Union

Nick Sakiewicz, behind the curtain

Photo: Earl Gardner

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

63 Comments

  1. Dan, good stuff. I’ve been very much a Sack critic. I think I still am not a fan, but certainly less strident in my tone. I’ve also put my money where my forum flame comments are and picked up a 4 seat 9 game plan. Still watching the FO warily, but I’ll test the waters.

    He still comes off arrogant as hell though, makes Ruben Amaro Jr seem congenial.

  2. very good read. this almost goes without saying but i certainly feel like i have a better grasp of what is going on after reading this

    • Dan C (formerly of 103) says:

      First off Dan, good work getting Sak to sit down with you!

      But I don’t neccesarily have a better grasp of what is going on then before. Sak said that Nowak sucked (but he hired him), that the U can’t spend like Toronto (duh), that he is part owner and there is a bunch of other owners besides Sugarman(listed on website allready).

      Here is what I did learn:
      Sak doesn’t like the West Coast (refused to go to LA, talked Sugarman out of Phoenix).
      Likes to “scoff”.
      Considers Kevin Payne a lesser man then him.
      Anyone could do Leiweke’s job.

      I still don’t like the guy. But I’ve used my forum flame in a different manner. Cancelled 4 season tickets we’ve had since ZOLO.

      • Dan C (of 103), did you cancel your season tickets because of the on-field performance, or because of the front office’s actions? I’m simply curious, no underlying message.

      • Dan C (formerly of 103) says:

        Brian,
        I think they go hand in hand. Yes, they were hamstrung by Nowak’s contracts/players….. but Sak allowed that to happen. I have a lot of issues, but at the end of the day, I watch soccer to be entertained and that wasn’t a very entertaining team last year. So, i’ll still watch on TV and I’m sure I’ll be taking the kids to a few games, but I won’t be making a large financial commitment until this team shows ambition on a consistent basis.

  3. The more transparency the better. Thanks Dan for pursuing this and thanks to Nick for being more forthcoming.

    Here’s to an awesome season…

  4. Dan good stuff asking him some tough questions and calling him out or correcting him when he was flat out wrong. I can’t imagine how this article would have looked had it been written by certain people from the Daily News.

    -

    One question for you in regards to the contracts Nowak was giving out. Is Sakiewicz basically admitting Nowak had free reign with no oversight from the CEO? Or, do you think them blaming it all on Nowak is a way to save face?

    • Well, the Union clearly gave Nowak mostly free reign as coach and general manager. Sakiewicz has been open about that before. I don’t think it’s just face-saving. Did Sakiewicz have to sign off on contracts in the end? Sure. I think it’s a situation where it took a certain amount of time to catch on to what Nowak was doing.
      .
      In retrospect, did they give Nowak too much power? Obviously. Everyone recognizes this. But when you consider Nowak’s track record prior to the Union — Supporters Shield, MLS Cup, Olympic team coach — it wasn’t that unreasonable to do.
      .
      I’ve said before: Nobody expected Nowak to implode like he did. Certainly, who knew that he might go in and try to skim transfer funds? Nobody will definitively say on the record that he did, and I have nothing that can prove it, but we’ve all seen the varying accounts about it. In the absence of available proof, I guess we all just have to decide what we think.

      • Yea those are all excellent points. Thanks!

      • But still…#FireSak

      • I’m not a Nowak fan by any stretch of the imagination, and with the way he changed lineups and formations over the 1st 2 seasons it was clear something wasn’t right; but at the time I was willing to overlook that because we made the playoffs in our 2nd season. I thought the team, despite Nowak, was headed for long-term success, and then it completely collapsed in a matter of months. I think it happened so quickly the spiral was too hard to stop, and it was to late to fix it, so they fired him and rode it out with Hackworth. It’s easy to look back and judge, but Nowak led the team to the playoffs before destroying it, and no one saw 2012 coming before it was too late.

  5. WilkersonMcLaser says:

    You know, just when I start to lighten up in my perception of the FO, Sak gets on the bullhorn to “set the record straight,” ie. tell the Union faithful that no matter what happens, he isn’t going anywhere as have to get used to it. What a class act.

    • This was close to my thought. I get the idea he’s trying to get across – that he’s not in the same situation as, say, John Hackworth who can simply be fired / have his contract terminated. But barring some really odd terms in the partnership agreement, the board can most certainly vote to remove him as CEO should they choose. I think his point was that given the relationships among everybody on the board, he can’t foresee it ever actually coming to that.

