The following is a Major League Soccer Press Conference and Q&A with MLS Commissioner Don Garber on Thursday at the Beverly Hilton in Beverly Hills, Calif. Garber addressed media following Thursday’s Board of Governors meeting
to unveil plans to expand to 30 clubs
in the coming years.
MLS COMMISSIONER DON GARBER:
We particularly in the last 10 years have had been experiencing unprecedented growth for a major league in North America. Expansion has been a key driver of that growth and it really is a great measure of the enormous enthusiasm and really the commitment that our fans have in markets both new and old to support our league and our players and to see the support grow continually. Today we had a board of governors meeting, as many of you know we have three of them a year, and it was decided at that meeting that our league will continue to be on a growth trajectory.
During that meeting we voted to expand the league to 30 clubs and that really is a big part of the news that came out of the meeting. There was a time one of our owners said when he came into the league he never thought we would be at 20 and now 10 years later we have made the decision to expand to 30.
We had previously announced our plans to expand to 28 teams and if you remember a number of years ago we announced the plan to go to first 24 and then 28 and met with 12 different cities to achieve that. We currently have 24 teams competing in the league, Nashville and Miami will begin play next year in 2020 and Austin will debut in 2021. That will bring our league to 27 clubs. And although the board did not select any particular markets today, they did authorize our office to exclusively advance our discussions with the ownership, potential ownership groups in St. Louis and in Sacramento.
Just a few minutes ago we contacted both St. Louis and Sacramento, their ownership groups, to invite them to make formal presentations to the MLS Expansion Committee. The ownership group in St. Louis has never met formally with our ownership through the Expansion Committee and neither has Ron Burkle and the Sacramento group. We anticipate that we'll have these presentations take place sometime in the next couple of weeks and we'll be asking them for their formal and final plans for their stadium, their final plans for a commitment of corporate support. You've been reading a bit about that in St. Louis, the final composition of their ownership group, and detailed economics on the funding of both their team, team operations and their stadium plans. We'll ask for their strategic plans for fan development, that's obviously an important part of what we're trying to achieve. We also want to see commitments to player development, which is very important for what we are trying to do to support U.S. Soccer, and the development of players for our national teams and then very importantly details on their community programs.
Following those presentations a decision on the next two expansion clubs -- teams 28 and 29 -- will take place over the next couple months. We hope to have that final decision prior to our All-Star Game at the end of July in Orlando. The board has established an expansion fee of $200 million for the next two teams, that's teams 28 and 29, and they deferred the decision on the expansion fee and the timeline for the league's 30th club and that will take place at some point in the future. There's been no timetable set for that at all.
Finally it's important to note that in addition to Sacramento and St. Louis, we remain in discussions with several other ownership groups regarding future expansion. But we will deal exclusively with St. Louis and Sacramento for teams 28 and 29.
I know that we have got a young guy, David from St. Louis (Post-Dispatch) has been here working the halls for the last 24 hours, I know you'll have some questions about St. Louis and I'm sure somebody will ask about Sacramento in the back, so fire away.
Q. So, take us through a little bit of your thinking in changing from 28 to 30 now. Was it related to the strength of or inability to judge between Sacramento and St. Louis?
DON GARBER: In many ways the answer to that is yes. We had two very, very strong bids. Sacramento was one of the early teams, along with St. Louis, that came into the process when we started this process a couple years ago and both of them had deficiencies on the ownership side. St. Louis had an ownership group that was not able to get a stadium deal across the finish line, we lost a vote in the city council. That was at the same time that we won a vote in Nashville, we won a vote in Cincinnati, and we won a vote in Miami. We were dealing with a gentleman by the name of Paul Edgerley who is a wonderful guy. I think Paul still remains interested in the league, but the Taylor family stepped up and very quickly took on the leadership of the St. Louis bid. As you know, Kevin (Nagle), in Sacramento was not able to finalize his ownership group. And even with the support of the mayor, with a great stadium site, that bid went from the top of the list to the bottom of the list until Ron Burkle and Matt Alvarez came in and we really wanted to select both of those teams. So, it allowed us to be able to make that decision. We have not determined when each of those teams will come in, although it should be assumed that they will come in somewhere around 2021 or 2022. That's going to depend on the presentations and the discussions we'll have with them at our Expansion Committee meetings in the next couple of weeks. Both markets have final stadium plans that I'm hoping, that they're hoping to bring over the finish line. I will say that in St. Louis's case they still have a lot of work to do with the city and the state in order to finalize their stadium situation. I think they're much further along than Sacramento.
