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Major League Soccer announced on Friday that the expansion squad scheduled for Sacramento, Calif., Which was due to start playing in 2023, is now on indefinite hold after Ron Burkle, the proposed squad’s main investor, informed MLS officials said he had “decided not to do so. go ahead with acquiring an MLS expansion team” in the city due to the impact of the coronavirus pandemic.
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Several sources with knowledge of the situation cited the increased costs associated with building a stadium at the Downtown Railyards site as the main reason why Burkle, who is also a co-owner of the National Hockey League’s Pittsburgh Penguins, decided not to go ahead. A source said Sacramento stadium costs fell from $ 300 million to $ 400 million, while infrastructure costs fell from $ 27 million to $ 47 million. In addition to these increases, the ability to raise funds from the projects’ limited partners, all in the midst of a pandemic, has fallen by about $ 60 million from what was expected.
“After working for many years to bring an MLS team to Sacramento, the League continues to believe that this can be a great MLS market,” MLS said in a statement. “Over the next few days, the League will be working with Mayor Darrell Steinberg to assess possible next steps for MLS in Sacramento.”
MLS announced the Sacramento squad with great fanfare in October 2019, but the deal was complicated. Burkle and co-investor Matt Alvarez not only had to pay an expansion fee of $ 200 million, plus stadium costs, but Burkle and Alvarez were also to acquire the USL Sacramento Republic championship side from owner Kevin Nagle. This part of the deal has also not been concluded.
Doubts began to emerge earlier this year over whether Burkle was going ahead with the project after The Athletic announced that his group had not signed the detailed deal with MLS. The news turned out to be a harbinger, as Burkle informed MLS on Friday night that he was withdrawing from the deal.
“I want to thank Mayor Steinberg for his continued efforts to bring MLS to Sacramento,” said MLS Commissioner Don Garber. “His commitment to the city and his service to its football fans should make every citizen of Sacramento proud.
“Interest in owning a club in Major League Soccer has never been higher. And I remain incredibly optimistic that our 30th team’s expansion plans are finalized.”
The announcement amounts to a massive setback, and perhaps a death knell, for Sacramento’s expansion hopes. While the Republic of Sacramento remains well supported, finding an ownership group with sufficiently deep pockets has been a struggle. By the end of 2017, Sacramento was seen as one of the pioneers in the expansion race, but ended up losing to Nashville and Cincinnati when Meg Whitman chose not to invest in the Sacramento expansion effort. .
Burkle was seen as Sacramento’s biggest investor, but now, despite the selection of a stadium site, Sacramento’s future as a home for an MLS team is in serious doubt.
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