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Indy Eleven name investors for MLS bid, identify stadium site

January 31, 2017
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(Photo courtesy of Indy Eleven)

Indy Eleven officials expressed optimism Tuesday that they can land a Major League Soccer expansion franchise for Indianapolis after the league hears their plans for a new stadium and sees the investors they have lined up.

The Eleven will be one of 12 minor-league soccer franchises bidding for one of four expansion openings in Major League Soccer. MLS said it will announce the first two cities to be awarded expansion franchises by the fall.

On Tuesday, Eleven officials unveiled the names of its potential investors—a group that includes local auto dealer Andy Mohr; Elwood Staffing President Mark Elwood; Heritage Environmental Services President Jeff Laborsky; and Mickey Maurer, a shareholder in The National Bank of Indianapolis and IBJ Corp., parent company of the Indianapolis Business Journal.

The group is led by Indy Eleven owner Ersal Ozdemir, who also owns Keystone Group, a local real estate development firm. Indy Eleven officials told IBJ on Tuesday morning they are still seeking other investors.

MLS in December announced it would be expanding from 24 to 28 teams. Two of those expansion franchises will join the league in 2020 and the other two will join at an undetermined later time. MLS officials late last year invited Eleven officials to apply for an expansion franchise.

“This all came together pretty quickly,” said Indy Eleven CEO Jeff Belskus.

Eleven officials said they are looking for investors who either live or own a business in central Indiana.

“We’re focused on people that are committed to Indiana and Indianapolis,” said Belskus, former CEO of the Indianapolis Motor Speedway.

The team has put together a plan to raise $320 million needed to cover the expected $150 million MLS franchise fee, a new 20,000-seat downtown stadium and start-up costs for the team, Belskus said.

“We are confident we will be able to raise the money we need to join MLS,” Belskus said.

Maurer said he is considering investing, adding that his involvement would likely be “small” relative to the total amount the group needs to raise. 

Maurer said he would like to see the team, which has spent three years in the second-tier North American Soccer League, move to the United States' top league.

“I like the principal, Ersal Ozdemir, involved. I think he’s a sound business person,” Maurer said. “And I think the sport of soccer is on the upswing.” 

Maurer said he gives the initiative “a reasonable” chance of succeeding, but added that government support will likely be needed.

While Belskus said the team has “had a lot of positive conversations” with city and state leaders about the proposed move to MLS, he added that there are no formal commitments on those fronts. 

How much each private equity partner would contribute “is still being worked out,” Belskus said, adding that investors he identified are on board “based on what we know today.”

The team has identified 16 acres adjacent to Lucas Oil Stadium for a new venue. That parcel, which has multiple owners, is bordered by Kentucky Avenue and Merrill, McCarty and West streets. Belskus said team officials are in negotiations to purchase the land. 

“We have our ideal location, but that doesn’t mean it’s the only [possible] location,” Belskus said.

The price to build the new stadium, Belskus said, is estimated at just over $100 million.

The private investors will provide “a significant” amount of money to get the new stadium built, Belskus said, but added that Eleven officials would prefer the city’s Capital Improvement Board own the open-air facility.

CIB President Melina Kennedy said “the prospect of the city having a MLS franchise is very exciting,” but she tapped the brakes on the CIB's owning the venue.

“At this point in time, with existing revenue, the CIB doesn’t have the financial capacity to take on a new stadium,” Kennedy said. “We wouldn’t support a new tax to get this done.”

For the proposal to work, she said, “it would have to be supported through private contributions and money the stadium generates itself.”

The CIB has had “preliminary discussions” with Eleven executives, Kennedy said, and CIB members are open to further discussions, though none are currently planned.

While Kennedy said “having a MLS franchise here is in line with our focus,” she added that the liabilities associated with the CIB's taking ownership of such a venue is “an important point to take into consideration.”

Another important consideration is the league's structure, said local sports marketer David Morton, who formerly worked for the soccer league.

Morton explained that a stand-alone entity, not the team owners, own MLS. The teams, he said, are merely franchise holders.

“The revenue-sharing model for MLS is much different than a league like the NFL, where the teams own the league,” Morton said. “MLS teams get much less in revenue sharing and are more reliant on locally generated revenue to cover their costs.”

If the Indy Eleven succeed in joining MLS, the team wouldn't be the first Division II franchise to make the leap. Teams in Minneapolis, Montreal, Seattle, Portland and Vancouver have all made the transition in the last decade. The Division III Orlando team jumped to the MLS in 2015. Minnesota and Montreal have made the jump from the NASL to MLS since 2012. 

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