The feud that threatened to undermine Sacramento's bid for an MLS expansion franchise has been resolved.
Sacramento mayor Darrell Steinberg issued a release on Saturday indicating that an agreement in principle has been reached between Sacramento Republic FC president and founder Warrant Smith and Sac Soccer & Entertainment Holdings chairman and CEO Kevin Nagle.
Under the agreement, which culminated after two days of negotiations facilitated by the mayor, Sacramento Republic FC will become the name and brand of Sacramento's potential MLS team. The parties will draft and execute definitive documents in the coming weeks.
The California capital had appeared to present a united front in terms of its expansion bid, but when the official bid book was presented to MLS on Jan. 31, it became apparent that the relationship between the USL club and Nagle's group had become strained. The bid contained no mention of Republic FC, which has been at the heart of the expansion bid's story given the success of the club both on the field and off.
Yet it is Nagle's organization that has accumulated an impressive array of investors, including San Francisco 49ers owner Jed York and HP Enterprise CEO Meg Whitman. SSEH was also the entity that pushed through a stadium plan that has been approved by Sacramento's city council. But while Nagle was an investor in Republic FC, it was Smith that retained controlling interest in the club.
"I am extremely pleased to announce that we have reached an agreement in principle that ensures Sacramento Republic FC will be the future of MLS for Sacramento," Steinberg said. "I thank all involved for their commitment to our city and for putting the public first. By working together, we have the strongest bid and are committed to ensuring Sacramento Republic FC becomes the next MLS team."
With each side needing each other to get the expansion bid over the finish line, the two sides have been engaged in merger talks for months. During a conference call last Thursday, MLS deputy commissioner Mark Abbott indicated that commissioner Don Garber had tried to help mediate the dispute. That proved to be unsuccessful.
With no agreement in place, and with MLS setting a deadline of Jan. 31 for the bid to be submitted, Nagle's group went ahead and submitted the bid, much to the consternation of Republic FC.
"If the bid submitted [on Jan. 31] by Mr. Nagle did not include Sacramento Republic FC, it was in violation of our agreements and without our authorization; and we will take this up with the appropriate parties immediately," the club said in a statement.
But a source close to Nagle emphasized that if the bid hadn't been submitted on time, then Sacramento would have been out of the running completely. The source added that the club didn't give permission to SSEH to use their name or logo in the bid book. That was why the bid lacked any reference to Republic FC.
"On behalf of Sacramento Republic FC and all of its fans and supporters, I want to thank Mayor Steinberg for his leadership during these meetings," Smith said. "His leadership was instrumental in bringing the parties together, and we are hopeful that the principle terms we discussed today can result in a definitive agreement that will lead Sacramento Republic FC to Major League Soccer. Thanks to our fans, supporters and indomitable city, Republic FC will be Sacramento's MLS team."
Assuming the deal is signed by both parties, the bid effort can now move forward. Smith and his current ownership group will continue to own and operate the USL franchise until it joins MLS. Once MLS play begins, Nagle and SSEH will become the owners of the team.
Nagle and SSEH will continue to lead the MLS expansion bid process, including ongoing progress on a proposed MLS stadium at the downtown Railyards.
"At long last, Sacramento stands before MLS as one team and one community," Nagle said. "From day one, my hope and expectation was to come together with Sacramento Republic FC as a united front. While it took longer than I had hoped, we've now reached our goal and delivered the result that Sacramento and Republic FC fans deserve."