David Beckham’s MLS Dream: If Beckham Can’t Land in Miami, Here Are Some Places to Take His Franchise

Landon Hemsley (SMBA ’15) looks at David Beckham’s attempt to own an expansion soccer franchise in MLS in this 5 part series. This section is Part 3. Be sure to continue to read through all five parts: Part 1Part 2Part 4Part 5.

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David Beckham has already publicly announced that he intends to bring Major League Soccer to Miami. However, he has faced considerable difficulty thus far in arranging for a stadium, which MLS Commissioner Don Garber has said must be in a downtown location. If the stadium cannot be built, MLS will not return to Miami. It’s as simple as that. Beckham, however, will have already paid his $25 million expansion fee, but will no longer have a market in which to place a team. He could conceivably, therefore, need to look to other places if he wants to run a franchise.

But where could he go? Not New York City, Orlando or Atlanta. MLS is well underway in those cities. But there are others that could serve Beckham very nicely.

David Beckham, Commissioner Don Garber and Mayor Carlos Gimenez Press Conference
Beckham already paid the $25 million expansion fee and could conceivably own an expansion team anywhere.

In the 2013 State of the League address, MLS Commissioner Don Garber indicated that the Minneapolis, Minn., and San Antonio, Texas markets are also of interest to MLS. News reports have indicated that Austin, Texas is very interested in obtaining an MLS franchise as well, as are Las Vegas and Sacramento, Calif.  Beckham could go to any one of these places if he so chose, but before Beckham goes anywhere, he needs to partner with someone. Beckham is a millionaire, not a billionaire. Being an MLS investor-operator requires the ability to sustain enormous losses for long periods of time, and Beckham will need help if he is to do this.

Beckham has yet to completely solidify his Miami ownership group, but as of February of this year had received interest from Marcelo Claure, the Colombian billionaire founder of Brightstar Communications, and Simon Fuller, the founder of American Idol. These two could conceivably walk with Beckham to wherever his franchise lands, but It’s more likely that if Miami isn’t an option, these investors will abandon Beckham. Thus, if Beckham wants a team elsewhere, he should assess potential partners in other markets.

Lucky for Beckham, a good portion of that has already been done for him here.

Potential future co-investors for David Beckham

Once upon a time, investment in MLS used to be for millionaires. Now it’s for billionaires. Sheikh Mansour bin Zayed Al Nahyan, the deputy prime minister of the United Arab Emirates, owns New York City FC’s principal backer, Manchester City FC. His net worth is estimated to be roughly $33.65 billion; he is by far and away the wealthiest sports owner in the world. He is an outlier, but he is not the only extraordinarily wealthy man to own an MLS expansion franchise. Flávio Augusto da Silva, whose net worth is estimated at $446 million, is the principal backer of Orlando City SC.

Who else out there is available for Beckham to court? Table I lists the net worth of the potential members of the group who have been mentioned in the press to have investment interest in MLS expansion. The table is organized by market and ranked in order of net worth. Beckham’s net worth is also listed.

Ranking Investment partner Market Estimated Net Worth Source
David Beckham ? $300 million Tamburro
1 Bill McGuire Minnesota $1.2 billion Forbes
2 Marcelo Claure Miami $950.5 million Carlyle
3 Simon Fuller Miami $608 million Crupi
4 Zygi and Mark Wilf Minnesota $310 million Walsh
5 Steven Hartman San Antonio $20 million + Quarstad
6 Rene Van De Zande Austin Unavailable
7 Kevin Nagle Sacramento Unavailable
8 Justin Findlay Las Vegas Unavailable
9 The Cordish Companies Las Vegas Unavailable

 

The ability of these investors to invest in MLS may not be a function of personal wealth alone. Justin Findlay and the Cordish companies are a unique entity. They have partnered with the goal of bringing a club to Las Vegas, but they have faced considerable opposition from city government where a stadium is concerned. Thus, while any of these investors may or may not have the ability to expend their wealth in order to arrange for an expansion franchise, they may face political obstacles preventing them from obtaining entry into MLS.

Furthermore, some of these owners may not have interest in Beckham’s addition to their investment group. Kevin Nagle of Sacramento is founder and CEO of a multi-billion dollar medical benefits company in Sacramento. Though his personal net worth is unknown, it’s very clear that he is a very wealthy man. The Cordish Companies, if they were permitted to invest, would be a corporate owner like unto Maple Leaf Sports and Entertainment, the owner of Toronto FC, and as a corporate owner, would have access to far more resources than the average investor. The only incentive these people would have to add Beckham to their ownership group would be if Beckham’s addition would put the bid over the top, a highly short-term, politically motivated move.

Rene Van De Zande of Austin is an interesting potential partner. Van De Zande is founder, president and CEO of Emergo Group, an international consulting firm. His net worth is unknown, but he appears to be a significantly wealthy individual. He invested an undisclosed sum in the Austin Aztex, the local USL Pro league team, in October of 2012.

Justin Findlay is another man of Van De Zande’s kind. He is the owner of five different car dealerships in Las Vegas and a managing partner in a larger automotive dealership company. Like Van De Zande and Nagle, his net worth has not been made public, and the fact that he has the backing of the Cordish Companies certainly makes him an appealing partner from the perspective of potential ownership.

In short, the potential is there, but there is more to be learned about these men before accepting them as potential investment partners.

Those who have expressed ownership interest in Minneapolis and Miami are by far and away the wealthiest of any of these candidates whose net worth is known. Bill McGuire, a prominent Minneapolis businessman, has been mentioned in the same sentence with the Minnesota Twins for potential co-investment in a franchise. His considerable financial resources would undoubtedly be sufficient to outlast any troublesome periods, and if he can build a strong relationship with Beckham, this partnership may indeed prove to be the most valuable of all. But given the fact that Beckham has Claure and Cowell waiting in Miami, it is easy to understand why Beckham and MLS are taking their time and being methodical.

So which market has the best options for potential ownership? Judging strictly by the ability of potential co-investors to sustain losses and keep a franchise running, Minneapolis and Miami appear to be the winners. San Antonio and Austin are clearly lagging behind in ownership wealth. But there are a few Maverick investors out west that, although late to the game, could provide the resources necessary to get things going.

That is, if they want Beckham to come along for the ride.

Be sure to continue reading through all five parts: Part 4Part 5.