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Report: Shutting down Chivas USA an option as MLS moves closer to finding new owner

Chivas USA team (USA Today Sports Images)

Photo by Kirby Lee/USA TODAY Sports Images

By CAITLIN MURRAY

Little more than a month after Major League Soccer officials stated Chivas USA could stick around for another season with the same name if a new owner isn’t found, a new report suggests the team could close up shop if a new owner decides to start fresh with a new identity.

MLS has found a potential buyer for the beleaguered Chivas USA franchise, but the league is preparing for the franchise to miss 2015, according to a report Friday from Sports Illustrated.

In other words, when the 19-team MLS adds New York City FC and Orlando City next year, the league could field 20 teams.

Citing unnamed sources, Sports Illustrated reports a frontrunner to buy Chivas USA has emerged, one willing to pay more than the $100 million paid by New York City FC ownership to take over MLS’ second Los Angeles franchise in a sale that could be approved as early as Oct. 6.

The report goes on to speculate that, as part of the sale, a new owner would keep the team in Los Angeles, but could choose to shut down Chivas USA for a season or two before a relaunch under a new name.

Chivas USA has been an embarrassment for MLS in recent years, playing in a near-empty StubHub Center for home games while taking up regular residence at the bottom of the Western Conference standings.

The franchise has been up for sale since February when MLS opted to buy Chivas USA for a reported $70 million. MLS has vowed to keep the team in Los Angeles to serve as rival to the Los Angeles Galaxy, even as groups from cities around the country vie for entrance into the league.

With 19 teams in the league this year, MLS will see New York City FC and Orlando City SC debut in 2015. Atlanta will join in 2017 and a Miami franchise is expected pending a stadium deal. That sequence, along with a re-branded second team in Los Angeles, MLS could be at 23 teams, with cities such as San Antonio; Sacramento, Minneapolis and Las Vegas identified as potential candidates for a 24th team.

The report added that Sporting Kansas City and the Houston Dynamo will move to the Western Conference in 2015. The Dynamo had long been expected to make the move, but Sporting KC had not previously been linked to a move to the West.

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What do you think of this report? Think it makes sense to shut down Chivas USA for a season or two before a relaunch and new name for the second Los Angeles team in MLS? Disappointed at the possibility of having your team miss out on easy points?

Share your thoughts below.

Comments

  1. i repeat teams 25 & 26 should be los angeles2 & miami like in 4 to 3 years.
    right now mls can EASILY expand with good markets while LA2 & miami get their #&!@ straight.
    mls can easily go to vegas, sacramento, san antonio, minneapolis, indy.
    another question, will red bull rebrand or survive and is galaxy ready for a new team in town with money.

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  2. Hard to understate how big of a failure this is.
    Like going bankrupt after winning the lottery type failure.

    Everyone is getting rich by investing in soccer in this country. Especially MLS. Everyone wants to get in. And they failed at it. Wow.

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  3. And immediately form a partnership with Tijuana. It would kill two proverbial birds. You are using an established brand to market to the local community. And also you get to share some resources such as loans. Want to make even more ties to the past. Call the team Sockers FC and make the colors yellow and blue. Not coincidentally, the Padres and Charges also have these colors. Complete the package by signing helmeted goalie Peter Cech as they Allan Mayer (?) wore a helmet because he had lots of concussions

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    • Not a bad idea at all and the lighning bolt would clearly look pretty sharp on Cech’s Monty Python helmet. I dunno though. maybe a bigger club is a better partner…. What do you think about Chivas? I know it’s realy a very lazy joke. Sorry. How about Club America though?Chivas USA was pretty shyte, but “America USA” could be pretty awesome.

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  4. I still don’t understand the need for a second team in LA when other cities are begging for a team. So what if there is a rivalry game now and then within a city.

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    • I don’t either. As a Galaxy fan, I have my own views and don’t know why anybody would want to support anybody else at all…. but it was always surprisng to me that this was allowed to happen. Chivas USA as a franchise was started around an (ultimately failed) strategy and target fanbase, and the location was a reflection of that strategy. Once Chivas USA is gone, there is really no logical reason why the franchise should have to remain in LA . Contracts etc are one reason but these are logistical matters and can be cleaned up in a number of ways or simply allowed to expire…

      I’d really like to see the franchise move somewhere that doesn’t have a team, as well. Too many cities want in. LA didn’t really show it could support the second team (not that it was a great execution or couldn’t be done better) and I don’t know how many people here are bursting with enthusiasm to see the team replaced. Many don’t know it was ever here.

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      • The reason for a 2nd team in LA is $100 MILLION dollars. Garber said is himself – all decisions are made in a boardroom. So, LA2 dollars plus what ever a new team will pay (25 mil {Becks discount} to 80 million {OCFC fee} equals LA2 stays put. It’s all about the money.

      • If somebody is willing to pay them $100mm, then of course that is a good reason, I agree. And you’re right it sounds like somebody saying so. We’ll know soon, I suppose.

