Knight: No Impact

[Redcoe15]

No Impact


Montreal is out.

Impact owners/financiers Joey Saputo and George Gillett have looked at their bank books and the markets, and decided that a $40-million (U.S.) expansion fee and the cost of building a new grandstand at Stade Saputo are more than they can presently afford.

I have deeply mixed emotions about this. Certainly, I'm disappointed that a good organization with a cozy stadium won't be stepping up to join Major League Soccer any time soon.

But I've also struggled to understand why a modest little club enjoying a wonderful season (USL-1 finalists, Voyageurs Cup champions, into the quarters of the CONCACAF Champions League) would want to commit such a huge amount of money to be part of such an odd, limiting league

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[Oldtimer]

I'm still upset about this.

Out of all of the bids, the one I really wanted in was Montreal.

[Vindaloo]

This is the one time I had some disagreement with an article from Ben Knight.

He says, "Obviously, MLS is a significant step up from USL-1. But is that difference really worth $40-million?"

Well..ummm...ya! Ben says it, it's a step up from USL. Well duhh then....is it really that hard to fathom that sports fans want to watch and support a local team of the highest tier of a sport in their hometown? People support an NHL or NBA team, both of which are US companies, so why the hell should MLS be any different? If Montreal can't afford $40m then so what, there is plenty of bids that will.

[Beach_Red]

I'm still upset about this.

Out of all of the bids, the one I really wanted in was Montreal.

Me too, but $40-$50 million? It really seems like way too much.

MLS better raise the salary cap soon. And here they are making rosters smaller.

[trane]

Good article. Interesting questions, and trully why 40 Million when two years ago it was 10 Million. What has changed? Is the situation so much better that it justifies such a huge hike?

[Toronto_Bhoy]

Is the Montreal going to be the first of a number expansion bidders to balk at this outrageous fee?

I just can't conceive "intelligent" investors [and sponsors] in this current [and future] business climate coughing up this type of cash. This fee is 4 times what we paid!

Saputo has the money but he's no fool…

[trane]

^ That is exactly it, money or no money why buy into this league for 40 Million? I understand if the fees went up even a 100 % to 20 Mill, but another 30 Mill in two years. It makes no sense.

[mighty_torontofc_2008]

Is the Montreal going to be the first of a number expansion bidders to balk at this outrageous fee?

I just can't conceive "intelligent" investors [and sponsors] in this current [and future] business climate coughing up this type of cash. This fee is 4 times what we paid!

Saputo has the money but he's no fool…

The fees fits a growing sports league...The Impact were fools for not building their stadium up to the MLS minimum 20,000 seats thus leaving them open to the economic downturn that has it most of the planet.
Montreal will be giving another chance, but not for a while you are looking at 2015-16 at least for the Impact.

[trane]

The fees fits a growing sports league...The Impact were fools for not building their stadium up to the MLS minimum 20,000 seats thus leaving them open to the economic downturn that has it most of the planet.
Montreal will be giving another chance, but not for a while you are looking at 2015-16 at least for the Impact.

How has the MLS grown that much to justify the increase? What franchises are financially stable/viable TFC and what 2 or 3 others? The yanks are deluding themselves.

[Toronto_Bhoy]

The fees fits a growing sports league...The Impact were fools for not building their stadium up to the MLS minimum 20,000 seats thus leaving them open to the economic downturn that has it most of the planet.
Montreal will be giving another chance, but not for a while you are looking at 2015-16 at least for the Impact.

Fits a growing sports league???

What league in the world increases it franchise fee 4 fold? Name one…

In fact name a fast growing sports league?

[TorCanSoc]

Montreal is going to get their ass handed to them in the CCL and be begging to get into MLS next year. They'll be screaming to get into the league. I really hope Vancouver gets in. Ottawa came out of left-field, I doubt they'll get it, but who knows with this stuff. I just hope one of them gets in.

If Seattle's 18,000 season ticket holders renew their season tix in 2010. And Philadelphia repeats anywhere close to Seattle's success, then I'd say the "Canadian phenomenon" will be put to rest. Henceforth making more Canadian teams harder to get in. MLS with two successes one in Seattle and one in Philly then this will pretty much snub any further Canadian expansion. I think Montreal is blowing their chance to step it up.

[trane]

^ I do not care how the franchises do in the US. I care about footy in my country. I hope that the Impact go further, because it will help further the Canadian game.

[troy1982]

Fits a growing sports league???

What league in the world increases it franchise fee 4 fold? Name one…

In fact name a fast growing sports league?

easy supply and demand just how everything else is price.
The value of something is how much someone is willing to pay for it. 2 years ago no one was willing to pay for an mls team for more than 20 million now 6 bids are willing to pay for one for 40 million.
I would say the fee should be higher since you have 6 bids for 2 spots who are all willing to spend $ 40 million. I think a price of $ 60 million would be the current value since i am sure you would have 2 bids left at that price.

[kodiakTFC]

according to MLSR, Montreal's ownership group came out today and said this wasn't true.

[J .]

Whether this is true or not, I read somewhere a quote something like " its not the team I hate, its their fans " and so that statement is true here with Montreal for me.

Wish they would join the league, but have nothing good for their fans.

[Cashcleaner]

I don't see the justification of $40 million, either. What exactly are you buying with that money? The MLS organization itself is proving to be less a sporting league and more a marketing business, so it's not like you're getting into an entity along the lines of MLB, NBA, or NFL. For the most part those leagues have a fairly hands-off approach to most matters and give the individual teams control over much of their dealings such as player transactions, ticket sales and marketing, etc.

