Tag Archives: AEG

The Sweeper: MLS Owners Speak Out On Strike

AEG

Big Story

An MLS ownership group has finally spoken out about the possibility of a strike by the players. Tim Leiweke, long-time chief executive of Phil Anschutz’s AEG (who own the LA Galaxy and half of the Houston Dynamo), expressed amazed consternation that the league’s employees could be so ungrateful: “It would have been easy for us to quit over the last 10 years,” he said. “There were five different times we could have called it a day. But we didn’t. We fought through it.

“So for them [the players] to suddenly threaten that they’re going to shut it all down, I’m a little amazed at the lack of respect they show for the commitment that we all have made to get the league to where it’s at today.”

“So when I hear them talk about striking and shutting the league down, I’ve got to tell you, they’re going to lose us when they talk like that.

“We do this out of passion. If this were a business, we would have quit this 10 years ago.”

(The Womens Professional Soccer players recently left without a team to play for as AEG abandoned the LA Sol might find Leiweke’s comments rather ironic. But that’s another story.)

AEG aren’t fooling anyone by claiming they are in this for the passion and not the business, as if this entire soccer venture was a tax write-off for Uncle Phil Anschutz, who didn’t become America’s 37th richest man through benevolence.

Obviously, AEG’s passion for the sport over business demands doesn’t extend to building stadiums without stages to suit the other parts of their entertainment business.

As one senior AEG executive recently put it, “There’s an expectation that all our assets will be good enterprises and profitable. There’s no charity involved.”

Of course, there shouldn’t be. The Galaxy are sometimes said to be profitable, sometimes not. If Leiweke is right and soccer is not a business for AEG, the sport probably doesn’t have much future in the United States; relying on a billionaire’s ongoing passion is not the way forward. It needs to be a successful business, which is why owners aren’t relenting on the players’ demands anyway, why several stadiums have those stage ends, and why Soccer United Marketing exists. Those aren’t bad things, but they’re about more than just passion for the sport.

And true, a huge loss-leading investment by Anschutz and Lamar Hunt was absolutely crucial to the league’s survival in its early years; the question is, do today’s players owe AEG something for that?

The fact is, the players, like most workers, don’t have a whole lot of leverage here except for threatening not to work. Appealing to Phil Anschutz’s best nature with nicely written letters from their mothers probably isn’t going to cut it. AEG are a $1 billion business that has decades of experience in litigation, with Anschutz described by one businessman who actually won a case against AEG as a man “will cut your legs out from under you”, according to this 2006 LA Times piece:

Like many aggressive businessmen, Anschutz also has acquired his share of adversaries. His litigation record reveals a sharp-elbowed tycoon willing to pay to make disputes go away and to keep his public image intact.

During the last three decades Anschutz has paid cash settlements — all of them confidential — to companies that claimed they were denied their fair share of profits or were done in by deceptive business practices, according to interviews and courthouse documents in California, Colorado and Wyoming.

Among the settlements was a multimillion-dollar award to Mel Gibson, who alleged that the theater chain Anschutz controls cheated the actor’s distribution company out of revenue from the hit movie “The Passion of the Christ.”

George Ablah, 77, a real estate magnate and fellow native Kansan, prevailed in a legal tussle with Anschutz over a failed oil and gas partnership.

“He is very tough,” Ablah said of Anschutz. “He thinks he is God. If you question him in any way, he will cut your legs out from under you…. He is extremely lucky with those tactics. It has worked out very, very well for him.”

As Fake Sigi says today about Leiweke’s comments, “The owners look like they’re going to stand firm.”  There’s nothing wrong with that, but the players make their living out of this sport and have every right to treat it as a business and not make concessions based on AEG’s track record or passion for the sport, as Leiweke implies they should; it’s not a “passion” for the players, it’s their workplace. They might not be paupers, but an $80k median salary in a career that lasts a decade or so means they don’t have the luxury to take the long view in the same way as Phil Anschutz, sitting on $7.2 billion.

