To open an occasional series looking at MLS ownership, Graham Parker sat down with MLS Commissioner Don Garber to talk about the phenomenon he believes is the most important development for the league in recent years: the change from a small number of owners, with multiple teams each, incubating the league, to a growing raft of entrepreneurs developing individual sides.
In 2011, Los Angeles Galaxy won the MLS Cup at the Home Depot Center. The popular narrative of that moment was how David Beckham, totem of the designated player era, finally delivered an MLS Cup — and there’s certainly a lot to that. But when the trophy came out to be presented, MLS Commissioner Don Garber did not hand it immediately to Galaxy captain Landon Donovan, but instead made a short speech of thanks to L.A. owner Phil Anschutz, whose AEG also owned the majority stake in the team the Galaxy had just defeated, Houston Dynamo. Garber then presented the trophy, which bears Anschutz’s name, jointly to Donovan and Anschutz.
On the face of it, it was one of those fairly standard ceremonial quirks that crop up in sports everywhere. If there was an odd note to it, it was the curiously valedictory feel of Garber’s speech — not that anyone gave it too much thought as the moment gave way to photographers grabbing the shot they really wanted: Beckham raising the trophy aloft.
But this was an important moment in the recent history of MLS. We were indeed quietly marking the passing of an era that preceded Beckham’s arrival. At one point, post-contraction in 2002, AEG owned around half the teams in the league. When MLS kicked off this season, AEG was one of 18 owners of 19 teams (soon to be 21 teams with 20 owners) — a diversification of the league’s governance that has transformed the culture of MLS ownership from one of paternalist oversight to one where an increasing number of owner-operators personally direct and invest in their vision on a day-to-day basis.
Before the season started, I sat down with Commissioner Garber to talk about the changing face of MLS ownership and its significance. We started by discussing the broad cultural forces that have shaped the context for the league — forces that might be described in broad strokes as globalization, the digital era, and the shift in demographics of sports audiences powered by the Hispanic and youth markets. This all ties in to what Garber calls “our whole point of difference, our core value, our unique selling proposition: This world is shrinking and soccer is the universal language of the world.”
We then talked about the popular history of the league — a narrative that, in its crudest form, might run from its foundation, to aging stars, to contraction, to soccer-specific stadia, to designated players, and now, perhaps, to the return of the natives, with the recent Clint Dempsey–led influx of U.S. national team players returning from Europe. But possibly the most important of all those developments has been a slowly evolving ownership structure, and indeed slowly transforming fundamental philosophy, of Major League Soccer.
Garber said that we are witnessing “the transformation of MLS from a league that was founded by several sports industrialists who will always have busts in the Hall of Fame of Major League Soccer when that’s created.” He continued, “Today that has expanded to be a very diverse, unique, and active ownership group. That has helped transform our league from where it was, fledgling in the late ’90s early 2000s, to now being full of great promise. Board meetings are dramatically different. The diversity of thought around our table has helped drive a lot of the key decisions that we’ve made, from our commitment to player development to the designated player rule, to the evolution of our commercial rules, to a continued evolution of our governance — and that makes my job a bit more complicated, but it’s the secret sauce.”
According to Merritt Paulson, the young owner of the Portland Timbers, who joined MLS in 2011, “One of the things the league has done a really good job of is getting a world-class group of owners onboard, and it’s certainly one of the most important aspects of expansion. You talk about the triangle of market strength, ownership quality, and getting the right stadium. And I think Don and the league have been knocking it out of the park on all of those fronts.”
Paulson is one of a new breed of owners in MLS that Garber calls “the young guns,” a group in which he includes Kansas City’s Cliff Illig as an honorary member. (“He’s a young gun with gray hair!”) “In our industry and the sports industry in general, when you have a great moment in your career and you have enough money to do what you want to do, a lot of that decision-making is, ‘Can I buy a sports team,'” says Garber. “Years ago that movement was to the traditional established major leagues in America, and today, among all these people who are in that position, it’s to invest in MLS, because they grew up with the game.”
People used to ask Garber when soccer was going to make it in America, and he would reel off metrics that proved the progress the sport was making, while also wondering to himself what would be the true catalyst for a real leap forward. “A great anecdote would be Adrian Hanauer. He comes from a family in Seattle who are one of the largest producers of feather beds and pillows — very wealthy folks. He owned a minor league team called Seattle Sounders. Ten years ago he talked to us about buying an expansion team for Seattle, and he said, ‘I’m not quite ready, but at some point I’ve got a couple of things that, if they hit, I’m going to call you up and I’m going to buy an MLS team.’ His family were investors in aQuantive, which was sold to Microsoft, and the next day I get a call from Adrian saying, ‘I’m not sure if you saw the papers, but I’m ready to talk.’”
Which brings us to the aforementioned “young guns.” Garber: “Adrian Hanauer is 48 and he is to Major League Soccer — like Merritt Paulson is, like Andrew Hauptman [Chicago] is, like Anthony Precourt [Columbus] is — our version of the Krafts when they came into the NFL, or Jerry Richardson when he came into the NFL, or Mark Cuban when he became an owner in the NBA. New, young, very successful sports entrepreneurs or business folks are now in a position to drive the growth of the sport in their country and certainly drive the development of Major League Soccer.”
While Garber has spoken bullishly in the past about the prospects of MLS, it has felt like a fairly recent phenomenon for its ongoing expansion to be matched by a similar expansiveness of tone from those who run it. Garber, as he has done at each public appearance in this offseason, emphasizes to me that the league is continuing to lose money, yet the comment sounds like an obligatory public tone-setter for the forthcoming collective bargaining year.
It’s a subtly different caution from even two years ago, when he mentioned the “ghost of the NASL” “haunting the corridors” of MLS during a preseason press conference. The failure of the free-market NASL, and of course MLS contraction in 2002, continue to be salutary lessons, of course, and the new breed of owners is respectful of those who navigated the latter. According to Paulson: “There’s a lot of reverence in the group for folks like Phil [Anschutz], the Hunt family [onetime owners of Columbus, Dallas, Kansas City — now just Dallas], and the Krafts [league founder members, owners of New England Revolution], for putting a stake in the ground and slogging it out. I’m exceptionally grateful to those guys for doing what they did in the face of a lot more adversity than certainly we face now.”
Indeed, that trio — Kraft, Hunt, and Anschutz — ended up laying, then maintaining, more of a foundation than they’d expected. Nor could they have expected that the makeup and conversational tone of the MLS boardroom by the end of 2002 would be so sharply distinct from the same (rather more crowded) room just 12 years later. How that happened is a story that takes in broad capital investment from ownership groups around the country, but also one that takes in an unprecedented surge in digital culture that has shaped fans and owners alike. MLS is a league born and shaped in the Digital Age, and its present-day owners were, as Garber tells me, “born out of that movement.” Still, in 2002 it looked like there was a long way back.
In Part 2 of this story: how Garber and a handful of owners navigated the long road back from contraction, and how the new breed of owners are transforming MLS and setting expectations for a crucial year.