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Transcript from Media Teleconference on Expansion with MLS President and Deputy Commissioner Mark Abbott

On Wednesday, February 1, Major League Soccer Communications held a media teleconference on expansion with MLS President and Deputy Commissioner Mark Abbott to discuss the 12 ownership groups and cities that have submitted official applications for the League’s next round of expansion.
 
Ownership groups from the following markets have submitted applications for consideration: Charlotte, Cincinnati, Detroit, Indianapolis, Nashville, Phoenix, Raleigh/Durham, Sacramento, St. Louis, San Antonio, San Diego, and Tampa Bay/St. Petersburg.
 
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MAJOR LEAGUE SOCCER PRESIDENT AND DEPUTY COMMISSIONER MARK ABBOTT
 
On Monday and Tuesday, we received applications from 12 ownership groups and markets seeking to be one of the next four MLS expansion clubs. I'd like to begin by thanking each of the ownership groups, the markets, the civic and community leaders and political leaders in those markets who provided their support in the applications, and fans in each of those markets who have been letting us know how excited they are about the possibility of Major League Soccer coming to their market in the future.

I've been very fortunate. I've been involved with the league since its inception. As you know, we had 10 teams when we launched the league in 1996, and to be able to see on a single day 12 markets submit applications with the strength of ownership groups and quality of stadium plans that we saw is really something that's quite amazing, and I think it's a tremendously strong statement about the growth of the sport and the league in the United States and Canada and the continuing growth of the interest in us. Again, we appreciate all of the work that went into the various applications that we have received.

Over the next few weeks, the league office will be reviewing in detail the applications and following up with the various markets with additional questions that we have or information that we may be seeking, and then we will be reviewing the applications with the expansion committee, which is comprised of a number of owners from our Board of Governors, and we'll be doing that in the coming months.

As we previously announced, it is our plan to announce the selections of clubs 25 and 26 prior to the end of the year, and we are targeting those clubs beginning play in the 2020 season. We have not yet established a timetable for the selection of clubs 27 and 28. We'll make that decision after we've selected clubs 25 and 26.

As you know, we received the applications yesterday, and so we're going to open it up to questions that you may have, and I would imagine that most of the questions will be about a particular market, perhaps the market that you're in. We're happy to answer those questions to the best of our ability. We haven't had a chance yet to review every application, so there may be details that we can't address yet. And as you might imagine, we're not in a position to rank the various markets or sort of handicap their chances of being selected, but we do look forward to answering your questions that you may have. And Dan, I'll throw it over to you for that now.
 
On Sacramento submitting a bid independent of any Republic branding and if there is any brouhaha
The process for the Sacramento bid began quite some time ago, and there have been ongoing discussions between Kevin Nagle and his group, and Warren Smith and the Sacrament Republic about coming together with a joint bid to acquire a Major League Soccer expansion club, and in fact the league was involved in those discussions. The commissioner personally was involved in those discussions last fall.

Recently it became clear, I think, that they had some issues that still required resolution before they could come together and present a united bid. But the deadline was yesterday, and so Kevin and his group moved forward with submitting a bid and discussing the expansion plan in their ownership group. But as Kevin said earlier today, it was their intention to continue the discussions with Warren and the Republic. It remains their intention to seek a situation where they can present a united bid, and our perspective at the league is we should allow those discussions to play out.
 
They've put a lot of work into a stadium site and a stadium plan and securing the approvals for the stadium and assembling an ownership group. So I don't think -- and the mayor actually gave a video in support, which I watched. So I think it would be hard to say there was miscommunication about the fact that Sacramento was filing an expansion application yesterday.

So I'd like to minimize some of the brouhaha and hysteria around this. I actually think it's fairly straightforward when you take a look at it.

 
On how an expansion candidate’s proximity to another MLS market affects chances and if there is a goal to spread out the geography of teams to expand the League’s footprint.
Interestingly, geography is a factor that you think about, but it actually can cut both ways. So you both think about the country and how to get broad coverage of our country, which is obviously quite large, but as you know, one of the core, I think, real competitive advantages or identities of our league are these great rivalries we have, and a lot of those rivalries are dependent on close geographic proximity.

