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SBD/16/Leagues Governing Bodies
MLS TO DELAY START UNTIL '96 BUT ANNOUNCING INVESTORS TODAY
Published November 16, 1994
"The life may be dribbling out of a nascent pro soccer league," according to John Helyar in today's WALL STREET JOURNAL. MLS will announce today that a delayed start-up in spring '96, though officials plan to "try to surround the setback with signs of progress," such as new franchise cities and financial backers (WALL STREET JOURNAL, 11/16). THE GOOD NEWS: The MLS will announce which franchises will join the seven charter cities (L.A., Washington, NYC/NJ, San Jose, Columbus, Boston, and Long Island) out of a pool that includes Chicago, Indianapolis, Denver, Seattle, Kansas City, and Tampa. Investors for these new teams will include NFL Chiefs owner Lamar Hunt and Metromedia Chair John Kluge. It "remains uncertain" whether the MLS will have ten or twelve teams (Jere Longman, N.Y. TIMES, 11/16). Other investors will include API Soccer, a division of a U.K.-based sports marketing Sponsorship Group headed by Kevin Payne, and a group of L.A. businesspersons, L.A. Soccer Partners. Most investors will contribute to the league and operate a designated team. However, there will be investors who won't run teams, including MLS founder Alan Rothenberg's investment group, investment banking firm Donaldson Lufkin Jenrette, and investment banker Paul Tierney. A "major" Japanese corporation is also "likely" to invest (Roscoe Nance, USA TODAY, 11/16). WORLD CUP BACKLASH: Reasons for the league's delay include "outsize ambition, flawed structure and alienated sponsors," according to the WALL STREET JOURNAL. MLS is short of its $100M capital goal. Rothenberg, who also organized last summer's World Cup, "envisioned piggybacking" on its success, but the tournament has "done as much harm as good." Richard Groff, commissioner of the rival American Professional Soccer League (APSL), says Rothenberg and MLS officials were trying to run the World Cup and MLS at the same time: "I think basically they ran out of time." Rothenberg's handling of the World Cup led to "infighting" within the U.S. Soccer Federation and his "effort to parlay the World Cup's success into a lucrative business for himself" has caused further "resentment." But more damaging could be the "wedge" driven between potential MLS sponsors and league organizers after the World Cup. MasterCard Int'l wound up suing the World Cup over $75M exclusive card rights, and Anheuser-Busch's "was furious" with Rothenberg's ban on beer sales at World Cup venues. IEG Sponsorship Report Editor Lesa Ukman said World Cup USA had an "Olympic organizing committee attitude, where you sell for as much as you can because you're just a one-time entity." Potential MLS sponsors are also "turned off" by a $2M category sponsorship and the fact the league won't have the int'l appeal of the World Cup (WALL STREET JOURNAL, 11/16).