Will Chris Leitch be given the infrastructure he needs to succeed?

Earthquakes Owner John Fisher discusses the new Intermedia partnership in January 2020 at Earthquakes Stadium, now PayPal Park. Included in the photo is the Earthquakes VP of Strategy and Partnerships, Ian Anderson (far right), and the Earthquakes COO Jared Shawlee (middle). Photo credit: ISI Photos

In my first article in this series, I asked the question “will Chris Leitch be able to turn the Earthquakes ship around?”. I mentioned there are two other questions we need answers to:

1. Will John Fisher and the Board of Directors give Leitch the necessary resources to turn the ship around?
2. Can the ship be turned around in 2022?

To be clear, “resources” can mean much more than “money.” But given the history here, “money” is the first thing that comes to mind. My highly-capable colleague, Colin Etnire, took on elements of this topic in his most recent article, How Good MLS Teams Are Built. If you have not read that article yet, I recommend starting there, as it has pieces that will be looked at more deeply in my next article about players.

However, there is more to spending money than spending it on players, and I will get to “players and money” soon enough. San Jose has also spent a tremendous amount of energy – and yes – money outside the first team. Let’s talk about that investment in infrastructure.

Catching up to the Market

The Earthquakes lack high-impact spending on player acquisitions. But there has also been a lack of publicly-visible spending on other critical areas of the club, even as most of the rest of Major League Soccer clubs have advanced on a number of fronts. There’s a lot more than the first-team singings that go into a soccer budget, including:

• Stadium and pitch infrastructure
• Sponsorship deals
• Integrated first team and academy practice facilities
• Expanding operations in scouting and analytics

I’ll break each of these down.

Stadium and pitch infrastructure

PayPal Park was built between 2012 and 2015. Wikipedia for PayPal Park provides some details that are typically left out of the conversations we have around the stadium, such as the $89M cost that was spent by then-owner, Lew Wolff, and current majority owner, John Fisher, for the 65-acre plot of land that the stadium, practice pitch, and the other developments such as offices and parking lots sit on. It’s common knowledge that the Earthquakes reported a cost of $100M to build the stadium, completely financed by the ownership group.

However, there have been some issues the club has dealt with over the stadium’s nearly 10-year existence from its groundbreaking to now that were not foreseen. Examples include:

• Construction issues and delays brought on by some findings below-ground, pushing the stadium launch from 2014 to 2015.
• The initial stadium sponsor, Avaya, declaring bankruptcy ahead of the pandemic, leaving the club without sponsorship revenue in 2019 and 2020.
• On-going issues with the slippery nature of the pitch due to problems experienced both with the initial grass surface (that were replicated by the 49ers using the same grass in Levi’s Stadium) and with the high water table beneath the stadium.
• The sorts of fan-friendly seating common in newer stadiums, such as standing supporters sections, took a long time to figure out and led to temporary eyesores.

But now we have seen great progress and investment on all of these fronts. While conversations will continue to be had around the role of the Largest Outdoor Bar In North America (LOBINA) and whether it takes too many fans away from their stadium seats and in-game atmosphere, the in-game experience for both players and fans has drastically improved at the same time naming rights were sold to PayPal.

Contrary to some previous interpretations from the club announcement in 2021, the investment in the SISGrass stadium pitch (now complemented by one for the practice pitch) is an ongoing one. The pitch has again been replaced this offseason, and a club spokesperson has indicated it will now be considered an annual investment. I estimate this investment around $1M annually.

New grass at @PayPalPark 🌱 pic.twitter.com/GzGlN7Y68s

— San Jose Earthquakes (@SJEarthquakes) December 1, 2021

And it’s now becoming known, although an official announcement hasn’t been made yet, that the “Ultras section” — in effect, the entire end of the stadium opposite LOBINA — is getting a significant facelift. Not only will the temporary bleachers go away, but the seating portion of that end of the stadium is going to be completely redone. Sources from within the club and supporters groups indicate that the “more expensive option” for the redevelopment was selected by the ownership group. While Toronto FC might be getting Lorenzo Insigne, John Fisher and the ownership group is going to be investing a similar amount or more into this significant stadium revamp. My personal estimate, not confirmed by the club, is between $5M and $10M, but I could see it being more if new amenities are added (or if my estimates are too dated).

There’s even a bit of proof of this stadium redevelopment happening on Ticketmaster.

So, the very real concerns about the stadium and pitch are, if not completely in the past then at least no longer a continuing concern. This also indicates there is ongoing investment from the ownership group into the stadium and the gameday atmosphere.

Now you may think this has little to do with the first team, but it matters a great deal to potential signings. A stadium getting updates and a new pitch every season is a great way to show prospective players that the owner does care and is visibly putting money into the club.

Sponsorship deals

Last year’s PayPal Park deal increases the value of the stadium rights, smack in the middle of what would have still been a $2M annual revenue from the Avaya deal. Sportico reported last year that it was a club-record sponsorship deal, estimated as high as $4M annually. If $4M annually, that amount easily catches up by next year what was lost by the bankruptcy. This puts another nine seasons on the current stadium sponsorship, and I’ll say with confidence that PayPal is not declaring bankruptcy.

