FC Edmonton - 2022 Season Thread

[PaulV]

On 10/28/2022 at 8:48 PM, shermanator said:

That's what he's been arguing though. That the New York Cosmos with Raul (despite him not actually playing in Edmonton because of the turf) and the Tampa Bay Rowdies with Joe Cole are bigger draws than Cavalry or Valour.

I will agree with that from the Ottawa perspective. There was a definite buzz in the soccer community when Raul came to town (and played) with the Cosmos. Much lesser buzz with Joe Cole but people who followed the Premier League still thought it was kind of cool. The people were definitely the draw rather than the teams themselves. The reality is that none of those teams by themselves were much of a draw (NASL,USL or CPL). It will take time to build up rivalries.

[Ozzie_the_parrot]

 

[shermanator]

Good article on the FC Edmonton situation. Bluntly, it doesn't look good.

If the claim that the league walked away from a $1 million offer to buy the club is true, the league should have taken that and run...

Quote

A high-ranking official from another CPL side described FC Edmonton’s inclusion in the Canadian Premier League back in 2019 as a ‘marriage of necessity’ at the time, but overall states that their inclusion was a poor decision from league management as they were ‘predictably not a good league partner’.

...

We had reported that new ownership groups had sniffed around, and we’ve now verified this with multiple sources. It also turns out that more than one group submitted a lowball offer of one million dollars which was reportedly rejected by the league, who had valued the team to the tune of about closer to nine million dollars instead.

A trusted source states tell us that a small number of potential owners all walked away from the Eddies at this valuation, which also came with the large caveat that they’d be saddled with Fath Sports Limited’s existing club-related debts, too. It’s unclear what this amount totals, but some numbers run as high as twenty-one to thirty million dollars. We weren’t able to confirm that figure, however.

With Time Running Out, Is This The End Of FC Edmonton? - Northern Tribune

[Ansem]

30 minutes ago, shermanator said:

If the claim that the league walked away from a $1 million offer to buy the club is true, the league should have taken that and run...

Had they done that, you'd be de-valuating the rest of the league. It's a better business decision to let it fold like MLS had previously done than give away clubs at a bargain price.

[Ozzie_the_parrot]

https://northerntribune.ca/fc-edmonton-fold-discussion/

...Throwing a wrench into this is a potential territorial rights deal between the Faths and the Canadian Premier League that could prevent the CPL from launching a new team without the current owners waiving their locational rights – with this, you have the recipe for something that might slow down the proper return of professional soccer in the YEG for the foreseeable future...

This snippet jumped out of the page. A hard bargain being driven by the Faths on territorial rights back in 2018 (linked in to the first refusal on Clarke Stadium angle mentioned by Steven Sandor?) would explain how the Faths can walk away in financial terms but still have a say and can still try to saddle a new owner with their past financial losses.

...We had reported that new ownership groups had sniffed around, and we’ve now verified this with multiple sources. It also turns out that more than one group submitted a lowball offer of one million dollars which was reportedly rejected by the league, who had valued the team to the tune of about closer to nine million dollars instead...

That valuation might make sense in the eyes of the initial investors based on a CSB share out to 2038 given what we now know about what Victor Montagliani signed away. Combine that sort of figure with the difficulties associated with securing the stadium requirements they want though and this league probably isn't going to be growing very fast any time soon.

Edited November 4, 2022 by Ozzie_the_parrot

[shermanator]

4 hours ago, Ansem said:

Had they done that, you'd be de-valuating the rest of the league. It's a better business decision to let it fold like MLS had previously done than give away clubs at a bargain price.

As with any asset, a club is only worth what someone is willing to pay. In this case, FC Edmonton has tens of millions in debt, no assets, minimal revenue opportunities, and a dozen years of a city rejecting them. They have no value. Period. 

Letting FC Edmonton fold and putting in a new club later on does not work here. Fath is going to fight any club that tries to pop up as he feels he is entitled to recoup his lost money from the NASL days.  Perhaps one day in the not-so-near future people are willing to pay the kind of dollars Fath wants to acquire those kind of rights, but the dollar ask is completely out of touch with reality in 2022.

So as a result, Edmonton is going to soon be without professional soccer due to an owner who claimed he wanted to do something nice for the city, but in reality just wanted to reduce his taxes, is holding the city hostage. Bravo...

[Ansem]

7 minutes ago, shermanator said:

As with any asset, a club is only worth what someone is willing to pay. In this case, FC Edmonton has tens of millions in debt, no assets, minimal revenue opportunities, and a dozen years of a city rejecting them. They have no value. Period. 

Letting FC Edmonton fold and putting in a new club later on does not work here. Fath is going to fight any club that tries to pop up as he feels he is entitled to recoup his lost money from the NASL days.  Perhaps one day in the not-so-near future people are willing to pay the kind of dollars Fath wants to acquire those kind of rights, but the dollar ask is completely out of touch with reality in 2022.

