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Three months ago, upbeat Major League Soccer officials announced they were entering formal negotiations with a private investor group representing Sacramento in hopes of signing a deal as early as July to bring the capital city into the league.
That date has arrived, but no deal is signed, MLS Commissioner Don Garber said Wednesday, offering his first formal update since April.
Garber said he isn’t concerned the deal will fall through, and emphasized MLS and the Sacramento investment group continue talks on an almost daily basis. Sacramento Mayor Darrell Steinberg is involved as well, Garber said.
Speaking at the league’s annual all-star game gathering here, Garber said it requires a huge investment of a half-billion dollars or more to enter the league.
“There are no hiccups,” Garber said. “These are lifetime decisions for an investor to make. These are massive commitments. It takes time.”
Garber said Sacramento’s talks will continue with no timeline for conclusion.
“There is no rush,” he said.
The league’s Board of Governor’s meets again in December, he said, although a decision on allowing entry into the league could happen before that. “We have plenty of time for them ... to reach a final agreement with us.”
Garber said he plans to visit Sacramento in the near future, but did not provide a date or an agenda. He said he also will visit Charlotte, another city vying for a soccer franchise.
A new MLS franchise would replace Sacramento’s existing professional soccer team, Republic FC, which plays in the lower tier United Soccer League. The new team would retain the Republic FC name. Garber said he would expect Sacramento to begin play in MLS in 2022, if an agreement is reached.
Ben Gumpert, Republic FC president, said Wednesday there are no hang-ups. Instead, he said the deal, which will cost the private investor group more than a half-billion dollars, is complex and takes time.
“It’s a complicated process,” Gumpert said. “Every day is a step forward. We’re 100 percent committed to making it happen. We are in a good spot.”
Steinberg acknowledged the difficulty of the ongoing talks, but said he is “not concerned at all” by the lack of a resolution.
“All the hard work and worry will be well worth it for our city and region,” Steinberg said in a text to The Sacramento Bee on Wednesday. “Everyone is stepping up. All the anticipation will make the end result even sweeter.”
Garber announced in April that the league plans to add three more teams, up from its current 27, bringing the total to 30, starting with talks with Sacramento and St. Louis. The league is also in talks with Charlotte and several other cities. Garber was in Las Vegas recently, talking with officials there.
The Sacramento and St. Louis proposals are more advanced, though, than Charlotte and Las Vegas. Sacramento officials were in Orlando this week but did not make a presentation to MLS. St. Louis officials, who had not previously met with the board, did make a presentation of their plans, Garber said.
Speaking earlier this week to ESPN, Garber said it’s getting more complicated to bring teams into the league. “It just means that the investment stake required to come into MLS, that process of finalizing deals, is getting more and more complicated.
“In both of these cases, you’re looking at between $500 million and $650 million in investment. When you are making an investment like that, they take a while to close.”
The league this spring hiked its expansion fee to $200 million; that is the amount a new team ownership group is required to pay the league’s other owners to compensate them for diluting the league’s contract revenues.
That fee was $70 million four years ago, and jumped to $150 million during the most recent expansion round.
Sacramento’s investment group is led by Los Angeles billionaire businessman Ron Burkle and his partner, movie producer Matt Alvarez. The two were recruited by Steinberg and other local officials to bring financial heft to the city’s bid.
The Sacramento investment group will be responsible for building what they have said will be a $250 million soccer stadium in the downtown Sacramento railyard.
The team investors have been in detailed discussions with the league over league standards for facilities to be included in the stadium.
Construction would likely take nearly two years, meaning the facility is unlikely to be ready for the start of the 2021 season, when Sacramento officials have said they hope to have a team formed and competing in the league.