MLS: The Value of Exposure Revisited

March 11, 2010

Back in January, we discussed MLS’ efforts to mesaure the value of its televsion exposure through various local and national broadcasts.  Through the website criticalmention.com, MLS tries to alert media  to the “value” of its presence on various television programs.  Since a couple of months have passed since we last checked in on this metric, we thought providing a snapshot of this “worth” of MLS media exposure.

In Houston, the local Fox affiliate devoted 30 seconds to the Dynamo signing of local product Francisco Navas.   Critical Mention estimates that the broadcast reached 93k households in the Houston area.  The estimated publicity value?  $920.00. The local CBS affiliate did a similar story on the same day but two hours earlier.  The broadcast reached about 30k less people, but the estimated publicity value? $1328.00  While the monetary numbers seem low, more than 150k households saw a story about the local soccer team signing a neighborhood kid.

In Columbus, WBNS (CBS) devoted 45 seconds to the Crew’s 2-2 draw against Toluca in the Champions League as part of its a.m. news. For a tournament that generates limited interest, the people woke up to a stirring comeback and coverage of three goals.   The broadcast (at 5:00 a.m.) reached approximately 70k households for a publicity value of? $2008.00.   Lastly, more than 135k households saw the Denver NBC affiliate provide more than two minutes of coverage of the team’s trip to London   According to critical mention, the spote generated almost $15k in publicity value.

As we said in January, these numbers are both interesting and informative and provide some tangible basis for comparison when looking at the value of exposure in the broadcast media.  This analysis is especially important when sponsors see their names splashed across jersey fronts during highlights or signboards show their brands for prolonged periods of time.  Moreover, given that many of these broadcasts are local, references to franchises (to a partially captive audience) stress the presence of the team to the community and may remind a viewer of the intention to buy a ticket or watch a game.


Champions League: Does it Matter?

March 10, 2010

Tuesday night marked the opening of the CONCACAF Champions League quarterfinal version for the 2009/2010 season.  What was once 24 teams is now 8, as the top regional sides competing for the right to represent CONCACAF in the Club World Cup.  This is the second season for the competition in its current iteration.  The play-in portion of the tournament started in RFK in July  before a paltry crowd typical of the tournament. The quarters opened up before friends and family in Columbus on a termperate night in Ohio.

In Europe, the Champions League competition is the most prominent of club events. Even during the broadcast of the Crew match, FSC was actively promoting its upcoming HD broadcasts of future Champions League games.   Club teams throughout the continent claw for the money, exposure and glamor of a spot in Europe.  In CONCACAF, the tournament barely registers a blip on the radar screen of the region’s soccer fans, especially in the US.  Teams must invest time, money and energy to compete in the event without the substantial rewards offered in the European version of the event.  The teams face extensive travel and generate limited revenue from ticket sales.  So from a business perspective, is it worth it?

We say yes.  As the tournament gains traction (especially in some of the newer markets), the exposure to international competition creates an enormous opportunity for exporting the League to the rest of the region. This will get a great test this year as US Open Cup Champ Seattle dips a toe into international play.  At the same time,  the elusive American soccer fan who watches only European football gets a chance to see more MLS on FSC in a tournament that makes perfect sense to them.

At the same time, players within MLS have the opportunity to show their wares to an array of potential suitors.  Ultimately, this creates transfer opportunities which can generate revenue for the teams and the League.  Similarly, front offices in MLS have an opportunity to evaluate talent from around the region, as they watch potential transfer targets play against MLS competition.

This process will take time, and likely will be a money loser for some time.  Yet the Champions League is an important business opportunity for Major League Soccer.  Ticket sales will come, as will television revenue and popularity over time.  Of course, it would help of MLS teams show well in the event.


Soccer Business Bits: The Art of World Cup Sponsorship, MLS All-Star Revenue & More

March 9, 2010

Tier-One FIFA World Cup sponsors pay almost $125 million for the right to reach 30 billion sets of TV eyeballs and almost 3 million stadium attendees.  Add in the enormous investment necessary to leverage the FIFA relationship (through ad materials, hospitality events, commercials, etc…) and only a serious company can join the elite group of six tier-one partnerships offered by FIFA.  It was therefore surprising when it was announced that little known Chinese renewable energy company, Yingli Green Energy,  had joined titans such as McDonalds and Budweiser in the upper echelon of sports sponsorship.  The deal entitles Yingli to stadium advertising, the use of the FIFA mark, prime real estate in fan zones and much more.