So as a result, Edmonton is going to soon be without professional soccer due to an owner who claimed he wanted to do something nice for the city, but in reality just wanted to reduce his taxes, is holding the city hostage. Bravo...

His rights, are they for Edmonton or the entire metro area and beyond?

CPL should have handle this the way MLS did with Cosmos - snub their silly demands and get someone brand new to start from scratch

This business mistake will hunt them for years

[Ozzie_the_parrot]

 

[Unnamed Trialist]

On 11/4/2022 at 3:48 PM, shermanator said:

Good article on the FC Edmonton situation. Bluntly, it doesn't look good.

If the claim that the league walked away from a $1 million offer to buy the club is true, the league should have taken that and run...

With Time Running Out, Is This The End Of FC Edmonton? - Northern Tribune

Totally agree. Without saying it should be 1 or 2.5 million, anything that keeps them afloat helps the CPL. 

[Stoppage Time]

26 minutes ago, Unnamed Trialist said:

Totally agree. Without saying it should be 1 or 2.5 million, anything that keeps them afloat helps the CPL. 

Losing a team is not good look of course, but I do wonder if accepting lowball offer does right by the other owners. Something creative might work. As the other owners have contributed to keeping FC Edmonton afloat, a new owner should reimburse each of them. A compromise valuation could be reached, somewhere between $1 million and $9 million, and perhaps owners receive a financial gesture if they paid more for their franchise at the time of acquisition.        

Sticking points remain though. First, Clarke Stadium still needs work. Second, the accumulated FCE debt of the Fath family is, apparently, on the table.  Perhaps. if (some of) those debts need to be assumed by a new ownership group, then the franchise should be available on the cheap. Nonetheless, Jeffrey is right on the face of it. CPL should jump at anything which is reasonable and feasible for the league. Cheers!

[Unnamed Trialist]

The CPL owner group and CSB don't seem to understand that losing a franchise devalues the entire league and creates a precedent for future investment.

You can't claim the current x value for the league based on a growth curve if you're losing clubs. That's a shrinking entity and a major argument in favour of risk. It invites future low-balling from aspirants who'd rightly argue: "you're asking what for a league that can't ensure viability of clubs?" It's one thing to buy into the CPL as it stands and entirely different to bid to enter a league taking backwards steps.

I'm surprised how many here misunderstand value.

I appreciate some would say you have to vet an aspirant owner's business plan, but that's different. You can still set standards for success and strict terms of compliance and not overprice your own expansion.

Edited November 5, 2022 by Unnamed Trialist

[yothat2]

 

 

1 hour ago, Unnamed Trialist said:

Totally agree. Without saying it should be 1 or 2.5 million, anything that keeps them afloat helps the CPL. 

seems pretty obvious

[Ozzie_the_parrot]

Used to think they should amputate FCE and move on but torn two ways on this one now the more we find out about the league's finances and the hold the Faths apparently still have over the future of Edmonton pro soccer.

Mark Noonan is right that MLS benefited from jetisoning Ken Horowitz (?) and the Fusion because he couldn't cope with the league's cash calls and by getting out of a bad stadium lease where the Mutiny were concerned but that league had lots of growth potential once the Crew demonstrated that the mid-sized SSS was the way to go. Is the same true for CanPL as configured right now?

The flipside is that if they are still at 8 clubs in 2023 and nothing is imminent on expansion because there isn't the same eagerness to build soccer stadia in a 2020s Canada context as there was in the 2000s and 2010s USA, and most would be investors view $9 million as exhorbitant for whatever they are calling a franchise fee, a lot is potentially riding on the Blue Bombers hanging in there with the Valour through to 2026. Keeping something going at Clarke Stadium is easier than doing it at a CFL stadium after a CFL ownership group bails.

Edited November 5, 2022 by Ozzie_the_parrot

[Ansem]

1 hour ago, Unnamed Trialist said:

The CPL owner group and CSB don't seem to understand that losing a franchise devalues the entire league and creates a precedent for future investment.

You can't claim the current x value for the league based on a growth curve if you're losing clubs. That's a shrinking entity and a major argument in favour of risk. It invites future low-balling from aspirants who'd rightly argue: "you're asking what for a league that can't ensure viability of clubs?" It's one thing to buy into the CPL as it stands and entirely different to bid to enter a league taking backwards steps.

I'm surprised how many here misunderstand value.

I appreciate some would say you have to vet an aspirant owner's business plan, but that's different. You can still set standards for success and strict terms of compliance and not overprice your own expansion.

Not that I'm saying it's ideal but this has happened before in MLS and look at them today. We can all agree that FC Edmonton's situation was rather unique compared to the rest of the league.

