Anthony Precourt and Dave Greeley Conference Call
(Tuesday, 10/17/17)
Anthony Precourt (Crew SC Investor-Operator and Chairman): Thank you, Tim. Good morning, everybody. I’m going to make a statement and then we’ll open it up for questions. MLS is enjoying unprecedented growth, our League peers are improving on and off the field, year over year. Precourt Sports Ventures has spent the last four and a half years committed to elevating Columbus Crew SC in to one of the top clubs in MLS, both on and off the field. That has been our vision since we purchased the club in July of 2013. We have demonstrated our commitment to being successful in Columbus: making significant improvements to stadium infrastructure, training facility infrastructure, a team-rebranding effort, resetting our front office and soccer operations leadership and getting to three Designated Players for the first time in club history.
Proudly, I can state that we have qualified for the playoffs in three out of our four years, we won an Eastern Conference championship in 2015 and hosted the MLS Cup, coming up a goal short. Despite all of the efforts to move the needle beyond the field success, our business is struggling to keep pace with the rising standards of Major League Soccer. The club historically, and presently, has challenges with matchday attendance, with growing our season ticket base, with demand for corporate sponsorships and with relevance. The stadium and site are challenges in Columbus. There is a growing disparity in attendance and corporate support when comparing Crew SC with its MLS peers and with other mid-size markets, such as Kansas City, Orlando, Portland and Salt Lake City. Despite increased efforts and investments, our current course is not sustainable.
With this in mind, Precourt Sports Ventures has decided it must begin exploring strategic alternatives to secure the long-term viability of the club. These options will include remaining in Columbus in a new, privately financed stadium in a new downtown location, or potentially relocating the club to the city of Austin, Texas. The key takeaway is that Precourt Sports Ventures has a strong ambition as a club to be a standard bearer in MLS. Our central goal is to be celebrated, to operate a vibrant and sustainable business that creates the resources to have a successful soccer team that is positioned to win trophies year in and year out. We need to have confidence in the marketplace in order to feel comfortable building a new world-class, state-of-the-art, soccer-specific stadium, so we have no choice but to proceed with exploring our options. No course of action is yet set in stone.
Now before I open it up [for questions], I also want to clarify some misrepresentations that have been made over the last 12 hours. This is just an announcement that we are exploring our options. No relocation decision has been made. We are not asking for public tax dollars and we are not asking either city to build a stadium for us. Any conversations that we have had in Columbus with potential investors centered around a new privately-funded stadium in the downtown area. No investor in Columbus presented a serious offer to invest in the club while the team plays at MAPFRE Stadium: not for 100 percent, not for 50 percent, not for any percentage. To say that a deal has been made to host games at UT [University of Texas] Austin is also premature. Now I will turn it over to Tim Miller to open it up for questions.
Question:This is a question about the stadium location issue that you addressed earlier with downtown in Columbus. Can you go through that process a little bit of locations you’ve tried to identify and maybe some of the difficulties you’ve had in trying to get stadium locations secured in Columbus? Where are the challenges there?
AP: Well we are initiating a process: a concurrent path of exploring our options in Columbus in a new facility and possibly relocating to Austin, Texas. We hired Barrett Sports Group a year ago to do a demand and feasibility study on Columbus, to understand what a new stadium might be like, what our supporters and fans and sponsors would like in a new stadium and where that stadium should be located. We’ve also hired a local real estate and development firm to do a site evaluation for us, to understand the best locations for a potential stadium. The key thing for us is that we need to have confidence in the market in order to feel comfortable building a new world-class soccer-specific stadium. We need stronger support in the form of attendance, in the form of a season ticket base, in the form of sponsorships so that we have the finances and the business model to build a new stadium. Building a new stadium in MLS is now a significant investment, so we are going to explore how that could come together. It would be premature to comment on specific stadium locations in Columbus at this time.
Q:I know in the past Austin, I guess San Antonio as well, who are both kind of the same areas, have been used as pawns so to speak for sports teams in the past, kind of as leverage. How is this situation any different? Austin is, I'm guessing, being very seriously considered in this case, right?
AP: Yes. We are sincerely looking at the opportunity of relocating our team to Austin, Texas.
Q:I just got done speaking with Alex Fischer from the Columbus Partnership. Can you tell us why his offer to buy half the team was unacceptable? Also, he says that they [Columbus Partnership] keep asking you for specifics as to what you need, what you need, what you need and that you haven’t given them specifics as far as requirements to stay.
