLS and the ship will be fine.

If this is such a sweet deal that MLS and their owners are willing to sell a portion of SUM to finance this, why isn't a single outside investor willing to do so?

Again, Commissioner Garber has stated several times in the last year or so that there are several groups who are interested, but MLS is not ready yet to sell the franchise. The Wilpon (NY Mets baseball owners) family are also now out of their Madoff legal situation, so they may re-enter the fray with not only capital, but great real estate opportunities in Flushing, Queens, coincidentally an area surrounded by tons of lovers of soccer.

AEG the company behind the LA Galaxy and almost everything else isn't interesting in this project, when I see that nobody is willing to step up and do this one their own, it makes me ask why?

One of Don Garber's first major initiatives after stabilizing the league with AEG/Anschutz and other owners was to reduce the number of multi-club owners and diversify and widen the ownership groups. I don't think MLS has any interest in AEG owning more than they do today/still (LA Galaxy & a portion of Houston Dynamo).

Also as a matter of historical note. AEG sold the MetroStars to RedBull after the stadium deal in New Jersey was set. Red Bull bought them out so that they could control the entire club and make the stadium into a solely soccer specific stadium like they did in Austria with Red Bull Salzburg. They were not interested in the concert aspect/quarter of a stadium that AEG had planned for their then jointly owned club. AEG is now one of the world's largest live entertainment companies. The stadium in Houston they are about to complete for MLS' Dynamo, comes with a stage/concert end. In the end of the day, AEG has probably little interest in buying more MLS clubs either. They own sports teams & venues worldwide and they use them for multiple functions (concerts, etc) to maximize revenue. Smart business-wise and certainly the Anschutz way. He/they just wouldn't be buying this club or any other MLS club, nor would the league want that anymore.

Nobody at MLS had a full time job helping Dave Checketts find a stadium location, nobody at MLS invested $100 million to building it for him. He put his money at risk, as did the owners of all the other teams to join MLS since 2005, but nobody is willing to risk their money on NY2 unless MLS does it first. Yeah that instills a huge amount of confidence in me.

With all due respect to the club that I stood on the field for during their draft coin toss and have been a STH for since inception - Real Salt Lake is not as important overall to the growth of MLS and taking it to the next level as a New York City based franchise will be.

David Checketts is an owner and that means he likely is in favor of the move to get this same club in the league. As you are also well aware, stadiums and their locations are increasingly important to the success of the MLS clubs. Echoing what I said above, MLS is not at the point where they can attract fans from all corners of cities to get to far-flung/suburban (see cheaper/easier municipal deals) stadiums.

Now that is a lot to think about, a lot to digest so we will call that good for Part I of this conversation about a second MLS team in New York City. I will publish Part 2 on Friday.

What are your thoughts on the topic?

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