Few events offer the worldwide reach of the World Cup and Yingli is taking an enormous gamble that sports fans will bring market share.  According to the Sports Business Journal, “Yingli signed its World Cup sponsorship because it believed soccer’s popularity would help the company raise brand awareness in key markets such as Germany, Italy and Spain, and potential markets such as Brazil and Africa.”  In addition, Yingli is hoping to develop relationships with other business and business leaders to increase brand awareness and sales.   Yingli develops, manufactures and sells photovoltaic modules and trades on the NYSE.  The company joins new MLS sponsor Continental Tire (a lower level World Cup sponsor) under the FIFA umbrella.

Multiple news outlets are reporting on the competition to host MLS Cup.  Cities such as Philly, Toronto and Los Angeles are vying to host the 2010 championship.  Most interesting to us, is the information contained in this article from the Toronto Star, about the value of hosting special soccer events.  According to the article, the MLS All-Star game generated $28 million (Canadian) over three days in tourism dollars while Real Madrid’s Canadian visit generated $10 million. These are the types of arguments typically raised to bring in big sports events, check out our interview with Simon Kuper, the author of Soccernomics for the other side of the argument.

Finally, Kyle McCarthy talks through the recent MLS announcement that all matches will be produced in HD for 2010.  According to the article, “MLS officials decided to make the move to HD production in an effort to compete with the high-quality broadcasts of English Premier League matches and supply fans with a better local television product that reflects the improving quality of play on the field…”  For those interested in the business of broadcasting soccer, we recommend reading this piece.


The CBA: What it Means to Mediate

March 8, 2010

At the end of last week it was announced that the MLS Players’ Union and MLS had submitted their ongoing CBA negotiations to mediation before George H. Cohen, the Director of the Federal Mediation and Conciliation Service.  The announcement left fans scrambling as they wondered about the ramifications of mediation and the possibility of a resolution.  We thought we would provide some quick thoughts on the process and the mediator.

Most importantly, mediation is a non-binding process. Though often confused with arbitration, mediation is typically much less formal and more importantly, is not binding.  The parties simply engage the services of a non-party neutral (Mr. Cohen) and ask for his assistance in reaching a resolution.  Typically, the parties offer their positions either in written or oral form to the mediator in advance of the sessions to set the baseline for negotiations.

Once the parties stake out their position and address any issues that the mediator needs to be resolved with the entire group , the mediator will  typically engage in “shuttle diplomacy”  by separating the parties and moving from group to group trying to advance towards a resolution. Once this process starts, the parties typically no longer talk to each other, but address concerns and solutions through the mediator who has the power to determine the pitch and mechanism of the delivery.   Ideally, proposals and counter proposals go back and forth through the neutral until all issues resolved.  At the end of the process, none of the proposals are binding unless the parties have reached an agreement.  There is a truism about mediation that a successful mediation means that neither party is totally happy. The process forces compromise and seems like a perfect route for the stalled labor negotiations.

Mr. Cohen’s is an experienced and well thought of labor negotiatior, who spent much of his career as an attorney on the side of labor unions.  He has a high level of expertise in labor law and collective bargaining and will likely lend a fair amount of credibility to the process. Despite his pro-labor leanings, the non-binding nature of the process and the high level personnel involved in the negotiations should obviate any potential bias.   Before receiving a nomination from President Obama  to his current role, he was also an adjunct professor at Georgetown School of Law teaching “The Art of Collective Bargaining.  For more on Attorney Cohen, click here.

Like all fans of MLS and American soccer, we are hopeful that the mediation process is successful and believe that the parties have chosen a good path to follow to bring this matter resolution.


Soccer Business Bits: Big Crowd for Mexico, Manchester St. Louis & More

March 5, 2010

On a day of international friendlies for teams preparing for the World Cup, probably no team performed before more fans than Mexico in its victory over New Zealand.  The performance was remarkable, not for the result, but because it is a remarkable circumstance where a national team playing at a neutral site against an unremarkable team can draw more than 90,000 fans.  Only Mexico playing in the United States could draw such a crowd for a non-competitive event.  Perhaps most amazingly, if the US had been playing at the same time in the same city, the crowd likely would have been 20k.