Geography is a factor, but it doesn't just cut one way when we think about what are the best four markets for us to select.

On the importance of detailed stadiums in terms of funding and questions still surrounding Minnesota United’s stadium and tax breaks
Just on Minnesota, Minnesota's stadium is moving ahead. There are discussions about legislation on the tax issue reference, but the stadium is moving ahead. We've had the groundbreaking and there's no question about that stadium moving forward. I just wanted to be clear about that with everybody on the call.

With respect to stadium plans, what we said is we recognize that by yesterday, which was the date when expansion applications were due, is that not every club or market would have a finalized stadium plan. What we asked for is at this time for people to provide us with information about the status of their stadium plan and what the path is for a finalized stadium plan.

We can't select a market without a finalized stadium plan, so there's a difference between what you have to have when you file, which was yesterday, and ultimately when we make the selection process, and that's why we have said it's going to take -- could be all the way through the end of this year before we're in a position to make those selections.

On if there is a ceiling on stadium size
We don't have any abstract of stadium size, but each community has a stadium size that will work for the MLS team in that community. And there are ways you can build stadiums that have different capacities that still work for MLS.

What's key to us is we're able to get a stadium plan and project there with a capacity that creates the right kind of environment for our fans, so there's no abstract or random stadium size. There would be a specific plan that we would have to evaluate in San Diego.
 
On if the preliminary talk of the Oakland Raiders possibly coming to San Diego would have any impact on MLS’ interest
With respect to the Raiders, I had not yet heard about that. Our focus remains on the stadium plan that was discussed when the commissioner was in San Diego on Monday, and we continue to believe that that's a compelling idea.

On if MLS would be comfortable with a stadium that could seat around 30,000 fans
The StubHub Center is at 27,000 seats, and Orlando is around 27,000 seats, also. I think it's not the total size that's the issue. It is making sure that the design is one such that we create the right type of environment for a Major League Soccer team.

On yesterday’s meeting with Nashville’s ownership group of Bill Hagerty and John Ingram as well as Mayor Megan Barry and if Nashville is in play for the first two expansion spots or would be more likely for the latter two
As I said at the outset, we're not going to be ranking or handicapping anybody's odds with respect to being selected, so I'll just leave it at that for now.

With respect to yesterday's meeting, it was the first time that I had had a chance to meet with John. I'd met with Bill previously and had never met the mayor, although I'd spoken to the mayor on the phone last summer. And it was a wonderful meeting. The mayor expressed the support of the city behind the application, and John expressed his enthusiasm about being involved in trying to bring a Major League Soccer team to Nashville. So I thought it was a very positive initial meeting.

There are really four criteria by which we take a look at markets as we think about our opportunities for expansion, and those four criteria are whether we believe the market has the dynamics within it to support a Major League Soccer team, both from a fan perspective and a corporate and media support; the role that that market plays in helping us achieve our overall goals of increasing national interest and national viewership for our media and broadcast arrangements; the strength of the ownership group; and the stadium plan. As the case with all of the markets that submitted applications, those are the criteria by which we will be evaluating Nashville.

On any frustrations with Charlotte with their accelerated timetable of about six weeks to pull the bids together
Let's talk about the timeline issue. When we issued the applications in December, that wasn't the first time that we had been talking to any of these markets, and in some cases, those discussions had been taking place literally over the course of years, and in some cases multiple months. So it wasn't the beginning of a process, it was the start of the next phase of a process.

And what we said and what was part of the application was that what we were asking is on the application deadline, which was January 31st, that we recognized that different markets would be in different places with respect to their ownership groups and with respect to their stadium plans, and that we just wanted to know where they were and hopefully they were as far along as they could be, but that they would be supplementing their applications as we continued the review process.

