Wednesday, December 03, 2008

Vancouver (maybe) waffling on MLS fee

Some disturbing (or confusing) news out of Vancouver may set back that city's bid for a MLS franchise.

The Financial Post is reporting that the potential ownership group is "reconsidering" the $40 million franchise fee. Last month, MLS pulled the rug out from the Montreal group after it tried to negotiate the fee down.

Confusing the issue was this statement from the article:
He said his group still expects to pay a $40-million fee if it is selected to join the league..."We know the league is looking for $40 million and we respect that," Mallett said in an interview. "All our financial modelling has been done around the $40 million."

The main concern of the backers is the $350 million price tag on the renovations of BC Place. Although it's as clear as the tap water in Kitchener-Waterloo (seriously, that stuff is vile), it appears that the money people are telling the soccer people that they ain't paying the $40 million unless they can be assured that there won't be a $350 million surprise after they are awarded a team.

Interestingly, the article also talks about the St. Louis group waffling on the $40 million as well. With St. Louis the question has always been around money. So, if there are doubts there, then there is little chance of success (which will be awkward since the announcement of successful bids will likely be made in St. Louis at the draft in January.

Meanwhile, Portland is facing some serious problems securing the public money and the Atlanta bid has never really been that serious about a spot in this round of bidding.

Absurd a month or so ago, the Ottawa bid is looking less and less crazy.

Update: I go into detail on the Portland bid over at The 24th Minute.


Anonymous said...

If other bidders are questioning the $40M expansion fee, you can bet Melnyk is doing the same. He has a history of buying things at less than market value, which is probably goes a long way to explaining why the guy's a billionaire.

I live in Ottawa, and while not a soccer fan, I work with many. Very few are Canadian-born, and when they talk soccer around the water cooler (and they do), it's EPL, Bundesliga, or other top flight Euro leagues. Sure, Melnyk's announcement warranted a few comments the next day, but beyond that, nothing.
I know they represent a very, very small sample group of Ottawa soccer fans, but these are what you'd call "best of breed" people. I asked them if they were excited about the prospect of a MLS team in Ottawa, and they're excitement was underwhelming. They'll watch games from around the world at all hours of the day, but when it comes to soccer in Ottawa, I think they'd much rather play it than watch something they think is less than top-flight.

I think it'll come down to how much Melnyk really dislikes the Hunt/CFL group. Anitpathy can go a long way in helping a guy overpay for something.

Duane Rollins said...

Another poster above had this to say:

Anonymous said...

An Ottawa MLS team could possibly set an all-time record for most money wasted/lost for a sports franchise in history.

(Me again) I'm pretty sure it was supposed to be in this comments section.

Duane Rollins said...

RE: your friends in Ottawa

I have no doubt that what you say is true. However, I will say that you would have heard the exact same comments made in Toronto about 2005. If marketed right, your friends will come out and will enjoy themselves.

The key is in the initial outreaches. MLSE nailed it in the first six months.

Although I have concerns about the viability of MLS in Ottawa, I know enough to understand that you just never can know what will and won't work

Anonymous said...

All the sniping by pessimists aside, it is beginning to look like the Melnyk bid is the most viable Canadian one, and possibly most viable of the whole bunch. Maybe Melnyk is crazy, but he seems attuned in taking the big risk where others are not. If that is what he wants to do it is fine by me. Other than possibly giving him the snow dump land , said to be worth 10 million dollars, The City of Ottawa is extrtemely unlikely to kick in another cent towards his venture. If Mr Melnyk wants to go ahead and risk his money , and that of any private business partners, more luck to him. As long as our City of Ottawa taxpayers are not stuck with any big bills we ought to wish him luck. If his private venture flies, Ottawa gains a lot. If it does not fly, we lose little. Mr Melnyk takes the loss.
All these good wishes are dependent on no Ottawa taxpayers money being promised to him, and as I said earlier, I think there is zero chance it will. He may ask for more public money, but he will not get it. He either raises private capital, or there will be no MLS team in Ottawa.

Blessed be the risk takers!