Q. To clarify, you're talking about entering formal discussions with the two cities, is this, did your board vote to hand the franchises to these two cities, as long as the discussions go the way they should? Are we in?
DON GARBER: What they basically have approved is for us to enter into exclusive formal discussions to determine what needs to happen to make that formal expansion grant. That decision, the decision to grant those teams has not been made, but they're all, they're both pretty far along.
There's work that needs to be done in both markets, different in each market, but we'll meet with our Expansion Committee. As I mentioned there are a handful of things we're going to ask them again, final stadium plan, final funding, final corporate support, we're going to work in Sacramento to get that back to the front of the list, if you will, to get an understanding of where they are in their fan development and player development, particularly in Sacramento as it relates to their training ground and academy program.
Q. Where does the St. Louis bid stand in terms of corporate support and site development, a stadium?
DON GARBER: Well it was a month ago that we met with the group, maybe a little more than that I think it was six or seven weeks ago they came in, Taylor family and Jim Kavanaugh and talked about their bid. The mayor's been very supportive of the effort. There were concerns that the league had regarding the level of corporate support that would get behind their bid. We mentioned that to Andy, and in a couple of phone calls he brought together 20 or 30 of the key corporate leaders of the community and they already are working on final commitments on stadium, naming rights and jersey sponsorship along with other sponsors that will round out really their contractually obligated income for the club, which is very important for them to secure. I am sure by the time that they the St. Louis group comes in that they will have those formal commitments.
Q. Can you shed any light on this?
DON GARBER: No. I mean, I'm not in a position to do that. I just know that we're very encouraged by the level of interest and the level of support for bringing Major League Soccer to St. Louis. I think it speaks a lot about the Taylor family who are great community leaders and believe, almost as a founding family for the city, to how to bring that city back to the glory that it had for so many generations. We'll say that a lot of the discussion around the table today was about the great history of soccer in St. Louis. The owner of the LA Galaxy, Phil Anschutz, talked about producing The Game of Their Lives and how the kids on the hill went out and beat England in the 1950 World Cup.
There's no question that St. Louis is a soccer market. We need to finalize the stadium situation there. They're further along with their stadium plan in Sacramento than they are in St. Louis. In St. Louis they still have work to do with the city, they have work to do with the state and we're hoping and expecting that Jim and the Taylors will sit down with the city and state leaders and get that finalized so that when they come in to meet with the league and it's signed, sealed and delivered.
Q. You said at one point the league wasn't going to go beyond 28 teams, now we're at 30. What's the ceiling in terms of number of teams for this league?
DON GARBER: Well we talked a bit about that, and you know a lot of our owners, and I don't know that we have a firm handle yet on what the final number of teams in the league ought to be. We have a lot of work to do to determine what the future state of Major League Soccer is in 10 years and in 20 years. We continue to believe that there are many, many cities across the country that can support an MLS team with a great stadium with a great fan base and with great local ownership that will invest in building the sport in their community.
We of late have been in very positive discussions in Las Vegas and in Charlotte. We still believe Phoenix is a good market. We have been in discussions with, in Detroit. I'm regularly speaking to Mayor Duggan in Detroit and I think that it is a great soccer market. What we really need to determine is what does it all mean for our league 10 years from now or 20 years from now. How do we have regionalized competition? We have still some teams that are traveling 20, 30, 40, in the case of Vancouver, 60,000 miles to play in the league competition. What's the right format? Do we have a single table, do we continue with the format that we have now, how do we create a structure that will be the most effective way to build a soccer nation that we're trying to do here and in Canada.
I will say that we are going to take our time on team 30. We have got a lot of cities that are interested in that 30th team. We don't want to be unbalanced, but at the same time I think we do need to take a bit of a deep breath and on board the teams that are going to be coming in over the next number of years. We presented a chart, and happy to share that with the group, it's an interesting thing to give the group on what's happening over the next four or five years.
You have Miami and Nashville coming in in 2020, and you have Austin debuting in 2021. We'll have six new soccer stadiums coming on during the next six to eight years, which is just remarkable. And we need to manage that in a way that's going to ensure that we're systematic and careful about expansion.
Player development has been a big driver of why we continue to think we need to expand. You think of planting all the seeds with our academies and with our second teams below our first teams. There's many opportunities for us to continue the momentum behind homegrown players, which has been very good for soccer in America.