Quick Hits

  • An interesting interview here with the Chester City fan running the Supporters’ Trust attempting to resurrect the team, explaining how they lost patience with ownership: “The final straw for many was the one-minute’s silence that was held for what was a “major benefactor” of the club, which, upon investigation, turned out to be the death of a drugs baron from Liverpool who had been assassinated by a South American mob. This was a person we were holding a respectful minute’s silence for?”
  • Amusingly enough, FIFA actually has an “ethics chief”, who have written to 2018 and 2022 World Cup bidders and told them to play fair. Just like Sepp and Jack do, obviously.

The Sweeper appears daily. For more rambling and links throughout the day every day, follow your editor Tom Dunmore @pitchinvasion on Twitter.

LA Sol Folds: Good for the Future of WPS?

LA Sol and Marta

It’s not surprising that many commentators have seen the demise of the LA Sol, regarded as the flagship team of WPS in its inaugural season last year, as a very bad thing.  The LA Sol had the highest average attendance in the league, the highest sponsorship income, and thanks especially to Marta, the highest profile.

But they also spent by far the most money on their stadium, payroll and promotion, culminating — despite the decent crowds relative to the rest of the league — in a loss of over $2 million dollars.

In some senses, their departure should neither be a surprise nor a great cause for concern for WPS going forward.

Alarm bells did not ring loudly about LA (despite the fact they said they wanted out mid-summer last year) because they were owned by AEG. Phil Anschutz’s company had bankrolled MLS in its early years, and many felt he would shepherd his WPS team through the growing pains as well, even if a new owner couldn’t be found.  But when this did prove to be the case, Uncle Phil did not swallow up the loss for another year.

And so Jeff Kassouf asks: “It is hard to imagine what prevented this sports and entertainment conglomerate from “being in a position to take on” the Sol for another short period of time, other than simply not caring.”

Yet though I understand the sentiment here, this isn’t exactly fair to AEG as a business operation– which, after all, they are. AEG decided to sell-off most of its MLS teams when the league had become a viable business investment for others to sell to; between 2006 and 2008, they sold the MetroStars (2006), DC United (2006), the Chicago Fire (2007) and half of the Houston Dynamo (2008). It’s clear AEG have been scaling back their ownership of sports franchises for some time (including outside of soccer) — and most of this after AEG had already committed to WPS (remember, the league was supposed to launch in 2008 originally, and thus commitments were first made by ownership groups in 2007).

In WPS’ case, there wasn’t going to be such an easy sell at this stage, though one could fairly ask if AEG or WPS really couldn’t have done more to find a viable new investor given how long they must both have known how this was going to play out in the offseason.

charity

Does this mean AEG should have sucked it up and continued to lose millions of dollars in 2010?  It’s easy for us to tell a billionaire like Phil Anschutz that he should, but there’s really nothing to say besides it’s his business, and he quite easily could have pulled the plug much earlier: most probably, judging from the timing that he cut back on other team investments, he may actually have wanted to but instead sucked up some losses out of a sense that he owed WPS at least a season due to his original commitment to the league.

What is perhaps more significant than all this is whether or not this is a blow to WPS as a business.  The league added two teams this offseason, so despite the demise of the Sol, the league will be larger this year. Sponsorship revenue is reportedly going to increase over 50% this year. Many of LA’s players will find new homes, including Marta, and it’s a sign of health that other teams seem to be able to take this on (though it is terrible for the LA players who will not find new roster spots).

One could argue that the Sol’s failure may even help the league, as it continues to build a smarter business model than that of the WUSA some years ago — the overspending and overambition that doomed the first women’s professional soccer league was mirrored by Los Angeles’ approach to WPS. But this time, the Sol appear to be an exception. Sure, other teams are losing money, but none at the scale of the Sol, sensibly operating within tighter constraints that better reflect the position of women’s soccer as a spectator sport at this point. If the Sol’s demise ensures other teams continue to tighten their belts, that’s a good thing for WPS.

Quite frankly, WPS is small-time in its appeal at this stage of its development, and it needs to be approached as such by investors. Sky Blue FC showed in 2009 — despite some internal problems of their own — that you can spend little and be successful. The Atlanta Beat opening a new 8,000 capacity stadium built for women’s soccer is the way forward, not trying to be big time with a 6,382 average attendance in the 27,000 capacity Home Depot Center, as the Sol had. An LA team will return to WPS eventually, but it’ll be in a smaller stadium with smaller ambitions, and that’s better for WPS in the long-term.

