Is a Major League Soccer team worth $200 million to Charlotte?
It’s a question the city might soon have to confront given reports that Carolina Panthers owner David Tepper may ask the Charlotte City Council to pay for upgrades to Bank of America Stadium that would help the city get an MLS franchise. Sources tell the Observer editorial board that that no such ask has been formally made yet — despite at least one report saying so — but there do appear to be conversations happening between the city and Tepper. A formal and precise proposal is sure to come soon, and council members are surely calculating now what a good deal would look like for the city.
We believe a good MLS deal does exist. This editorial board has said before that the city should welcome the opportunity to partner with Tepper, who has displayed both vision and an understanding that ventures should benefit more than his own bottom line. An MLS team could be one such venture, but is the reported price tag of $100-200 million too steep for Charlotte?
In some ways, it’s not a bad deal. The city, after all, committed almost $300 million in 2003 to bringing an NBA franchise back to Charlotte. We got more than a team with that investment, certainly — we got an arena and the big events it subsequently has attracted. Still, $200 million to secure a franchise in a growing U.S. league is at least a little intriguing.
But the best way to judge Charlotte’s potential investment is a way Tepper and any businessperson would appreciate: What are the comps these days on public dollars and MLS facilities? The answer: $100 million is on the high end, and $200 million would eclipse most every other city’s investment by tens of millions. Most MLS teams, including those in Sacramento and St. Louis — sought less than $100 million in recent years. A few asked for no public dollars for facilities.
Those numbers come with a caveat — most have involved MLS-only stadiums, not improvements to an existing stadium as Tepper is proposing. The average public money spent on MLS facilities, according to Marquette University research? $83.3 million.
Just as important, perhaps, is how much of a partnership Tepper is pitching. According to the Observer’s Jim Morrill, Danielle Chemtob and Brendan Marks, Tepper is proposing that he will pay more than $400 million in franchise fees, salaries and other costs associated with the franchise, and that the city will pay for stadium upgrades and team facilities. But unless Tepper is also offering the city a stake in the MLS team — and the chance to earn a profit — it’s disingenuous to describe that proposal as anything but the city footing all the stadium costs. That’s rare in pro sports these days, and it’s not much of a partnership. Charlotte should ask for more.
The city also should ask about Tepper’s plans to eventually ask for the city’s help with a domed stadium that would house the Panthers and the possible MLS team. Tepper might see that as separate from the MLS proposal, but a city investment in sports facilities comes from one finite bucket of tourism-related taxes. Also, it’s politically dicey for the city to pay for hundreds of millions for Bank of America Stadium upgrades if that stadium might be replaced in the near future. Never mind that any request for public money — even if it comes from tourism taxes — is viewed amid the backdrop of other needs that the city still needs to address.
All of which are challenges Charlotte can overcome. There’s a good MLS deal out there. The city council has some work to do to find it.