Yahoo Finance Sacramento's MLS expansion team on the brink after billionaire investor backs out
A year and a half after it was announced an MLS expansion team was on the way to Sacramento, one of the team's key investors is jumping ship.
Billionaire Ron Burkle has pulled out of the Sacramento Republic FC project due to concerns related to COVID-19, MLS announced in a statement on Friday. The league stated it still believes Sacramento can become an MLS market, and will look into the next steps for the city in the coming days:
Sacramento Major League Soccer deal loses key investor Ron Burkle. MLS says they will work with Sacramento Mayor Darrell Steinberg on the next steps in the coming days. pic.twitter.com/r8ERLEeXnr
— Sean Cunningham (@SeanCunningham) February 27, 2021
"I want to thank Mayor [Darrell] Steinberg for his continued efforts to bring MLS to Sacramento," MLS commissioner Don Garber said in the statement. "His commitment to the city and delivering for its passionate soccer fans should make all citizens of Sacramento proud.
"Interest in owning a club in Major League Soccer has never been higher. And I remain incredibly optimistic about finalizing expansion plans for our 30th team."
Sacramento's quest for MLS team continues
The move is a wild about-face for a bid previously thought to have already crossed the finish line. MLS announced it had awarded its 29th team to Sacramento all the way back in Oct. 2019, the culmination of a years-long pursuit of a spot in the fast-growing league.
Burkle, along with Hollywood producer Matt Alvarez and Sacramento businessman Kevin Nagle, finally gave Sacramento the financial backing it needed to land a team. Burkle is also co-owner of the NHL's Pittsburgh Penguins. In addition to the $200 million entrance fee for the league, the group also announced plans for a $250 million, 20,000-seat stadium in downtown Sacramento.
However, according to the Sacramento Bee, Burkle only signed a preliminary agreement with MLS, and never officially signed a formal long-term agreement. After the team was announced, the ongoing COVID-19 pandemic reportedly caused construction costs for the new stadium to escalate due to a one-year construction delay. Along with expansion teams in Charlotte and St. Louis, the club's debut was delayed a year to 2023 due to the virus.
Obviously, replacing the financial backing of a billionaire isn't easy, and that's what Sacramento will have to do if it wants to hold onto its MLS team. The city's mayor released a statement Friday night saying it has no plans to back down:
My statement on the news from @MLS that Sacramento’s lead investor has pulled out. Here @TheCityofSac we’ve met all our commitments, and we will work in partnership with the league to find a new lead investor. @SacRepublicFC pic.twitter.com/NSeULrI4C4
— @mayor_Steinberg (@Mayor_Steinberg) February 27, 2021
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