Major League Soccer assumes ownership of Chivas USA
Major League Soccer has finally pulled the plug on its disastrous 10-year relationship with Mexican businessman Jorge Vergara, announcing Thursday that it assumed ownership of the troubled Chivas USA franchise.
The sale price was believed to be around $70 million, although the league refused to comment on the amount. When Vergara and his wife, Angelica Fuentes, bought out original partners Antonio and Lorenzo Cue 15 months ago, they reportedly spent $40 million, or four times what the foursome paid in expansion fees to join the league before the 2005 season.
“Certainly, it hasn’t worked out as well as anybody had expected,” MLS Commissioner Don Garber said. “I don’t think this is the fault of ownership per se. There’s a lot of issues that we, the league, take responsibility for. Now we are just very focused on a new beginning.”
The league will install its own management team to handle the day-to-day operations of the club, while MLS continues talks with potential investors. The team will open its season next month under the Chivas USA brand, but the team’s name and colors will return to Vergara and Fuentes after a transition period.
Wilmer Cabrera, a former MLS executive who was named the team’s coach last month, will keep that job for the time being, Garber said.
Thursday’s sale, in the works for months, comes at a delicate time for MLS, which is in negotiations for a new national TV deal. Although English-language ratings are down, the league is playing up the addition of a second well-heeled team in the New York market as well as expansion franchises in Orlando and Miami. But the continued presence of a failing team in the country’s second-largest media market probably would have hampered those discussions.
Garber said he wants the franchise to remain in Southern California, where it would play in a soccer-specific stadium downtown. Chivas USA’s lease with StubHub Center, which it shares with the Galaxy, runs out after this season, and the league has been exploring several options, including a joint venture with USC to build a facility near the Coliseum.
One suitor who is not in the mix, Garber insists, is Stan Kroenke, the billionaire owner of the NFL’s St. Louis Rams and the Colorado Rapids of MLS and the largest shareholder in English Premier League club Arsenal. Kroenke purchased 60 acres of land near Hollywood Park last month, leading to speculation that he was planning to move a football or soccer team there.
“Any rumors that have been out in the market about that are not true,” Garber said.
When Vergara helped found Chivas USA, the idea was to brand it a sister club to the original Chivas, the wildly popular Mexican league club in Guadalajara also owned by Vergara. The teams would share a nickname, uniforms, players and coaching styles in the hopes of capturing the loyalties of the area’s massive Mexican American population.
The team made it to the Western Conference semifinals four times in its first five seasons. But Chivas USA has finished last or next-to-last in each of the last four seasons, going through six head coaches and at least five team presidents during that span.
Forbes estimated the team lost an MLS-worst $5.5 million in 2012, and last season home attendance dropped to a league-low 8,366 a game. The team was also hit with three lawsuits from former employees who alleged they were discriminated against because they weren’t Latino and didn’t speak Spanish.
Matt Reid, a spokesman for Sard Verbinnen & Co., the public relations firm representing Vergara and Fuentes, said all three lawsuits were resolved before the team’s sale.
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