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Minneapolis MLS Team Faces Short-Term Expenses, But Long Term Earning Potential

NASL club Minnesota United Owner Bill McGuire and several wealthy business partners are "prepared to spend" about $250M of their own money to bring a MLS expansion team to Minnesota, which "begs the question: Will this be a moneymaking venture?," according to Dennis Brackin of the Minneapolis STAR TRIBUNE. Several sports economists agreed that such a "large initial financial outlay comes with risk, one the McGuire group is attempting to minimize by requesting tax breaks for construction costs and property taxes for a new soccer-specific stadium." But they said that it also "comes with the opportunity to make money," although it is a "long-term proposition because of the anticipated early debt payments associated with the stadium." Smith College professor Andrew Zimbalist said, "They’re looking at probably at least 10 years before they’re beginning to get a return." Brackin writes the gamble in investing in MLS is that financial success is "linked to the continued growth of soccer in this country, and more specifically on broadening the MLS fanbase." While there is "plenty of room to grow," there is also "no guarantee of that growth, at least enough to turn MLS into a moneymaking venture, which it currently is not." Warriors President & COO Rick Welts, who is also an investor in the LAFC expansion team, acknowledged that the economics of MLS "have to grow to allow the league 'to compete on the world stage for player talent.'" He added that improved talent will "lead to richer TV deals ... and, in turn, increased franchise values" (Minneapolis STAR TRIBUNE, 5/29). Meanwhile, Minnesota Gov. Mark Dayton said of whether there was any chance for public funding of a soccer stadium in downtown Minneapolis, "Anything is possible, but the Legislature voted overwhelming for no subsidy. I’m glad that the owners want to bring Major League Soccer to Minnesota, but they’ve been told for months now they’re going to have to go without public subsidy" (Minneapolis STAR TRIBUNE, 5/29).

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