When Anschultz Entertainment Group decided to help launch a Women’s Professional Soccer team in Los Angeles, what were they expecting?
There are two reasons I ask.
First, nobody’s been able to get AEG to comment on the Sol – the former WPS team in Los Angeles: the one that had the best record in the league last year; the one that had the most recognizable player in international women’s soccer; the one that, as of Thursday, has ceased to operate.
I have tried over the last week to get in touch with AEG regarding the Sol. Nothing.
As he detailed on tonight’s podcast, my fellow Set Piece Analyst Jeff Kassouf tried to contact them, with no greater success. Even better connected writers failed to have their outreach returned.
AEG’s reluctance to talk is understandable. After Philadelphia, when we learned that coach Abner Rogers not only would not be brought back but had actually been let go three weeks before, something seemed strange.
Sensing that things were going south with the Sol, I started asking around, and I know I was not the only one. There is probably a long and ignominious list of people still waiting to hear from AEG and the Sol. We can’t all have the inside track.
Regardless, nobody has heard from AEG, so we are left to wonder why they abandoned the Sol in November and why they would rather have the club’s doors closed than continue operating the team until another potential buyer can be found.
The second reason I ask what AEG was expecting: The Sol were doing fine, particularly by any reasonable standard against which you can judge a new, major sports team.
The team lost money – true. Then again, every team did, though the Sol were the team on the right end of a spectrum described by Tonya Antonucci when she said, “There are some teams that are losing in the $1-million to $2-million range.”
That’s what you get when you pay a player $500,000 per year, as Marta was reportedly earning: you may lose money. Usually that sacrifice is made to build your brand and, hopefully, recoup your investment in the long run. Regardless, it is not uncommon for sports franchises to lose money, particularly in their first years. Much of the money made with franchises comes when teams are sold and investors reap the benefits of the team they’ve built.
This is a process with which AEG is very familiar. The Los Angeles Galaxy are the league’s most valuable franchise, one that is profitable. The move to bring in David Beckham – who, like Marta, is by far the league’s best paid player – has lifted the Galaxy to an unprecedented value for an MLS team.
As of 2008, Forbes’ estimated value for the team was $100 million.
Between the Galaxy, the other sports teams in which AEG has interests (which, across the world and across sports, numbers thirteen), the stadia and concert facilities it owns, and Live Nation, it seems unlikely that a two million dollar loss from one, one-year-old sports entity would be unmanageable, particularly one looking to build their brand by paying Marta.
Given their quick exodus from WPS, it does not seem like AEG was interested in creating the women’s soccer version of the Galaxy. It does not seem they were interested in money-making (given their willingness to pay Marta’s salary), and it does not seem they were in it for competitive reasons. Had they been, AEG would have stuck around, given the Sol were the best team last season and were poised to be as good in 2010.
That brings us back to trying to determine what AEG was expecting; or, rephrased, what did AEG want from the Sol?
I can’t help but think of the Florida Marlins.
In 1997, the Florida Marlins won Major League Baseball’s World Series, after which owner Wayne Huizenga reduced payroll and eventually sold the team to John Henry. Huizenga maintained control of (then named) Pro Player Stadium. Even after the team’s sale, the Marlins were obligated by a lease signed under Huizenga’s ownership, forcing the new owners to pay high rent payments to the man from whom they bought the team.
Consider that, according to sources, AEG make at least $750,000 in rent from Chivas USA’s home games at Home Depot Center in 2006. At the time, the rent Chivas paid was the main expenditure keeping the club from profitability.
If that rental rate were charged the Sol for the 2010 season, a new ownership group would have to pay AEG $600,000 for the team’s twelve home games.
It is unclear if the Sol paid rent during the 2009 season and, if so, how much. If the club did pay rent, it would be one AEG entity paying another, something that could be seen as exaggerating the extent of AEG’s losses through the Sol.
AEG used to operate Toyota Park after the Chicago Fire was told sold to Andrew Hauptman’s group. AEG would have had a similar relationship with Red Bull Arena and Red Bull New York had the club not bought AEG out of its arena shares (at a price that could be considered above market, per sources). There is a brief history of AEG being in position to profit from renting facilities to Major League Soccer teams.
The operating costs associated with paying rent to Home Depot Center was reportedly one of the considerations in a potential sale of the team. According to Jeff Kassouf’s work at Equalizer Soccer, that potential sale broke down “in the 11th hour,” per Antonucci.
Until AEG speaks, we will not know what motivated them to abandon the Sol, and given the group has no requirement to discuss this decision, we may never know why the beacon of Women’s Professional Soccer went out after one season.
Ultimately, AEG did not care as much about the Sol as others, and given their continued commitment to the Galaxy and Dynamo – and the lengths they have gone to try and make each successful – AEG did not appear to take the women’s game as seriously.
I agree completely. AEG could afford to stay on but they chose not to and they had unreasonable expectations. It’s a very disappointing situation.
I’m no AEG fan, but they’re blameless here. They told everyone coming in that they would finance the club for one year and then they were gone. Nobody at WPS or with the Sol is blaming AEG. All are thankful AEG helped them kick things off.
There’s a story about this at ESPN Los Angeles’s website. In it an owner from the other group that owned the club said that AEG even though it owned just half the club took on 90 percent of the debt. And that the Sol lost $3 million, more than had been reported.
I can’t agree on blameless. The “one year” fact is debatable. You might be right, though. The idea I currently have is that it was a more “get it started” standard. That actually paint a better picture of AEG than the one year mark.
The $3 million figure has come-out in the last week. Credit to French for getting, reporting it.
As far as nobody within the Sol or WPS blaming AEG, I think both organizations are doing a good job of presenting the right public face.
There are many questions AEG has caused us to ask. Not all of them are going to lead to answers which indict AEG; however, we need to ask why AEG wasn’t making the same commitment to the Sol that they’ve made to other teams.
And then there is the whole rent issue.