With respect to Charlotte, we did see some concern about the role that the deadline was playing, and had some concern as to whether it was impacting the deliberations. So we had a conversation with Marcus Smith, and Marcus decided to move ahead with the application, remove the deadline as an issue, and to say to the city that they're prepared to submit the application to continue discussions with the city. I know there was discussion around the deadline, but in the end, it really didn't play a role in anybody's determination as to whether move or not move forward.
 
On the number of teams selected at specific intervals
With respect to clubs 27 and 28, the idea is from the pool that we have to also make those selections. We have not yet determined the timetable for those selections, as I said, and undoubtedly information in those markets will develop over the course of that time. And so I would imagine, as the case with all the applications, they'll supplement it with additional information.

With respect to Miami, we continue to work with David (Beckham) and his partners on finalizing a stadium plan. I don't have an update to provide you on that today, but that's something that we continue to focus on and hope to be able to bring to fruition with them.

On legislation for funding a stadium in St. Louis being held up a few times
Well, in our discussions with the ownership group and with public officials, it was and it remains our understanding that in order for the stadium to remain -- and project and process to remain on a timetable to allow them to hit the 2020 opening that the April ballot is the ballot that they would need to hit. So we remain supportive of that, and I don't think anything has changed with respect to that.

On the timeframe for picking one of the next two expansion teams in MLS
You know, what we've said is by the end of the year, and it could be earlier, a lot of it has to do with the stadium plans and the timetables for those stadium plans. And so what we wanted to indicate is that we have targeted these clubs to begin play in 2020. It could be as long as the end of the year for us to be able to finalize those plans, but it could be sooner.

We learned a lot yesterday with the initial information that we received, and we'll be learning more in the coming months as we continue to work with the various groups that are introduced.

On Detroit being in limbo with city and county and if there is a deadline to finalize sites
We don't have a firm date as to when you have to have the site finalized in order for us to hit the year end, but there's going to be a practical aspect to that which is going to be slightly different in every community, depending on what type of governmental approvals you may need. But in order for us to select the city, they're going to have to have a finalized plan. We know that the groups continue working on the jail site, and we'll just have to continue to see how that plays out. I don't really have more specifics on that other than I know they continue to work on it, and that remains their goal.

There’s going to have to be some point prior to the end of the year where there's a finalized stadium plan so that we're able to conclude that all the elements are in place for us to be able to select a market. That exact date is going to vary from market to market depending on what governmental approvals and other things they need to have in place in order to ensure that the plan is final. And I don't know what that date is yet in any particular market. That's something that we'll be learning as we continue to review the applications, reach out to the groups, and speak more specifically about their particular situations.

On Tampa Bay being the highest ranked media market without a team and stadium renovations being privately funded
As I said just a few minutes ago, there are four factors that the league will think about or use when evaluating any particular application, and so I'm not going to rank markets today. We're at the beginning of that evaluation process. But some of the factors you've cited are factors that we talked about just a few minutes ago. What's the stadium plan, and how is it going to be executed, how does the market help us achieve our overall national goals, what do we think the dynamics within any particular market are that lead us to believe it would be successful. We're not going to today apply those to any particular market or handicap any particular market, but those are the factors that we're using in our evaluation.

On the Indy 11 proving to be good on attendance in NASL, having struggles in 2012, and being encouraged by MLS made for them to apply
While we were supportive of their desire to apply, we didn't go to any market and encourage them to apply. This was a process by which people have been aware that we are going to expand, and they have approached us. I don't want to get caught up in semantics here, but we were open to the application from Indy 11, but I would quibble a little bit about the characterization that we went around to any market and encouraged them to apply.

The thing that I think is interesting is, as you note, the team there has been successful from its perspective, and they have begun work on a downtown stadium plan. Other than that, I don't have a lot of specifics to comment on with respect to their plan, but those were two components that obviously we're aware of.

