As MLS lays out plans to expand to 28 teams, caution is key

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Don Garber’s MLS is pointed toward rapid expansion. (The Canadian Press via AP)
Don Garber’s MLS is pointed toward rapid expansion. (The Canadian Press via AP)

Major League Soccer won’t stop growing anytime soon. On Thursday, the 21-year-old, 20-team league, which will swell to 22 teams for the 2017 season, announced the rough timeline for the next four teams to join – one spot of which has already been allocated to a second team in Los Angeles. And then it will add two more teams to make it 28, the league said.

“At some point we will stop expanding,” MLS Commissioner Don Garber said on a conference call. “That point will come.”

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But not anytime soon.

Following a Board of Governors meeting, the league outlined its plan. After Minnesota United and Atlanta United join in 2017, LAFC will follow in 2018. David Beckham’s proposed Miami team should follow in short order. This we already knew. Then, MLS hopes to add a 25th and a 26th team – assuming Miami gets done as the 24th – in time for the 2020 season. Two more slots will open up thereafter, at a time to be determined.

The markets vying for those four or five spots – again, Miami is the wild card – will have to submit a formal expansion application by Jan. 31, 2017, regardless of when they hope to enter the league.

MLS expects 10 markets to apply, after prospective ownership groups have publicly announced their interest in the league. That would be Charlotte, Cincinnati, Detroit, Nashville, Raleigh/Durham, Sacramento, St. Louis, San Antonio, San Diego and Tampa/St. Petersburg. Charlotte and Raleigh/Durham would seem to be an either/or equation since it’s hard to imagine MLS putting two teams in North Carolina.

“There is tremendous interest in professional soccer across the United States and Canada,” Garber said in a statement. “Since announcing plans to expand to 28 clubs late last year, many potential ownership groups have contacted us, and numerous public officials have stated their desire to bring an MLS expansion team to their city. We look forward to reviewing expansion applications in the coming months and conducting formal meetings in 2017 with possible team owners.”

The league has clearly laid out the conditions for joining. First, said Garber, is “A committed ownership group that’s passionate about our sport, believes in the league and also has the resources to invest in infrastructure, to build the sport at all levels in their market is first and foremost.”

“Second,” Garber continued, “is the market. And we look for a market that has a history of strong fan support for soccer overall at all levels. We certainly look at market size and geographic location. And obviously we look for the level of corporate support.”

“Third is the stadium,” Garber concluded. “We look for a very comprehensive stadium plan that ensures that the team will have a proper home for fans and players that will also serve in many ways as a destination for the entire sport in their respective market.”

MLS expects new owners to take on a multi-decade commitment. This is a long game, that will be more costly than just the expansion fee, which was announced as $150 million for the 25th and 26th teams, to be revised for the 27th and 28th. “This is the start of a huge investment in MLS from each group as every potential market will be building a stadium,” Garber said, adding that there are also other facilities and investments like a practice facility to be funded. “That leads to an investment that will go well north of $300 million.”

That there is nevertheless this tussle for teams seems to confirm two things. Firstly, that it’s almost impossible to lose money owning a big-league franchise in America – what you may lose in operating costs is easily earned back in rising team value over the course of 10 or 20 years. Secondly, that a great deal of wealthy people believe MLS is a sound investment. This notion is reinforced by the scarcity of available franchises in other major sports, but, all the same, the significant buy-in cost doesn’t appear to be an obstacle.

Consider, after all, that when MLS began in 1996 it had just 10 teams. It expanded to 12 in 1998 but contracted back down to 10 in 2002. In the last decade alone, however, it has added nine teams.

“We do view expansion as a leading indicator as to where this sport is actually going,” Garber said. “Early on, when I came into the league [in 1999], the original investment was $5 million and the next couple of years after that we were struggling to get folks to come into our league to even cover the losses or the debt of some existing teams. While we don’t really look at expansion fees as a determinator of value, we do look at it as an indicator of what people believe is the future of Major League Soccer.”

Still, the question that should be asked at every step is whether MLS might be in danger of overheating. In some ways, a league is only as strong as its three or four weakest franchises. This is even more true with a unique single-entity setup, like that of MLS, which doesn’t just share revenue but is essentially one large company.

While the league says it will hold at 28 teams for a while, it also said that at 24 and 20. And so it seems inevitable that MLS will grow to 30 or 32 teams, just like the four other major team sports leagues in the country – the NFL, NBA, NHL and MLB. It has already learned the lessons of ill-chosen ownership groups or markets in Chivas USA, Miami and Tampa Bay, the three clubs that were axed (Chivas was relaunched as LAFC).

MLS hasn’t gotten an expansion wrong since 2005 with Chivas, which was a hare-brained idea to launch a satellite team for a Mexican powerhouse targeted at a small sliver of its potential mega-market in Los Angeles. But in bringing in five more teams while the pool of strong markets is getting ever thinner is ambitious. And with ambition comes risk.

The league deserves the benefit of the doubt. But a great deal of caution should be exercised. Just look, after all, at the fits and starts of the Miami franchise, which still doesn’t have a viable stadium plan or funding over a thousand days after getting the go-ahead from the league.

Leander Schaerlaeckens is a soccer columnist for Yahoo Sports. Follow him on Twitter @LeanderAlphabet.

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