Major League Soccer awarded a new expansion team to Los Angeles in October 2014, filling the vacancy in the market created by the dissolution of Chivas USA just three days earlier. In its first two seasons, LAFC has earned the most points and scored the most goals in the league, while its 35 wins were the most in the Western Conference and its 13 losses were the fewest in the league.
In the three-plus years leading up to the team’s on-field debut in 2018, the club delivered on just about everything it set out to do; A beautiful stadium, passionate supporter culture and recognizable star in Mexican International Carlos Vela, who has since begun re-writing the league record books and leads a team with an exciting mix of diverse young talent.
But what sets LAFC apart, is its large ownership group who collectively comprise what may be the most accomplished ownership group in sports. From its conception, LAFC has always boasted a bounty of celebrity owners and supporters. From former basketball legend Magic Johnson to actor Will Ferrell, the boxes at Banc of California Stadium are often filled with a circle of well-known stars.
Tom Penn, President and Co-Owner of LAFC and former General Manager of Philadelphia 76ers, discusses what it means to be an owner of a sports club and the challenges of building a new team.
What motivated you to be part of the LAFC ownership group?
My involvement with LAFC ownership began before there was a group. It started with an idea from a Vietnamese entrepreneur and two investors from Malaysia. From there we partnered with a diverse group of Los Angeles based investors and assembled an unparalleled group in professional sports. I have been honored to work with each of our partners. We represent best of the best across so many industries: technology, sports, entertainment, real estate, private equity, etc. We have a wonderful esprit de corps and a true spirit of partnership within the group.
What are the biggest challenges you have had to overcome in building a reputable and globally successful club while competing head on with LA Galaxy, one of the biggest names in the MLS?
At the time that we announced LAFC in October 2014, the Los Angeles Galaxy were months away from winning their 5th (out of 20) MLS Championship, and Chivas USA (another LA based MLS team) had just announced its closure. LA is the busiest sports market in the world, with two pro teams in the NFL, MLB, NBA and NHL, plus major college football teams with UCLA and USC. We distinguished ourselves in this crowded market by building a true Club, rather than a franchise. We appealed to our early supporters and challenged them to co-create everything with us. Our supporters had a loud voice in selecting our name, colors, crest, and all foundational aspects of our culture. And then we were able to acquire the most precious land in Greater Los Angeles for our stadium. We constructed a masterpiece of a building in the heart of the city. That differentiated us from the Galaxy and all other teams in the market.
How do the challenges of running an MLS club differ to that of an NBA team?
Soccer is truly a global sport. Basketball is an American sport that has appeal globally. Our players come from all over the world which makes talent scouting and procurement an unusual challenge. John Thorrington, our General Manager, has done a masterful job of identifying young talented players on the rise. In the NBA we do not have a transfer market for players; NBA teams acquire their players via an entry draft, trades, or free agency. In global football, the ability to buy right and sell player contracts for profit offers different challenges and opportunities.
LAFC has a large ownership group comprising of business executives, athletes, celebrities, and private equity managers, what advantages does this bring?
Within our ownership group, I have the greatest contact list in pro sports. From the beginning, we asked each of our partners to be participants rather than passengers. We asked all owners to commit more than their financial capital; we asked for their experiential capital and their reputational capital. Somewhere along the way, each owner has contributed something unique and positive to the project. From the beginning the ownership represented Los Angeles, and they have delivered on the promise to Los Angeles.
What are the most important lessons you have learnt as an owner of a club?
I have learned that we are privileged to be a small part of a big Club. LAFC is a true partnership with our supporters, employees, players, and fans. Our group serve as stewards of the Club for our community. Sports means so much to a city. LAFC from the beginning has been committed to unite the world’s city through the world’s game. We bring joy to people. And we serve as a force for good in our community. I am honored to play a small role in our Club.
Can you tell us a little more about LAFC’s coronavirus relief efforts and any other initiatives the club has been doing to remain involved in the community?
I am so proud of how our Club has responded to the crisis. Our supporters (the 3252) stepped up early and often with donations and events in support of our community. Our employees have donated countless hours organizing and volunteering at various LAFC hosted events. Our LAFC Foundation has established the Black and Gold Fund for COVID-19 Relief. We are hosting several blood drives at our stadium in partnership with the Red Cross. We have hosted weekly food drives at the stadium with the Salvation Army and with other charitable partners. And we have stayed engaged with our audience in clever, creative, and meaningful ways. We will come back stronger and more together as a Club.
How have the league been supporting its members during these difficult times?
The league office has been engaged and supportive every step of the way. Major League Soccer is a cohesive group. Our unique single entity structure (where team owners own equal shares of the entire league) creates a very fertile foundation for collaboration and partnership. The league has formed committees of owners and executives to address each aspect of club and league operations during the crisis. We truly can’t wait to re-start the season and bring the beautiful game back to life in North America.