Q. You mentioned talking about where this league is going to be in 10 years, not putting a cap on the number of teams. Where do you see the league in 10 years? Do you think there could be a MLS 1 and MLS 2, is it about splitting the league east and west and only participating regionally, how do you as commissioner want to set this league up for that growth?
DON GARBER: Well we need to do the work to determine that. We have a very, very engaged Expansion Committee that's chaired by Jonathan Kraft. We have a great competition committee that's chaired by Clark Hunt and Greg Kerfoot and we're going to work within those two committees to determine the ultimate playing format and to determine where those players are going to come from over time. Do we need to change our rules to ensure that we have the right number of designated players, TAM players, the right number of domestic and international players, the right incentives for teams who develop players and sell them on and all sorts of things that need to happen before we could make that decision? So I can't answer that today. The commissioner and the league office do not have an opinion yet until we do the work with the expansion committee. I will say that we have done a lot of work, and expansion has been a key strategic initiative in the league office for the last 15 years. We have to determine what's the right pan is to roll-out of teams in what market, with the right ownership, with the right stadium plans, and we have recognized that our best days are still ahead. We want to have a league that is of the proper size by the time we are getting into negotiations with our new television deal, which will take place in 2021, and we want to be right sized, if you will, by the time the World Cup is here in 2026.
Q. Interested, I keep hearing this talk about all the expansion, are you going to bring relegation to America? I mean, I see that with European soccer, the way you're expanding, is that something that you guys have even discussed with two leagues?
DON GARBER: No.
Q. No?
DON GARBER: No, we really don't discuss it at all. It's not something that we think is an effective way to manage our league and we certainly don't think it's a rational approach when we're going to be asking Sacramento and St. Louis to invest 200 million dollars in getting into the league and then in each case a minimum of 250 million dollars in stadium projects, some of them could be more. So you're looking at 450 million dollars of investment.
So, if you're putting a half a billion dollars into a business and you have a bad year and all of a sudden you're playing in a different league without the same structure, without the same CBA, without the same revenues, without the same infrastructure and all that it makes absolutely no sense.
Q. Can you give us a sense of kind of what tipped the scales for St. Louis among the owners, what did they really like?
DON GARBER: Andy Taylor, Caroline Kindle Betz and Jim Kavanaugh are an ownership group that's so deeply engrained in the community and believes so much in the city. We spent a lot of time in St. Louis for years now trying to get a number an understanding of what's driving it as a city on the rise. What are the community leaders like Andy and Jim doing to bring the city back to its glory and where does soccer fit into that plan? This sport that has such great history there. Clearly the stadium project and the funding of the stadium project got them from being off the list to being almost on the top of the list. And I give a lot of credit to the mayor, who's been a cheerleader for the city and a cheerleader for our league from the start, even with the previous ownership group.
Q. Small bump this week, small bump last week actually and if they didn't get a port expansion, this is deep in the weeds. No problem for MLS?
DON GARBER: We have bumps in every market, including existing markets, we live riding down a bumpy road and we have committed, deeply connected local owners who have the influence to be able to get over the finish line and overcome all these obstacles. It is what is taking Major League Soccer to where it is today.
Look at what's going on in Miami, we just made it past a challenge in Nashville because John Ingram is so deeply embedded in the community. I have great confidence in Jorge Mas that he'll get through his issues in Miami and I have confidence that Andy and Jim will get through whatever challenges they have in St. Louis. But they have work to do. And now we are throwing it over to the city and state saying, hey, work with us, work with them, so that we can get something finalized.
Q. You mentioned the TV deal which is coming up for renewal. How does expansion help or does -- I guess you think it does help with the TV contract that seems like that's been undervalued? And in addition to that, is there a movement away from having domestic TV coverage and to nationalizing MLS TV coverage?
DON GARBER: International?
Q. No, no –
DON GARBER: What do you mean by nationalized?
Q. National like in the United States. In other words, Real Salt Lake will not have its own contract, it will be a national contract.
DON GARBER: Well again just a reminder for everybody, every team has local rights to deals. In Salt Lake City it's actually over the air. But we have agreements with YouTube, we have deals with FloSports, and we have deals with local sports cable operators. Every market has its own different dynamic. And then the league takes a select number of games for sale to Univision, Fox and ESPN, all who have been great partners for us, and then we take a fee that we sell overseas and that's distributed in 130, 140 countries.
