Monday, April 29, 2013

Abu Dhabi Sheik Said To Pursue Soccer Franchise For Queens

Sheik Mansour bin Zayed al-Nahyan, center, whose private investment group owns Manchester City in the English Premier League, during a match against Liverpool in 2010. Major League Soccer is attempting to install 35,000 seat-soccer stadium /concert venue in Flushing Meadows-Corona Park.   MLS hopes to reveal the plan within the next 4 to 6 weeks.  (Andrew Yates/Agence France-Presse — Getty Images) 


The Russian entrepreneur Mikhail D. Prokhorov owns the Nets basketball team. Red Bull, the Austrian-based energy drink company, owns the Red Bulls soccer team. Now a member of the royal family of Abu Dhabi is poised to become the latest foreign owner of a New York-area professional sports franchise, according to the New York Times.

Sheik Mansour bin Zayed al-Nahyan, a member of the Abu Dhabi royal family, whose private investment group owns Manchester City in England’s Premier League, has entered final negotiations to purchase a franchise of Major League Soccer to be situated in Queens, according to two people with knowledge of the negotiations.
The prospective owners are willing to pay a $100 million expansion fee for the league’s 20th team, which could be called New York City F.C. and begin play in 2016, the two people said. That would more than double the expansion fee of $40 million paid by the Montreal team that entered M.L.S. in 2012.
After months of public hearings, applications and discussions, a deal for a privately financed $340 million stadium in Flushing Meadows-Corona Park, which would hold 25,000 spectators and could be expanded to 35,000, could be completed in several weeks, according to several people with knowledge of the deal.
The league wants to make the announcement before May 25, when Manchester City is scheduled to play an exhibition at Yankee Stadium against its English rival Chelsea, the two people familiar with the negotiations said.
Neither Don Garber, the commissioner of M.L.S., nor Sheik Mansour could be reached for comment Sunday. Last week, Garber told reporters he hoped to make an announcement about the expansion team in New York in four to six weeks. In addition, Mayor Michael R. Bloomberg told reporters last week, “Hopefully, we’re getting close to announcing a new soccer stadium here in Flushing Meadow Park.”
While foreign ownership of professional teams is relatively limited in the United States, it is rarer still for those owners to be of Arab descent. But the influence of oil and gas money in the Middle East has spread in international soccer in recent years.
In 2008, Sheik Mansour bought Manchester City for $330 million. Last year, Qatar Sports Investments, a branch of the emirate’s sovereign wealth fund, completed its buyout of Paris St.-Germain in the French league, valuing the club at $130 million.
Qatar also won a contentious vote to host the 2022 World Cup. And beIN Sport, a subsidiary of Al Jazeera, the Qatar-based television network, now televises soccer matches in the United States, some featuring the American national team, others showcasing top leagues in Spain, England, Italy and France.
For M.L.S., an affiliation with the Abu Dhabi royal family and the owners of Manchester City would broaden the global footprint of the sport in the United States. And the association with wealthy owners willing to spend hundreds of millions of dollars on their team would provide another vote of confidence in soccer’s potential in America, sports industry experts said. Owning a team in New York could also provide a springboard for other opportunities, including potential real estate investments.
In 2012, M.L.S. had a higher average attendance than the N.B.A. and the N.H.L. A recentglobal survey named it the seventh-best soccer league in the world.
“If England has the world’s biggest soccer league, then America has the most up and coming league,” said Steve Horowitz, a partner at Inner Circle Sports, an investment bank that has put together soccer deals, including one last year on behalf of Erick Thohir, anIndonesian media magnate who bought a controlling stake in D.C. United.
Sheik Mansour, who is in his early 40s, was listed in 2009 by Forbes as its newest Gulf billionaire, with a personal fortune of $4.9 billion and a collective family fortune estimated at $150 billion.
Abu Dhabi, a part of the United Arab Emirates, holds 9 percent of the world’s oil reserves, and Sheik Mansour is chairman of its International Petroleum Investment Company, part of what Forbes estimated as a $650 billion sovereign wealth fund.
Buying a soccer club allows the establishment of business and political connections and provides good public relations in enhancing Abu Dhabi’s global business empire, said Stefan Szymanski, a professor of sports management at the University of Michigan and a co-author of the book “Soccernomics.”
“These are long-term investors, the Warren Buffetts of the Middle East,” Szymanski said. “It almost doesn’t matter what plays inside the stadium. It’s the location, the city, that indicates it’s a good investment.”
A salary cap in M.L.S. would prohibit Sheik Mansour from spending hundreds of millions of dollars to sign players, as he has done with Manchester City, which in 2012 won its first Premier League title in 44 years and is now valued by Forbes at $689 million, the fourth richest in England and an increase of 56 percent from last year.
A New York franchise could help develop young players for Manchester City, Szymanski said, while Sheik Mansour positions himself in the event M.L.S. takes off in terms of attracting a wider television audience, offering larger salaries and becoming more appealing to soccer fans in the United States who now prefer the international game.
Buying into M.L.S., Szymanski said, may also be a subtle signal by Sheik Mansour that he has other alternatives if he begins to feel impinged by a European soccer initiative called Financial Fair Play. This is an attempt to curb runaway deficit spending and restrict teams to income generated from broadcast rights, ticket sales, corporate sponsorships, merchandising and competition prize money. A person familiar with the M.L.S. negotiations said the league would have been more wary of Arab ownership if a New York team were being bought by the Qatari royal family, which has shown support for Hamas, aPalestinian group that Israel and the United States consider a terrorist organization.
Referring to the Qatari ownership of Paris St.-Germain, the person familiar with the Abu Dhabi negotiations said, “That would have been a much larger challenge.”
Several experts said they would not expect much political blowback from an Abu Dhabi ownership in New York.
“These people have a huge interest in political stability,” Szymanski said. “Jihad would be the furthest thing from these people’s minds.”
Still, legislative hurdles remain, even with the ownership group proposing to spend hundreds of millions of its own money instead of asking the city for hundreds of millions in subsidies. The City Council, no doubt aware that some community groups have opposed the project because of the loss of park space, must approve the land use plans for the stadium. The State Legislature also must approve plans to replace the 10 to 13 acres of parkland that would be set aside for the stadium. M.L.S. and representatives of Sheik Mansour are also in discussions with the Mets about using the parking lot at Citi Field on game days.
The city said it was in “active discussions” with M.L.S. But pending a final deal, the Parks Department is spending $2 million to install two new soccer fields and make other repairs to the land where the proposed stadium would sit.
Read More:

New York Times - April 29, 2013 - By Jere Longman and Ken Belson 

A Walk In The Park  - April 29, 2013

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