Major League Soccer (MLS) has announced that the inaugural seasons of three expansion teams - Charlotte, Sacramento Republic FC and St. Louis - are to be pushed back by one year as a result of the impact of Covid-19.
The league debut of Charlotte, Sacramento Republic FC and St. Louis have all been delayed while Austin FC will continue to join the league in 2021.
Currently, Austin are further down the line in terms of their preparation process compared to the other teams, hence why they’re permitted to join. Charlotte, the league’s 30th franchise, will now join the MLS in 2022 instead of 2021. Whereas, St. Louis and Sacramento will have to wait until 2023 for their chance to join the highest level of professional football in the United States and Canada.
The decision was not taken lightly, as MLS commisioner Don Garber and the expansion committee came to their conclusion. Following the decision, Garber said in a statement, “It is important for each club to take the necessary time to launch their inaugural MLS seasons the way their fans and communities deserve,”
“With the extra year to make up for what has been a challenging 2020, these teams will be well-positioned for their debuts and for long-term success.”
The financial complexities Covid-19 have caused has purely impacted all businesses operations worldwide. Specifically, in the MLS, Garber predicted that the league and clubs will experience a $1 billion drop in revenue for 2020. Charlotte, who are expected to reveal their name and logo on July 22, have experienced delays of their renovation work at the Bank of America Stadium, also home of the NFL’s Carolina Panthers.
David Tepper, billionaire, owner of Charlotte and president of Tepper Sports & Entertainment has said, "After a lot of discussion with Major League Soccer, we are confident it is in the best interest of our club and our supporters to take additional time to ensure a successful inaugural season,"
"When we were awarded the team in December [of 2019], we knew we were on an extremely tight timeline to begin play in 2021 but we were ready to meet that challenge. Unfortunately, the COVID-19 pandemic has impacted several of our essential initiatives. We have made huge progress in the last few months but having additional time to build is important."
Tepper was awarded the team after paying between $300 million and $325 million for the expansion fee to enter the league. Sponsorship of the club is already in place as, in July 2019, Ally Financial signed a multi-million-dollar deal with Charlotte which was influential to Charlotte gaining entry to the MLS over Las Vegas and Phoenix.
Both St. Louis and Sacramento each paid an expansion fee of $200 million when they signed in the second half of 2019. Matt Alvarez, owner of Sacramento has said, "With an additional year, we can better adjust for the impact of the pandemic on our community and identify how we can best serve the neighbours and friends that have supported our club on its rise to Major League Soccer,"
While owner of St. Louis, Carolyn Kindle Betz has said, "We've been working closely with the league and collectively agreed that the adjusted timeline was the best decision to position our club for a historic launch and long-term success,"
Both teams are at the construction stage of building their new stadiums to host future MLS matches. The delay of the expansion team’s entry to the MLS do not impact their expansion fee payments, therefore will not financially impact any existing clubs in the league. Austin FC, however, will proceed as originally planned to begin play in the MLS in 2021. As construction workers are deemed to be essential in Texas, Covid-19 guidelines have not stopped work in their stadium, planned to house 20,500 fans.
With a new domestic broadcasting deal in 2023 and the 2026 World Cup to be hosted in America, investors are excited at the opportunity of entering American soccer. The average team in the MLS is now worth around $313 million, up 30%. However, the majority of teams continue to operate at a significant loss, deemed to be a risk for potential investors wanting to enter the American Soccer market.
Author: James Parker