SEATTLE — “This has been quite a journey”
Adrian Hanauer sat at a table alone at the Seattle Sounders headquarters, addressing the media and waxing nostalgic on the first 10-plus years of his time with the MLS version of the team. Remarking that the announcement of the new ownership structure of the organization was “bittersweet,” Hanauer recalled his first meeting with now-departed investor/operator Joe Roth at the MLS All-Star game in Colorado, where Roth said he wanted to bring a MLS franchise to Seattle. Along with Roth, Paul Allen and Drew Carey, Hanauer launched the team in 2009 to then-unprecedented success: winning a US Open Cup (the first of three in a row) in its first year, a Supporter’s Shield in 2014, and culminating in a MLS Cup in 2016, setting attendance records at the same time.
“The trophies along the way, the fact that this team has has the best record, the most consistent winning record of any team over the ten years, and ultimately winning that MLS Cup in 2016 ... was something that I’ll never forget,” Hanauer said.
It was fitting, then, that Hanauer had the stage to himself. Roth was initially the majority owner, though he did not own 50+1 percent of the rights to operate the Sounders in Seattle (Hanauer confirmed during the press conference that the initial ownership equity saw Roth with about 35%, Hanauer with 32.5%, Paul Allen with 25 and Drew Carey with 7.5%). US Soccer’s Professional League Standards require that one person or entity own at least 35% of a team. In 2015, Hanauer and Roth essentially swapped their stakes, making Hanauer the new majority owner among the group.
With the loss of Roth and the addition of a new group of owners, Hanauer’s life gets a little bit simpler, and a lot more complicated. No longer dealing with Roth’s sometimes controversial nature will probably mean less headaches for Hanauer, but now there are more voices in his head.
Operationally, Hanauer continues to own his share through Hanauer Futból LLC —established in 2007 — which includes Hanauer, Paul Berry and Lenore Hanauer, the family matriarch. That group has expanded its percentage of the interest in the team from 35% to a number which has yet to be disclosed. Vulcan Sports Group, operated by Jody Allen, the sister of the late Paul Allen, will continue to control a 25% share. A source indicated that Allen will be an active participant in the operation of the team though VSG president Chris McGowan, a sentiment echoed by Hanauer. “He’s only been in the role for a number of months, but that relationship has gotten really strong,” Hanauer said.
Carey has increased his investment in the team as well, according to Hanauer. It was not immediately clear by how much his ownership stake grew.
The remaining interest in the Sounders’ operational rights in Seattle will go to the newly formed Seattle Futbol LLC, comprised of Russell Wilson and Ciara, Macklemore, several current and former Microsoft executives and an assortment of families in the area. Hanauer said he and Roth, after discussing an exit strategy for the California movie producer, decided that it was important that local investors be brought in if possible.
News of Roth’s decision to step back meant that other interested groups from outside the area were looking to pursue the Sounders, which could have led to an uncertain future. Former Microsoft executive Terry Myerson contacted Hanauer to see what he could do about strengthening local ownership ties.
“There were other interested groups,” Hanauer said. “Terry was intent on keeping the Sounders almost exclusively locally owned, I felt the same way and Joe felt the same way as well.
“We were focused on keeping it local.”
While there are new people signing the checks, Hanauer clarified that this ownership change does not mean there will be necessarily be an infusion of cash to the team.
“There is no new pot of money,” Hanauer said. “Joe sold his equity to a group of new people.”
A recently discovered SEC filing suggests the new group of owners bought their shares for $58.6 million, but it was unclear what percentage of ownership that covered. A source said that an estimated team valuation of about $350 million was “in the ballpark.” It’s unclear if Hanauer is the outright majority owner (i.e., 50%+1) at this point, and given these changes, he indicated there will be some organizational initiatives to provide for input from the new ownership group.
“We’re putting an executive committee together that includes some of these owners and a broader group to explore how we...can leverage their knowledge and make them part of decision-making going forward,” Hanauer said. He characterized the percentage equity stake owned by the new group as “substantial.”
With an increase in the size of the ownership group, concerns were raised about the decision-making process among a group that large (nervous laughter permeated the room when Howard Schultz’s tenure with the Seattle Supersonics was referenced). As the majority owner, Hanauer was clear that the buck will stop with him.
“I am the majority owner and retain control,” Hanauer said. “That was important to me and it was important to the league. Ultimately I will want to involve them [the new owners] and make them feel like partners, but ultimately I’m going to be able to make the call.”
There was no immediate news about what sort of initiatives this new group may implement, but Hanauer hinted at several announcements over the next few months. Setting aside the stadium discussions in Tacoma for Reign FC and the Defiance, Hanauer revealed that there is movement on a new training facility for the Sounders.
“We have some exciting announcements to roll out,” Hanauer said. “We are currently going through a feasibility study on training facilities. We want to make sure that if we invest for the next 20 or 30 or 50 years, we’re in the right location.
“We love our Starfire location, but we are very close to deploying some resources for the long haul and we want to get it right.”
While Hanauer said the team is happy with the relationship with CenturyLink Field, there are some areas for improvement, and he hopes this new ownership group and better communication with the Washington State Public Stadium Authority can lead to improvements which will help the Sounders going forward. “Is it perfect? No.” Hanauer said. “There are a whole lot of positives. Teams throughout our league have challenges with scheduling at times and we’re no different. We are confident that any scheduling issues can be mitigated over the course of time.”
Hanauer even made mentioned of the third rail in American soccer — synthetic turf — and expressed some muted optimism that some changes to the playing surface could come down the line.
“The dream scenario would be grass, and it’s not impossible that down the line there may be some way to solve for that,” he said.
The team will hold an introductory event next week showcasing the new ownership group. Most members of the new ownership group are expected to attend.