With MLS to Charlotte now a done deal, here's what comes next
Article URL:
www.bizjournals.com/charlotte/news/2019/12/17/with-mls-to-charlotte-now-a-done-deal-heres-what.htmlMight be behind a paywall...
You may have heard something about Major League Soccer coming to Charlotte. On Tuesday at the Mint Museum uptown, the league’s commissioner, Don Garber, joined David Tepper and Mayor Vi Lyles to make official what became a poorly kept secret weeks ago.
Tepper bought the NFL Carolina Panthers in 2018 for $2.275 billion and has devoted much of this year to adding a soccer team. Now he’s got one — and they’ll be taking the field in 2021 at a renovated Bank of America Stadium.
Here are a few of the details, benchmarks and highlights from the principals involved, collected during group and individual interviews and formal remarks made at the museum.
• Tickets, tickets, tickets: The Panthers started accepting refundable season-ticket deposits on Tuesday. The cost is $50 for the supporters’ area, $75 for general seating areas and $100 for the club level. Deposits are charged per account, not per seat. There is a 12-seat limit for season tickets. And what are tickets likely to cost? A good comparison is Atlanta United FC, which, like Tepper’s team, is a sister franchise to an NFL team. Arthur Blank launched Atlanta United FC in 2017, putting the team at his newly opened Mercedes-Benz Stadium. Blanks owns the NFL Falcons as well as the MLS team.
According to Team Marketing Report, average ticket prices for Atlanta United are $37.75 for general seating and $295.88 for premium tickets (club level). Suites are excluded from those averages. Charlotte MLS prices will be set in the spring but are likely to be close to what Atlanta and other recent expansion teams are charging.
• Suite life: Last summer, Panthers president Tom Glick told me the Charlotte MLS campaign had secured commitments from 60 companies to pay $100,000 each for luxury suite rentals during soccer season, assuming an expansion franchise came to town (hard to watch soccer without a team, isn’t it?). On Tuesday, Glick told me the suite sales campaign will now go beyond existing NFL luxury-box owners. There are 151 suites at BofA Stadium with capacities of 12 to 44 people each. There are five suite membership clubs. In total, suites and suite clubs account for 4,350 seats.
Tepper told me Tuesday the capacity for MLS games will consist of lower bowl seating (22,716), club level tickets (11,321) and the suites (4,350), a total of just over 38,000.
• Money (still) talks: MLS Commissioner Garber, Tepper and Glick all referenced the importance of the Panthers’ reception for corporate and civic leaders in August during Garber’s trip to Charlotte.
CEO and executives from the following companies and organizations joined Mayor Lyles and Dena Diorio, the county manager, at BofA Stadium to express support for an MLS team: Albemarle, Ally Financial, Atrium Health, Bank of America, Belk, Bojangles’, Charlotte Center City Partners, Charlotte Regional Business Alliance, Coke, Domtar, Duke Energy, Jeld-Wen, LendingTree, Northwood and Truist.
“That then segued into a more formal relationship with Ally Financial and a handful of other companies,” Garber said. Tepper mentioned Tuesday that the Ally sponsorship ranks among the largest in MLS.
• Oh, right, you need a team: Charlotte MLS takes the field in 2021, a quick turnaround for Tepper’s organization. While talks are well under way for a team training complex at the city-owned Eastland Mall site, a final deal must still be negotiated and construction will likely take 18 to 24 months. Meaning the new team needs a training home in the near term.
And the team needs bodies, as in coaches and players. “We’ve been anticipating for weeks that we would be asked to play in 2021, so we’re well on our way with (hiring a) sporting director, chief scout, scouting team, head of youth development academy,” Glick said. “Then we’ll move on to team manager, assistant coaches, physios, trainers.” What’s a physio? Tepper asked the same thing, jokingly, after Glick used the term — it’s what British footballers call the team medical staff. (Glick, remember, is a former executive with Manchester City.)
• Help wanted: An MLS staffer offered a rudimentary primer on assembling a roster, noting that the league holds an expansion draft one week after its annual championship match, the MLS Cup. That championship match is played in early November. Because many of us here are soccer and MLS newbies, it’s worth noting the season runs from February to November. Teams play 34 regular season matches: 17 home and 17 away.
