Nashville SC

Nashville SC minority owners looking into Orlando City purchase

Yesterday, The Athletic – as it so often does – broke a big story with the news that Leonard, Mark, and Zygi Wilf are looking to purchase a controlling stake in Orlando City SC. The article is subscribers-only, but the news is in the headline and the most relevant stakeholder for our purposes provided a public statement:

“The Wilf family continues to evaluate potential opportunities in business, sports and entertainment, but it wouldn’t be appropriate to comment on any specific discussion at this time,” said Lester Bagley, executive vice president of public affairs for the Minnesota Vikings.

Via The Athletic

(For what it’s worth, OCSC’s current ownership representatives said they don’t foresee a change in ownership via their own statement to The Athletic. But that’s like a college athletic director saying “we didn’t interview any head coaching candidate except the guy we hired!” i.e. maybe true in a very literal and technical sense, but not a practical one).

This is newsworthy to fans of Nashville Soccer Club not just because it is league news, but because the Wilfs are minority owners in the Nashville SC business (the club declined to comment on the situation, I have reached out to Nashville Soccer Holdings but have not received response at the time of publication). The Athletic‘s story indicates that they would have to sell their stake in Nashville SC. The relevant portion of the MLS Constitution states as follows:

A. Interest in or Control of Other Team OperatorsNo Team president, general manager, coach or any other personnel of a Member may (i) obtain a position with, or directly or indirectly exercise control of any management authority over any other Member or (ii) obtain any direct or indirect financial interest in any other Member, unless, with respect to this clause (ii), (x) the facts in connection with such intended financial interest are disclosed in detail in an application provided to the Commissioner by the applicable Member and such interest is expressly approved by the Board of Governors in accordance with the procedures set forth in the MLS LLC Agreement…

Major League Soccer Constitution

“Other personnel” is doing a lot of heavy lifting there, but it’s fair to assume the intent is that ownership in multiple teams is not allowable, unless given the express consent of the Board of Governors (the most powerful body in MLS’s corporate structure, consisting of the primary owner of each franchise), and with a compelling reason. The days of three owners for 12 teams are in the distant past.

So, what does it mean for Nashville SC?

Largely, it feels like… good news? Or at least not bad news? The Wilfs’ ownership stake in the franchise seemed expressly designed to check two boxes in Nashville SC’s ownership portfolio:

  1. Experience with professional sports team ownership (the Wilfs own the Minnesota Vikings of the NFL)
  2. Experience with navigating municipal waters to get a stadium built in a private-public partnership and the connections in design and construction to turn said stadium into a practical reality (since the Wilfs have owned the Vikings, they left the Metrodome (pbuh) and built US Bank Stadium)

(For what it’s worth, I wrote that entire section based on general knowledge, and then happened across an article in which it’s explicitly stated, which really ties the room together). Those two aspects were far more about the ownership group being attractive enough to earn the initial MLS bid (mission: accomplished), rather than long-term necessities for the franchise.

While the full financials of Nashville SC’s ownership group are not known, the general understanding is that the Wilfs’ full slice of the pie is in single-digit percentages (by league rule, John Ingram has to own at least 35%, and he’s reported to own much more than that), so the financial situation is not a game-changer, either. Even if the going rate for an MLS franchise is around $450 million right now – per The Athletic‘s story, that’s where OCSC’s valuation is – a 10% stake runs $45 million, which is $9 million less than Ingram paid to get the stadium deal finalized. Obviously it’s not chump change, and surely he’s not super-interested in regularly unloading eight-figure amounts over his already-planned investments. But even if he just wanted to absorb that cost (rather than replace the Wilfs in his ownership group with someone else), that’s not an insurmountable hurdle.

Largely, by all appearances, the Wilfs’ purpose to Nashville SC has been served. Nashville SC’s purpose to them – remaining involved with MLS in their long quest (their bid in Minneapolis was beaten out by Minnesota United) to own majority interest in a team – hasn’t necessarily run its course, but been more of a placeholder. From a practical perspective, it’s hard to see any tangible negative effects on Nashville SC. As long as there’s not another global pandemic that forces teams to dip into their ownership groups’ private wealth, the relationship may very well have run its course anyway, whenever there’s an ownership opportunity elsewhere for the Wilfs to pursue.

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