        Honestly that sounds like a very aggressive bid and I really don’t know how the deal could command such a premium over the the $60mm MLS was rumored to be asking in August… As a side note, I wonder if MLS has bid teams support their valuations at all, or just takes the money and turns over they keys. This would seem reckless based on their past experiences, but watching NYCFC operate makes me wonder just how much Don knows about what’s coming after the check clears.

    • LA could support three D1 soccer teams. Maybe four

      LAG is in the South Bay so that leaves:

      -DTLA or East LA team
      -San Fernando Valley
      -Inland Empire/Riverside.

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  5. This team should be moved to Sacramento. Bonney Field is at 8k and could be expanded to 15 by May.

    With Chivas players plus a few Republic FC and an off season to add ~5 new players–Sacramento Republic FC could be up and running by the start of 2015 with sell outs EVERY game. Guaranteed.

    LA 2 can come back in 5 years once they get a stadium.

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    • I agree that would be great, but the problem is attendance is no longer the economic driver of sports franchises. It’s all about media markets. Growing up in Sacramento, the Kings sold out all of the time, the minor league baseball team could draw more than the parent A’s, and now Sacramento FC is the hottest ticket in town. Los Angeles is just way too large of a media market to pull the second team even though that makes the most sense for soccer fans in the States.

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      • This is not exactly true, though not false either. TV has changed the game globally and is a signifcant potential source of revenue that MLS is still working to master, and will need to ramp up significantly in the coming years in order to really suceeed.

        However, I wouldn’t trivialize game attendance just yet and TV is not the fastest growing componenet of soccer franchise revenue at the biggest clubs (sponsorship/merchndising is)… Below is link to good graphic (using Deloitte 2012/2013 data) showing the revenue contributions from Matchday (game receipts) Broadcast (TV rights) and Commercial (sponsorship and merch) for a number of top European clubs. It’s a pity they don’t show any MLS clubs , but I’d speculate they may actually have a distinguishing quality that the revenues from game receipts remain the highest… nonetheless, even for mature superclubs, gate receipts continue to provide a solid chunk of the revenues and have hardly been dwarfed. TV and Commercial will grow very slowly from here until MLS can displace competitors home and abroad,… but they are the biggest source of “dry powder” for future growth no doubt.

        http://www.businessofsoccer.com/2014/02/18/how-do-soccer-clubs-make-money/

      • OK, explain how Chivas is benefiting from the LA media market seeing that they don’t currently broadcast ANY of their games even on cable.

      • The league is all about untapped markets too. Other than NYC, most cities can’t support two teams. LA couldn’t. They had long enough time to do something and they couldn’t. Wasting two or three year of haggling over building a new stadium is stupid. Better to move to Sacramento, San Diego, San Antonio, Las Vegas, Phoenix, Minnesota (Pick-one) than continue to play second fiddle to the Galaxy — mind you in a stadium owned by the Galaxy’s owner. Small markets don’t matter if you can recreate Portland. Now that’s not an easy task as Portland still maintained ties to the original NASL long before they joined MLS. San Diego had a structure and tI think Sacramento and San Antonio DO now and to a lesser degree Minnesota. ANY of those places would be better for the team and better for the league in the long run.

      • Yusef, I think the media markets argument still supports Sacramento.

        From the Wiki: The 2010 United States Census estimates for the region totaled a population of 2,461,780, making it the 4th largest metropolitan region in California and 18th largest in the United States.

        So let Galaxy dominate LA. If LA is such an amazing market, then expand Stubhub Center, sell out every game, and get huge ratings. I don’t see how a SECOND team in LA is justified in terms of “media markets” when you’re also forsaking some pretty large markets.

        Sacramento, San Jose, and LA would all have great rivalries. The Bay Area is a HUGE market and I could see Sac and San Jose playing to crowds of 50k (at Levi’s, AT&T, or Cal Berkeley) AND huge ratings. Galaxy – Chivas never generated that. It’s a big market in terms of population, but not in terms of fandom. The Galaxy are enough.

      • For what it’s worth I don’t think Galaxy are allowed to expand StubHub Center. If they outgrow it I believe they’ll have to move somewhere else in L.A.

    • From a fan point of view, Sacramento definitely deserves a team. From a business point of view, I haven’t heard they are willing or able yet to pay the $100 million MLS entry fee or sale of Chivas. Sacramento will eventually get the investors needed if fans keep showing up.

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  6. So here is my wild guess. The LA Lakers will buy Chivas and re-christen the team the Lakers FC. The Lakers are already on Time Warner Sports so I bet they could finesse a good TV deal. It would give the brand 12 month presence and Addidas could do both uniforms. There could be a lot of cross promotion. Most importantly they have the political clout to get a stadium built in the LA area.

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  7. The end of a horrible experiment. And to think that MLS was also considering rebranding the Rapids as “Arsenal” and the Quakes as “Club America” at one point.

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  8. The rich get richer??? SKC and Dynamo to the West. Does an Eastern Conference even exist or deserve to be played? East playoff bracket…..yuck

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