Stadium Discussion

[mgarbowski]

I think Kjbert is saying they will only allow Yanks to own 20% of NYCFC LLC (Made that up for arguments sake). NYCFC is a subsidiary of CFG. There will also be another corp let’s call it WP LLC that yanks have no interest in (maybe Related does tho). WP LLC will have to get approval for and construct/lease stadium. NYCFC LLC pays WP LLC rent as a subtenant. WP also makes money off of other events, naming rights, concessions. All NYCFC makes $ from is MLS related income like Apple TV deal, playoff bonuses, etc…. Technically NYCFC can show a loss every year with their huge salaries & lease payments. WP shows a profit every year based on rent and concessions - debt service & expenses (no RE taxes!). Value of the “team” is NYCFC LLC + WP LCC, but Yanks could be iced out of the real valuable part.

If this is the plan, it's a basic privately held company scheme where the controlling owner abuses passive minority owners. But it has nothing to do with stadium rent. I'd love to take the deposition:

Attorney: how is CFG cheating the Yankees.
Rand Levine: the Yankees are minority owners of NYCFC. CFG placed NYCFC's most valuable asset inside a separate LLC and forces NYCFC to pay absurdly high rents.
Attorney: how much rent is the stadium LLC charging NYCFC?
Levine: $4M every year. It's an outrage.
Attorney: how much the did the Yankees charge NYCFC to rent out Yankee stadium.

Levine: have I mentioned the parking spaces.

 

[Kjbert]

Makes sense. But unless the Yankees are going to be playing a baseball game there (this absolutely needs to happen by the way), how would they be paying rent?

Because, again, as Mark laid out, it would be the club LLC paying that.

NYCFC is 80% owned by CFG and 20% owned by the Yankees.

NYCFC pays rent to Yankee stadium.

Why wouldn’t NYCFC pay rent to Etihad Stadium?

 

[mgarbowski]

As a practical matter, situational conflicts of interest are almost the norm in privately held companies. People either behave honorably or they don't. To fund the stadium there are a few options:

1. NYCFC LLP pays for the stadium. Unless the LLP has ~$800M in capital reserves set aside, that requires either
   1. a massive new capital contribution from existing owners
   2. a capital infusion from new owners that dilutes the shares of existing owners
   3. a loan. At current rates, the best options is probably to borrow from CFG or some other Mansour family entity that can/maybe offer better rates and terms than available at market, or lock in current rates which are higher than they have been in decades.
2. Create a separate LLP owned by CFG/Mansour family with no Yankee involvement, which avoids requiring more money from the Yankees or diluting their interest in the team or a massive loan but walls off the Yankees from both the costs and benefits of the stadium deal..

Pick your poison. You can't have everything and you cannot avoid situational conflicts of interest. I expect the Yankees are OK with option 2.

 

[Buckley]

FYI: I still like the 25k as the sweet spot but it looks like the club is open to expanding that number based off demand in the coming years. The thread goes on to say that the club will continue to play majority of the games at YS, *BUT* once everything for the plan is approved, shovels start going in the ground, etc the club will consider making Citi Field the primary venue until the stadium is complete.

https://twitter.com/x/status/1593661956287864833

 

[adam]

FYI: I still like the 25k as the sweet spot but it looks like the club is open to expanding that number based off demand in the coming years. The thread goes on to say that the club will continue to play majority of the games at YS, *BUT* once everything for the plan is approved, shovels start going in the ground, etc the club will consider making Citi Field the primary venue until the stadium is complete.

https://twitter.com/x/status/1593661956287864833

Love that they are doing what we all felt makes the most sense rather than doing what a certain minority partner might want. Sounds like Legends ain’t comin to queens.

 

[moogoo]

Love that they are doing what we all felt makes the most sense rather than doing what a certain minority partner might want. Sounds like Legends ain’t comin to queens.

perfect opportunity to really bring in queen's food culture into the stadium and keep prices the same as they are outside the stadium. that would be EPIC.

probably unrealistic, but a food lover can dream.