AP: We’ve had private conversations and they are probably better to remain private at this time. I’m going to stay there. There was no serious offer made to me in regards to an investment in the Crew. I’ve made it perfectly clear and so have potential investors in Columbus, that a new investment would not be made until we got to specifics around a new stadium plan. No investor in Columbus has ever given me a formal, serious offer and they’ve all expressed that they would not have an interest in investing in the team until we had a stadium plan.
Q: Anthony, the interviewer earlier was talking about how our market almost seems like it is being used as leverage. What makes you think that soccer at the MLS level would work well in Austin? What attracts you about our city?
AP: Austin is the largest metropolitan area in North America without a major league sports team. It has a growing national and international presence. It has a strong multicultural foundation, it’s millennial, it has a robust economy. We’ve long thought of Austin as a potential ideal fit for a Major League Soccer team. It is the most attractive untapped market in the United States for Major League Soccer.
Q:When we read your story about your purchase of the team, this was back in 2013, part of that was that it was very important to the Hunt family that the Crew remained in Columbus and you said at the time that you were committed to that. So what’s changed?
AP: I was committed to that and I believe that I demonstrated my commitment through significant investment in infrastructure, in personnel, in the quality of our product on the field. What has changed? Our League has grown leaps and bounds, it’s been unprecedented the improvement we’ve seen year over year and new markets that have come in the League have shown dramatic attendance. Let’s look at Atlanta with over 70,000 fans over their last few games, with Orlando building a new facility and averaging over 30,000 fans a game, with New York City FC. The list goes on and on. Our peers get stronger and stronger, year in and year out and I have to get back to our ambition as a club. This is key: our ambition as a club is to be a standard bearer in Major League Soccer, to be respected on and off the field in terms of our soccer operations and our business operations and to operate world-class, soccer-specific infrastructure. We’re going through growing pains now. It’s time for us to explore building a world-class, soccer-specific stadium so that we can be celebrated and successful and sustainable.
Q: Have you selected or made a decision on whether you want to be downtown Austin or possibly out at a location like COTA [Circuit of the Americas]?
AP: Nothing is set in stone, we’re just getting started with this process, so I’m not going to really comment on specific stadium sites at this time. Major League Soccer has learned over our history that operating in the urban core, where the most people in the community can access the facility and enjoy the facility, that’s important. So, a downtown location is important.
Q:In conversations with city officials [in Columbus], a lot of them, including the Mayor, a lot of them seem to have been blindsided by this announcement. Why, from the city aspect, were they kept in the dark and how can those conversations progress moving forward?
AP: Again, I think that’s misrepresentation. I have been very clear since the beginning of 2016. I raised my hand and expressed our concern around the health of our business with both public and private leaders in the Columbus community. The process began after we won the Eastern Conference and hosted the MLS Cup and our jersey renewal was up, so we reached out to Alex Fischer in the Columbus Partnership to help us in securing a market rate jersey sponsorship. And I have to say that was a long process that came together at the 11th hour. We were unsure whether we would even have a jersey sponsorship for 2017. I’ll just tell you this: we have engaged the community privately since the beginning of 2016 about our business issues and made it clear that we would potentially start to explore our strategic alternatives if the business did not improve.
Dave Greeley (President of Precourt Sports Ventures): Hey guys, this is Dave Greeley. I just want to add to Anthony’s comment. We had a very specific objective, factual in findings, presentation we gave to Columbus business leaders in early September and it outlined, very specifically, all of our issues and challenges and we also said at that point in time, “Guys we have no choice, given these facts and findings, that we are going to need to explore our strategic options and alternatives.” So, Anthony deserves a lot of credit for being extremely stand up and candid in that meeting.
AP: And again, this is about building a new soccer-specific stadium, a world-class, soccer-specific stadium and it’s going to be privately financed. So, we’re not asking for public tax dollars. I would not ask Columbus for anything. We need to make that step as a club.
Q: Wanted to ask you a question again that I asked earlier and see if you could put a better time frame on it and that is, what the time frame for all of this would be? Are we talking one year before you make a decision? Two years? Can you clue us in on that?
AP: This is just the beginning of the process and we look forward to exploring the opportunity. We will be playing in Columbus in 2018 and we’re just kicking things off. I want to talk a little bit about the timing of our announcement at this point in time. There is no good time to make this sort of announcement, I understand that. The timing should underscore the seriousness of our actions here to realize our ambitions. This is an opportunity for us to escalate the conversation for those that need to understand it, and if there’s a chance for us to stay in Columbus or if there’s a chance for us to move to Austin we need to start to work on it immediately. Again, our situation is not sustainable. We need to get to a place where we can be successful and put out a good product on and off the field.
