The inside story of how new MLS team LAFC went from dream to reality
LOS ANGELES — The Global Sports Summit is an annual summer event in Aspen, Colo., that's a sort of Davos for sports owners and executives from around the world. In one of the most gorgeous spots in America — the St. Regis Aspen Resort — the GSS encourages networking by quietly bringing together a cross section of heavy hitters from the NFL (Steve Ross, Zygi Wilf, Dan Snyder), the NBA (Mark Cuban, Jerry Reinsdorf, Dan Gilbert), MLB (Peter Angelos, Ed Cohen), the NHL (Jeff Vanderbeek, Charles Wang) and European soccer (Adriano Galliani, Andrea Agnelli, Bruce Buck).
MLS owners are also fixtures at the event, including Clark Hunt, Stan Kroenke, Merritt Paulson, Robb Heineman, Jay Sugarman, Andrew Hauptman and Larry Tanenbaum. Given the setting, then, it probably shouldn't be surprising that the genesis moment of MLS' newest team — the Los Angeles Football Club, set to debut in 2017 — came during the 2012 Global Sports Summit.
At lunch one day, a Vietnamese-American venture capitalist named Henry Nguyen sat down next to MLS commissioner Don Garber. Nguyen was intrigued by MLS. Born in Vietnam, he came with his family to Fairfax County near Washington D.C., and grew up following the area's sports teams, including Joe Gibbs' Super Bowl winners and Bruce Arena's championship soccer teams at the University of Virginia and D.C. United. After earning degrees at Harvard and Northwestern, Nguyen had moved back to his birthplace (where his father-in-law, Nguyen Tan Dung, is the country's prime minister), been wildly successful (his group opened the first McDonald's in Vietnam) and become the co-owner of the Saigon Heat, a team in the ASEAN Basketball League.
"Don, I really love the direction MLS is going," Nguyen told Garber that day. "I'm a fan of all sports, but I realize now living outside the U.S. that there's only one world sport, and it's soccer. MLS has so much potential. Do you think there's an opportunity to invest in or own a team?"
"Of course," Garber replied. "We're going to be expanding. We still have some current owners with multiple teams, and we want to move away from that."
Nguyen couldn't let go of the thought. At the end of the conference, he reached out to Tom Penn, the Global Sports Summit co-creator and organizer, who had worked as an NBA executive (for the Portland Trail Blazers and Memphis Grizzlies) and was now an NBA analyst for ESPN. "I'm going to call you about something," Nguyen told Penn.
Soon, Nguyen checked back in: "Tom, I'm pretty serious about MLS. Can we start looking into it?"
Two years later, on Oct. 30, 2014, Nguyen and Penn stood on a stage in Los Angeles with a third principal owner — Peter Guber, a co-owner of the Los Angeles Dodgers and Golden State Warriors — and a star-studded list of global investors (there are 22 in all) to announce the birth of LAFC, a new soccer club with the most ambitious of goals.
"We have aspirations to be a club that can be on a par with some of the great clubs in the world," Nguyen said. "It won't happen overnight, and it may not happen in a decade, but that's the lodestar, the goal we have set. I believe that's where soccer is going in this country. We want to be one of the clubs here that leads that."
Two years ago, not long after Nguyen decided to pursue an MLS team in earnest, he called his friends Vincent Tan and Ruben Gnanalingam, who also attended the Global Sports Summit. Like Nguyen, both men own basketball teams in the ABL, and both have a big soccer interest. Tan, a flamboyant Malaysian, is the majority owner of Cardiff City, which played in the Premier League in 2013-14, while Gnanalingam is a co-owner of Queens Park Rangers.
Nguyen asked them what they thought about pursuing an MLS team. "They were like, ‘Wait a second: First of all, there's no relegation? All right, you got me!'" Nguyen, 41, said with a laugh. They talked more about MLS' single-entity structure, in which all the team owners were partners, just like in the ABL. "And it snowballed from there," Nguyen said.
