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New MLS franchise figures to increase calls for Chivas USA sale

May 21, 2013|By Kevin Baxter
  • Chivas USA owner Jorge Vergara rides his motorcycle while wearing a helmet painted with Chivas' colors.
Chivas USA owner Jorge Vergara rides his motorcycle while wearing a helmet… (Los Angeles Times )

Now that Major League Soccer has brought years of work to a successful end by placing another franchise in the New York metropolitan era, it's time for Commission Don Garber to turn his attention from the league's newest franchise to the league's most embarrassing.

And the record expansion price of $100 million the New York Yankees and English Premier League team Manchester City paid for a foothold in North American soccer figures to increase that pressure.

Chivas USA continues to languish, with Sunday's loss to Real Salt Lake leaving it winless in its last six matches and securing its hold on the Western Division cellar. The team hasn't reached the playoffs or had a winning record since 2009. Chivas has had the worst attendance in the league the last two seasons -- this year's average of just more than 8,000 at home games is a league-high 38% drop from last year's dismal total -- the team doesn't have a local broadcast deal, shares a stadium with the Galaxy and has virtually no visible marketing.

Other club owners have been silently pressuring the league to do something, arguing that the franchise has failed to comply with the "basic expectations" of team ownership, which is dragging down the value of their investments. And they have a point, considering that even Garber has admitted that the league is only asĀ  strong as its weakest franchise.

"I don't know much of the details about conversations that have gone on in relation to Chivas," said the team president of one prominent franchise, who is not authorized to speak publicly on the matter. "Something needs to happen there."

In recent weeks there have been persistent rumors that Mexican businessman Jorge Vergara was preparing to either sell the franchise or be pushed into selling by the league. Vergara and his wife bought out two partners last August to become the sole owners of Chivas USA. They were said to be negotiating with Mexican billionaire Carlos Slim to sell his Mexican League team in Guadalajara as well as the team's new stadium. Vergara reportedly wanted to include Chivas USA in the deal but Slim had no interest in the MLS team.

If Chivas USA can't find a buyer, that could increase pressure on the league to step in and force a sale or take over management of the franchise, as Major League Baseball once did with the Montreal Expos and the National Hockey League with the Phoenix Coyotes.

The league issued a three-sentence denial of such plans last week, saying "Major League Soccer is aware of recent media speculation concerning Chivas USA. Such speculation is completely unfounded and untrue. MLS is fully supportive of the current owners of Chivas USA and has never considered taking over the club or moving it."

Interestingly, Chivas USA did not issue a denial or clarification of its own but simply emailed out the MLS statement on club letterhead.

But that was before the Yankees and Manchester City ponied up $100 million to join MLS.

That transaction is a sign that the status quo cannot be allowed to continue. Most MLS clubs swim in a sea of red ink. But as the New York expansion fee shows, there is value in the league's clubs. That makes Chivas USA a potentially valuable but underperforming asset.

A group in Orlando has been talking to the league for some time about locating a team there -- which would also benefit the league since MLS has no teams in the Southeast. Groups in Texas and Miami have also expressed interest in teams.

That's not likely to happen by expansion, though, since the addition of the second New York team -- the 20th in MLS -- would appear to freeze any further additions for the time being. So that leaves the league with a willing and unserved market -- say, either Orlando or Miami -- and a wreck of a franchise in Chivas USA. The simple solution would be for the league to buy out Vergara, who figures to make a tidy profit -- he and three partners paid just $10 million to join the league in 2004 -- then flip the team for several million more. The new owners would then move the team, expanding the league's reach, strengthening its brand and giving the former Chivas franchise a chance at success it won't have under current ownership.

It's a move the league won't take lightly since it has relocated just one franchise in its 18-year history. But it's one the league would appear to have no alternative but to pursue.

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