Troubled Major League Soccer club Chivas USA will cease operations, effective immediately, and will be replaced by a club that will begin play in the league in 2017, MLS announced on Monday.
The new ownership group -- which, according to SI.com, includes venture capitalist Henry Nguyen, Mandalay Entertainment Chairman and CEO Peter Guber, former NBA executive and current ESPN analyst Tom Penn, and current Cardiff City owner Vincent Tan -- will be officially introduced on Thursday. That announcement will also shed light on the group's plans to build a soccer stadium in the Los Angeles area.
"As part of our new strategy for Southern California -- a major hotbed of soccer participation and fan support -- we believe that engaging with a new ownership group which has the resources and local community ties, and a plan for a dedicated soccer-specific stadium, provides us with the best chance for success," MLS commissioner Don Garber said in a statement.
ESPNFC.com reported last month that MLS would shut down the club. Sources with knowledge of the situation said that players and staff were informed on Monday morning of the league's plans and that MLS said it would assist the club's employees in finding new jobs.
As for the players, the league announced that it will hold a dispersal draft "at a later date," while sources said MLS intends to hold the draft around Dec. 1. It is not clear at present whether expansion teams New York City FC and Orlando City will be included, as the source said there are still some details to be ironed out with the MLS players' union.
Sources also said that Mexico international striker Erick "Cubo" Torres -- who led Chivas USA in scoring this year with 15 goals -- is unlikely to be included in the draft. The league is in the process of exercising the option on Torres' contract, and sources have said Torres likely will be made a designated player. How Torres would then be allocated hasn't been determined.
The move to disband Chivas USA means the league will operate with 20 teams next year and will be composed of two 10-team conferences. With Orlando and New York City FC entering the league next year, Sporting Kansas City and the Houston Dynamo will move to the Western Conference.
When Chivas USA joined MLS in 2005, the hope was that the club would capture the large Latino fan base present in the area. However, the team has struggled, both on and off the field.
While the club did enjoy a brief spell of success from 2006 to 2009 when it made the playoffs four consecutive years, Chivas USA always seemed to operate in the shadow of the L.A. Galaxy, with whom it shared StubHub Center in Carson as a home venue.
Garber said in an interview with ESPNFC.com that targeting the Latino market was likely doomed from the start, but that times have changed for the league since those days.
"I think it was more a bad idea than bad execution," Garber said of the marketing strategy. "Hindsight is 20/20. I'd do it all again the same way. What I hope everybody can remember is at that time; MLS was in a very different place than it is today. Things were really difficult. [Chivas USA and Real Salt Lake] were our 11th and 12th teams. Next year we'll have 20.
"It's a difficult business that we're all in, whether you're in soccer or any other professional sport. Everything needs to be perfectly aligned. Unfortunately it didn't happen with Chivas USA and we've learned from some of the decisions we made then and now have put a new strategy in place that addresses all of those decisions."
Chivas USA's image took a an even bigger hit in 2013. After Jorge Vergara bought out co-owners Antonio and Lorenzo Cue in 2012, he held a meeting with team staff at which it was alleged that he said, "If you don't speak Spanish, you can go work for the Galaxy, unless you speak Chinese, which is not even a language," according to a lawsuit filed against the club.
That sparked a series of discrimination lawsuits, one of which included youth coaches Ted Chronopoulos and Dan Calichman. That suit, as well as one filed by the onetime head of human resources, Cynthia Craig, was settled out of court.
Combined with the club's inability to find a stadium of its own, attendance suffered. The average attendance for the club's home games this year was just 7,063 fans, less than half that of the team just above Chivas USA in the attendance rankings, the San Jose Earthquakes.
But San Jose played most of its home games in a home venue that held just 10,525 fans while constructing a new 18,000-capacity stadium that will open next season.
One executive said that there were Chivas USA home games this year with fewer than 1,000 customers in the building.