“Reposted from Forbes”
Major League Soccer announced today that it is delaying the inaugural season of three expansion teams — Charlotte, Sacramento and St. Louis — due to a disruption in business operations caused by the coronavirus pandemic.
“It is important for each club to take the necessary time to launch their inaugural MLS seasons the way their fans and communities deserve,” MLS commissioner Don Garber said in a statement. “With the extra year to make up for what has been a challenging 2020, these teams will be well-positioned for their debuts and for long-term success.”
According to one league source, the delay does not affect expansion fee payments and so it will not dramatically financially impact the existing clubs.
The debut of Charlotte, the league’s 30th franchise, is now delayed from 2021 to 2022. David Tepper, the billionaire owner of the NFL’s Carolina Panthers, was awarded the team in December and paid between $300 million and $325 million for the expansion fee to get into the league. The team will play in Bank of America Stadium, the 75,000-seat home of the Panthers. Renovations are slated to accommodate the club, including soccer-specific locker rooms and a new field entrance. The seating configuration will be lower-level only, equal to capacity of 38,000. Tepper Sports and Entertainment president Tom Glick told the Charlotte Business Journal in June that the MLS club already collected 8,000 ticket deposits, accounting for 25,000 to 30,000 seats per game.
Last week Charlotte signed its first player, Sergio Ruiz, a 25-year-old midfielder from Spain’s second division team Racing Santander. The team still has plans to reveal its name and logo on July 22. It already has its jersey front sponsor, Ally Financial ALLY -5%, which officially signed a multi-million dollar, multi-year deal with Tepper in July 2019, and helped Charlotte land the expansion franchise over Las Vegas and Phoenix.
Originally slated to begin MLS play in 2022, Sacramento’s Republic FC, owned by Ron Burkle, Matt Alvarez and Kevin Nagleand, and St. Louis’ MLS club, whose women-led ownership group is headed by rental car company Enterprise Holdings executive Carolyn Kindle Betz, will begin play in 2023. Each paid a $200 million expansion fee when they signed on as the 28th and 29th expansion clubs in the second half of 2019.
Preparation for stadium construction continues on Republic FC’s 21,000-seat soccer specific Railyards Stadium. The team said season ticket members and deposit holders will retain their priority and seat selection will continue as planned, beginning in 2021. Land preparation work continues in St. Louis. Both teams said the one-year adjustment will help them with the pandemic-driven challenges in the construction industry.
Austin FC, owned by Precourt Sports Ventures and announced as the 27th franchise in the league in January 2019, will begin play as planned in 2021. In Texas, construction workers are considered essential, which has helped the team stay on schedule with completion of its new 20,500-seat, soccer-specific stadium.
The average MLS team is now worth $313 million, up 30% year-over-year, but most of its teams continue to operate at a significant loss. Still, MLS investors are spending big to secure a share of the U.S. soccer market with eyes on potential goldmines down the road: a new national TV deal in 2023 and a stateside World Cup in 2026.