Penn, 47, was ready to dive in too. While living in Portland, the NBA guy had fallen in love with the Portland Timbers, the wildly popular MLS team with the league's most rabid fanbase. "It's phenomenal, one of the best sporting experiences in the world," Penn said. "You can say that, actually, with the size and the intensity."
What's more, Penn was fascinated by the conversations he was having with Portland owner Merritt Paulson and other MLS owners while organizing his Global Sports Summit. "I got to meet all the guys who run the teams across all sports, and some of the best operators in sports are in MLS," Penn said. "Somewhat by necessity, because they're grinding it out, they're still building, they're in the trenches."
Once the group decided it was serious about pursuing an MLS team, they started thinking about cities. Los Angeles was at the top of the list. "And one of our first door knocks was to AEG: Would you sell the Galaxy?" Nguyen said. "It just wasn't available. As we kind of kept looking, Tom said, ‘Hey Henry, why don't we look at Chivas USA?'"
Talks continued with MLS, which bought out Chivas USA owners Jorge Vergara and Angélica Fuentes in February and took over the floundering club, which was poorly run and, truth be told, poorly conceived in the first place to try to attract fans of Chivas de Guadalajara.
A year ago, Nguyen was introduced to Guber, 72, the L.A.-based chairman and CEO of the Mandalay Entertainment Group. Over 40 years in the entertainment business, Guber has produced movies like Rain Man, Batman and The Color Purple, totaling more than 50 Academy Award nominations.
"If we were going to pursue something in L.A., we needed to have really strong roots here, and Peter fit that bill perfectly," Nguyen said while sitting next to Penn during an interview with SI.com at Mandalay's headquarters. (Guber was out of town at the time.) "So when our ownership group got together in terms of myself, Peter, Vincent and Ruben, it was like, O.K., this clicks, this works. Tom and I were really just charged with keeping this process rolling."
As the project accelerated this year, LAFC kept adding minority investors, including some of the biggest names in sports and entertainment: Magic Johnson; Mia Hamm and Nomar Garciaparra; Chad Hurley, a co-founder of YouTube; and the motivational speaker Tony Robbins. (See the full list of 22 below.) The group was finally ratified at the MLS Board of Governors meeting in L.A. in early October. Chivas USA would fold, and LAFC would start as an expansion team in 2017, coming into the league with Atlanta to make 22 MLS teams.
The expansion fee for LAFC is in excess of $100 million, an MLS record, and the clubs says it will spend at least $150 million on its new stadium.
"With the army of assets that we have together, it's just such a cool professional opportunity," said Penn, who proudly shared a bottle of the LAFC "Ignition Ale" that was produced by his friends at Portland's Rogue Ales for last week's launch event. "When you think about Los Angeles, so much of sports ownership is about the real estate that you end up owning, the territory you have. And this is Boardwalk and Park Place together for this sport."
Now the fun part — and the hard work — begins.
What are they going to call the team? At the announcement, the owners said "LAFC" was a placeholder name and not necessarily the one that would be chosen in the end. But already that tune is changing, suggesting that perhaps the first public unveiling was a trial balloon of sorts.
Is it likely that "Los Angeles Football Club" will end up being the official team name? "I think it's a reasonably good chance," Nguyen said. "My little joke is this is the only football in Los Angeles. In the world, football means one thing. Maybe it speaks a little bit to our own vision and our own aspirations."
"It's timeless, right?" Penn said of the LAFC name. "This is something that could really evolve when you have this vision of a global brand."
(One suggestion here: Consider Los Angeles Fútbol Club. It would work in English and Spanish and be a perfect reflection of the City of Angels, plus there would be no confusion with NFL football. There's a reason we chose Planet Fútbol as our brand name for SI's soccer website.)
And the color red? Will that become the official LAFC color too? Everybody jokes that Tan changed the century-old colors of Cardiff City from blue to red because he liked red better.
