City Beat

Texts reveal new details about Sacramento's MLS bid and the financiers being courted

Southern California billionaire Ron Burkle toured Sacramento's soccer stadium site and has had detailed discussions with Republic FC and Mayor Darrell Steinberg about becoming the lead investor in a Major League Soccer expansion franchise, according to text messages obtained by The Sacramento Bee.

City and team officials also have met with a group led by former Sacramento Kings player Omri Casspi and two East Coast real estate magnates, one of whom owns a stake in the NBA’s Minnesota Timberwolves, text messages show.

Public records show that a third ownership scenario for an MLS team in Sacramento may also be in play. A city records request filed by an Austin, Texas, law firm in April sought correspondence between city officials and Anthony Precourt, owner of the Columbus Crew MLS team. Precourt plans to move the Crew to Austin before next season, but the records request — combined with an ESPN analyst’s prediction last week that the Crew will move to Sacramento — has fueled speculation that Sacramento may be Precourt’s second option if he’s unable to secure a stadium deal in Austin.

Neither Precourt nor the law firm that filed the records request responded to requests for comment.

The text messages obtained by The Bee through a Public Records Act request detail the intense campaign by Republic FC and City Hall to recruit a deep-pocketed investor who can lead Sacramento's bid for one of two remaining expansion spots in Major League Soccer. Potential investors were given tours of a planned soccer stadium site in the downtown railyard and the mayor was in frequent communication with MLS Commissioner Don Garber over the past six months.

The messages from the mayor, his aides and top Republic FC officials also show that in addition to the Burkle and Casspi groups, several other potential investors have expressed interest in leading or becoming involved in Sacramento’s bid, including a financier from Miami and an individual from Chicago who was not identified in the messages.

Sacramento was passed over for a spot in the latest round of MLS expansion because the league wants Republic FC to find a wealthy investor who can help cover the $400 million upfront cost of a franchise and keep the team financially viable in the long term. Teams were instead awarded to Nashville and Cincinnati, although MLS plans to add two more teams in the future.

Republic FC Chairman Kevin Nagle has said he is willing to bring in a new investor to help lead the bid. Text messages showed that Nagle has agreed to contribute $125 million toward the MLS franchise fee.

“As we’ve shared before, we’ve been in active discussions for some time with several potential investors to finalize our ownership group and deliver the MLS club our fans and community deserve,” Nagle said in a written statement. “We remain in close contact with both MLS and Mayor Steinberg as we make steady progress towards our goal. We look forward to sharing more details with our fans, but must continue to respect the private nature of our ongoing conversations at this time.”

Major League Soccer spokesman Dan Courtemanche said Wednesday that the league’s board of governors will discuss the next round of expansion during its meeting at the All-Star Game on Aug. 1 in Atlanta. Multiple cities are expected to compete with Sacramento for the final two spots, including Detroit, Phoenix and San Diego.

Steinberg has made recruiting a lead investor a priority, telling Garber in a December text message he would “personally vet any potential investors with you and your team before we went too deep in any one direction.”

During that same text message, Steinberg asked that MLS give Sacramento “due consideration” toward an expansion franchise when it secures a lead investor and requested that the league not force the city to compete against other cities vying for the final two spots.

“Please don’t put Sacramento back in the larger pile,” he wrote to Garber. “We have earned a different consideration. I will deliver for MLS and Sacramento if you give me and us the chance.”

Garber did not respond to the message with a text of his own, although texts show the two have spoken on the phone on numerous occasions.

In an interview Wednesday, Steinberg said he has “been encouraged by all of the conversations we’ve had over the months because what I’ve seen is a significant interest in partnering with our local ownership group and making Sacramento a Major League Soccer city.”

“This takes time, but these months have not been wasted in any way,” the mayor said.

Burkle appears to be Sacramento’s preferred investor.

The Southern California billionaire was recruited to lead Sacramento’s bid to purchase the Kings in both 2011 and 2013, but had to back out over concerns that his ownership stake in a sports management company would create a conflict of interest. Burkle owns a share of the NHL’s Pittsburgh Penguins and his net worth is estimated at $2.3 billion.

On March 14, Burkle was joined by three partners during a visit to Sacramento, according to a text message from Republic FC Chief Operating Officer Ben Gumpert to mayoral aide Scott Whyte. The Burkle group toured the site of a planned soccer stadium in the downtown railyard with developer Larry Kelley, whose company owns the site; had lunch with Kelley and Sacramento developer Mark Friedman; and visited the Republic FC offices.

“Ron certainly is up the curve on sports investing given his experience (unlike most of the other ones you have met or spoken with),” Gumpert wrote to Whyte. “Also has spent enough time in Sacramento to appreciate the market.”

Steinberg personally texted Burkle as recently as April 30, asking if there was “anything new on the MLS front?” Burkle did not respond to the text.

Frank Quintero, a principal at Burkle’s Yucaipa Company investment firm, confirmed in an interview that he and Burkle were “definitely up in Sacramento,” but declined to elaborate on Burkle’s interest in Republic FC. Burkle sat in the front row of a Kings game at Golden 1 Center the night of his visit.

The group involving Casspi also received significant attention, according to the text messages. Casspi, who was drafted by the Kings in 2009 and most recently played for the Golden State Warriors last season, first expressed interest in buying a stake in Republic FC in 2014.

His partners in the MLS bid were identified in messages as Meyer Orbach and Ezra Stark.

Orbach is a New Jersey-based real estate investor whose company owns hundreds of high-end apartments on the East Coast, including several prominent properties in Manhattan. He purchased a 9.5 percent stake in the NBA’s Minnesota Timberwolves in 2016.

Stark, based in Cleveland, is the chief operating officer of Stark Enterprises, a real estate firm that has been quickly expanding, especially in the New York area.

Gumpert told city officials in a text that Stark and Orbach are “connected to Omri through Israel/Jewish organizations.” Casspi is a native of Israel. Gumpert said both Stark and Orbach had met with MLS league officials and that “both are very focused on the real estate side” of an investment in Republic FC.

Casspi, Stark and Orbach did not return messages Wednesday.

As for Precourt, there were no text messages released this week detailing conversations between his company and Sacramento officials. Precourt is in negotiations with the city of Austin to take control of a site for a planned MLS soccer stadium, setting a deadline for the end of June.

Last week, ESPN soccer analyst Taylor Twellman said on air that he does not think the Crew will move to Austin, but instead will “end up in Sacramento.” He did not elaborate.

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