The last major hurdle for Major League Soccer’s further expansion into the most populous market in North America has been cleared, and the result is mostly an economic gain for the city and LAFC.
According to Thuc Nhi Nguyen of the LA Daily News, the Los Angeles City Council unanimously approved the construction of a new stadium for the expansion MLS club LAFC and surrounding amenities in Exposition Park on Friday, May 6.
The construction is set to begin this summer, and will occupy 15 acres. Aside from the 22,000-seat stadium, there will be retail space, office space and a soccer museum. The site will be the current L.A. Memorial Sports Arena.
The economics of the situation are interesting. Nguyen reports that 3,000 jobs are expected to be created, with 1,200 of those being permanent after the demolition of the arena and new construction projects have concluded. Nguyen’s report also states that local residents will be given preference in consideration for those jobs.
Perhaps the biggest factor in the economic benefit for the city is that the demolition and construction will not take a penny of public funds. The $250 million project is completely privately funded, which is both a negative and positive for the city depending on the outlook.
While none of the capital required for the construction will be taken from the city, that also means that the venue will be privately owned. Unlike venues that are supported by public funds, the city won’t receive any residual income from the venue such as lease payments.
Despite sharing a market with the LA Galaxy, prospects for LAFC appear good. Los Angeles is the most populous market in North America, and fans in the greater metropolitan area are accustomed to divided loyalties.
The National Basketball Association’s Lakers and Clippers share the Staples Center. The National Hockey League’s Kings also play their home game inside Staples, and share the bigger market with the Anaheim Ducks. In Major League Baseball, the Los Angeles Dodgers are akin to the Kings, sharing the greater market with the Los Angeles Angels of Anaheim. All these franchises are financially performing well.
Not only is the market big enough to support two MLS clubs, it is a friendly market for the beautiful game. Forbes ranked the LA Galaxy the second-most valuable MLS club in its latest valuations, thanks largely to its broadcasting deal. The demographics of the city’s population are such that support a high chance of success for MLS on an expanded basis.
With construction given the green light, LAFC’s executives can now begin to sell their product and build up hype around the club for the next two years before the club begins its inaugural season in 2018. If LAFC can get a broadcasting deal anywhere on-par with what the Galaxy have negotiated, their future will be secure.
Being in a market that has already proven its affinity for MLS’ product, the unique narrative of a cross-town rivalry with the Galaxy and a state-of-the art facility to christen, there’s little reason to be anything but optimistic about the future for LAFC.
