Minnesota United FC hired sports investment bank Galatioto Sports Partners to raise between $100 million and $150 million in equity to fund the new stadium that the team needs when it moves up to MLS from the North American Soccer League.
GSP is not yet in the market seeking investors because the team has not reached an accord with local political leaders in St. Paul for a stadium site.
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Bill McGuire and his partners plan to privately finance a stadium.
Photo by: MLS |
“As soon as they site it we will” reach out to potential investors, said Sal Galatioto, president and founder of Galatioto Sports Partners.
The amount Galatioto expects to raise underscores the emerging business of MLS, which has enjoyed soaring franchise values and the development of soccer-specific stadiums.
A presence in sports finance since the late 1990s, Galatioto said the Minnesota United assignment is his first significant one in the sport (he valued MLS teams for limited partner sales in the past). He had described the sport as minor league, but said he’s now changed his tune.
“I am falling on my sword,” he said. “I am a lot more bullish now. With the new New York franchise, the Orlando franchise and the Pacific Northwest ones, and the Toronto franchise going well, it is a much more interesting business model.”
New York City FC is playing its first season this year, as is Orlando City FC, and the clubs are third and second, respectively, in attendance in MLS this year. The Seattle Sounders rank first, and Toronto FC is fourth.
In March, MLS awarded a franchise to an ownership group led by former UnitedHealth Group CEO Bill McGuire. His group includes the Pohlad family, which own the Twins, and Timberwolves owner Glen Taylor. McGuire owns the NASL team Minnesota United FC, and the other owners are joining him for the MLS franchise.
MLS awarded the club contingent on a new stadium. The NASL entry plays in the 8,500-capacity National Sports Center in Blaine.
The club plans to privately finance and own a new stadium. United projected $120 million for construction and $30 million for land acquisition. Initially the team focused on Minneapolis, but the city spurned the club’s request for property tax exemptions for a stadium.
The group recently turned to sites in St. Paul. Earlier this month, St. Paul officials approved a plan to waive property taxes, as long as the club privately funded the stadium.
MLS officials expect the club to launch in 2018.
Minnesota United President Nick Rogers confirmed the club had hired Galatioto Sports Partners as financial adviser. Rogers declined to comment on any stadium site progress.
