Chivas USA ceases operations; new L.A. franchise to begin play in 2017

What began 10 years ago with a lot of hope and expectation ended quietly in a staff meeting at the StubHub Center on Monday as Chivas USA employees were told that the Major League Soccer franchise was ceasing operations.

But Southern California won’t be without a second franchise for long. On Thursday, the league is expected to announce the formation of a new club that will begin play in 2017. The ownership group of that franchise will be headed by Henry Nguyen, a Vietnamese American venture capitalist, and Mandalay Entertainment CEO Peter Guber, a co-owner of the Dodgers and the NBA’s Golden State Warriors.

Also part of the group will be Vincent Tan, the Malaysian owner of English soccer club Cardiff City. The group is expected to pay in excess of $100 million for the rights to the franchise, which will join the league as an expansion team free of the Chivas brand. The team is to play in a new soccer-specific stadium; among the locations under consideration is Exposition Park, next to the USC campus.

The decision to fold Chivas USA was made in a unanimous vote of the MLS Board of Governors early this month. The league will conduct a dispersal draft of players on the Chivas USA roster next month before the Dec. 1 deadline for exercising player contract options.

When Chivas joined MLS in 2005, the league hoped to make it an iconic franchise and a worthy rival to the deep-pocketed Galaxy. At first it was, making the playoffs four times in its first five seasons.

But then ownership embarked on a number of ill-conceived changes that crippled the team, dropping it to the bottom of the Western Conference standings and cutting average attendance in half while losing millions of dollars. A series of discrimination lawsuits filed against the team last year further embarrassed MLS, which bought out the family of Jorge Vergara, a Mexican businessman, for about $70 million in February.

For the last eight months the league had been acting as Chivas’ caretaker while it searched for a new ownership group. Mark Abbott, the MLS president and deputy commissioner, met with 15 prospective ownership groups before recommending the Nguyen-Guber team to the league’s owners.

With Chivas leaving the league and expansion teams in New York and Orlando joining for next season, MLS will realign before the 2015 season, creating two conferences of 10 teams each. Joining the Galaxy in the Western Conference will be Sporting Kansas City, the defending MLS Cup champion, and the Houston Dynamo.

Teams will play a 34-game regular season, facing each team in its conference home and away, playing each team in the other conference at least twice, home and away, and then playing six additional intra-conference games.