At the end of the day, if women’s professional soccer is to survive in the long-run, it has to be because it’s sustainable, not thanks to charity from Uncle Phil. And the league, outside of LA’s bloated budget that’s now been blown away, is expanding and not contracting as a whole: the green shoots are still growing for women’s soccer here, folks.


An Unlikely World Cup Venue: Home Park, Plymouth

Theatre of Greens

The Football Association announced today it had further narrowed its potential World Cup venue locations in England to 17 stadiums in 12 cities. The familiar names were there — Old Trafford, Wembley, etc — but one that will certainly have surprised observers at home and abroad was that of Home Park, Plymouth.

This is not the Theatre of Dreams: it’s the “Theatre of Greens”, home of Plymouth Argyle in the Championship (one of only two English teams to play in green). Home Park dates back to 1893, and though it’s been renovated since, isn’t exactly up to FIFA World Cup standards at present, holding around 20,000 after considerable renovation in the past decade.

But Plymouth’s presentation to England’s World Cup Bid panel included ambitious plans to upgrade the stadium to a 46,000 “Wembley of the West”. The club is already committed to a £20 million expansion of the stadium to hold 27,000 regardless of the bid, with plans to increase the capacity to 46,000 should the bid be successful at a cost of a further £30 million.

The stadium design is by Populous, one of the world’s leading stadia-design firms, also responsible for Wembley Stadium. Of particular interest was that a representative of American firm AEG, who have built and operated MLS stadia for a few years now, joined the Plymouth delegation’s presentation to the panel, with AEG slated to operate the stadium.

MLS fans will not be surprised to learn that AEG’s interest in Home Park is in more than the sport of soccer, with rugby and other entertainment events also planned for the venue. Plymouth impressed this on the World Cup panel as evidence the giant stadium would not end up empty besides any World Cup games it hosted.

“I think they got the impact of the design of the stadium, and most importantly they got the point that the stadium is about multi-sport and entertainment use after the World Cup. It’s not just about Argyle’s 23 home games a season,” Plymouth’s executive director Keith Todd told the Plymouth Herald.

A curious wrinkle is that AEG’s billionaire owner and long-time major backer of MLS, Phil Anschutz, sits on the USA Bid Committee competing with England to win the right to host the World Cup. I guess it helps to have more than one basket to put your eggs in, doesn’t it?

Happy Birthday to the Chicago Fire!

twelfth-smaller

Tomorrow is the Chicago Fire’s birthday, and to mark the occasion the team and Section 8 Chicago, the Independent Supporters’ Association, are co-hosting a birthday party at Toyota Park.  Major League Soccer’s first venture into expansion (along with its dead fraternal twin Miami) turns 12 on the 138th anniversary of the great conflagration that made the city, the Great Chicago Fire.

As some of you have heard, the powers that be at Philip Knight’s Portland based world empire Nike had (unbeknown to me.  . .and the Fire’s owner, AEG’s Phil Anschutz) already named the team the Chicago Rhythm when I was hired as the team’s first employee in June of 1997.  Nike had named and designed logos for its other sponsored MLS teams: San Jose Clash, Tampa Bay Mutiny, Dallas Burn, New York/New Jersey MetroStars and the lone surviving name, Los Angeles Galaxy.

We were quite surprised when we began our name search to find that the good folks at Swoop Central had not only named us, but had also created our logo and colors.  One of my biggest regrets from my Fire years is that I misplaced the only tangible proof I’ve seen of their vision — a 2″ embroidered patch with the words “Chicago” and “Rhythm” circling a neon yellow coiled, tongue spitting cobra on an optic blue field.

To the joy and relief of many, we avoided a lifetime of misspelled team references, bad Catholic birth control method jokes and just plain poor branding when at my urging Phil Anschutz intervened at the highest levels to Nike and told his counterpart Phil Knight that it was his team and he was going to name it whatever he wanted, but it sure as sheep sh*t wasn’t going to be “Rhythm”.  OK, he probably didn’t say “sheep sh*t”, but he wasn’t happy.

