Buying our way in: Sacramento should acquire Chivas USA to get into MLS
On Miami’s swank Ocean Drive, the Versace mansion sits empty, awaiting sale.
On the opposite coast, the StubHub Center sits more than three-quarters empty on a Sunday night, as Chivas USA awaits its own impending sale.
Sacramento soccer fans with Major League Soccer aspirations should keep an eye on both coasts.
Two weeks ago, MLS commissioner Don Garber announced that the 19-team league intended to expand to 24 teams by the end of the decade. With a second New York franchise already confirmed and Orlando clearing the final hurdles to build a soccer-specific stadium last week, it appears only three slots remain.
David Beckham — as part of his contract to come to MLS — has the option of buying an expansion franchise. The former Manchester United star was in Miami at the end of May to gauge local support for MLS and speak with potential investors. Beckham’s meetings included one with billionaire Marcelo Claure, who owns Bolivia’s Club Bolivar.
Last week, reports surfaced that Beckham was interested in buying the Versace mansion, which will be sold in a bankruptcy auction next month. Coincidentally, the starting bid ($25 million) is the same price as Beckham’s MLS ownership option.
The star power, financial backing, and allure of South Beach make Miami the clear front-runner for spot No. 22. That leaves Sacramento scrapping for those two remaining slots with a dozen other cities, including locations like Atlanta that would expand the league’s nonexistent presence in the Southeast and provide a regional rival for Orlando and Miami.
Meanwhile, Sacramento detractors point out that California already has three teams and shouldn’t receive a fourth before states like Michigan, Indiana, Georgia, Minnesota, Virginia, or North Carolina have one MLS club.
And yet, there sits Chivas USA — a shipwreck of a franchise adrift at the bottom of the standings. Owner Jorge Vergara and his partners paid just $10 million to join MLS in 2004, hoping to extend the popularity of Liga MX club C.D. Guadalajara (“Chivas”) in the United States.
Nine years later, the club doesn’t have a local broadcast deal and no visible marketing campaign, according to the Los Angeles Times. Chivas USA ranks last in MLS in attendance at 8,724 fans a game — nearly 5,000 less than the next closest club. Adding to Chivas’ woes, HBO’s "Real Sports" released a report last month alleging the club discriminated against two former youth coaches because they weren’t of Mexican heritage.
Other MLS owners are reportedly so fed up with Vergara that some have accused the Chivas owner of failing to meet basic expectations of ownership, and demanded he sell the club, the Los Angeles Times reports. For his part, Vergara doesn’t seem too enamored with MLS anymore either, with reports stating Chivas USA has been on the market since January.
Buying Chivas USA and moving it to Sacramento isn’t a new idea. Ex-Assembly Speaker Fabian Nunez and his group made Chivas USA the target of their plan to bring a team to suburban Elk Grove. Warren Smith, the owner of Sacramento’s new USL-Pro team, Sacramento Republic F.C., has stated that he wants the franchise to get into MLS within five years, but recent developments also make Chivas appear as viable an option, if not more so, than expansion.
While Vergara only paid $10 million to enter the league, expansion fees have risen dramatically in the past decade. After Toronto paid $10 million to enter the league in 2007, Seattle paid $30 million in 2009, Portland $35 million in 2011, Montreal $40 in 2012 and New York $100 million for the team that will join the league in 2015.
While an expansion fee for Sacramento wouldn’t approach the New York price tag, it likely would exceed the Montreal buy-in. Meanwhile, Forbes magazine valued DC United at $50 million following the sale of the club in 2012, while the Columbus Crew sold for $68 million this month.
DC United is one of the most storied clubs in the league and sits in the ninth-largest TV market in the country. And while Columbus isn’t a big market, that deal included Crew Stadium. Meanwhile, Chivas USA hasn’t won a trophy, is going to miss the playoffs for a fourth straight season and doesn’t even have a local broadcast deal.
All of which is a long way of saying that the price tag for Chivas could be roughly equivalent to an expansion fee. And while rumors about moving Chivas USA to another location in Los Angeles or San Diego persist, Sacramento would be a good fit for the franchise.
The Galaxy owns LA, and moving Chivas USA to Sacramento would allow MLS to expand into another California market, while using its remaining expansion slots to increase its footprint in the Southeast and Midwest.
While Garber has said he has no plans to move a franchise right now, Earthquakes fans will remember quite bitterly when MLS allowed their franchise to move to Houston and rebrand itself as the Dynamo in 2005. Vergara’s reported willingness to sell the club and the league’s desire to scrub away the headache that Chivas USA has become might tilt the scales toward relocation.
Meanwhile, as the race for 24 continues this fall, keep an eye on the MLS butterfly effect. If Beckham buys a mansion in Miami, does an investor in Sacramento start to see all those empty green seats at the StubHub Center in LA as a better investment for the Central Valley?
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