As the Fire wind down another disappointing year this offseason may prove to be very interesting on and off the pitch. Not only does the club need to make smart use of the mounds of General Allocation and Targeted Allocation Money that they have amassed over the last two seasons, they must move toward repairing the perception that they themselves have perpetuated as an organization not seriously looking to compete with other big market clubs in MLS.
Part of the reluctance to dip into the fray for high-priced “star” players over the last seven years is in part due to the lack of control and financial windfall that stems from the anchor of the lease agreement at Toyota Park with the Village of Bridgeview. The 30 year lease agreement was signed in 2005 and agreed to by the Village, Major League Soccer, and then Fire owners Anschutz Chicago Soccer, a division of AEG.
In order to get a stadium built in the Chicago area 11 years ago, MLS agreed to a series of terms that would ultimately be seen as a crutch for the “operator” – who did not reap all of the benefits that professional sports teams get today in sweetheart deals with municipalities eager for a major league tenant. Among those terms that are:
- The Fire pay an annual Facility Fee originally set at $300,000.00 that increases at 2% every year. They also cover event expenses for each use of the facility.
- Naming rights are owned by the Village, along with marketing and advertising rights for the stadium. The team does however retain subsidiary naming rights for areas within the stadium. Incidentally, Toyota’s 10-year naming rights deal expired earlier this year although the name “Toyota Park” is still in use on a temporary basis. Toyota has already begun removing branding in the stadium throughout the course of this season. Sources indicate that if another sponsor is not found or Toyota finally decides to remove all of their branding, the facility will be renamed “Bridgeview Stadium”.
- The Fire have to reimburse the Village for any home games held outside of the facility. International friendlies included.
- No MLS team can play in the Chicago market area in any stadium other than Toyota Park, even if the Fire cease operations.
- The maintenance of the field is the responsibility of the Village. A bitter battle over the condition of the field has been fought over the last several years but Bridgeview has remedied the problem with the hiring of a new maintenance team. The Fire had been using this avenue as a potential “out” of the lease for breach of contract terms. More on this later.
- The team is responsible for reimbursing the Village for use of ancillary facilities, including the main field for practice sessions.
- Concessions and box office are controlled by the Village, although there are shared revenues.
- Shared revenues include: Team at 92% of gross ticket revenue; 50% split of net parking and net concession revenue; Team receives 30% net license, net event suite revenue, and net sponsorship revenue.
- Team receives 22.5% of gross merchandise revenue.
- The turf practice facility is technically owned by the Village of Bridgeview. Former Fire Director of Player Development John Dorn financed a good deal of its construction with his own funds.
The condition of the playing surface at Toyota Park ,which used to boast one of the better fields in MLS deteriorated to the point where Frank Yallop publicly decried its poor maintenance on more than one occasion, perhaps as a not so veiled attempt to make the team’s unhappiness well known in building an argument for an exit. The Fire also actively encouraged visiting teams to file complaints in written reports to MLS about the condition of the pitch. Players also voiced displeasure.
Andell Inc.’s President and Chief Operating Officer, Kashif Shiekh who sources indicate has played a substantial role in controlling budgetary issues for the company, which includes involvement with the Fire, began searching at least over one year ago for potential alternate stadium sites within Chicago city limits should a break from Bridgeview occur. At least two potential sites have been explored, one near the Bridgeport area with access to the Dan Ryan Expressway and another in the Hyde Park area. Peter Wilt’s future Chicago NASL team has also been researching potential stadium sites in the City, but it would seem that getting another stadium built in the current political climate will still be extremely difficult. It’s also important to note that the Chicago political machine had little to no interest in helping to build a soccer stadium in 2005, hence the acceptance of the Bridgeview proposal by MLS and the Fire.
Shiekh’s name has surfaced again more recently with regard to taking a more active role and involvement with the Fire. General Manager Nelson Rodriguez recently indicated that Andrew Hauptman and Andell have committed the resources to adding high-level impact talent during the coming January window but the proof will be in accomplishment. The sums of MLS “funny money” that has been accrued will certainly help massage the restrictive league salary budget enabling him to fill spots with potentially higher quality players but the real test of commitment will come if and when the Fire are able to land a player that the team can truly rely upon as a cornerstone of a winning side. The Fire had a player of that stature in place in the person of Cuauhtemoc Blanco when Hauptman and Andell purchased the team in 2007 for a reported $35 million dollars but have not had one since. The cost of a player of that magnitude today will be considerably more than the $2.7 million annual contract that Blanco signed in 2007 however. Perhaps not so coincidentally, the Fire have not been as successful on the pitch or in drawing interest to the team and Toyota Park since Blanco’s departure following the 2009 season.
The addition of more clubs to MLS within the next few years and the escalating expansion fees for new entries, which have been speculated to now reach the $200m mark have led some to argue that now may be the time for Andell to cut bait and get as much of a return on investment as possible.
Should Andell decide to pursue a sale of the team and attempt to capitalize on the skyrocketing value of MLS franchises, Fire Confidential has learned that there are at least three potential ownership groups that have shown interest in a purchase. While no deals appear to be close at the moment, the mention of the potential buyers among well placed sources indicates that the possibility does at least exist.
The three current potential groups include:
Richard Levy – A local entrepreneur with a Chicago Kent Law degree who is the CEO and Founder of Victory Park Capital, the company which owns the Giordano’s pizza company. Originally from South Africa, he has been active in the Chicago area for years. Along with real estate investor Jared Schenk, he was one of the original minority partners/owners of the Private Bank Fire Pitch. Victory Park Capital, a private-equity firm with $2.25 billion in assets, invests in distressed businesses. He and Schenk are also listed as Board Members of Chicago Fire Juniors City youth club in publicly available tax returns.
Majeed Ekbal – A real estate developer currently living in Chicago. Ekbal has a history of well publicized issues that could be of concern to MLS. Started working in the Chicago area in the early 90’s owning Expresso, Inc,. a company which bought and delivered groceries to customers locally. He also works as a marketing and advertising executive in Chicago. Apparently played Division 1 college soccer at American University in the 1980’s. Note: the suit against Ekbal has been settled.
Bridgeview Group – The Village of Bridgeview has maintained an icy relationship with the Fire and that doesn’t seem to be on the road to repair any time soon. The Village is planning improvements to the area surrounding Toyota Park and those plans do not include the Fire. According to sources, a group of investors that includes owners of the NBA’s Sacramento Kings have expressed an interest in making a move. This group consists of several individuals who are prepared to make a bigger push in the coming months. Members of this group organized the recently held Open Air concert event at Toyota Park.
Any potential new owner will need to explore the continued viability of playing in Toyota Park, although the 2007-2009 seasons provide proof that supporters will find their way to Bridgeview and fill it enthusiastically if a good team is on the field. Weighing the possibility of adding a multi-million dollar buy-out clause on top of the acquisition fee will certainly be a major sticking point of any future sale.
No concrete timelines have apparently been set for any deal to be finalized since discussions appear to be in the very early stages but it does make for a more interesting offseason. Some Fire insiders insist that offers are fairly commonplace and Andell has no intention to sell. The January window could be very telling.