On FC Cincinnati’s successful first year and the strong preference for a team controlling a soccer-specific stadium
We have had discussions with them about a plan for a new stadium. I think that obviously we're still at the beginning of the process here. I know that they have been spending time evaluating that, and those are conversations that we look forward to continuing to have with them. Other than that, I don't really have any specific comments on the stadium plan in Cincinnati, but we have talked to them about a new stadium.

You do know if it's finalized when you see it, but I think that's because it's finalized. What we're looking for is knowing that the stadium is going to be built, and that requires really three things. You need to have a site under control. You need to have whatever relevant government approvals you need, which vary from market to market. And you need to have the financing secured. And when you have those three things, then absent some catastrophic act of God, we know the stadium will get finalized and built, and that's what we're interested in.

So I think we know it when we see it, but there are some specific criteria that you're able to judge it by.

On any discussions with those groups that are not linked to a specific NASL or USL team, especially as those two other teams might be coming to those markets post-2020
What we talked to people who are interested in expanding into Major League Soccer is that there are opportunities at other levels of professional soccer in the United States, and those are things they may want to get involved with, which are great for their community and great for the sport.

It's not a requirement. As you know, we have had owners involved with other teams, and we've had owners that aren't. Not a requirement, but those can be worthwhile investments and activities for potential owners to undertake.

So it really is a market-by-market determination, and it's an ownership-by-ownership determination.

On impressions of San Antonio’s bid and possibility of a franchise
I'll begin by saying that we have a lot of respect for the Spurs' organization, and I think it really speaks a lot about the state of the sport in this country that they got involved with the USL, they're involved with the stadium for that team there, and that they're interested in Major League Soccer. I think that's a real positive with respect to generally about the sport that an organization that has been as successful as them is interested in pursuing Major League Soccer.

I don't have much more detail than that, but I think that was something that -- certainly caught our interest.

On how important fan involvement is with a close bid coming down to two cities
I put it slightly differently, which is one of the criteria that we think about for cities is fan support, and that can be measured in a whole variety of ways. And I suppose buzz and social media is one way, but I'm not sure that that's the only way that fans can express their interest or demonstrate that there would be support.

I wouldn't want to say that we could be persuaded by a very clever social media campaign. We're going to be pretty rigorous in trying to analyze each market and whether we think the fundamentals are there for success, including whether we think the fan support will be there.

On a previous ownership group that put together a great bid that has become a model example
As you might imagine, it's difficult for me to point out or favor any particular team. I would say that, though, let's just take a look at what's happening this year with both Atlanta and Minnesota coming into the league. I think that they are both examples of strong ownership groups, great commitment to stadium plans in the case of Atlanta, sharing a beautiful stadium which has been designed with Major League Soccer in mind, and in Minnesota, the stadium that's going to be built in the Midway area, and then in markets where we know there's a lot of great fan support. I don't think I have to go back too far in time to see examples of really what we're looking for, and I think Atlanta and Minnesota are examples of both of those things.

On St. Louis soccer history and MLS’ desire to have them in the league and how significant it would be to have them in the League
We’re not going to rank markets today, but we've been very supportive of the ownership group and the stadium process in St. Louis, and we remain very supportive of that today.

You know, all of the markets that we saw make submissions yesterday have lots of great attributes and factors that lead us to believe they could be successful, and St. Louis clearly falls in that category, also. As you point out, there's a great history for the sport, going back to the very beginnings. We have a tremendous ownership group, and we've got a really compelling stadium plan. We've been public about our support in St. Louis, and that hasn't changed.

On ownership in Charlotte with a family that has very deep ties to the sports industry, specifically NASCAR, but they have virtually no soccer experience
In our discussions with them, a couple things. We are in the professional sports business, and as you know, many of our owners have other teams and interests in other leagues beyond Major League Soccer, and that's been a real strength for the league. When we look at a family like the Smith family, we're impressed by the experience they have broadly in sports and entertainment. We think that could be a real asset for us.

On a hard and fast deadline to even out the number of teams coming in
The role of the expansion process is something and the timetable for the expansion process impacts how we're thinking about the timetable for Miami, but we haven't yet developed the specifics of how that would work.