Crew SC owner considers moving team to Austin, Texas

[Midas Mulligan]

Columbus is the MLS franchise analog of Michael Bradley.

Some people are overly attached because he’s been there for forever. But he’s really not very good relative to new options, and in retrospect, he’s never been that good.

Thank you for your service. See you in the funny papers.

 

[Shawn Ryu]

And you think Austin is better?

 

[Midas Mulligan]

And you think Austin is better?

You asking me? I'd say it's damn sure worth finding out. And It's not my money.

 

[QuigrNYCFC]

They've had twenty years.

And your response is to throw good money after bad because you're significantly emotionally involved. Look at the facts, at the highest level of support the crew has ever experienced, in terms of attendance, it still posted a loss and managed to achieve a stellar 19th. Experiment is over, Columbus does not want to support the Crew.

Meanwhile Austin Texas has every single metric in its favor and it will probably get that beautiful expansion hype.

I'll say it now and I'll keep saying it until it sinks in. Columbus has had 20 years to show they are deserving of an MLS club, and they have failed. They have failed so badly that they are hurting MLS and the future of soccer in this country. The numbers don't lie.

You want the USMNT to be better, then it starts by cutting deadweight; Columbus has proven itself to be soccer deadweight on the MLS level.

Do the crew even have an academy?

 

[413Blue]

When you have such a large league, it's tough to have a league full of marquee opponents, but Columbus was always such a forgettable team. Nobody gets excited when the Columbus Crew come to town, nobody makes any plans to travel to Columbus. That club was just so, blah. No Norwegian Americans want to live in Columbus, no young Americans want to get drafted and live in Columbus, so it hurts from a talent perspective as well. It just has no sex appeal. We'd attract better talent to a team playing in Austin or Miami. Sure, Austin may end up being a bust, but I can't imagine they would draw less than the Crew do now, so their baseline would be about even, with the potential to catch a spark like most other recent expansion clubs.

That being said, I don't like moving teams around, especially as we are still expanding.

 

[JGarrettLieb]

And you think Austin is better?

Did you read my post?

Its not so much that Austin is better or worse, though Austin is probably a better city, its that Columbus has failed to prove its capable of supporting a MLS team.

With no DP's and virtually no youth setup the club has one of the lowest net income's in the league and has the lowest value in the league.

NYCFC makes so much money that without a stadium it would have positive net revenue with some DP's and no stadium. Do you have any idea how nuts that is? NYCFC is probably paying damn near double digit millions for its YS rentals. Put another way, we can have Pirlo, Villa and Maxi and still make CFG its money if we get a stadium.

 

[Christopher Jee]

Thats where we completely and totally disagree. The average sports fan only really wants cares about high level of competition, followed by being a home league. Thus the best thing that soccer in this country can do is to generate the most revenue so that it can achieve the highest possible level of play.

Secondly, spots is an entertainment business if the market for something is too small, then its too small. And with Columbus running a deficit with virtually no DP spending and a shitty youth development system, I'm going to go ahead and say the soccer market in Columbus is too small right now. That can change in the future.

Third, no just no. No one should be forced to sell a part of an asset/firm they own because its customers have an emotional attachment. Like I said previously, Columbus does not care about MLS soccer enough to warrant an MLS team, having an MLS team in Columbus weakens MLS soccer and thus soccer in America. MLS soccer in Columbus is a value destroyer. If Columbus wanted an MLS team then they could have actually supported the one they had!

MLS will move from Columbus, and it won't return, likely ever.

And yes if NYCFC wasn't supported enough by the local community I'd expect them to leave.

This is strong reasoning, but my heart doesn't always follow my head, so it pollutes it with provocations - there are a couple of aspects of this situation that rankle and yet have me curious as somebody who only dabbles in thinking about this stuff.

Maybe you can set me straight:

• It struck me that we are reasoning along classical economics / free market lines that don't neatly apply to MLS. I think if we had a completely open system here then the resolution of the conflict between Precourt and the Columbus fans would be more straightforward. Columbus fans would start their own club and it would end up at whatever level its supporters can, well, support. Same goes for Precourt's franchise. Whether his franchise would / should be able to start in the same league / division is probably up for debate as well, although if we wanted the market to give us the best "signal" it would be fairer to have them start at similar positions. The closed system that is MLS deprives us of this signal, and deprives Columbus of a path back towards the pinnacle of league football. MLS is deciding, not the market . And that may be why this doesn't feel like a cut and dry business outcome for some, or at least me. If MLS is willing, or we are willing to give it license, to flout free market concepts for "the good of the game", then why not expand that notion to protecting community investments?
• I'm not familiar with single entity sports or franchise relocation, but I'm curious how relocated franchises in other sports have fared. I've always been conflicted about whether soccer clubs are more community amenities or entertainment products and suspected that they are closer to the latter in this country. Maybe it boils down to whether the idea of a club representing a community and establishing an unbreakable bond with it has value for people. It definitely does for me. That's why I support NYCFC and not, say, Atlanta, who are hot as hell right now. If this does have value, then what value is left on the table when people are afraid to get behind a team because it might move? What value is lost when those bonds are broken? Is that valuable tangible in terms of dollars and cents? If so, is it too diffuse and indirect to measure effectively? Did fans assign value to and hand over their money based on the unwritten assumption that they were strengthening that bond? Do they wish they could have it back now?

 

[JGarrettLieb]

This is strong reasoning, but my heart doesn't always follow my head, so it pollutes it with provocations - there are a couple of aspects of this situation that rankle and yet have me curious as somebody who only dabbles in thinking about this stuff.

Maybe you can set me straight:

• It struck me that we are reasoning along classical economics / free market lines that don't neatly apply to MLS. I think if we had a completely open system here then the resolution of the conflict between Precourt and the Columbus fans would be more straightforward.

Gladly.

1. Market Economics perfectly apply to MLS, look up a cartel or a monopoly.

2. An open system is the worst possible result for a sports league, and its fans. Its basically axiomatic that sports fans only really care about the highest possible level of competition and the locality of the league. People want to go to matches, that's why MLS has a hope in hell against its European competition, in conjunction with national pride.

Columbus fans would start their own club and it would end up at whatever level its supporters can, well, support. Same goes for Precourt's franchise. Whether his franchise would / should be able to start in the same league / division is probably up for debate as well, although if we wanted the market to give us the best "signal" it would be fairer to have them start at similar positions. The closed system that is MLS deprives us of this signal, and deprives Columbus of a path back towards the pinnacle of league football. MLS is deciding, not the market . And that may be why this doesn't feel like a cut and dry business outcome for some, or at least me. If MLS is willing, or we are willing to give it license, to flout free market concepts for "the good of the game", then why not expand that notion to protecting community investments?

Whether any franchise should be able to be in the first division is excursively determined by the ownership's membership in the monopoly. Nothing else. If local ownership wants to start up a bid and apply for membership in then monopoly then that is their right and prerogative.

In so much as there is a signal, the fans of Columbus have given it to MLS, the city of Columbus cannot financially support a MLS team. End of story. The fans have had 20 years to make it happen and they just haven't. There's your signal, the city of Columbus does not spend enough money on MLS soccer to make it worth while. In the past, when MLS was truly bush league the city had the financial wherewithal to support that level of team, now that MLS is trying to play with the big boys a second fiddle city doesn't cut it anymore. For all the vaunted population and "support" that Columbus gives to its teams has no one noticed that there is literally only one other major league team in Columbus? And that team, the NHL blue jackets, is also just about dead last in the NHL market valuation? https://www.surepayroll.com/resources/blog/the-most-valuable-nhl-teams

Columbus had a team, that's the only reason that this kerfuffle has any legs, any reading of the present market says that putting a professional team in Columbus is a terrible idea. The only reason the Buckeyes are at all viable is because they don't have to pay their players.

How many ways do I need to say that Columbus isn't major league material right now, as a city?

I'm not familiar with single entity sports or franchise relocation, but I'm curious how relocated franchises in other sports have fared. I've always been conflicted about whether soccer clubs are more community amenities or entertainment products and suspected that they are closer to the latter in this country. Maybe it boils down to whether the idea of a club representing a community and establishing an unbreakable bond with it has value for people. It definitely does for me. That's why I support NYCFC and not, say, Atlanta, who are hot as hell right now. If this does have value, then what value is left on the table when people are afraid to get behind a team because it might move? What value is lost when those bonds are broken? Is that valuable tangible in terms of dollars and cents? If so, is it too diffuse and indirect to measure effectively? Did fans assign value to and hand over their money based on the unwritten assumption that they were strengthening that bond? Do they wish they could have it back now?

1. Don't look at the European soccer model for how a team should or should not be. Sports provide entertainment to you, end the story there. Any further investments a team makes are purely PR. You want to be entertained, they provide a way to entertain you. Why do people look for greater emotional attachment in a financial relationship? You know what happens if one of those deeply emotionally involved people can't pay for a ticket? They can't go. You're in a financial relationship, not one with your girlfriend.

