Franchise scarcity is a fact of life in the American sports scene. This means that a team is always willing to skip town if it gets a better offer from another city, which is just what the San Diego Chargers did when they decided to move to LA.
So what to do? One idea is to attract another sports franchise as a replacement. This option suits MLS perfectly with its ambitious expansion plans. Hence a group called FS Investors has put up a proposal to knock down the old Chargers stadium and build a new soccer stadium alongside commercial developments, the site to be called “SoccerCity”.
Thanks to an excellent article by Mark Zeigler published today, we have some insight into how FS Investors view the economics of MLS. In a memo sent to their potential partners San Diego State University and seen by Zeigler, they anticipate a cost of $150 million to buy a franchise. But they also anticipate that the franchise will never breakeven, and have pencilled in losses of $40 million. Their exact time horizon is not stated, but on a 5-10 year view that amounts to $4-$8 million a year.
These figures stack with the $100 million or so losses per year for the entire MLS which the league itself has admitted to.
And if taxpayers are desperate enough for live sports, there no reason why they won’t pay this. Otherwise, it’s not obvious who else would.