"Everybody jokes, but it's true: In Asia, it's good luck," said Nguyen with a smile. "It's not just Vincent. Everybody in Asia feels that way about red. I've always liked red as a color, not because I'm Asian, but because I think it's a pretty cool color. But when you talk about colors and team branding, there's so much that goes into it. What are the other clubs and sports teams in this city? What are their colors? What are the other colors in the league?"
The most important infrastructure project, of course, is building LAFC's own stadium, which was a requirement from MLS for awarding the team. Nguyen says the private funding for building the stadium is already in place, and they want it to be ready in time for the team's first MLS game in 2017. The stadium will be rather intimate at first: "around 22,000 to 25,000 [seats]," Nguyen says, "that's where we're going to start." It will have a natural grass field, a point worth noting since Atlanta's new stadium, shared with the NFL's Falcons, will have artificial turf for soccer.
Where will the stadium be built? "We're just at the beginning of this process," said Nguyen, who as the principal owner was asked by MLS to commit to moving to the L.A. area to help shepherd the stadium process. Possibilities include "everything from the top of the Valley all the way down to the tip of Orange County," he added. "The greater Los Angeles area has so many neighborhoods, such diversity in terms of ethnicities, soccer interest, sports interest. We have to figure it out almost grid by grid. There's no one single silver bullet spot. There are places where you'll make tradeoffs. So what are the least amount of tradeoffs you can make that can help us serve what we hope to be a very big diverse collective supporters base?"
(MLS, for its part, has mentioned the L.A. Sports Arena as a potential location for the stadium, and a spot not far from downtown L.A. seems like a decent chance.)
Then there's the not-so-small task of building a fanbase. "We're going to build a bond slowly with our fans and supporters groups," Penn said. "We've had a tremendous early response. It's more of an art than a science. We're sending a clear message that we're stewards of your team, whatever we're going to make, so we're calling them co-founders on this. The word is originals. Henry came up with the term. We're looking for LAFC Originals to originate this with us.
"So build a brand, build our bond, which you can't do in words," he added. "We're just going to behave that way over time. And then build a building. It's a full-blown, all-out, all-hands-on-deck effort from the ground up to establish a place to play."
As for the soccer team itself, Nguyen has specific things he's looking for from a coach. "We want someone who really understands the game and the players, particularly in the U.S. and MLS first," he said, adding that it's important to have a productive youth academy in place, especially in Southern California. "But we also want someone who understands the game on a global level."
Penn was a hardcore NBA operations and player personnel guy, and he wants to hire soccer people with that same singular obsession. "We'll hire soccer experts where this runs in their DNA and it's metabolized in everything they do, and they live in that mineshaft," Penn said. "Having been in that role in a different sport and having seen the mistakes made with the way decisions get made, I think there are some lessons learned there for sure for me. We'll put best practices in place on player acquisition."
(Painful but true: Penn — who was mysteriously fired as Blazers vice-president by owner Paul Allen in 2010, just 10 months after getting a promotion and raise — was part of the braintrust that chose to draft Greg Oden ahead of Kevin Durant in 2007.)
Having seen firsthand the atmosphere in Portland for the Timbers, Penn is hoping for something similar with LAFC's supporters groups. "It's different here," he said, "but [we want] to replicate the organic birth and then growth of this thing with our fan in every way. It's a real chance to connect and be interconnected unlike other franchises."
Nguyen, for his part, likes to speak of building things from the ground up: He calls Tan "an entrepreneur's entrepreneur," for example, and he lights up when you ask him what sort of innovations he plans to bring to the fan experience at LAFC's stadium.
"You have to understand that the modern sports live experience is competing now with the on-air experience," Nguyen said. "If you just look at a sport like the NFL, they're going to have a major challenge with media, whether it's RedZone or all of these innovations that are happening in terms of their on-air media production. It's going to be hard to compete to get someone off their couch.
