Orlando City Soccer Club behaves like a real business
With all due respect to the U.S. women's World Cup soccer team and its world championship run, my favorite sports story this summer was a soccer story from Florida.
The Orlando City Soccer Club is the creation of Phil Rawlins, a businessman from the U.K. who settled in Orlando, and a Brazilian businessman, Flavio Augusto da Silva. Beginning in 2010, they operated the team successfully in the (lower level) North American Soccer League while seeking a Major League Soccer franchise, which they got in 2013. Orlando City signed a wellknown Brazilian midfielder named Kaká to provide some star power and began MLS play in March, using the Citrus Bowl as its temporary home field.
Fans have been raucously enthusiastic. Orlando City sold out its entire offering of season tickets for 2015, and more than 60,000 attended the first MLS game. The team has been at or near the top in average attendance among MLS teams since then. Orlando City has marketed itself and Orlando vigorously as the “soccer capital of the South.”
Good for Orlando City. Good for Orlando.
And now the part of the story that made it my favorite.
For better or worse, the owners of sports franchises in America have been able to leverage their teams’ visibility into claims on the public purse. By one accounting, professional football, baseball, basketball and hockey teams around the U.S. have received some $20 billion in subsidies for new facilities since 1990 — despite decades’ worth of studies and consensus among economists that the economic impact of sports stadiums is minimal and a bad deal for taxpayers. Eight Florida pro teams receive various kinds of state subsidies.
The ownership of Orlando City wasn’t shy about seeking public assistance for a permanent home field. It put together a deal with the city of Orlando and Orange County for a $115-million facility with about 20,000 seats. The city and county together went in for about $35 million to purchase and prepare a site. Meanwhile, the team went begging to the state for $30 million, lining up with the Jacksonville Jaguars, Miami Dolphins and International Speedway Corp. (NASCAR’s owner), which all want taxpayer funds to expand or upgrade their venues.
A funny thing happened on the way to the public trough. The Legislature got so caught up in trying to keep poor people from getting federal Medicaid money that it didn’t get around to the law that doled out money to the wealthy team owners.
Orlando City could have done what the Jags, the Dolphins and NASCAR will likely do — double down on lobbyists and go back to Tallahassee next year. But it didn’t. The team had already begun to believe the market could support a stadium with 5,000 more seats than it had planned. And rather than wait on state funding, Orlando City decided that it would just build the stadium on its own, without taxpayers’ money.
The team is buying the stadium site and paying the city and county back what they spent for the land and improvements. It will finance its $130-million facility, own it and control all the associated revenue streams — concessions, fees for hosting other events, naming rights, etc. Like a real business.
Orlando City made it clear in announcing its decision that it didn’t have anything against public money and wasn’t trying to be the poster team for a new approach to stadium funding. Its decision was driven by its own needs, it said.
But in behaving like a real business, the team highlights what’s always been true — sports teams can operate with a lot less help from the government than they think they deserve. Incentives for firms creating jobs that pay well and broaden a community’s economic base are one thing, but why should taxpayers subsidize wealthy owners for whom the teams are basically toys? Some business groups, quick to complain about government “overreach” and fiscal irresponsibility in some contexts, are silent when it comes to giving taxpayers’ money to billionaires.
Those who make the argument that a city isn’t somehow validated until it has a professional sports franchise might consider Austin. The fastest-growing big city in America, Austin has focused state and local incentives on the tech industry and now has a tech sector any city in the country would kill for. The lack of a professional sports team doesn’t seem to have hurt either its development or self-image.
Consider, also, Jacksonville, which won’t be a great city until it develops its downtown, regardless how the Jaguars perform. Or St. Petersburg, where the presence of the Tampa Bay Rays has been a non-factor in the emergence of a world-class downtown. And where the city is beginning to realize that the 80 acres where Tropicana Field sits could generate a bigger economic bang as a tech hub than as a baseball field.
Meanwhile, Orlando City isn’t the only soccer franchise that has decided to pay its own way. The Los Angeles Football Club, an MLS expansion team slated to begin play in 2018, also has announced plans for a stadium — 22,000-seats, $250-million — that will be privately financed.
It may be that we’re entering an era in which communities have different notions of quality of life than before — a football or baseball team is a nice asset, but so is an arts community, good schools and a thriving entrepreneurial community. Doesn’t a team need a great city as much as a city needs a team? What does it say about a place if it has to bribe a billionaire into staying put?
Orlando City’s decision to invest its own money in a stadium is about the best vote of confidence that the city of Orlando could get. The team may not establish a new template for all-private stadium financing, but they’ve shown that it’s possible. And the fans who come to the new stadium can enjoy the games secure in the knowledge that Orlando City didn’t have to squeeze other taxpayers to put their team on the field.