2. There is an accounting concept called goodwill. Its basically the intangibles of a business, your and my emotional attachment to NYCFC for instance, put down onto the balance sheet. Its more art than science to come up with a figure for goodwill, but the basic accounting is: Goodwill equals the price paid for the acquired company minus the fair market value of its net identifiable assets.

In Columbus' case the good will would be the purchase price of the Columbus Crew, minus the purchase price of a generic MLS expansion team. So $130mm - $150mm = -$20mm

The collective value of the bonds between the city of Columbus and the Crew are worth negative twenty million dollars.

 

[roxfontaine]

Its not so much that Austin is better or worse, though Austin is probably a better city, its that Columbus has failed to prove its capable of supporting a MLS team.

Great post. It's interesting to see argument to the contrary of the highly visible sentiment right now.

This right here is why I'm personally baffled by this whole idea. We are in a single entity league so there will be times where we just don't "get it" as fans. That's fine with me. This one is striking because with a quick look into Austin soccer, I don't see how this is going to fare any better for Precourt.

The Austin Aztex failed in Austin and were moved to Orlando. That clearly panned out well for Orlando. The Austin Aztex, in the latest iteration, played '12 - '16 at House Park. The stadium seats 6,500. Their average attendance over those years:

12 - 1,269
13 - 1,438
14 - 1,828
15 - 3.226

The spike in '15 due to the move to USL. The stadium doesn't meet minimum capacity standards so when faced with having to move to a regulation sized venue, coupled with natural disaster, the team took a hiatus in '16. Somewhere along the line they become affiliated with Columbus Crew. Now here we are with them possible becoming the Columbus Crew.

Then, when listening to friends in Dallas talk about this, they say that this will affect both the Dynamo and FC Dallas because these fans will definitely have some splintering and San Antonio is still the odd man out.

This is all very weird and could very well end up being a nasty black eye for the league. How does an owner that can't figure it out in a decent enough market get a free restart in another difficult market where there are already two competitive teams and a third waiting in the wings. He won't spend on growing the game in Columbus where there is no competition but he's ready to spend it in Austin? It doesn't make any sense.

 

[joe]

It's cool that Anthony Precourt is posting in our forums, IMO

 

[Keith Putnam]

Why do people look for greater emotional attachment in a financial relationship?

You're really asking this about sports fans' relationship to sports teams? Possibly one of the most emotional and least rational cultural activities people participate in? Are you trolling?

Beyond THAT is the reality that human beings are far from the rational economic actors that classical economics would like to believe they are, even in areas of life that have nothing to do with expressing the raw emotionality of tribalism in a sublimated form. See, for example, the work of recent Nobel Prize-winning economist Richard Thaler on this exact topic (not so much the sports angle, but still).

 

[Shawn Ryu]

Did you read my post?

Its not so much that Austin is better or worse, though Austin is probably a better city, its that Columbus has failed to prove its capable of supporting a MLS team.

With no DP's and virtually no youth setup the club has one of the lowest net income's in the league and has the lowest value in the league.

NYCFC makes so much money that without a stadium it would have positive net revenue with some DP's and no stadium. Do you have any idea how nuts that is? NYCFC is probably paying damn near double digit millions for its YS rentals. Put another way, we can have Pirlo, Villa and Maxi and still make CFG its money if we get a stadium.

Austin is similar sized with similar demographics, and like Columbus, dominated by college sports, but they are gonna somehow have higher value than having a team in Columbus?

The fact that they have no DP and virtually no youth set up is ALL on the club/ownership. Not the city.

If they want to get out of Columbus it boggles my mind how they think Austin is a better alternative.

 

[sbrylski]

JGarrettLieb is killing it in this thread, and I agree 100%.

However, the biggest issue I have is how poorly this has been executed so far, and not just from a PR standpoint.

Precourt's stadium negotiations have been botched out of the gate. He has no leverage in Austin by not seriously engaging with Columbus on at least a preliminary option in the city. And in Austin, it seems like he is at square one in his stadium search. The current plan is to move to Austin in 2019 and play at a 20,000 seat college stadium with a track around it, indefinitely. That is an objectively terrible plan.

And you can defend the Austin market as high ceiling, but the truth is there is a very wide range of potential outcomes here, including averaging even less fans per game than in Columbus. Especially if they have stadium struggles. Precourt will be paving new ground here with professional sports in Austin.

I can understand good, rational business decisions, even if they are a little cold-blooded. But poor execution is ruining this one.

