The San Jose Earthquakes for Sale: What It Means for MLS and the Bay Area
The San Jose Earthquakes, one of Major League Soccer’s oldest teams, are officially on the market. Owner John Fisher has reportedly enlisted investment bank Moelis & Co. to assist in facilitating the sale, according to a recent report from Sportico. This shift marks a significant turn for the franchise, which has a storied history in American soccer.
Background on the Team
Founded in 1994, the Earthquakes originally left the league in 2000 but made a strong return in 2008 after a hiatus. Fisher, who also owns the Oakland Athletics, acquired the team in 2007 for a modest $20 million expansion fee. This investment has since transformed into a franchise valued at approximately $600 million, as ranked by Sportico in January 2023. The true potential of the club can be gauged by its home, PayPal Park, a soccer-specific stadium that aims to create a dedicated soccer atmosphere.
Fisher’s Motivations
Fisher’s decision to sell a controlling interest in the Earthquakes comes nearly four years after he first hired Moelis & Co. to explore selling minority shares in the team. This move reflects a broader strategy to capitalize on the rising value of MLS franchises. While Fisher’s net worth is estimated to be around $3 billion, the Earthquakes have struggled with attendance and revenue. Last year, the team’s attendance ranked among the lowest in the league, which could make selling the club more appealing for Fisher and his investment strategies.
The Current State of MLS and the Earthquakes
As of now, the Earthquakes sit eighth in the 15-team Western Conference, showing signs of competitiveness but struggling to recapture the pre-2000s enthusiasm. Their value stems not just from performance but also from the lucrative demographics of the Bay Area, which boasts a wealth of high-net-worth individuals. This unique market could attract potential investors, looking beyond on-field success to the business opportunities that a franchise like the Earthquakes presents.
Competing Sales in the League
The Earthquakes aren’t the only MLS franchise on the market. The Vancouver Whitecaps are also seeking new ownership, with the majority owner having hired Goldman Sachs last December to conduct the sale. This broader trend suggests that MLS teams are entering a new phase of commercial viability, appealing to investors who see long-term value in U.S. soccer.
Challenges and Opportunities Ahead
The Earthquakes are facing hurdles, such as low revenue streams and attendance issues. However, their valuation has increased notably in recent years, due in part to the socioeconomic makeup of the Bay Area. Potential investors might also view the franchise’s established base and history as strong assets, leveraging them to foster growth in attendance and performance.
Fisher’s Broader Portfolio and Future Plans
In addition to the Earthquakes, John Fisher is deeply involved with the MLB’s Athletics, who are currently playing at Sutter Health Park. With plans to move to a new $1.75 billion stadium in Las Vegas, Fisher is trying to raise over $500 million for ballpark construction by selling limited partnership stakes. This variety of investments indicates Fisher’s commitment to growing his portfolio, making the sale of the Earthquakes a strategic decision.
The San Jose Earthquakes’ future remains uncertain but undeniably exciting. As the club seeks new ownership amidst a landscape of increasing MLS team valuations, its journey will have implications beyond its immediate community, resonating with soccer fans and potential business entities nationwide.