So the future strategy, which the head of our MLS Business Ventures Group will work on, is to determine what is the right combination of content for us to take out to the market, are we going to aggregate all of our rights, local and national and international into one package? Are we going to continue to have multiple national broadcasters in English and Spanish language, are we going to go and have one exclusive broadcaster in the United States, for example, like the NHL has with NBC? All that work is being done now. We have got a great media committee that will work in consultancy with the league to try to put that plan together.
Q. How does expansion and then how does expansion fit in a that?
DON GARBER: The growth, the momentum story behind Major League Soccer is what I think is such a positive part of what our partners overall feel so good about. And whether that's a broadcaster looking at the excitement in Cincinnati with 32,000 people coming out to a game, those images for ESPN, Fox and Univision are really what they have been hoping for many, many years. Our broadcast relationships are very strong, and they have been driven by the excitement in many of our markets.
We feel very strongly that expansion is a driver of interest, it furthers the momentum story that MLS continues to be a league on the rise, and we're confident it will help us in our negotiations with our media partners.
Q. You mentioned the challenges that you faced that you'll have to just look into as far as the talent pool of how many DP's how many TAM players, etc., You have a CBA negotiation coming up in January. How much does this decision to expand, knowing that those challenges come down the road influence the leagues goals and the leagues ideas about how to change its structure, specific to investment in the on-field product?
DON GARBER: I don't think anybody argues that the quality of play continues to grow as we add more and more teams. So there has been no impact on the quality of play through expansion. We have the ability to change our investment strategy, the TAM program and the designated, discretionary TAM program were initiatives that were put into place because we knew we would be adding a lot of teams and we wanted to give our teams the opportunity to go outside of the domestic player pool and be able to expand the quality of our rosters, make our domestic players better, give more opportunities for our domestic players with the TAM program, but in essence have an increased quality of play.
We're in a global market, and I don't think that there's any impact on our quality -- it's no diluted impact on quality of play with expansion. We have 30,000 registered professional soccer players to select from. Frankly, I think it's the opposite. You start thinking about the global interest in coming to our league, it's driven by the fact that there's so much opportunity, so many jobs. You think about what excites us, excites our ownership, we have 4 or 5,000 people that are working full-time in professional soccer in our country and Canada. And you add more teams, you add more jobs, you add more opportunities, that's all about building the soccer nation in our country. One of the byproducts of expansion is just opportunity.
Q. I want to be clear here, if I'm understanding what you're saying correctly is that because these are exclusive discussions with St. Louis and Sacramento, teams that were 28 and 29 are theirs to lose, you are not discussing these teams with other cities or bids. If these two teams, two bids can bring their proposals to the finish line, they get them.
DON GARBER: I don't know that I would use they're theirs to lose, I would put it more positively than that. I would say that we're going to enter into exclusive discussions with both markets to ensure that they have all the elements in place to be able to be granted teams 28 and 29. And each of them has issues that they need to work on to be able to get to that completion point.
Q. Again, the issue that Sacramento has, restate that.
DON GARBER: I would say it's, they need to finalize their corporate sponsorship support and they need to finalize their stadium plan. They have ownership of the land, but they have a handful of outstanding issues that they need to work on. They need to close the deal with the city. They have other elements of their stadium plan that needs to be finalized. I have confidence that they will come in and present a complete plan on the stadium front. We have spoken with them for many, many years about securing committed, contractually obligated income, both on naming rights and jersey front, over an extended period of time. We need to get back into that discussion with them. I think St. Louis has done a terrific job in that area and has a lot momentum on that front, so we'll be talking to them about finalizing their stadium, their sponsorship support. We need to work with them on what their training player development plan is. They're not far enough along there, but I know that they have been making progress. So those are the three things that I would put out there.
Q. It sounds like you've got great confidence in them.
DON GARBER: I have great confidence in both markets. We wouldn't be here where we are today with the support of our ownership group to try to put all the elements in place to give them the opportunity to finalize a deal.
Q. Are 28 and 29 expansion teams married? Say St. Louis figures it out, Sacramento doesn't. Does that delay St. Louis, or do they move forward?
DON GARBER: No, if one of those teams do not satisfy all of the outstanding issues, then they would drop out and conceivably another team could come in. I don't anticipate that happening. I think we're fairly confident that we have work to do in each market, but that we just need to finalize a number of outstanding issues.
Q. So, you need two to make this expansion work?
DON GARBER: No. We don't need two. We're going to deal with each of them separately because they likely will come in at different times as I mentioned that in my opening comments, so we don't need both.
