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Media & Entertainment Law
: Sports BizBarca Looking at Investing in Philly MLS Franchise
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Having walked away from pursuing an expansion franchise in Miami, it appeared that FC Barcelona's interest in Major League Soccer was going to remain that of an interested observer for a while. However, one doesn't become one of the richest and most powerful clubs in world soccer by just standing on the sidelines. Barca officials have been to Philadelphia to inspect the new stadium construction site and review the expansion franchise's business plan all as part of a potential investment in the franchise which is to begin play in MLS in the 2010 season.
Philadelphia has a solid stadium plan in place and the new field is under construction. The $115 stadium will receive government funding for $75 million, leaving the franchise investors to come up with the balance. The franchise founders has been seeking additional investors for some time, but the search has taken on a new urgency with the global economic collapse. In addition, Jay Sugarman, who is the majority owner of the franchise, has suffered steep losses in the market collapse. He founded and is CEO of iStar Financial, a commercial real estate finance company whose stock price has fallen from $20.19 on the day the franchise was awarded to $1.70 as of today's market close.
Clearly, it would be good for both the Philadelphia franchise (which needs a nickname already) and MLS for Barca to not only take a financial stake in the club but to take on a significant role in how the club is operated. While Barca needs to learn the ins and outs of the unique way MLS is structured and the American way of soccer, it brings world class expertise and a brand name that is unmatched to a league that can use all the infusion of sparkle it can get. If Barca elevated MLS on the world stage or merely improves the operations of a new franchise, while hunting North America for young talent to scoop up for its development pipeline, there is nothing but upside to getting the club as deeply involved in MLS as possible.
Full post as published by Sports Biz on March 16, 2009 (boomark / email).
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