Questions arise about the growth of foreign ownership in US soccer

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The recent events regarding Frank Lampard have brought the question of foreign ownership in the U.S. professional soccer leagues back into the spotlight. The Lampard saga has highlighted a growing trend of investment from foreign owners into the United States professional game.

New York City FC (NYCFC) is the most extreme and perhaps dangerous example yet of foreign ownership in American professional soccer. Chivas USA, an ill-conceived project that never made much sense even in the abstract, soured many fans in the US on partnerships and foreign ownership. Chivas USA was structured unlike NYCFC initially, simply serving as a “franchise” of the Chivas brand under separate ownership that included Chivas Guadalajara owner Jorge Vergara. But when Antonio Cue sold his share of the club in 2012, the team became essentially a completely integrated stepchild of the larger Mexican club. NYCFC already resembles that in its relationship with parent club Manchester City FC.

Prior to Chivas USA’s disastrous demise, foreign clubs such as Crystal Palace, Pachuca, Fulham, West Ham United, Tottenham Hotspur, Ajax, Stoke City, Burnley, River Plate, Boca Juniors, Independiente and others had either invested in American clubs or strongly considered doing so. Many around the game, myself included, felt foreign investment was a positive, and worked to solicit these clubs in order to build credibility and integrate the US more closely into the world game. However, recent events have begun to change the thinking of many, including me.

New York Red Bulls is another example where a foreign ownership group’s understanding of the American market has proven to be limited. But Red Bull must be given credit for building a stadium unlike any other in a big market in the United States and sticking through some very difficult years.

The revival of the New York Cosmos had been long sought by fans. But few thought the revival of the club would be down to Saudi money, British management and participation in a second division league. But the NASL’s New York entry, like the two MLS teams in the area, are owned by foreigners and have faced questions about management.

However unlike New York City FC, the Cosmos owners don’t manage another soccer club though they are closely tied into the business dealings of the Asian Football Confederation (AFC).

New MLS entry Orlando City SC boasts Flávio Augusto da Silva, a Brazilian businessman, as the majority owner. The Lions have been uniquely positioned locally and have yet to face the types of questions other clubs have about foreign ownership. However, the clubs willingness to trade domestic player slots for international ones (Orlando right now has 12 international player slots, when MLS rules allocate 8 per team) might raise questions in the future about how committed the club is to developing local talent. Da Silva is well-connected in Brazilian soccer circles but thus far no conflicts have arisen with his ownership of the Lions.

Down the Florida Turnpike two and a half hours from Orlando is the granddaddy of all foreign owned clubs now that Chivas USA is no more. The Fort Lauderdale Strikers were previously owned by Traffic Sports, a Sao Paulo based sports marketing company that has a history in the third-party player ownership business. Traffic continues to own the NASL’s Carolina RailHawks, though in the four years when the RailHawks and Strikers were both owned by Traffic, Fort Lauderdale was considered the “Traffic team.” Because of Traffic’s involvement with the Strikers and their ownership of multiple clubs abroad, Strikers fans often felt the team was simply being used as a parking place for players. A feeling also developed in some quarters that Traffic’s relationship with CONCACAF was the reason for the company’s investment in the Strikers, RailHawks and NASL. This allegation wasn’t totally fair, but a perception developed that the club simply existed to benefit the parent company, whose relationship with CONCACAF resembles that of the New York Cosmos’ management’s relationship with the AFC.

The Strikers were sold by Traffic late last year to a group of Brazilian investors. The primary owners of the club live abroad and have left a 27 year-old American educated Brazilian native Ricardo Geromel in day-to-day charge of the club. Initially, fans welcomed the purchase of the club by any entity that would remove Traffic from management decisions. But in the few short months Geromel’s group has run the Strikers, it has become obvious that local marketing has been geared largely towards Brazilian ex-pats in the Fort Lauderdale/Boca Raton area and that decisions cannot be made quickly without the approval of the Brazilian-based owners.

DC United, once considered the signature team in MLS, has now passed through multiple ownership and management teams in the last few years. The latest owner, Erick Thohir, an Indonesian businessman who owns an NBA team, an Indonesian soccer club and Inter Milan, has thus far kept United independent of his other interests. But fears remain among a small number of fans that at some point DC United will simply be an American extension of Inter.

Stan Kroenke is an American who owns one of the biggest soccer brands on the planet – Arsenal. In 2007, just after his initial purchase of shares in Arsenal, Kroenke toyed with the idea of rebranding his MLS team as “Arsenal Colorado.” The plans for the rebranding the Rapids were abandoned and the club did win the 2010 MLS Cup. But the Rapids, already an ugly stepchild in the Kroenke empire of American sports teams, became even a lesser priority after Kroenke took control of Arsenal. Never one to spend much money, Kroenke has put his focus into running Arsenal and his major American sports clubs and left the Rapids in lamentable shape compared to the rest of MLS.

Foreign ownership is here to stay in American soccer, but the question that must be asked is whether the lack of local ownership of clubs in major markets is a hindrance to the growth of the game and of American players. Only time will give us the answers on that front.

 

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2 Comments

  1. Kei January 29, 2015
  2. Alex Gago February 23, 2015

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