• What’s your name? We won’t know until spring 2020. The Panthers are enlisting fan opinions as they consider MLS names, so prepare your FCs, Uniteds and Sporting monikers. According to a Raleigh soccer writer, Tepper already has a few ideas in mind, having applied for trademarks on several names, including Charlotte FC, Charlotte Crown FC and Charlotte Town FC. Uniforms (kits in soccer — make that football — lingo), logos, badges and colors will also be introduced in the spring.
• Is this up for debate? Lyles on Tuesday faced a number of questions about the closed-door debates she and council held while negotiating the outline of an agreement with Tepper and MLS. She defended the process as typical of any economic development project and emphasized that the transcripts and minutes will be publicly released once a final agreement is reached. Tariq Bokhari, a Republican councilman, told me Tuesday that the talks are bigger than just soccer and extend to what Tepper and the Panthers will do to build an entertainment district in uptown. It’s possible the discussions will segue into the long-term future of Bank of America Stadium and Tepper’s statements that he wants to build a multi-purpose, retractable-roof domed stadium within a decade. Likely price tag: $2 billion, with 40% to 50% funded by taxpayers.
Asked about future requests by the Panthers, the mayor cut off that line of questioning by saying she doesn’t know what else Tepper might want and punctuated her answer by insisting Tuesday would be a day for soccer topics alone. Lyles told me and other reporters Tuesday that the $110 million of tourism tax revenue targeted for Charlotte MLS is not a done deal and will require extensive citizen input and discussion.
“That number is going to be set aside as a reserve for us to think about how we implement those plans,” she said. Asked about incentives for the Eastland Mall property, the mayor said, “My goal is to have Eastland back on the tax rolls.”
City government bought the 80-acre mall property for $13.2 million in 2012. The following year, the abandoned mall was demolished. In 2018, a K-8 magnet school opened on 11 acres of the land, leaving 69 acres undeveloped.
An MLS training complex will likely occupy 20 acres on the site, leaving the rest to be determined by the city and its master developer, Crosland Southeast.
• Matters of semantics: Reporters lobbed questions about whether there is any going back on the $110 million promised by Lyles in her November letter to Garber. For her part, the mayor said nothing’s been decided.
“The money is not pledged, it’s in reserve as we complete two development plans: the east side as well as our entertainment district on the west side,” Lyles said.
Compare that statement with her letter to Garber, in which she wrote of a city government-Tepper collaboration including “$110 million in hospitality funds set aside to help ensure a successful venture over the next many years.”
The mayor said having many “people engaged and involved in what we do. That’s the most important thing. This is about community good.”
Lyles referenced youth leagues using MLS practice fields in Dallas as an example of some of the community outreach she wants to see with a team here. The mayor said there is not an anticipated division of the taxpayer money for the Eastland headquarters and stadium upgrades or an uptown entertainment district. Separately, Tepper said most of the public money, if allocated, would be used for the Eastland training center.
• Mutual admiration society: Mayor Lyles, Tepper and Commissioner Garber offered one another numerous pats on the back. Garber said Charlotte would not have gotten a team without Tepper’s ambition and persistence. At the same time, the commissioner said that, without Lyles, “We’re not here today.” Of Tepper, Lyles said, “I want to thank Dave. He knows how partnerships work.” A key piece of the tentative agreement between city government and the Panthers is the soccer headquarters at Eastland, a project the mayor predicted will spur a “transformation of the east side.” Afterwards, while speaking with reporters, Lyles said several times that no one would have thought as recently as two years ago that the former mall site would be able to attract a high-profile major league sports team headquarters.