I don't wish them to fold but giving away the club is just as counter-productive business-wise

[Unnamed Trialist]

You lose a team, then automatically any investor has to ask about the perceived risk of the entity.

It becomes the CPL having to answer uncomfortable investor's questions, instead of the other way around.

Apart from shrinking by over 10% in league size, you lose the tv market, the merchandising, the investment into the shirt, the crest, the name. The fan base, frustrated as hell but now not just with the Edmonton owners but the CPL for bailing. You lose the advantage of nearby travel for Western teams, you lose the Alberta derby. You get Saskatoon naysayers jumping on it with "I told you sos". CSB has to go back to sponsors and say, "hey, remember how we said with CPL expansion your investment is even better..?"

You also forget your best NT team player is an Edmonton boy and you lose everything he could do to support the project.

MLS: not a good example at all because you're talking about a Tier 1 pro league in  a market of 300 million plus where there are 40 urban centres bigger than Edmonton that could support a club with 15-20,000 seats available.

Edited November 5, 2022 by Unnamed Trialist

[yothat2]

2 hours ago, Unnamed Trialist said:

You lose a team, then automatically any investor has to ask about the perceived risk of the entity.

It becomes the CPL having to answer uncomfortable investor's questions, instead of the other way around.

Apart from shrinking by over 10% in league size, you lose the tv market, the merchandising, the investment into the shirt, the crest, the name. The fan base, frustrated as hell but now not just with the Edmonton owners but the CPL for bailing. You lose the advantage of nearby travel for Western teams, you lose the Alberta derby. You get Saskatoon naysayers jumping on it with "I told you sos". CSB has to go back to sponsors and say, "hey, remember how we said with CPL expansion your investment is even better..?"

You also forget your best NT team player is an Edmonton boy and you lose everything he could do to support the project.

MLS: not a good example at all because you're talking about a Tier 1 pro league in  a market of 300 million plus where there are 40 urban centres bigger than Edmonton that could support a club with 15-20,000 seats available.

Well said 👏

 

These are the arguments beyond the numbers. Hard to have $9 million dollar valuation when you lose an club within the first 3 years. 

[Ansem]

2 hours ago, Unnamed Trialist said:

You lose a team, then automatically any investor has to ask about the perceived risk of the entity.

It becomes the CPL having to answer uncomfortable investor's questions, instead of the other way around.

Apart from shrinking by over 10% in league size, you lose the tv market, the merchandising, the investment into the shirt, the crest, the name. The fan base, frustrated as hell but now not just with the Edmonton owners but the CPL for bailing. You lose the advantage of nearby travel for Western teams, you lose the Alberta derby. You get Saskatoon naysayers jumping on it with "I told you sos". CSB has to go back to sponsors and say, "hey, remember how we said with CPL expansion your investment is even better..?"

You also forget your best NT team player is an Edmonton boy and you lose everything he could do to support the project.

MLS: not a good example at all because you're talking about a Tier 1 pro league in  a market of 300 million plus where there are 40 urban centres bigger than Edmonton that could support a club with 15-20,000 seats available.

MLS IS a good example as I'm referring to clubs that folded by end of 2021 within 4 years of league activity at a time when it wasn't even on anyone's radar domestically let alone internationally including us. Look where they are now.

Also, investors are STILL joining the league and PAYING the fee DESPITE FC Edmonton potentially going away. The article makes it very clear that the way they joined the league was under different sets of circumstances than the other clubs. 

Can't ignore those facts also, giving away a club is not a good idea

My preference would be for the league to get a pop-up stadium elsewhere in the metro area if they are keeping FCE operations. Succeeding at Clarke under the current terms is near impossible 

 

Edited November 5, 2022 by Ansem

[Stoppage Time]

51 minutes ago, Ansem said:

My preference would be for the league to get a pop-up stadium elsewhere in the metro area if they are keeping FCE operations. Succeeding at Clarke under the current terms is near impossible 

 

I do not know the user terms or the working relationship between the Eddies and CPL; however, I have to think that any owner willing to contribute to improving Clarke Stadium would find a welcoming partner at Edmonton City Hall. Synergy is better than working at odds. I also wonder if some kind of debt deal could be done whereby a new owner takes on a portion of Fath/FFCE debt, then that could be, in whole or in part, the franchise fee. My previous comment that "bailout support" from other owners this season should be compensated remains. Cheers!

[DoyleG]

3 minutes ago, Stoppage Time said:

I do not know the user terms or the working relationship between the Eddies and CPL; however, I have to think that any owner willing to contribute to improving Clarke Stadium would find a welcoming partner at Edmonton City Hall. Synergy is better than working at odds. I also wonder if some kind of debt deal could be done whereby a new owner takes on a portion of Fath/FFCE debt, then that could be, in whole or in part, the franchise fee. My previous comment that "bailout support" from other owners this season should be compensated remains. Cheers!