Q:To follow up on that timing question, do you worry at all that making this announcement now with the team trying to, obviously in the playoffs, and trying to make a run there, can distract them or get in the way of that run at all right now?
AP: You know, every sports organization’s goal is to win a championship and that’s our goal, unequivocally, is to win a championship this year. We’ve got a great team, we’re playing really well and we’ve got true pros. We’ve talked to our players, our coaches about the situation and they’re good to go. We’re going to give it a run for an MLS Cup this year.
Q: Since the day you bought the team, you’ve consistently used phrases like “committed to Columbus” and talked about long-term plans and just last October you told the Dispatch that you were “tired of the insecurities that Crew fans had about the team possibly moving.” Now that you’re openly considering moving the team, do you feel like you maybe owe those Crew fans an apology for suggestions of like unwavering commitment?
AP: I stand by what I said. I know the Crew fans are avid fans, and you know, I want to make the statement that I recognize their love for this club and that they pour their heart and soul into this club every Wednesday and Saturday. Look, we’re trying to be a successful club here, we’re trying to take the next step. So, I hope you guys recognize the ambition.
Q:You’ve said a few times that this would be a privately financed stadium. In the Dispatch story where you were quoted you also said that you imagined, anticipated the deal being a public-private partnership. Can you explain the difference between kind of how you’re framing it now and how you anticipate it being public-private if the stadium in Columbus is to occur?
AP: I said it would be premature to discuss how a stadium may be financed, but I also said in that statement that I was expecting it to be primarily privately financed. I expect it to be privately financed in Austin or Columbus.
Q: Often times when we hear about sports teams moving it’s over trying to get public financing for stadiums, that’s obviously not the case here, so can you I guess elaborate on what really is kickstarting this possibility of moving?
AP: I think we have room for improvement in Columbus as it relates to matchday attendance, growing our season ticket base, getting to market rate corporate sponsorships and just generally being relevant in the city.
Q: Earlier you listed several things you see as positives for the team in Austin. A lot of them I think are very similar to what you would have, what you do have in Columbus in terms of the city and kind of the fanbase and what-not. What makes you confident that a team would work in Austin that has not worked in Columbus over your ownership?
AP: We’ve seen new markets be really successful in MLS. Our recent expansion has been a tremendous success and there is a receptivity to MLS 3.0 in new markets. You know, we’ve got 22 years of operating history in Columbus and look, we’ve tried really hard. I’ve worked extremely hard over the last four and half years to improve this club and I’m going to continue to work hard to improve this club. That’s my goal. Our ambition is to be successful on and off the field and be a standard bearer for MLS, and we’ve tried very hard to do that in Columbus.
Q: In a follow-up question, you had mentioned you were looking for investors. Have you identified and locked-down or are you talking with Texas investors and who are they?
AP: That would be premature. Again, we are just initiating the process and I’ve said this again, in Columbus or in Austin, we are very open to bringing in local investors and we will have conversations about that.
Q: I want to press you just a little it on [the] site in downtown Columbus. The [Columbus] Partnership said that you did conduct a stadium survey earlier this year in January or February. Were there specific sites in downtown that were identified? And if you could identify those to us, that would be great.
AP: Yes, there are three sites that have been recommended to us and we will continue to look at them. That’s all I can comment on.
Q: I know you’re fully aware of the Austin Aztex with the USL and how it just didn’t really work out. I think the attendance was a little over three grand before they left. Does any of that give you pause at all or is this an apples-oranges kind of thing with the MLS?
AP: I think it’s apples and oranges. You know, we’re talking about Major League Soccer. You know, the Aztex had some troubles with their stadium, with the fan experience and they weren’t playing Major League Soccer. I commend them for being visionaries and pioneers and trying to see soccer in a very attractive marketplace where I think soccer can be very successful. We had a good experience working with the Aztex within our affiliation, so good on them. We’re all on the same boat, we want soccer to be successful in every marketplace and we both believe that Austin can be a great MLS market.
Q:You mentioned that you’re considering both options concurrently, so what tangibly do you need to see change here in Columbus between now and whenever you make that final decision?
AP: We have to have the confidence in the market place in order to feel comfortable building a new world-class, soccer-specific, state-of-the-art stadium. Again, we have room for improvement as it relates to matchday attendance and our season ticket base and the demand for corporate sponsorship.
