(Published by The Philly Soccer Page on Feb. 5, 2014)
Nick Sakiewicz isn’t going anywhere, and he wants you to know it.
Philadelphia Union’s chief executive felt the heat from fans after the team’s offseason began very slowly.
Now, with the Union brass having answered the critics with three big midfield signings and one of the league’s best drafts, Sakiewicz wants to set the record straight.
“The idea of people saying I’d be fired like (former D.C. United chief executive) Kevin Payne was fired is comical,” Sakiewicz told me Tuesday.
Why is it comical? Because he was there at the beginning, when Keystone Sports and Entertainment Group, the corporation that serves as the Union’s investment team, was just an idea.
“I had started Keystone on my American Express card,” Sakiewicz said.
Behind the curtain of the Union’s investment team
Details about the Union’s investment group have historically been rather nebulous. The team website includes basic biographies on some of the investors, but an understanding of how that group works has never been public knowledge.
Sakiewicz decided to explain how it works this week, after several weeks of hearing calls from fans about him being fired. I referenced that in a column last week, and he got in touch after reading it because he wanted to straighten things out.
Keystone began, he said, with him and iStar Financial CEO Jay Sugarman. Back in 2006, Sakiewicz had overseen the sale of the then-MetroStars to Red Bull. Philip Anschutz, whose AEG had owned the MetroStars and still owns the Los Angeles Galaxy, had offered Sakiewicz a job in Los Angeles, but Sakiewicz said he didn’t want to go west.
“It all started with the sale of the MetroStars to Red Bull,” Sakiewicz said. “When that happened, I kind of sold myself out of a job.”
He said he met Sugarman sometime around 2006. Sugarman was considering buying a professional sports team and had his eyes on the NBA’s Phoenix Suns, Sakiewicz said. The two began working together, and they agreed to buy in on a Major League Soccer franchise because they felt it had the “most upside,” Sakiewicz said.
“I was the guy who started it initially,” Sakiewicz said. “Jay was the one who put in the primary investment.”
The two became and remain the dominant pair in the Union’s ownership group: Sugarman the chairman of the team’s board of directors, and Sakiewicz the chief executive.
From there, they brought in others. To date, the club has 13 investors, with more on the way.
“We’re going to be adding more investors in the coming months,” Sakiewicz said.
A board of directors makes the big picture decisions for the club, including determining the overall budget and big expenditures such as the construction of a new training facility or the $2 million allocated this year for player acquisitions beyond the standard salary budget. Team employees, including Sakiewicz, handle day-to-day management. Sugarman and Sakiewicz have seats on the board, as does the family of YSC owner Rich Graham. Other lesser known members of the board include local businessman Gunti Weissenberger, Marc Utay of Clarion Capital and a representative for the firm, Weston Solutions. (A full list of members is below.)
Sakiewicz said the notion of Sugarman as an absentee owner is false, simply by virtue of the investment team’s makeup and arrangement. “None of our owners are absentee,” Sakiewicz said. “All of them are engaged. The agreement that we all have is I’m the face of the franchise.”
And that face isn’t departing any time soon. While Sakiewicz foresees a time when he steps back as chief executive, it isn’t now. Not by choice, and not by force.
“I brought in all these guys,” Sakiewicz said. “The last thing in the world that’s going to happen is Nick Sakiewicz getting fired like Kevin Payne in D.C.”
In response, I broached the theoretical possibility of the team’s board deciding one day that Sakiewicz should vacate the CEO role while remaining a part owner. Sakiewicz scoffed at the idea. Would the Seattle Sounders fire Adrian Hanauer as general manager, he asked me. No, he said. Hanauer and his family have too much money invested in the Sounders. So I pointed out the Sounders’ fan association actually votes on whether to retain the general manager and could theoretically remove Hanauer. “I’ll believe it when I see it,” Sakiewicz said. “I think that’s more about publicity than in the actual sense.” He eventually conceded that the Hanauer analogy is not the best one because of the fan vote component, but Sakiewicz’s point is clear nonetheless. He isn’t getting fired.
Big money vs. real money
Sakiewicz sounds willing to stack his performance up to other clubs, but he stresses the Union have a very different business model.
He points to Toronto, which has drawn headlines and praise for spending an estimated $100 million to bring in Michael Bradley, Jermain Defoe and others in an overhaul of the club. Such an offseason was unprecedented in MLS and overshadowed an impressive haul by the Union, who some say had the league’s second most impressive offseason.
“I get frustrated when I see people say how smart Toronto is spending $90 million,” Sakiewicz said. “I’m not sure how smart that is.”
What’s better, Sakiewicz asked: Michael Bradley for more than $6 million a year, or Maurice Edu at a $1.5 million figure? He thinks it’s Edu, particularly when you consider the Union aren’t owned by a massive corporate conglomerate, as is the case with Toronto, Los Angeles and New York.
“I get frustrated when I see Tim Leiweke breaking the bank up there,” Sakiewicz said. “If we had spent that, we’d be mortgaging the team for 20 years. We have to do things different than the Los Angeles Galaxies, Torontos, and Red Bulls of the world.”
For the record, that $1.5 million figure isn’t Edu’s salary, but it might be the eventual transfer fee. Sakiewicz said the Union’s option to buy Edu is in “the low seven figures.” His actual salary will be about $600,000 with some incentives built in that could raise that figure, Sakiewicz said.
The signings of Edu, Vincent Nogueira and Cristian Maidana were the culmination of a strategy set in place a year and a half ago, “the day John Hackworth became interim manager,” Sakiewicz said. The team had to rid itself of burdensome contracts that former manager Peter Nowak and scouting director Diego Gutierrez secured for several player acquisitions, with most of the players coming from Colombia, Costa Rica and Panama, where Gutierrez did much of his scouting.
“I’ve never seen so many so contracts done so poorly,” Sakiewicz said. “One hundred percent of those deals were done poorly.”
When asked if he believes that Nowak and Gutierrez were skimming money from transfer and loan fees associated with those contracts, as alleged by former Union players and in documents associated with Nowak’s lawsuit against the team, Sakiewicz said he could not talk about it, which is not unusual with litigation.
In any case, Nowak is finally fading in the team’s rear view mirror. Conversations like the one Sakiewicz and I had Tuesday simply didn’t happen during the Nowak era. People often described the club as secretive. Now, the team is embracing transparency. The technical staff let a reporter track them on draft day, with fascinating results. Hackworth talks openly with media and fans. So too does Sakiewicz.
Times have changed. You would not have read any of this two years ago.
Union board of directors
- Jay Sugarman: chairman and founding owner, member of MLS board of governors
- Nick Sakiewicz: founding CEO & operating partner, alternate to MLS board of governors
- Rich Graham: Representative of the Graham family’s investment, youth development partner
- Rob Buccini – Buccini-Pollin Group (BPG) real estate development partner
- Chris Buccini – BPG
- Dave Pollin – BPG
- Larry Bove – Representative of Weston Solutions investment
- Marc Utay – Clarion Capital
- Guntram Weisneberger – President of The Westover Companies