 

[JGarrettLieb]

Austin is similar sized with similar demographics, and like Columbus, dominated by college sports, but they are gonna somehow have higher value than having a team in Columbus?

The fact that they have no DP and virtually no youth set up is ALL on the club/ownership. Not the city.

If they want to get out of Columbus it boggles my mind how they think Austin is a better alternative.

Go back and read my posts. The short summary is fastest growing city in America vs city that is growing slower than the population average. City that is experiencing a major influx of silicon valley and NY investment money wealth vs a blue collar city that is a net exporter of talent.

Year 2000 population Columbus 715,971 (city not metro)
Year 2000 population Austin 672,241 (city not metro)

Year 2016 population Columbus 860,090 (city not metro)
Year 2016 population Austin 947,890 (city not metro)

Austin is a more attractive city for just about every imaginable reason. Full stop.

JGarrettLieb is killing it in this thread, and I agree 100%.

However, the biggest issue I have is how poorly this has been executed so far, and not just from a PR standpoint.

Precourt's stadium negotiations have been botched out of the gate. He has no leverage in Austin by not seriously engaging with Columbus on at least a preliminary option in the city. And in Austin, it seems like he is at square one in his stadium search. The current plan is to move to Austin in 2019 and play at a 20,000 seat college stadium with a track around it, indefinitely. That is an objectively terrible plan.

And you can defend the Austin market as high ceiling, but the truth is there is a very wide range of potential outcomes here, including averaging even less fans per game than in Columbus. Especially if they have stadium struggles. Precourt will be paving new ground here with professional sports in Austin.

I can understand good, rational business decisions, even if they are a little cold-blooded. But poor execution is ruining this one.

Yeah the execution has been bugging me, I really like the initial idea and the concept overall, and I think its a great thing, but the actual execution leaves a lot to be desired. From my perspective Precourt screwed up the how not the why. Hell, the NFL has given us the playbook in how to move a team from one city to another with minimal fuss. Deviations from that playbook is what causes more reaction than what is necessary.

Step 1: Start talking about how the stadium isn't that great, or how the franchise just isn't making money. Start it small, but slowly and steadily put greater onus on the city and the fans to keep the team where it is. This step should be 3-4 years.

Step 2: Begin earnest negotiations with the city to get a better stadium. It doesn't matter if you already want to move, the forms must be followed. Negotiate hard, and make it seem like things are going well, but make sure you have one or two poison pills in your pocket, that you state in your initial negotiations, that you won't ever let go of. For example, say Columbus needs to completely rebuild the stadium in downtown on the taxpayers dime. Negotiate down some of it, but keep the parts that won't ever work. Be sure to make some kind of progress though. You need to keep the optics as favorable as possible.

Step 3: Talk quietly with the city you want to move to. See if there could be any traction there.

Step 4: Repeat 2 and 3 for a few years until you have a stadium plan ready to rock.

Step 5: Sign the stadium deal in the prospective city. Ink on paper people.

Step 6: Announce the move within 36 hours of signing the stadium deal. Shit will leak yo, and you want to control the narrative. Saying things like, offered a better deal or were willing to negotiate in good faith are great things to say at this point. You want to point as much fan ire right back at the city and its mayor/council as possible.

Step 7: Start building the stadium ASAP, and play out your last year or two in the original city.

Step 8: Move.

Step 9: Enjoy your money.

The way Precourt has managed it is just awful, he's ignored all the steps and broken all the rules. That means there is going to be minimum hype in Austin and maximum outrage in Columbus. He's basically setting himself up to be the Chargers by mismanaging this move to this degree. ugh.

 

[JGarrettLieb]

Great post. It's interesting to see argument to the contrary of the highly visible sentiment right now.

This right here is why I'm personally baffled by this whole idea. We are in a single entity league so there will be times where we just don't "get it" as fans. That's fine with me. This one is striking because with a quick look into Austin soccer, I don't see how this is going to fare any better for Precourt.

The Austin Aztex failed in Austin and were moved to Orlando. That clearly panned out well for Orlando. The Austin Aztex, in the latest iteration, played '12 - '16 at House Park. The stadium seats 6,500. Their average attendance over those years:

12 - 1,269
13 - 1,438
14 - 1,828
15 - 3.226

The spike in '15 due to the move to USL. The stadium doesn't meet minimum capacity standards so when faced with having to move to a regulation sized venue, coupled with natural disaster, the team took a hiatus in '16. Somewhere along the line they become affiliated with Columbus Crew. Now here we are with them possible becoming the Columbus Crew.