I've said it before - I am gutted with the news about Montreal, but I also can see some of their reasons for pulling their bid.

[Keystone FC]

I don't see the justification of $40 million, either. What exactly are you buying with that money? The MLS organization itself is proving to be less a sporting league and more a marketing business, so it's not like you're getting into an entity along the lines of MLB, NBA, or NFL. For the most part those leagues have a fairly hands-off approach to most matters and give the individual teams control over much of their dealings such as player transactions, ticket sales and marketing, etc.

I've said it before - I am gutted with the news about Montreal, but I also can see some of their reasons for pulling their bid.

Again, I agree Cash. If you look at it more and more MTL is making the right move. As a USL squad they have a SSS that needs no more expansion, they are financially sound, they are playing for the CCL title, they have a good fanbase, and in a league that doesn't have unnesseccery tournaments, and are very dominant in their league. They come to the MLS that may all be wiped out for what? To play in the same tournament that MLS clubs play in? To travel to the other side of the continent to play a club that only gets 1,000 people in the seats? To up the price on tickets to offset the rise of player salaries?
Would I have liked to see MTL in the MLS...Yes! But I also would like them to be a success in the ways of TFC being successful because in the long run we are talking about Canadian Soccer in general when we talk about TFC, Van, and MTL. As it stands right now all 3 are successful in certain areas (on the pitch, in the stands, in the community, in the media) and for one to fall or fail means it's that much harder to convince people to invest in the sport in Canada.

[Beach_Red]

In fact name a fast growing sports league?

Well, that's just it. This is the only league with expansion opportunities.

Well, the NFL would be happy to have a team in LA but they want a billion dollars. A billion. Houston paid, what, $700 million?

In five years $40 million could look as big a bargain as the TFC expansion fee does now.

There are many reasons why soccer is the most popular team sport in the world - and the fact even the goofy MLS is succeeding as much as it is and expanding proves it's the sport that's worth it.

[sidvan]

Would have been great for TFC and a natural rival. Given the economic climate, I believe Montreal made the right decision.

[CretanBull]

A few years back, you could have bought a ready-made team (Houston, from San Jose) for $35 million. Why $40 million for an expansion side? Picking from a list of cast-off players from a league that has a diluted talent base to begin with doesn't make a lot of sense...even less so during an era of expansion when there are several new teams coming into the league within a few years of each other.

[CretanBull]

Suputo is a billionaire, so is Gillett (although more of his money is tied up). They can 'afford' a team, it just doesn't make sense. Montreal is doing well in the ULS. It would take a long, long time to make up the $40 million fee plus the cost of stadium expansion simply by selling an extra 7,000 tickets per game.

[Redcoe15]

Knight: More from Montreal


Make of this press release what you will, soccer fans:
---
RECTIFICATION REGARDING MONTREAL'S BID FOR MAJOR LEAGUE SOCCER
Following MLS Commissioner Don Garber's statements regarding Montreal's bid, the Montreal partnership group would like to bring one important rectification:

Montreal did not withdrew its bid from Major League Soccer but was informed that the league did not retain its bid. Out of respect for the Grey Cup festivities, the partnership group will not make any additional statements over the weekend. However, the President of the Montreal Impact [and] Saputo Stadium, Mr. Joey Saputo, who is spearheading Montreal's MLS bid, will meet the media: Monday, November 24, 2008, 10:30 am, Saputo Stadium, 4750 Sherbrooke Street, Montreal.
---
Here comes the other side of the happy, happy MLS expansion story, folks. It won't be dull.

Onward!

[keem-o-sabi]

fans would have to actually buy the tickets in montreal to make up the costs. They give away most of their tickets to matches (to the tune of 70% of tickets to matches are free).

[Parkdale]

and the plot thickens.....

[Technorgasm]

Im glad.
Gillette is fucking up my club. (Liverpool)

no need to have his dirty fucking hands in the MLS pot too.

[Steve]

A few years back, you could have bought a ready-made team (Houston, from San Jose) for $35 million. Why $40 million for an expansion side? Picking from a list of cast-off players from a league that has a diluted talent base to begin with doesn't make a lot of sense...even less so during an era of expansion when there are several new teams coming into the league within a few years of each other.

The expansion fee is a bet on league growth. Look at the forbes valuation for TFC, they value as at what, 44 million now? That's a nice 4x increase from our expansion fee in 2 years. No matter how you look at it, that's a kick ass investment. You have to realise that now, with TFC showing a nice profit the first year, expansion fee is going to go up (as other investors will see that and hope to replicate it). Also, Beckham came in after we got the expansion, so that might have driven up the fees some.

Personally, I would say the fees have probably gone up a little fast, but, since they have 6 investors for 2 spots, the market would disagree with me.

[Chewy Unikronik]

Im glad.
Gillette is fucking up my club. (Liverpool).

How exactly is he doing this, if the team is at the top of the table?

[gmacpheetfc]

Anyone catch the press conference?????

[Parkdale]

How exactly is he doing this, if the team is at the top of the table?

and they won't be at the end of the season. They'll probably have to sell off some big name players just to keep the lights on in the clubhouse.

[CretanBull]

They have such a huge roster they probably wouldn't notice a few sell-offs. That Lucas guy sucks...why they play him over Alonso is absurd (even if they have Champions League games to worry about).

As for the business side of things, isn't it the other guy Hicks who's causing the money problems?