MLS TO DELAY START UNTIL '96 BUT ANNOUNCING INVESTORS TODAY
"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).