Investors, Republic owners square off after Sacramento MLS bid submitted without team name – Sacramento Bee

Sacramento’s bid for a Major League Soccer team was plunged into chaos Wednesday over a dispute between Sacramento Republic FC’s lead investor and its founder over use of the Republic brand.

Less than 24 hours after the bid was formally submitted, representatives of Republic FC charged that lead investor Kevin Nagle violated his agreement with the club by applying for the MLS franchise without using the Republic brand. Nagle, however, said he doesn’t control the rights to the Republic brand, hasn’t been able to negotiate an agreement with team founder Warren Smith on the sale of the brand, and had to submit the bid Tuesday in order to meet MLS’ deadline.

He said “my preference would be to keep the Republic name” if Sacramento’s bid for an MLS team is successful. So far he and Smith haven’t been able to agree on a price.

Nagle submitted the bid to MLS headquarters under the name of Sac Soccer & Entertainment Holdings, a corporation he controls. Eleven other cities submitted bids as well as MLS prepares to add four teams.

MLS officials declined to say whether the rift between Nagle and Smith will damage Sacramento’s bid, and tried to downplay the controversy. “I’d like to minimize some of the brouhaha and hysteria about this,” said Deputy Commissioner Mark Abbott in a conference call with reporters. “I think it’s fairly straightforward when you take a look at it.

Asked if Nagle can get an expansion team without the Republic FC brand, Abbott said “the people in Sacramento believe presenting a unified front is the best way to proceed….We should give those discussions time to play out.”

Sacramento Mayor Darrell Steinberg jumped into the fray, saying he’s asking both sides to meet with him. “I am not going to allow a private business dispute to get in the way of Sacramento getting what it deserves – a major league soccer franchise,” he said in a prepared statement. “I am asking the parties to meet with me at City Hall to immediately resolve all remaining issues. The city’s interests come first.”

Neither side had an immediate response to Steinberg’s invitation.

As of Wednesday, it appeared Nagle and Smith were approaching a state of war. Republic FC issued a blistering statement accusing Nagle of violating his agreements with the team.

“This is deeply troubling to us….If the bid submitted yesterday 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,” said the statement, released by Republic FC spokeswoman Erika Bjork.

Smith couldn’t be reached for comment, and a representative for Nagle didn’t have an immediate response to the team’s statement.

Internal friction doesn’t necessarily doom a community’s attempt to get an MLS team; Minneapolis-St. Paul was awarded a team in 2015 even though two competing ownership groups submitted applications.

In Sacramento, the confusion about the name began spilling out late Tuesday on social media, where Republic FC fans accused Nagle of abandoning the team’s brand.

“Why would Major League Soccer exclude (the) team that put Sacramento on the map?” wrote Jason R. Riley on Twitter in one typical comment.

The Tower Bridge Battalion, the vociferous Republic FC fan group, said on its Twitter feed: “TBB has, is and always will be (Sacramento Republic FC) until we die. All of the money (Republic investor) Kevin Nagle has to offer won’t change that.”

Nagle, who made his fortune in the pharmacy benefits business, said Sac Soccer has always been the corporate entity for pushing the MLS bid.

Smith’s plan was to get a minor league soccer team up and running, which he did in 2014, and that investors would follow and take the Republic to its MLS goal. The runaway success of the Republic, which won the United Soccer League championship in its inaugural season in 2014, attracted Nagle as an investor.

But Smith and Nagle have not yet consummated a deal. So when the time came for Nagle to join 11 other cities submitting expansion bids to MLS on Tuesday, Nagle said he had to move forward without the Republic name because he doesn’t own it – for now.

MLS currently has 22 franchises and will christen a 23rd in Los Angeles in 2018. The league expects to name two new expansion teams sometime this year, and two more at a later date.

Because it could be six months or longer before MLS decides whether it will expand again, Nagle said that leaves time for him to continue negotiating with Smith.

Smith was not present at Tuesday’s downtown press conference announcing Sacramento’s MLS bid and its newest investor – Hewlett Packard Enterprise CEO and former gubernatorial candidate Meg Whitman.