Management: U.S. Soccer Reboots

Los Angeles is home to three professional soccer teams. There are the L.A. Galaxy and Chivas USA, which are developing a spirited Anglo-Hispanic rivalry that is played out passionately when the two meet in the Home Depot Center, a soccer-only stadium that holds 27,000 fans within its cozy confines. The third is the national team--Mexico's national team. It's not unusual for Los Tricolores, the hated rival of the U.S. national team, to draw crowds of 80,000 for its games, played in the Rose Bowl or the Coliseum. In fact, the U.S. avoids playing Mexico in Los Angeles for that reason.

What is unusual is that all those teams are managed by Major League Soccer (MLS). The pro league born of the highly successful 1994 World Cup staged in the U.S., MLS has struggled for a decade to find its place in the sports-entertainment complex. But by thinking like an entrepreneur and managing like a global business, the league is facing the prospect that many concluded was unreachable in the U.S.: success. "What we have today is far more stability, far more credibility and far more optimism about our business and far more popularity than we've had," says MLS commissioner Don Garber.

In the past 18 months, a league that has been kept whole by dipping into the deep pockets of two soccer-nutty billionaire owners has attracted close to $1 billion in outside investment from new franchises, new team owners, public stadium funding and sponsorship money. Adidas kicked in $150 million to become the league's sole uniform supplier, in part to hold off Nike. MLS is close to a new television-rights deal with ABC/ESPN, one in which it will actually get money for its games, instead of having to buy the time from the networks and hope to sell it. And earlier this year Red Bull, maker of the popular energy drink, bought the New York City franchise from Anschutz Entertainment Group for an investment that will top $100 million.

The Big Apple team, now called Red Bull New York, is building a stadium in Harrison, N.J., 12 miles from midtown Manhattan, that epitomizes MLS's effort to be a major minor sport in America. Or a minor major one. The 25,000-capacity, two-tiered Red Bull stadium is designed to deliver a more European feel to the customers, which can't be done when 15,000 fans--a typical MLS crowd--get lost in a 70,000-seat U.S. football stadium. The Harrison arena will be one of eight new stadiums, including the Home Depot Center, Pizza Hut Park in Dallas and the $100 million, publicly funded Bridgeview Stadium near Chicago, that are purpose-built for MLS teams. "It gives the public a sense that we're here to stay," says Garber.

MLS has stayed around mostly because two of its founders, Lamar Hunt and Phil Anschutz, kept it afloat (unlike the women's professional league, which disappeared last year). Hunt, an oilman who also owns the NFL's Kansas City Chiefs, and Anschutz, an oil and technology entrepreneur who owns too many things to count, have had a burning passion for the game that has consumed better than $100 million of their money. Hunt owns three and Anschutz four of MLS's 12 teams. The original idea was to unload all but one each as the franchise values increased. That was 10 years ago. Having unloaded New York, Anschutz is expected to sell his Washington franchise, D.C. United, this year.