The ownership dispute that threatened to derail Sacramento’s bid for a Major League Soccer team has been settled.
Sacramento Republic FC founder Warren Smith and investor Kevin Nagle reached an agreement in principle that will allow Nagle, the wealthy pharmaceutical executive who’s spearheading the MLS effort, to use the popular Republic FC brand in the bid for the expansion team. Smith will continue to control the team until it starts play in MLS, assuming the bid is accepted.
The agreement was announced early Saturday by Mayor Darrell Steinberg, who mediated a combined 12 hours of negotiations between the two men at an Old Sacramento law firm Thursday and Friday nights.
Financial terms of the deal, which was reached shortly before midnight Friday, weren’t disclosed.
“I am extremely pleased to announce that we have reached an agreement in principle that ensures Sacramento Republic FC will be the future of MLS for Sacramento,” Steinberg said in a prepared statement. “I thank all involved for their commitment to our city and for putting the public first.”
Nagle, who invested in the minor league club during its inaugural 2014 season, formally submitted the bid for one of four MLS expansion slots Tuesday without incorporating the Republic FC brand in the paperwork. On Wednesday, the club issued a statement on Smith’s behalf accusing Nagle of violating their agreements by launching a bid that omitted Republic FC.
That exposed a rift that had been building behind the scenes for months. Smith and Nagle hadn’t yet made a deal that would give Nagle control over the club or the Republic FC brand. Facing a league-imposed deadline to submit the expansion application, Nagle said he had no choice but to make the bid through a separate company he does control, Sac Soccer & Entertainment Holdings.
Nonetheless, die-hard Republic fans blasted Nagle on social media, accusing him of abandoning the team whose remarkable popularity put Sacramento in the running for an MLS spot in the first place.
Within minutes of the announcement of the tentative agreement, the fan base appeared to have made its peace with Nagle. Tower Bridge Battalion, the boisterous support group that had been criticizing Nagle, tweeted thank-yous to Nagle, Smith and Steinberg. “Let’s keep our movement going and take our club to new heights!” the group said.
What remains to be seen is how much damage, if any, the dispute will have on Sacramento’s MLS chances. Commissioner Don Garber tweeted Saturday that he appreciated Steinberg’s “efforts to bring the two groups together and present a unified bid.”
Until the dispute flared up, Sacramento had been considered a leading candidate for a team. Garber all but guaranteed Sacramento would get an expansion team during a visit to the city last spring.
MLS Deputy Commissioner Mark Abbott, speaking to reporters Wednesday on the league’s expansion process, wouldn’t say if the rift would harm Sacramento’s bid but noted that Nagle’s camp was keen on incorporating Republic FC into its effort. Abbott added that Garber had intervened in the talks between Nagle and Smith several months ago, to no avail.
The dissension in Sacramento grabbed the attention of the U.S. soccer community. Brian Straus, the influential soccer writer at SI.com, wrote this week that a bid “that appeared to be a lock suddenly is surrounded by questions and uncertainty.”
With the rift patched up, Steinberg said he thinks Sacramento is “on the cusp of getting a Major League Soccer franchise.” In an interview Saturday, the mayor said Nagle and Smith were able to put their emotions aside to hammer out the basic framework of a deal.
The agreement was the product of shuttle diplomacy. Nagle and Smith, and their advisers, occupied conference rooms at the Norman Roos law firm in Old Sacramento, while the mayor went back and forth delivering offers and counteroffers.
When it was over, the three men posed for pictures drinking beer. “It was very satisfying to see them both shake hands,” said Steinberg, who compared the negotiations to budget deals he brokered as president pro tem of the state Senate.
“At long last, Sacramento stands before MLS as one team and one community,” Nagle said in a statement released by the city. “From Day One my hope and expectation was to come together with Sacramento Republic FC as a united front.”
Nagle and Smith thanked Steinberg, with Smith saying: “His leadership was instrumental in bringing the parties together, and we are hopeful that the principle terms we discussed today can result in a definitive agreement that will lead Sacramento Republic FC to Major League Soccer.”
Smith will maintain control of Republic FC as long as it’s playing in the minor league United Soccer League. If the MLS bid is accepted, the team would be owned by Nagle and the ownership group he’s assembled – a roster that includes San Francisco 49ers principal owner Jed York and Silicon Valley executive and former gubernatorial candidate Meg Whitman.
Sacramento is competing against 11 other cities for the four expansion spots. The league is expected to pick the first two spots later this year.