    • +1
      -
      Sometimes it’s just best to let your actions speak for you rather than trying to back them up with bluster. Even most of his harshest critics were willing to give him his props for all of the Union’s recent moves, but then he has to go and ruin it by doing the CEO equivalent of popping his jersey.
      -
      He’s helped the Union make some really good moves, but clearly he has no sense of self awareness.

    • Atomic spartan says:

      Sounds like Sak has been taking lessons from Christie

  6. Where the fuck was he when 100% of the Nowak contracts were signed?

    • You are saying, in fact, no one other than Nowak and Gutierrez actually read the contracts.

      I mean to give Nowak the power to sign contracts is one thing. But to have no one in your organization to read the language of your contracts, if those contracts were that poorly done, is insane.

      • I agree with you completely, they should have read the contracts. But since the team made the playoffs in 2011 (before some of those bad contracts from 2012) I think the F.O. felt Nowak earned their trust to go out and find players. Obviously, in hindsight it didn’t work, but I remember preseason 2012 I was excited about them going out and getting players to try to improve on the playoff exit of 2011. Except Lopez. He looked like a dud from the beginning.

  7. Great work Dan thanks.

  8. If Sak will ‘never get fired’ because of his initial investment and he was the guy – then he shouldn’t be GM. The GM definitely should be held responsible for that job, and if they do a bad job definitely should be fired. I’d be very scared at Sak’s arrogance about this fact.

    • The problem, I think, is one of terminology. Sak isn’t a GM in the sense that Ruben Amaro or Sam Hinkie. It seems to me the more comparable in Philly sports is Dave Montgomery, except Sak is a bit more hands on.

      • He’s the CEO, not General Manager. He oversees the business side of the team, not so much the technical aspects. He helps sign players, allots money and makes business decisions like the practice field. In terms of player acquisitions, that’s mostly up to Hack, Vartughian, Albright and Curtin.

  9. John O'Donnell says:

    Thanks Dan, good article. I love that Sak has come around a bit to talk about what is going on behind the scenes. He took a typical Philadelphia beating this off-season but in the end they delivered. We expect a lot from our teams, so he just might as well get use to it. Most of the signings seemed to follow a logical plan, except Edu. I think they had targeted Maidana and Nogueira sometime at the end of last year and Edu was someone who became available just recently. I can appreciate this as it shows they had a plan and still were able to adjust on the fly. They also used the draft to build depth for the team, something they were lacking in last year. I wouldn’t be surprised if three to five players stick with the team.

    The other thing that I might be reading into, is that Sak learned from the Nowak experience and him and Hack work more closely together. As a fan of the team, I can’t ask to much more from what they accomplished this off-season but how Hack uses these new players is still open to debate. I know where they train is an issue but unlike other teams in the league, they have to be a little more creative in getting a facility built. I wish you asked a little more about who is coming in as investors and where they plan to build the training facility. Is the plan for new owners or is it more like the Eagles, who partnered with NovaCare? I believe that there is an empty warehouse next to the Highland Ave. train station that could work out well for a facility with plenty of land for training fields. It would also show more of a commitment to Chester. A few people on here don’t like Sak’s brashness but I do, as it shows he cares and finally seems to have a plan. As a fan I just want it yesterday but in the end, he’s up graded the team from last year.

  10. Start the season with a gaping hole at CB and possibility of Gaddis at LB with not left foot than Sakiewicz can sit in an empty PPL park for all I care. You fix the mid field (hopefully) yet the defense is suspect. This needs to be addressed now!!

  11. The Chopper says:

    Good read Dan. Nick Sak is a pretty good businessman with a solid business record in MLS since the league’s early days. From a business perspective he is a solid GM. His involvement on the soccer side is a different issue. It seems over the years at Metro Stars/red Bull, his involvement as a player control GM was ceded to the technical staff and he focused more on the business side. I believe that continued with the Union and Nowak had pretty much free reign.
    I am guessing that after Nowak’s departure, especially during Hackworth’s interim days, he started taking a more active role in contract matters.

    Sak’s biggest drawback is Sak. He is a succesful guy and he wants you to know it. He has this Mark Cuban kind of bluster as an owner that just doesn’t fit and is not at all endearing.

  12. TLDR
    I started this
    I’m not going anywhere.
    I’m not spending Dempsey Bradly type money
    It’s all Nowaks fault (still)

  13. Thanks for adding another piece to the puzzle, Dan. Sak will never be someone to love, but I must admit the offseason moves have been impressive, and clearly he played a wrong role in them. I care about winning way more than I care about whether Sak is a snake, and in recent months evidence of the FO’s commitment to winning is surfacing. I’m grateful for that, though I’ll wait with fingers crossed.

  14. They’re looking for more investors? I wonder if they’d be open to the idea of selling microshares to the fans.

    • No American league would ever ever ever allow that. Even though I have no idea what that would mean under the MLS’s current structure.