[Unnamed Trialist]

54 minutes ago, Ansem said:

MLS IS a good example as I'm referring to clubs that folded by end of 2021 within 4 years of league activity at a time when it wasn't even on anyone's radar domestically let alone internationally including us. Look where they are now.

Also, investors are STILL joining the league and PAYING the fee DESPITE FC Edmonton potentially going away. The article makes it very clear that the way they joined the league was under different sets of circumstances than the other clubs. 

Can't ignore those facts also, giving away a club is not a good idea

My preference would be for the league to get a pop-up stadium elsewhere in the metro area if they are keeping FCE operations. Succeeding at Clarke under the current terms is near impossible 

 

Facts are, @Ansem that no investors are still joining the league and paying the fee. You are mistaken. The new team in Vancouver involves investors already in the league, who from what we know paid the initial entry fee the first year, then shifted it over to Pacific.

So they are not new, and they are not paying the current reported fee. If anything, all reports say they had a deal on Vancouver from the start which enabled them to pay that 2019 early-bird fee. Or that fee with certain % added on, either the early-bird or the early bird slightly augmented.

CPL has no new teams, fully new, since At Ottawa joined in early 2020. VFC is not one of them.

Then, you cannot use the long list of failures and arbitrary stadium and city changes in MLS, as if the mess they have gone through demonstrates you can make the same mess and get away with it. Just the opposite: that formula is death for a Canadian league.

Anyways, MLS was only saved by Anschutz and Lamar Hunt 2 decades ago after the earlier model was flagging: it needed FIFA backing, US Soccer, the US regularly qualifying for the WC, plus billionaires throwing huge sums at a loss.  In a market that, unlike Canada, can permutate and shift from here to there and still be buoyant. Canada can't, we only really have a dozen clear markets then a handful more, maybe. And we need them all. 

If you argue that in spite of all the problems, we may look back in 10 years and say, hey, we survived, that is fine. It may be true, or it may be the narrative where another Canadian leagues fails. There may be some narratives there about surmounting obstacles, and climbing out of holes, I don't doubt it. But you don't take a cavalier attitude about obstacles or holes, and certainly don't invite them. 

[cornerkick]

How has the club been able to service the existing debts ?  Interest on 21-30 million dollars would be a decent chunk of their revenues for the season.  I'm guessing the interest rate would be pretty high, given the nature of the business.     

[Cheeta]

5 hours ago, yothat2 said:

Well said 👏

 

These are the arguments beyond the numbers. Hard to have $9 million dollar valuation when you lose an club within the first 3 years. 

I think it's just a number.  More guideline than demand of payment.   

I could be wrong but I don't think the league is getting too hung up on it.  I HOPE it isn't.  Different locatons will have different valuations as they should.  And I would expect that outside of some baseline requirements that the league has to have that it is very likely CPL HQ is open to a wide variety of very different expansion proposals so long as the commitment investment is there. 

Joe Blow rides into town promising to build a $5M stand at park X,Y, or Z in Quebec City so that there's a venue for CPL in town I doubt the CPL owners are still going to be demanding a $9M cheque for Monsieur Blow.   

You get the idea.

But I could be wrong.  Maybe the CSB's revenue stream from their deal with the CSA is looking very, very, promising and the current owners of CSB, the CPL franchises, don't want to give away a slice of that growing pie to just anybody?  The skys the limit.  You want to buy in or no?  

[Stoppage Time]

4 hours ago, DoyleG said:

Unfortunately, yes, and the joke is on potential buyers. I know that the consensus is that the City of Edmonton is not too progressive in this instance.

[shermanator]

Losing FC Edmonton is a massive loss for Cavalry supporters as well. 

We lose out on pre-game at the Aviary with Edmonton supporters where we can curse the dynasty:

We lose bringing Clarke Stadium to life for the two games a year where people in attendance seem to give a shit:

We lose celebrating on the bus ride back at 2 am:

We lose our only viable and biggest away day. Those trips are instrumental in building the supporter base and the best games I've been to, because of the investment required in making the trip.

Edited November 6, 2022 by shermanator

[Ozzie_the_parrot]

Was it ever disclosed how much Atletico Madrid paid in an Ottawa context? Suspect they got in at the early bird price as part of the mechanics of getting the Fury out of the picture after Miami FC bought their USL franchise. Quite how Jeff Hunt fits in with them and the nature of their deal with OSEG on taking over the Fury's stadium lease has never been fully clear either.

If CanPL thinks a franchise is worth $9 million and wants someone to pay that in future the optics of having to leave the Edmonton market are not good when it is high on the list of markets that have to work in a Canadian context for that sort of approach to running a sports league to be viable.

Edited November 6, 2022 by Ozzie_the_parrot