 

[franchise646]

Has the concept design grown on anyone else. It looks like a stadium that stands on it's own.

 

[Buckley]

FYI: I still like the 25k as the sweet spot but it looks like the club is open to expanding that number based off demand in the coming

Has the concept design grown on anyone else. It looks like a stadium that stands on it's own.

That was a generic placeholder concept expect it to change significantly

 

[KevinJRogers]

I expect the Yankees are OK with option 2.

I think you're right about this. The initial franchise fee was what, $100 million? They must have recouped by now, and more. If they don't have to put another dime in and can just take their mailbox money from now on, they may indeed be cool with that.

Me, too.

 

[ZYanksRule]

I think you're right about this. The initial franchise fee was what, $100 million? They must have recouped by now, and more. If they don't have to put another dime in and can just take their mailbox money from now on, they may indeed be cool with that.

Me, too.

The Yankees are not getting out of this partnership now, when the team is this close to becoming even more profitable and valuable.

 

[adam]

Who’s going to be our big DP signing to attract people to our new stadium. Needs to be a big name. Probably around 25-26 right now which would be 30-31 by then. Would be even better if they did well in the 2026 WC. De Jong, Richarlison?

 

[moogoo]

Who’s going to be our big DP signing to attract people to our new stadium. Needs to be a big name. Probably around 25-26 right now which would be 30-31 by then. Would be even better if they did well in the 2026 WC. De Jong, Richarlison?

some south american player for sure. that would bring the biggest crowds and cater to the queens neighborhood.

personally, if he continues to get better, i would love federico valverde. the guy is a beast and his right foot is a cannon. whether he agrees to come to little ole MLS is another story though

 

[KevinJRogers]

The Yankees are not getting out of this partnership now, when the team is this close to becoming even more profitable and valuable.

Totally agree. They'd want a ridiculously ginormous buyout. But hey, if they quietly take their distributions and a little facility money until we get our park built and ignore us the rest of the time, then whatever.

 

[adam]

some south american player for sure. that would bring the biggest crowds and cater to the queens neighborhood.

personally, if he continues to get better, i would love federico valverde. the guy is a beast and his right foot is a cannon. whether he agrees to come to little ole MLS is another story though

Still think we need to pander with a Chinese player. Especially if we’re playing more games at Citi in the next 5 years.

 

[moogoo]

Still think we need to pander with a Chinese player. Especially if we’re playing more games at Citi in the next 5 years.

i think the chinese population would be more interested in seeing a big name non-chinese player over a decent chinese player from some lower league.... and definitely not as a DP!

 

[Kjbert]

Harry Kane.

 

[LionNYC]

Harry Kane.

Wrong thread?

 

[adam]

Wrong thread?

Nope. He’s suggesting who will be DP to open the new stadium and draw ppl in.

 

[KevinJRogers]

This is a little light, and the second point is a little silly in my opinion. But it's good to think about our stadium in a slightly wider context. It's great for us, but it's great for our league and our sport as well.

3 Reasons NYCFC’s New Stadium Plans Are Most Important In MLS History

The newly announced project represents a major step for Major League Soccer in overcoming one of its most persistent obstacles: Establishing a significant presence in New York City.

www.forbes.com

 

[FredMertz]

NYCFC is 80% owned by CFG and 20% owned by the Yankees.

NYCFC pays rent to Yankee stadium.

Why wouldn’t NYCFC pay rent to Etihad Stadium?

If I can step in here and try to mediate a communication gap -- I believe Kjbert is saying that CFG will create or use an entity entirely separate from NYCFC to operate the stadium as to insulate any stadium cash flow from the Yankees. He's not suggesting that the Yankees will literally pay rent to the stadium, just that their 20% ownership means they are "effectively" paying 20% of the rent that will be paid to the stadium entity without earning 20% of the stadium profits.

I don't think there's actually much in the way of disagreement here.

I still believe that it is very unlikely that the Yankees are long-term partners in this venture, meaning both the stadium project and the club and it would not surprise me at all if a Bronx stadium deal being reached was a pre-requisite for the continuation of the relationship.