• What does this have to do with the Marvel Cinematic Universe? Glad you asked …
East Charlotte boasts a diverse population, including more Hispanic and Latino residents than the county as a whole. All involved in Charlotte MLS emphasized the potential audience of Hispanic and Latino fans. Soccer is entrenched in Hispanic culture — and Tepper promised an extensive outreach campaign to that audience. As for east Charlotte, he said, “The idea is to have it develop and keep the population the same” rather than gentrifying the neighborhood. “So you have local restaurants and local shops run by local people. And it makes that (environment) much richer. … It has to be safe, it has to be well-lit and all the rest of those things.” Tepper said reviving the Eastland Mall site and surrounding area represents what he refers to as Spider-Man moments. As in, “With great power comes great responsibility.” At the same time, he said, “It’s not going to be easy, it’s a commitment to community. I’d like if everybody buys into it. If they don’t, they don’t, and I can’t make them. But that’s the vision.”
• Feeling peachy: It looks like a rivalry with Atlanta United FC will be easy to get started. Garber mentioned the nearby poster child for MLS expansion — Atlanta has already won a championship, has led the league in attendance all three seasons of its existence and is Forbes’ most valuable team — and a few boos could be heard in the crowd. Tepper told the crowd, referring to Atlanta, “We’re the hot city — screw that other city.”
• The pitch for the pitch: Garber said all along that the prospect of a Charlotte club playing in an NFL stadium gave his league pause. Much of the past 20 years has been dedicated to convincing teams and cities to build soccer-specific stadiums, often in the range of 20,000 to 30,000 seats.
Atlanta and Seattle helped change Garber’s mindset while considering Tepper and Charlotte. Both clubs play in NFL stadiums and they happen to be the top two MLS teams in attendance. In 2019, Atlanta United played in front of 52,510 fans, on average, while Seattle’s Sounders had crowds of 40,247 per match. Average attendance league-wide was 21,322, marking the second consecutive year it declined. The addition of a 24th club, Cincinnati, pushed cumulative attendance to a new record: 8.7 million. All of the above figures are courtesy of sister publication Sports Business Daily.
Tepper told me the Panthers already have architects and designers planning the needed upgrades, including a center-cut field entrance, new locker rooms, a supporters’ area on the main concourse and TV camera stations suited for soccer. He winced at the city’s robust construction market, noting prices will be at a premium. Tepper declined to disclose estimated stadium renovation costs. And BofA boasts a perfect site, he told me. “To have people walking from Stonewall (Street), the Gateway Station three blocks from the stadium, all the millennials downtown, I don’t know where it is in the United States — that location is great. We’re going to make the soccer experience great.
Garber told me, “What we have been able to achieve is a commitment from David and his organization to ensure that Bank of America will be MLS-ready, that it will be an appropriate environment for MLS fans, that it’s going to be played on a beautiful (natural) grass surface, which is always preferred in our sport.” Then he put pressure on Tepper to deliver by saying, “We’ll fill that stadium.”
• Pleased to meet you: The commissioner and Tepper pointed to MLS’ millennial-friendly appeal and diverse audiences as an important aspect of the league’s growth. In Atlanta and Seattle, the crossover between NFL and MLS season-ticket holders is less than 3%, Garber said. Tepper said there are many sports fans who don’t go to NBA and NFL games in Charlotte, but would like to embrace a team. MLS, he said, can provide that outlet.
• Bottom line: According to Forbes, 16 of the 23 teams that played in 2018 ran operating deficits. And still, expansion fees keep soaring, bolstered by increasing sponsorship interest, steady ticket sales and an audience that includes a significant number of hard-to-reach millennials. Marc Ganis, an industry consultant with extensive ties to NFL owners, told me Tuesday that consistent profitability for MLS teams is unlikely “for the foreseeable future. Operating an MLS club is a bet on future values increasing. Those handful of teams that make a profit make a small one.” Tepper, with a personal net worth of $12 billion, can probably hang on.
• Time machine: When the Carolina Panthers took the field as an expansion NFL team in 1995, founder Jerry Richardson and his partners paid $200 million. That’s equal to $337 million adjusted for inflation. On Tuesday, Tepper closed on an agreement to pay roughly the same amount — $325 million — for an MLS expansion team. Where was MLS in 1995? In its infancy, with the original 10 clubs granted to ownership groups for the bargain price of $5 million each; that’s a whopping $8.4 million adjusted for inflation, or one-fortieth of what Tepper paid.