      • Sure they would. The Green Bay Packers.

      • Different era. In the modern corporate era of sports ownership in the US. Ownership structures are specifically banned in the NFL with the Packers being grandfathered in.
        Also being a
        packers shareholder is kind of a scam, you own a share but get no dividends and have no power.

      • A publicly owned team could be a huge success if handled properly. That’s a HUGE if. The shareholders should be allowed to appoint members of the board in addition to the other investors, OR have a separate vote on the board (survey-style, majority is the vote). If fans are literally invested IN the team, not just through season tickets but ownership, it would – theoretically – provide more stability to the teams and leagues. But we don’t live in a perfect world, so no I doubt that will happen.

  15. Nice. Thanks Dan. I understand why Nick had Nowak handle the players. Nick had to structure the business side of the team. Nowak took advantage of the situation. Not so hard to believe.

  16. the haters are still here? i would have thought that after the last month, they would at least tone down the grumbling for a few weeks…

    • I have gone nowhere. NOWHERE.
      Just because the Union have had a good MONTH. It hasn’t made me forget the last couple of YEARS.

    • Well, maybe they are just stealing a page from Nick Sackiewz apparent PR playbook: “scoffing” at the notion that they would be “going anywhere” with obnoxious arrogance.

  17. Nick, you have my support as I have told you in the past when we first met. I have been with you as a season ticket holder from the start and nothing will change that.

  18. Why would a totally not broke big time soccer operation need more investors? This recent splurge may be bought on credit in hopes of future expenditures.

    • The Chopper says:

      More operating capital is never a bad thing. They are profitable, but not by much.

      Expenditures such as the training fields, operation of the academy and eventual expansion of PPL park may require funds that the current ownership group wouldmrather not dip into their pockets for,

      • Fair nuff. But more investors means less profits. I’m gonna go out on a limb here and say these dudes want as much profit as they can get.
        Can you think of any other team in the MLS that is always looking for more investors like the Union is?

        • Maybe if they get more investors, then each of those investors could get more investors, who would then each get even MORE investors . . . IT CAN’T FAIL!

  19. Profits are not necessarily the same as distributions or income. They can get profits from the team being successful and, thus, being worth more if it is sold (which would require the team and league to be successful). Look at Twitter. Those investors made huge profits when the company went public, even though Twitter as an operating entity was negative on the income statement and there were no distributions/dividends to the investors.

    • Let’s all hope that PhilaU have nothing in common with Twitter

      • Just saying that more investors does not mean everything being done on the cheap for the team — it could mean that the potential payoff to investors could be when PSP goes public, makes hundreds of millions and buys the team for $200M

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  21. Great stuff, Dan. While I applaud Sak for reaching out, I’m not sure he did himself too many favors. If the board ever really wants the fans to trust them, they need to be transparent about revenue. How is the club doing financially, and what % gets reinvested vs. paid out to the investors. That’s the kind of behind the curtain info I’d love to see, but I’m obviously not going to hold my breath.

  22. So we’re stuck with this piece of shit? Great.

  23. Sak says that he wants to do things different from the LA Galaxies, and the Red Bulls, and now the Torontos. What the heck is the problem with their plans?! They work! We should learn from experienced clubs and not be an outsider. We’re a 5 year old club. It’s time to start adapting to life Sak. Because whatever we’re doing now…it isn’t working.

    • I think the issue isn’t that he wants to do things differently as much as he’s saying that the Union don’t really have a choice than to do things differently. We just don’t have Galaxy, NYRB, Toronto level scratch to do that.

      Most of his points were about signing quality players, but getting value. Unless we manage to get a new set of rich owners and/or a massive spike in attendance at games, we’re not going to be able to compete with the wealthiest MLS clubs on even financial footing.

      That’s not really Sack’s fault as much as it’s reality.

  24. Pingback: Leiweke, Sakiewicz trade blows on Toronto FC offseason - FanSided - Sports News, Entertainment, Lifestyle & Technology - 240+ Sites

  25. just to echo a concern brought up by many. Sak feels no real pressure. This interview was done (from saks POV) just to tell everyone how untouchable he is and that detractors are wasting their breath.
    I appreciate the article as it allows me to understand the structure better and that PSP got him to sit down and at least answer some questions but the typical you can’t get rid of me cause I own this is a bit disturbing.
    I love the U and have 4 season tickets now and will support the club no matter what but its never good to have too much power concentrated with an ego-maniac.
    He should realize though that now hes playing with our money and I can tell you the hard core fans won’t carry the team financially. theres just not enough of us.

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