Major League Soccer to consider adding Charlotte, San Diego teams?

With 22 teams set to begin competing for the Major League Soccer title in just over one month’s time, soccer buzz is starting to pick up in North America. The sport is trending upward, as the MLS has no shortage of expansion suitors. Los Angeles FC is set to join in 2018, and Miami still holds an expansion slot while it continues to work out stadium site issues.

Eight other investor groups have expressed interest in joining MLS in the near future, vying for teams in Cincinnati, Detroit, Nashville, Raleigh-Durham, Sacramento, St. Louis, San Antonio and Tampa/St. Petersburg. With so many teams already vying for an MLS franchise while pleading with their local municipalities for assistance, another two teams have stepped forward and submitted plans for consideration to commissioner Don Garber and MLS before the Jan. 31 deadline. The latest contenders and their plans are as follows:

Two new challengers emerge:

Charlotte, N.C.

With a soccer team already entrenched in the city as the USL’s Charlotte Independence, a business group led by Marcus Smith, President of Speedway Motorsports (NASCAR), is proposing to bring top-tier soccer to the Queen City. The group is proposing to renovate the iconic Memorial Stadium near downtown Charlotte with a combination of public-private funding. It would require a total of $87.5 million in public funds from the City of Charlotte and Mecklenburg County, which might prove to be the biggest impediment to completing a deal. For their part, the business group would contribute the balance of the renovation costs as well as the $100 million franchise fee the team would need to pay MLS to serve as an expansion team. The city/county would look to fund its share of the costs through new tax levies on hotel, restaurant and rental car revenues.

San Diego, Calif.

Backed by an investment group headed by Steve Altman (former Qualcomm VP), Peter Seidler (lead investor of the San Diego Padres)  and Nick Stone (FS Investments founder), the group proposes using the site recently vacated by the NFL San Diego Chargers as a multi-use facility. The proposal calls for the construction of a 30,000-seat, $200 million stadium to be completed by 2020 that can be shared by an MLS team as well as the San Diego State University football team, and be part of a $1 billion development to include a residential, shopping and entertainment district. While the overall scope of such a plan would take longer for the approval process to complete, the most enticing part of the plan from the city’s vantage point is the financing for the land and stadium, which will come entirely from private funds. Part of the plan also calls for ample acreage set aside for a larger stadium in the event an NFL team can be lured back to San Diego. With the nearest soccer team across the border in Mexico, it would have area-wide exclusivity for professional soccer. The city is also showing its commitment to the sport by hosting the U.S. Men’s National Team friendly match against Serbia this Sunday, and expects strong ticket sales in advance of the match.

Outlook:

The idea of Charlotte getting a team appears to be a long shot. Passage of new revenue streams by local governments is always a tough sell (even if local taxpayers are not footing the bill directly), and there is currently a more modest proposal from the USL’s Independence team to spruce up Memorial Stadium. Here, the local ownership team would contribute $12.5 million for stadium renovations and then make lease payments over a 25-year period. The team would operate and maintain the facility, and be responsible for its maintenance. While they’d also keep all of the revenue associated with the operations, the lack of new tax levies being required from public scrutiny as well as a low risk factor would prove tempting to any locality. In short, the MLS proposal as it stands now faces long odds to succeed.

While San Diego has but one of ten groups that is set to submit a business plan in order to house a MLS franchise, the uniqueness of the plan as well as the use of private funds affords San Diego a good shot at fielding a team in the near future.