New investors / operators in Orlando and Houston
May 21, 2021 by Jason Davis
By Jason Davis – WASHINGTON, DC (May 21, 2021) US footballer – The list of differences between Major League Soccer and pretty much every other league is how they define club ownership. Although the term is no longer used occasionally, MLS has investors / operators rather than traditional owners. This is one of the hallmarks of a unified league designed to limit financial competition for players between clubs. MLS may have relaxed some of these restrictions, but the basic idea remains. It’s a different way of running a professional sports league. Owning an MLS club is in the news thanks to the Orlando City and Houston Dynamo sales.
Orlando City will change hands for the first time in its MLS existence. Brazilian billionaire Flavio Augusto da Silva acquired a controlling stake in a successful USL franchise and funded the jump to MLS in 2015. While the Lions under da Silva fought mostly on the field, he oversaw the construction of a football-specific stadium in Orlando Kaka and the Portuguese winger Nani attract star power.
The hiring of Oscar Pareja, one of the last big changes in Orlando under da Silva’s leadership, could be the turning point in turning the club into a force. In his goodbye message posted on the Orlando City website, da Silva claimed a level of performance that is not exactly reflected in the record.
“I can say with confidence that both Orlando City SC and Orlando Pride have set the standard for football organizations around the world. This is real testament to the dedication of our passionate supporters – fans, front office staff, players, minority owners and partners -. It has kept us striving for unprecedented success, ”he wrote.
Orlando’s new owners, the Wilf family, paid Da Silva’s reported price of $ 400 million. The owners of the National Football League’s Minnesota Vikings fought to expand Minnesota United and held a minority stake in Nashville SC. That shows their interest in the league and the opportunity to run their own MLS club. Orlando football fans hope the new investor / operator will pick up where the old one left off.
Houston’s new investor / operator Ted Segal is something of an unknown in sports ownership. Unlike some of Major League Soccer’s best-known big money owners, Segal doesn’t really have a public profile. Most of what we know about the property developer comes from a brief biography of the EJS Group, the company he founded and which he runs as president. His only other athletic interest is in a mixed martial arts estate, the Professional Fight League. The reported price for the Dynamo is equivalent to the $ 400 million the Wilfs are spending to buy Orlando. The NWSL clubs also belong to both.
This pricing creates the market for existing MLS teams amid the ever-increasing fees of the modern expansion era. With Real Salt Lake in the market, MLS needs to find a party willing to spend a similar amount. The RSL package no longer includes an NWSL team, but first-class training facilities and two football-specific stadiums.
The Wilfs are well known, at least as professional athletes. Segal is not. Neither is local for their new MLS purchases. You take control of clubs that are part of a league in transition, with high-turnover clubs like Atlanta United, LAFC and the Seattle Sounders separating from the pack in various ways. Teams with committed investors / operators willing to spend money when needed tend to do better. There may be an alternative route to success, but the level of difficulty is high and the error rate is low.
MLS remains a competition based on parity, and spending doesn’t guarantee much more than a semi-annual spot in the playoffs. However, only a few clubs can really keep up if their owners are unwilling to invest heavily in many areas.
The Philadelphia Union is a prime example of a club that focuses on player development and smart spending to win a significant trophy that goes against recent trends. For the Wilfs and Segal, not only would walking this narrow path be time consuming, but it would also mean finding the right people to perform the operation.
It’s a lot easier to keep the clubs running the way they did. The Wilfs have the luxury of the status quo of producing a playoff team at least in 2020. If they keep the Houston course, the Dynamo competitors may not become competitors anytime soon.
This puts more pressure on the operation chosen by Segal. Again, MLS may not technically have any owners, but investors / operators have enough control over their clubs to limit the meaning of this distinction. We work according to the MLS rules and we know how much difference spending can make in a relatively short period of time.
For the Wilfs, knowing how to operate under the NFL’s hard-cap system could be beneficial. They also have experience bidding for Minnesota United and keeping that stake in Nashville. At the same time, Segal comes into the league without the limitations of experience. MLS works in a unique way compared to professional football, not to mention the other sports. There is still a league going on that is making rules that change the level of competition.
With so much excitement about new teams and flashy spending in places like Atlanta and Los Angeles, it’s easy to forget that running a successful franchise is difficult. After all, only one team can win a championship in a year. In Orlando and Houston, fans will kick off the summer wondering if their club’s new investors / operators can get them closer to the only thing that matters. That will always be the MLS Cup.
Jason Davis is the founder of MatchFitUSA.com and the host of The United States of Soccer on SiriusXM. Contact him: [email protected] Follow him on Twitter.
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Photo by Fernando Leon – ISIPhotos.com