Posted February 20, 2014

MLS purchases Chivas USA from Vergara; will re-sell, keep rebranded team in LA

Brian Straus, Chivas USA, MLS
Jorge Vergara

Jorge Vergara has sold Chivas USA to MLS, which assumes control of the embattled club with an eye on reselling and rebranding the team while remaining in LA. (AP)

Major League Soccer announced Thursday that it has purchased Chivas USA from beleaguered owners Jorge Vergara and Angelica Fuentes, marking an end to a disastrous experiment that commissioner Don Garber recently labeled the most significant setback of his tenure.

MLS will appoint a new club president and keep head coach Wilmer Cabrera on board while searching for a new ownership group. “We’ve had lots of conversations with local owners. There’s an enormous interest in participating,” Garber said during a Thursday conference call, adding that the league paid “market price” for Chivas USA.

Manchester City and the New York Yankees recently spent $100 million for New York City FC, while Orlando City paid around $70 million to join. Both clubs begin MLS play next year.

Chivas USA’s new owners will rename the team and are expected to build a new stadium in the L.A. area. Garber said the “leading concept” is a previously considered plan to use the site of the Los Angeles Memorial Sports Arena on the grounds of USC, although there are other locations in play. The commissioner shot down recent rumors that Colorado Rapids and St. Louis Rams owner Stan Kroenke had his eyes on a second MLS franchise in Southern California.

Vergara, Fuentes (his wife) and their former partners, Antonio and Lorenzo Cué, bought into MLS in 2005 for only $7.5 million and intended to create a rival to the Galaxy by tapping in to the area’s massive Mexican-American fan base, much of which supports legendary club Chivas de Guadalajara. The project fell flat from the start, however, as the Chivas ‘B’ team won only four games its first season.

There were moments of promise here and there, including four straight playoff berths, but a carousel of coaches and club executives and several arbitrary philosophical U-turns ensured there was no progress. Losing seasons and an exclusionary brand made it impossible to gain any traction in the market, and Vergara’s takeover of the club in 2012 was the beginning of the end. A recently settled employment discrimination lawsuit filed last year by two former Chivas youth coaches, along with the paltry crowds at StubHub Center, embarrassed the league and left it with almost no choice but to step in.

Garber refused to pin blame on Vergara and Fuentes, claiming Thursday that they were committed to growing the game in the U.S. and receptive to league advice. And he argued that Chivas USA isn’t the first professional sports franchise to struggle in a complex business. But the commissioner said that when the league impressed upon the couple that a rebrand probably was needed, that a soccer-specific stadium requiring “massive amounts of capital” was necessary and that they would have to “really double- and triple-down on their own personal time and recognize they needed to spend more time in Los Angeles,” the solution became clear.

For many outside Guadalajara, however, it’s been obvious for years.

“The team was losing money from the very beginning [as the Galaxy's tenant] , so they were never able to invest in the types of players that would have made an impact,” Garber said. “The challenge with Chivas USA was that it did not represent the city in the ways that soccer fans — Chivas Guadalajara fans or fans otherwise — were embracing. That was the unfortunate aspect of it. It did not deliver on our expectations.”

To say the least. Average attendance dropped to a pathetic 8,366 in 2013. In a December interview with SI.com, the commissioner said, “We didn’t get it right, and still don’t have it right, with Chivas USA,” when asked to identify the most significant failure since he took the job in 1999.

“It was my concept to get Vergara involved and expand his Guadalajara brand, and we didn’t execute it properly and I have told him that I take responsibility for that,” Garber said at the time, insisting that Chivas USA was a “setback” rather than a “failure” because “it’s not over yet.”

Now it is. Garber said the league isn’t interested in owning or operating Chivas USA for “one day longer than we have to,” but that it will take the time to identify the right owner — one who can take the lead on a stadium push and establish a team identiy that more Southern Californians will support. The club’s lease at StubHub Center reportedly expires at the end of the 2014 season. Cabrera will report to the new president, who will run the organization independently but within a set budget determined by MLS.

“The key thing here is that there’s no rush,” Garber said. “We want to get this right. You can only relaunch and we know we’ve got to get it right the second time around.”

15 comments
senevada
senevada

maybe NYCFC will learn this lesson, not to come out as a ManCity farm club. MLS fans dont want that. NYC FC should wear something other than light blue and stop pounding on the ManCity connections as if the very name of Manchester City elicits awe in all who behold it. Not in NYC it doesn't pallys. 

usamnt
usamnt

Hey, let's begin to market a team in LA as an American team in California, not an MX B team. That being said, great news and I wish the team and players all the best luck in their rebranding - I know the players and coaches deserve a shot to compete out from under the nationalist overtones of poor ownership that should have been disgusting on day one to more people than it was.

Matthew W
Matthew W

Yeah, let's expand some more....

spikevicious
spikevicious

The Sports Arena?  Who the heck is going to go watch a soccer game over there?  I can't imagine people from the Westside, the San Fernando Valley, or even the San Gabriel Valley want to drive into that neighborhood to watch the Galaxy's little brother play.  They'll have to get this right even more than Beckham's Miami franchise.  Come to think of it, he'd be the perfect owner to get this franchise up and running, with his connections, familiarity, a built-in rivalry and existing support for him in LA.  But his sweet-heart deal doesn't allow it.  Oh well...I wonder who the new owner will be.  Please, don't let it be Magic Johnson.

mysterious.j
mysterious.j

There is a ZERO % chance this team will be moved.  MLS is addicted to expansion fees, so they will never allow a new owner to take a potential $!00mi off the table.  

JamesRaulerson
JamesRaulerson

Don't be surprised if Atlanta, or the NASL owners in  Minneapolis or San Antonio, buy this team and move it to one of those cities. All three on the next round of MLS expansion.

MrTemecula
MrTemecula

If Kroenke buys Chivas, then L.A. football fans can start saving their money for season tickets seat license, because the Rams are coming home.

bserious
bserious

@mysterious.j not following your logic.  The league is going to expand the number of clubs they have, moving this club would have no effect on that in any way.

MrGameandShow
MrGameandShow

@JamesRaulerson  Clearly that is not going to happen. Garber expects the owner to build a stadium in LA. He wants two teams in LA. So no...

spikevicious
spikevicious

@MrTemecula  

The story already pointed out that Kroenke is not an option.  Besides, with the way he's involved with Arsenal, who says he'd make a better impression than Vergara?

MrGameandShow
MrGameandShow

@MrTemecula  Good tie in for the LA Rams. Highly doubt Kroenke wants anything to do with Football/Soccer.

Enusmith1
Enusmith1

@bserious @mysterious.j let me help you understand. If they moved the team to say Miami they would not be able to get the expansion fee that putting a new team in Miami would give them. 

CorbNoir
CorbNoir

@MrGameandShow @JamesRaulerson  


He's playing that line in public, he has to or it looks bad on the league as a whole. I have no doubt his preference is to keep the team in LA; whether someone is actually going to step forward and buy the team AND lock up a stadium deal before this upcoming season ends is another. It's more than likely he'll quietly hear proposals from interested parties outside of LA as a plan B. 

bserious
bserious

@MrGameandShow @MrTemeculaheh, yeah, obviously Kroenke would never want to spend a penny on soccer.  That's quite the well informed comment, thanks.