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