The only question here is if the revenue from such a deal will feel long in the tooth compared to other stadium sponsorship deals in five years. My guess is that it will, although it’s possible that the deal with PayPal provides for graduated payments over the 10 years, i.e., increasing from $2M in year one to $4M by year ten.

We are entering the last year of the Intermedia sponsorship for the kit (Sutter Health continues to be shown on the academy kits) with an unveiling of a new secondary/away kit to come here on February 18th. The terms of that deal were never made public, and the same can be said for the sleeve (wearables) sponsors in 2020. A club spokesperson told me that the wearables may change from PayPal for the upcoming season.

But it’s fair to say that we are seeing vast improvements in this area, led by Ian Anderson, VP of Strategy and Partnerships. Ian landed the Quakes the PayPal deal, and I expect to see his fingerprints on future kit and wearables deals as well. In my experience, Ian is a highly-competent executive, operating in the background where most Quakes fans will never see him, but demonstrating the same level of passion that fans see more visibly in COO Jared Shawlee.

Again, sponsorships affect everything around the club and allow for more investment into the club itself, the academy, and perhaps even the next area we’ll discuss.

Integrated first team and academy practice facilities

Here’s where things get more interesting: as of the time of this article, I was unable to obtain an update on the club regarding the state of the Santa Clara County Fairgrounds as a potential location for a new first team and academy facility. A spokesperson cited the deal as having reached a “crucial stage”, and the club seems reticent to declare this possibility one way or the other until they get beyond that particular hump.

This San Jose Spotlight article, while mostly talking about a new cricket stadium, says the county supervisor indicated they are “completing negotiations” with the Earthquakes to use part of the fairgrounds for a training center.

So while we sit in limbo on whether the facility will see actual construction in 2022, the important thing is knowing that the investment in the stadium will not prevent ownership from also investing in building a facility once a site is determined and allocated. That’s not nothing. That’s a pretty big something.

Expanding operations in scouting and analytics

This is a passionate area of mine and one that has a big impact on the present and future of the club. First, Bruno Costa, Head of Scouting and Recruitment, recently announced a new hire:

We’ve been asking for new hires in scouting, and here is proof of one happening. Martin’s professional focus has been on the domestic sphere, and I’d still like to hear more about scouting happening in Europe and South America. I still feel like there is a model that can be used here instead of relying solely on agents in those regions bringing their players to the GM–one that relies more on paying a finders fee to scouts in those regions. But that’s a different discussion for a different day.

Secondly, I’ve been asking for investment in analytics for years. I’m told we won’t see any splashy press releases happening about this area, but we have solid information that this is an area John Fisher is investing in.

We already know from Chris Leitch about retaining the Twenty First Group for some special projects. I suspect they’ve had a hand in the offseason signings and perhaps the SuperDraft selections.

And the big hire I’ve been asking for is coming, if not here already. Here’s a job posting that was available on many websites a couple of months ago, and its absence on most sites tells me the hire is close or starting with the team.

“Management responsibility for Data & Analytics team” tells me this isn’t a single hire. When I asked him about hiring in this area before, Leitch indicated there would be several hires in the backoffice area, and this job posting corroborates that statement.

And such a move fits very well with what we’ve seen so far from the club this offseason.

Infrastructure Matters

John Fisher is allowing the club now to finally catch up with much of the rest of the league with new investments. It’s tempting for the typical fan to say “the rest of the league” definitively, but I’m here to tell you there are many owners that invest almost nothing, and, as we demonstrated here, there is a lot more than “nothing” happening now.

Also, there are owners that invest in one player and ignore the infrastructure. That’s also a problem because it’s a short-term bandaid and can lead to long-term issues if that marquee player has a miserable time in his underfunded new home. Fisher is at least removing some objections and in the end, these behind-the-scenes investments will propel the club ahead of many in Major League Soccer.

So either you think I’m a shill for the front office and a billionaire, or you are thinking “that’s great, where are the $5M DPs?”. And, again, when most fans think about the General Manager being given resources, they don’t mean hiring a back-office analytical geek like me. I’m well aware of this.

The problem here is separating the signings from the back-office organizational structure and stadium improvements. I’m here to tell you these are not only connected but they are also interwoven for a club that will be run the way the San Jose Earthquakes are starting to be run. Get ready for the future, because it is starting now.

Conclusion

I’ll get to players here finally in my next article, but if Leitch’s version of the Quakes will identify players primarily from within Major League Soccer and its mechanisms – a move away from the Jesse Fioranelli era, to be sure – then it has to be smart about how to do it and find the players that are emerging that will fit its direction in their prime years.

In the meantime, we can put to rest that the ownership group is not investing in the club infrastructure. Those concerns were valid even a couple of years back, but they likely won’t be valid once the academy facility construction and new stadium improvements start. Next, we’ll turn our attention to the right level of budget and spending on players for teams to be successful in MLS.