Billionaire Investor Ron Burkle To Purchase Sacramento Republic, Railyards Stadium Site

Source: Sacramento Business Journal, Scott Rodd
Photo: From left to right: Sac Republic’s current owner, Kevin Nagle; Sacramento Mayor Darrell Steinberg and Sacramento Republic FC president Ben Gumpert are shown at Downtown Sacramento Partnership’s State of Downtown event Tuesday morning. (TIA GEMMELL | RIVERVIEW MEDIA PHOTOGRAPHY)

The Sacramento Republic appears to have found a billionaire investor to buoy its bid for a Major League Soccer franchise.

Ron Burkle has agreed to purchase a majority ownership in the soccer club, Sacramento Mayor Darrell Steinberg said at Downtown Sacramento Partnership’s State of Downtown event Tuesday morning. Burkle has also agreed to purchase the proposed soccer stadium site, and an additional 14 acres for an “entertainment district” in the Downtown Railyards development, Steinberg said.

In May, Major League Soccer selected Cincinnati as what was then its newest expansion city, beating out Sacramento and Detroit in their bids for a franchise team. Last week, the league announced it would add a team in Austin, Texas.

MLS officials previously indicated that the Republic needed a billionaire lead investor for Sacramento’s franchise bid to succeed.

The Republic’s current owner, Kevin Nagle, said Burkle’s agreement to purchase the team and stadium site is predicated on MLS choosing Sacramento for an expansion team. In the meantime, Nagle said, Burkle has signed a letter of intent and the Republic, the city and Downtown Railyards have begun the process of preparing the team and land purchases.

The Republic and the city have been searching for a billionaire lead investor for about a year and met with at least half-a-dozen serious potential investors, Steinberg said.

“The league told us we had nearly all the pieces in place for MLS … but the league wanted one more thing—a well-capitalized partner,” Steinberg said during his remarks at the State of Downtown event.

Burkle emerged as a leading contender to invest in the team. He is co-founder and managing partner of The Yucaipa Companies LLC, a Los Angeles-based private equity firm that invests in distribution, retail and food companies. Its past investments have included supermarket chains Fred Meyer and Ralphs.

Neither Nagle nor Steinberg said how much Burkle will invest in the Republic to gain a controlling stake in the team. Burkle is also a part-owner of the Pittsburgh Penguins professional hockey team, which Steinberg highlighted as an indicator of Burkle’s acumen in building professional sports franchises. Burkle’s net worth is estimated at $2 billion, according to Forbes.

Nagle told the Business Journal that the Republic’s existing ownership group would be combined with Burkle’s controlling ownership stake, if the purchase is completed.

Steinberg said he plans to speak with MLS commissioner Don Garber today about the agreement with Burkle.

Steinberg did not give an anticipated timeline for the development of the stadium, but said he expects the time it will take to develop the Railyards to be “much shorter” with Burkle’s agreement to purchase the proposed stadium site, and also with Kaiser Permanente completing its purchase of a site for its planned medical center in the Railyards. The completion of Kaiser’s land purchase was also announced at the State of Downtown event.

Steinberg reiterated previous statements that the stadium construction would be privately financed, but suggested the city could provide infrastructure support for the project.

https://www.bizjournals.com/sacramento/news/2019/01/22/billionaire-investor-ron-burkle-to-purchase