Broo View: FC Cincinnati soccer stadium will go where the money leads it

It's all about business, not soccer
Posted at 4:14 PM, Mar 08, 2018
and last updated 2018-03-08 17:10:57-05

West Side, Newport, all around the town, even Oakley.  

The FC Cincinnati stadium site is a moving target -- unless you understand the business behind the business.

And Carl Lindner III is a businessman.

I'll admit, up front, I have no inside knowledge of what I'm about to speculate.  But if you've been watching this stadium soap opera, it's hard not to see how things add up.

As the great Sly Stone once sang: "Sometimes I'm right and I can be wrong."

Interesting how FC Cincinnati General Manager Jeff Berding has been spending a lot of time in Cincinnati's West End.

He's spent a lot of time trying to sell his team's idea of putting a stadium there. It's the most complex deal of the three proposed sites.  

To get a stadium built in the West End, FC Cincinnati would have to demolish Stargel Stadium, reconstruct that stadium on another site, build its own soccer-only stadium and get into the home building business (free parking to neighborhood residents, too).   

All that to build a soccer stadium. 

Oh, and by the way, a significant amount of the West End's current residents don't want anything to do with FC Cincinnati's construction ideas.

Meantime, in Oakley, the response to a proposed stadium site for FC Cincinnati has been lukewarm. A new traffic impact study -- and traffic can be a major problem in Oakley -- seems favorable to what a new stadium would bring to that area. 

Some of the locals aren't too thrilled about more cars showing up on their neighborhood streets. But the land of the proposed stadium site isn't going to sit vacant. Logic would dictate better traffic jams on 40 or so nights a year, rather than 365 nights a year if another "big box" store decides to make Oakley its home.  

And then there's Newport, Kentucky, the loyal old girlfriend who was first to offer Berding and his group some land development love before the new girls showed up at school.  

The Ovation site offers a magnificent view of downtown Cincinnati. It's close to significant night life at Newport on the Levee and other places. And, it's "shovel ready." 

It's perfect.  

Except it's in Northern Kentucky. 

And while you and I may have no problem with that, FC Cincinnati has heard from a significant amount of research from its current fan base that the Ovation site won't fly. To some fans, it's an ocean, not a river, that separates Cincinnati from Newport. 

The FC in FC Cincinnati would stand for "fairly close." And of course, Todd Portune's parking garage would only be a memory if Newport is the site.

Oakley is by far the easiest play for FC Cincinnati. So why all the construction gymnastics with the West End?

Land development, baby.

I don't know Carl Lindner III, but I once worked for his dad. 

And I can't believe the son is not the father. Carl II was in business to do business. He was a philanthropist, to be sure, one of the greatest in our area's history. 

He always struck me as someone as business prudent.

"I'll buy this, now how do I make money with it?" he probably said more than once in his life.  

Can his son really make money on what is a $250 million investment by simply owning an MLS team?

Let's do the math.

There are 30 players on each MLS roster. Some get to play in matches. Others are on the development squad. Some move from one status to the other. 

A year ago, the highest paid player in MLS was Kaka (soccer players are a lot like Sting, Madonna, Drake and JZ. No last names required). Kaka pulled in $7.168 million in 2017. 

Of the top 50 players in MLS in 2017, the lowest paid player was Atlanta United's Carlos Carmona (why isn't he known as Carlos, or C-Mona or just 'Mona?).  

Anyway, Carmona took $725,000 to the Georgia bank of his choice. Twenty-eight players in MLS last season had salaries of $1 million or more. 

In 2017, the minimum salary in MLS was $53,000. The MLS average team payroll is about $12 million per season, pittance by NFL standards. But so too is MLS TV's contract, compared to the NFL's. 

ESPN and Fox are both in the middle of eight-year deals that pay MLS $75 million a year in broadcast rights. Another $15 million per year in TV rights come from Univision. That's $90 million a year, divided 26 ways, when the league completes its current expansion. That's about $3.5 million per team, per year in broadcast rights. 

With a team in MLS, ticket prices will go up. Back in the fall, Berding told that the team wants to make going to an FC Cincinnati game as affordable as possible.  Its single-game tickets now are in the $10-$60 range.  The MLS Columbus Crew have single-game tickets as low as $25 and as expensive as $50.   If you take an average, multiply it by stadium capacity and multiply it by the 17 home matches an MLS team has every season, you could gross over $12 million per year in ticket sales.

$12 million in ticket sales.  $3.5 million in television revenue.  Average MLS payroll is $12 million.  If everything goes perfectly.  And while other possible revenue streams exist (local broadcast rights, merchandise sales), it doesn't sound like a large profit margin, and a long time getting a return on that $250 million dollar outlay. 

In other words, it costs a lot to field an MLS team. So how do MLS teams make their money?  This was an interesting story that came out last summer about MLS. And so was this story in the Wall Street Journalabout about a year ago.  Basically, it's all long-term thinking for MLS owners.  

Long-term, does the West End site offer more of a chance for the Lindner group to development business (retail, business or even housing) than either Oakley and Newport?  The answer seems to be "yes."   Otherwise, why all the gyrations to get a simple soccer stadium built?

I don't know if land development is the answer.  I hear from some that the MLS is pushing Lindner's group to build in the West End, wanting a more urban location.  I also hear that MLS is really agnostic about a stadium location.  I know MLS wants the $200 million, really from any city and group, because it helps foot the bills for its existing teams.  I sense Sacramento and Detroit aren't in any position to move as far forward as FC Cincinnati is right now. There's an old business adage:  make the sale and get out of the room before anyone has a chance to change their mind.  It's probably where MLS is right now. 

When he brought a United Soccer League franchise to Cincinnati two and a half years ago, it may have been a "passion buy" for Lindner III.  He genuinely likes the sport.  But he's first and foremost a businessman.  And it seems like his best chance to succeed in the stadium-building business is to build in the West End. 

But only if he, and it, are wanted.

Let's get a head start and wish a happy 60th birthday to the lead singer of this group.  Martin Frye hits the big 6-0 Friday.

The group was the short-lived ABC, a four man group from Sheffield, England.  Fry was the lead singer.  ABC had six songs that made the Top 20 in the USA.  It had a nice run, from about 1982 through about 1991.  The song was from the band's 1982 album, "The Lexicon of Love".  Frye co-wrote the song with the others in the band and says it's not about love.  It's about how you feel when "you get your teeth kicked in by somebody you love"

Fry is still around.  He toured with ABC's drummer in the "Regeneration Tour", featuring several bands from this time period, about ten years ago.   And he celebrates his 60th birthday Friday.