“Chicago MLS”, as we were known prior to October 8, 1997, was headquartered in a series of suites in the Equitable Building on prestigious Michigan Avenue, downtown Chicago.  We started with a single suite for the original three employees — Allison Holmstrom (now Gregory), who was my executive assistant and absolutely the most valuable employee during the team’s first year, Denis Hamlett (then scout and community relations representative, now Head Coach) and me.   Every time we added three more staff, we added a suite until we reached critical mass soon after the team name announcement and relocated to the much loved loft space in River North.  The exposed brick and timber offices provided a great working atmosphere and were conveniently located between the Chicago’s greatest Italian joint, Club Lago, and Chicago’s best Irish pub, The Brehon.

Chicago Fire logo

While we hammered away with Nike on the name issue, we were prevented from holding any sort of public name contest, so instead we bought a list of names (who knew such a thing existed) and brainstormed internally.  The list included the usual Chicago suspects, many of which popped up again during the WPS’ Chicago Red Stars public name the team contest last year:  Blues, Wind, Mob. . . .and Fire.

I don’t recall there being significant internal debate, as most of us preferred Fire.  The three concerns we had were potential connections to the failed World Football League team of the same name, connection to a disaster, and conflicts with the city’s Fire Department.  We actually held an advance meeting (where we swore them to silence) with Chicago Fire Department officials to make certain they would be supportive of the team and name.

While short-staffed from July through September of 1997, we outsourced much of the PR and marketing functions to Aaron Cushman, Cardenas-Fernandez and the MLS office.  It was Cushman that came up with the idea to send out misleading invitations to the team’s launch event at Navy Pier.  The invitations, which were sent to media, potential sponsors, soccer and community leaders, featured a pen drawing of the Blues Brothers and led many people to assume we were going to be called the Chicago Blues.

My memories of the announcement day are fading, but I recall my nervousness while walking down Illinois Street from our offices to Navy Pier with our staff who I barely knew at this point.  Up until that day, I was on a VERY short leash held by the powers that be in Colorado — Phil Anschutz and his right hand man on his sports and real estate projects, Bob Sanderman.  They had a bad experience with their first general manager with the Colorado Rapids and had expressed concern with my young age (37) prior to my hiring.  Their daily phone calls and close attention to our operation was both helpful and a little nerve wracking for me through the first few months: though that was about to change beginning on October 8, 1997.

I remember (probably more from the video that I’ve seen dozens of times) making the announcement “Ladies and gentleman, CHICAGO FIRE!” followed by a large banner dropping to reveal the logo and showers of pyrotechnics framing the Fire’s now recognizable maltese cross.  Loud applause and cheering faded and we went inside Navy Pier’s historic Grand Ballroom for a celebration that lasted the rest of the day.

Fire Birthday Cake

We didn’t make a night of it, though, as it had been a very long week already preparing for the announcement and we knew the real work began the next day when season tickets went on sale.  We had full page ads placed in the Chicago Tribune and Sun-Times as well as heavy rotation on network and cable television.  We all came in early the next day hoping the phones would ring.  At 10:00 am central time on October 9th, our prayers were answered and the phones lit up like Foster Brooks on New Year’s Eve.  Everyone, including Denis, learned how to take a ticket order.

We quickly surpassed our sister team’s (the Colorado Rapids) season ticket numbers, which was our internal measuring stick, and eventually climbed to the top of MLS.  While nowhere near the Seattle or Toronto numbers, back in 1998, our 6,000+ season ticket base was turning heads.  Every sale we made took more pressure off of me and gave me more confidence to lead the team. On April 4, 1998, a crowd of 36,444 watched the Fire’s inaugural home game at Soldier Field.

I’ll always remember October 8, 1997 as the birth of my favorite soccer club, but I’ll also remember it as a day that I became comfortable with my abilities to lead a major league team.

Happy Birthday Chicago Fire, and here’s to many more!

Peter Wilt writes every Wednesday for Pitch Invasion. Follow him on Twitter @RedStarsCEO.