"That's where I think soccer will have a huge opportunity," he continued, "because there are sports that when you see them live, they're a lot richer and more meaningful than seeing it on a broadcast. And soccer is by far one of those experiences. That's why I think the culture of the team, the culture of the supporters group, that's extremely important. That's why you want to be there, to feel that."
Nguyen also spoke of creating a stadium with top-flight amenities, from food to common viewing areas to putting real-time analytics on the phones of fans in their seats. "So if it looks like this midfielder is being extremely lazy, can I confirm that with some stats?" he said.
As you speak to Nguyen and Penn, their excitement is palpable. First kick in a little more than two years, in a stadium that hasn't yet been built, doesn't seem very far away. After all, it was just two years ago that the idea for this team came about. Things move fast. When asked if he'd received any communication from players and coaches interested in joining LAFC since the launch announcement last week, Nguyen nodded.
"There's been some interest," he said. "E-mails. For sure."
He wears the smile of a happy owner. The idea that began at the 2012 Global Sports Summit is now a reality.
Henry Nguyen: Owner and managing partner, LAFC. (Principal owner of the team.) Managing General Partner of IDG Ventures Vietnam, a private equity firm focused on consumer, technology, media, and telecom investments. He leads as the Developmental Licensee for McDonald's restaurants in Vietnam.
Peter Guber: Owner and executive chairman, LAFC. Chairman and CEO of the Mandalay Entertainment Group. Has been an entrepreneur in the entertainment, sports and communications industries. Owner and co-executive chairman of the Golden State Warriors and co-owner of the Los Angeles Dodgers.
Tom Penn: Owner and president, LAFC. Sports industry veteran. Co-founder and President of the Sports Leadership Institute and an ESPN NBA Analyst. Spent four seasons as vice-president of basketball operations and assistant general manager of the Portland Trail Blazers before joining ESPN.
Ruben Gnanalingam: Owner and director, LAFC. CEO of Westports, which holds the majority share of cargo in Port Klang, Malaysia. One of the co-owners of KL Dragons (basketball) and Queens Park Rangers.
Vincent Tan: Owner and director, LAFC. Founder of the Berjaya Corporation group of companies and an entrepreneur in Malaysia. Tan has been a majority owner of Cardiff City since 2009.
Magic Johnson: NBA Hall of Famer, five-time NBA champion, three-time NBA MVP, Olympic gold medalist, businessman, co-owner of the Los Angeles Dodgers.
Mia Hamm: U.S. soccer Hall of Famer, two-time World Cup winner, two-time Olympic gold medalist, AS Roma board of directors.
Nomar Garciaparra: Former Boston Red Sox star, TV and radio analyst for Los Angeles Dodgers.
Chad Hurley: Co-founder and former CEO of YouTube. Currently the CEO and founder of MixBit, a collaborative video platform.
Tony Robbins: Author, entrepreneur and philanthropist.
Allen Shapiro: CEO of Dick Clark Productions and managing partner of Mosaic Media Investment Partners.
Bennett Rosenthal: Co-founder and senior partner, Ares Management.
Brandon Schneider: Group vice-president, ticket sales and services for the Golden State Warriors.
Harry Tsao: Member of the Golden State Warriors ownership group and a technology investor since 2007.
Irwin Raij: Co-chair of sports practice, Foley & Lardner.
Jason Sugarman: Founder and executive chairman, Wealth Assurance Holdings.
Kirk Lacob: Assistant general manager, Golden State Warriors.
Larry Berg: Senior partner, Apollo Global Management.
Mark Leschly: Founder and managing director, Iconic Media Partners, and managing partner, Rho Capital Partners.
Michael Mahan: President, Dick Clark Productions, and partner, Mosaic Media Investment Partners.
Paul Schaeffer: Vice-chairman/COO, Mandalay Entertainment Group.
Rick Welts: President and COO, Golden State Warriors.