Then, when listening to friends in Dallas talk about this, they say that this will affect both the Dynamo and FC Dallas because these fans will definitely have some splintering and San Antonio is still the odd man out.

This is all very weird and could very well end up being a nasty black eye for the league. How does an owner that can't figure it out in a decent enough market get a free restart in another difficult market where there are already two competitive teams and a third waiting in the wings. He won't spend on growing the game in Columbus where there is no competition but he's ready to spend it in Austin? It doesn't make any sense.

Near as I can tell, the Austin Aztex failed because they basically did the same thing as FC Dallas. Played close enough to the city to technically call themselves Austin Aztex or FC Dallas, without actually playing in the city of choice. FC Dallas plays in Frisco and suffers greatly for it, consistently getting the leagues lowest attendance. The Aztex were over 20 miles and a shitload of traffic from the city center. Its like if NYCFC was playing in Garden city or worse. Do you honestly think NYCFC would be pulling over 20k people in garden city?

Downtown stadiums are the way to go. The nearer it can be to commuter rail the better.

Also Austin is doing that Southern idiocy thing where they won't build subways because they aren't cost effective. Herp Derp dumbasses once the tunnels are built they're basically permanent, stop using a 20 or 30 year time horizon. Its so goddamn frustrating yeah we need to compare rails to road so we're just going to use the average lifetime of a road as our time horizon. Which completely negates the fact that rail steel can last nearly a 50 damn years if you design it with minimal curves. And that the major cost of rail is the laying of it in the first place.

I went off on a public transit rant again, oops.

Back to soccer.

Look the potential for Texas soccer is there, probably in a big way. But if you insist on placing the stadium outside of downtown its pointless. Also, I think we've basically proven that Minor leagues aren't well supported, especially when they aren't in the city they are supposedly in.

Precourt has given up his hype advantage by not having a stadium at the ready. He's honestly mismanaging the living shit out of this move, but I expect the end result to be a team with higher attendance that is financially stable and worth more. As long as he can build a stadium in Austin.

Were I an MLS owner I'd vote against the move as is, just because I think it was incompetently executed, not on its fundamental merits. If Precourt came back in a year with a stadium plan in Austin at the ready I'd give him the go ahead.

 

[sundance]

Near as I can tell, the Austin Aztex failed because they basically did the same thing as FC Dallas. Played close enough to the city to technically call themselves Austin Aztex or FC Dallas, without actually playing in the city of choice. . . .

They failed, among other reasons, because their downtown (HS football) stadium was destroyed in a flood of historic levels in the middle of their first season. Round Rock was the least bad substitute available at the time on short notice. Ownership spent a lot of time trying to avoid exactly what you’re accusing them of aiming for.

Aztex fate was a lot of bad luck, a little bad timing, and an ownership group wary of spending the amount of money it would have taken to force the stadium issue given what they saw as the economic reality of a minor league team’s expected revenue against downtown austin real estate availability and pricing. This is *not* reflective of the chance of any MLS team finding success in the market—especially as any move to Austin is contingent on a stadium deal in place, obviating the biggest hurdle.

 

[JGarrettLieb]

They failed, among other reasons, because their downtown (HS football) stadium was destroyed in a flood of historic levels in the middle of their first season. Round Rock was the least bad substitute available at the time on short notice. Ownership spent a lot of time trying to avoid exactly what you’re accusing them of aiming for.

Aztex fate was a lot of bad luck, a little bad timing, and an ownership group wary of spending the amount of money it would have taken to force the stadium issue given what they saw as the economic reality of a minor league team’s expected revenue against downtown austin real estate availability and pricing. This is *not* reflective of the chance of any MLS team finding success in the market—especially as any move to Austin is contingent on a stadium deal in place, obviating the biggest hurdle.

I did not know that about the Aztex, my bad.

But that does not change the core of my argument in the slightest. Columbus had the opportunity to show that it could support a MLS team for twenty years, they failed. Thus the best option for the ownership is to move them out of Columbus.

 

[ferrarinycfc]

Not sure if any of you guys go over to the Big Soccer forums, but Bill Archer is one of my favourite soccer writers.

http://www.bigsoccer.com/threads/done-don-major-league-sleaze.2077566/

 

[Ulrich]

Not sure if any of you guys go over to the Big Soccer forums, but Bill Archer is one of my favourite soccer writers.

http://www.bigsoccer.com/threads/done-don-major-league-sleaze.2077566/

That’s a great write up!

 

[mgarbowski]

Before Precourt announced his intentions a few weeks ago, how well known or conversely how secret was it that his deal with MLS had an escape clause to Austin?