Today’s Rumor of the Day brought to you by the Italian national daily newspaper Il Sole 24 Ore. Article is about, “a rumor” floating around, “Italian Financial Circles,” that new Inter Milan majority owner Erick Thohir is going to “cash in” his majority stake in MLS’S DC United to help pay off the debt he agreed to incur with the Inter purchase, some €200M [aprx. $271,780,000 USD] .
As per usual, some MLS fans went all in on the rumor and into meltdown mode. FYI – Italian Media is less reliable than English Media to give you perspective.
Why I love this rumor so much… the idea that DC United’s value is anywhere near large enough to make even in dent in the almost $300M Inter debt is laughable. When Uncle Erick bought in as majority owner, his valuation was aprx $50M USD [almost €36.8M] and he only owns 60% of that.
Forbes Magazine did a valuation of all MLS clubs in July of 2013 and placed DCU second lowest at $71M [apx. €52M]. It’s revenues are $17.7M [aprx. €13M] and operating at a deficit of 2.8% annually. In large part, because it has not been winning and as much as I LOVE RFK [and I do] it is time to grow up and move out on our collective own. No real estate makes the club much less valuable. [Note, Inter also has no stadium, as the local government of Milan owns the San Siro and both Inter and AC Milan are renters].
Now, Uncle Erick and his DCU partners, the coolest owner in sports Will [Chang] and Jason [Levine] have agreed in principle to fund the construction of a new stadium for DCU within the boundaries of the District in exchange for the City handing over the land at Buzzard’s Point. That is a whole other issue because the City does not actually own the land at Buzzard’s point but does own choice real estate in a better location in the District. They are planning on swapping the plots with the owner of the Buzzard’s Point and then give Buzzard’s Point to DCU for the stadium. Welcome to DC,…we elected Marion Berry AFTER, “the bitch set [him] up…” [his excuse for being caught doing crack, not mine] .
The stadium deal is worth big money.. it is in the last great undeveloped section of the City and to be clear… there is NO MORE space within the City limits. It is 63 square miles, 19% of which is federally or private controlled park lands, plus there is all the land owned by the Fed and City governments. While it will be expensive to build, it is a major necessity especially if the club is to be sold for big money.
Now, I know there is the theory that says, “well they can just move the club to a different city, since it is not tied down in DC.” Yeah, I do not see how that works. MLS needs a presence in the Nation’s Capitol even if just for aesthetic purposes only; also it would be moving MLS’s most successful club, away from its core and lose a cut of a potentially huge stadium deal in a highly sought after market.
By the way, the same Italian Media Reported between August – November of 2013 said he was selling his minority interest in the NBA’s ’76ers [see the use of “the” before letter names, it is ok with “the MLS” too]. Some going all the way to say that he had already sold it to fund Inter. At present there is no evidence that he has sold his interest in anything for any reason including funding Inter.
The current DC United article mentions something about DC United CFO/COO Michael Williamson [and newish COO] but I cannot make out what it says and none of the translate apps can either. Hoping one my Italian speaking peeps can clear it up. My guess is that it based on the Steven Goeff’s Soccer Insider column from Dec that says, Thohir may move him to Inter to run things there.
The two clubs formed a, “Strategic Partnership” just two months ago and crossover between the club has already started. Young DC United playmaker Michael Seaton just spent several weeks training with Inter. There are expected to be coaching and staff swaps between the clubs as well as best practices.
Does Uncle Erick sell United to be Inter’s sugar daddy? Maybe, but I doubt it at least not until the stadium is done or officially dead. It is hard to say, “here buy this club losing money and oh yeah, you are on the hook for an additionally $150M minimum to build a stadium. Peace..”
Additionally, Inter having a solid base in America is a big coup with the move of Serie A clubs attempting to expand their fanbase here.
UPDATE — Uncle Erick Speaks: “These assets are integral parts of my international sports investment strategy and I look forward to growing both brands well into the future. “I deny, in no uncertain terms, recent media reports which indicated otherwise. “My commitment and dedication to both DCU and Inter is unwavering, and I am focused on producing results both on and off the pitch at both clubs.” Statement via ESPN FC