In other business news, MLS has made it clear that it has an interest in foreign investment dollars.  According to this article, Don Garber recently met with representatives of Manchester City to discuss the possibility of investing in MLS.  Garber’s quotes suggest that MLS is looking to foreign teams to invest in expansion franchises.  Given the amount of interest from local investors, it is surprising that the league actually has an interest in associating with foreign teams. This is especially so in light of how poorly the Chivas branding worked out.

Finally, the USSF has announced that it will team with First Lady Michelle Obama for a free clinic as part of her recent anti-obesity initiative.  “During the event, the U.S. Soccer Foundation will announce a new and ambitious partnership with the National Alliance for Hispanic Health that brings together the U.S. Soccer Foundation’s Passback Tour and the Alliance’s ¡Vive tu Vida! Get Up! Get Moving!™ the nation’s largest Hispanic family health lifestyle event series with over 15,000 participants annually.”


TV Notes: ESPN & Soccer

March 4, 2010

Just a couple of quick notes on ESPN’s broadcast of the USA/Holland match and some other ESPN broadcast notes.  First, the match was preceded by a 15 minute studio show featuring Alexi Lalas and Bob Ley.  Ley brings a professional voice to ESPN’s soccer coverage and he is a better studio fit than Rob Stone.  Ley disappeared from ESPN soccer for a number of years but has recently returned.  While no longer doing play by play, he adds a certain gravitas to the studio show that makes it seem more professional and less like friends discussing soccer in a living room.  Especially for the World Cup, formal is better.

The actual broadcast was somewhat choppy, with camera angle problems and significant stumbling from John Harkes on a number of items.  However, ESPN did a better than usual job of promoting MLS within its national team broadcast, and signiifcant time was devoted to pimping the ESPN2 and ESPN MLS openers at the end of March.

The booth team also did a good job (as didottom line) of noting the future USMNT games on ESPN, including the Czech Republic and Turkey matches in Hartford and Philly respectively.  Both games will be shown on ESPN2.  Interestingly, it took ESPN some time to add Hartford as the location, although that long rumored news had been confirmed for some time.

There was a good mix of national advertisrs for the game, including the postal servcie and Gatorade.  Gatorade also bough screen time in the upper left hand corner.  It will be interesting to see how well those screen ads sell for the World Cup.  Those can be valuable properties during highly watched matches.   ESPN also heavily promoted the England/USA game, which will be a weekend contest on ABC.


Moving Through Orlando, Thinking About Dallas

March 3, 2010

We spent yesterday in Orlando, the land of Disney, Sea World and most recently the Wide World of Sports preseason MLS tournament (won by New York).  Looking around the Disney area, there was little mention of the games, and none of the locals seemed to have any knowledge that it was happening.  However, Orlando is not an MLS city,  and most of the folks we spoke to were not from the area originally and mostly focused on their tourist industry jobs.  However, the lack of recognition about MLS and this mini-tourney got us to thinking about our Dallas interviews from last Spring.   Read our interview below and think about how this would play out in your city.

We have discussed the attendance woes in Dallas on a number of occassions.   With a fairly new stadium in Pizza Hut Park, a local population in Dallas that plays soccer en masse, premier online, independent coverage and a long history as an original team in MLS, FC Dallas would seem to be an obvious choice for success at the gate.  Yet, the team is averaging just over 9k and attendance is dropping fast.

The big question is of course, Why?  There are theories about front office ineptitude, poor performance on the field or a suburban stadium too far from downtown Dallas (does anyone actually live in downtown Dallas??).  We were in Dallas this week and performed a bit of marketing reconissance to check on efforts to promote FC Dallas  in Big D.  We asked everyone we met, from cab drivers to waitresses to business assoicates about FC Dallas and Pizza Hut Park.  The results of our anecdotal survey were pretty dramatic.

Almost everyone we met had heard of Pizza Hut Park, but nobody had every been there.  Most associated Pizza Hut Park with the Roughriders, a Double A baseball team playing at Dr. Pepper Park in Frisco, TX (same location as Pizza Hut Park).   We spoke with season ticket holders for the Mavericks, Stars and Cowboys, all of whom knew nobody that had seen an FC Dallas game, yet almost everyone knew about the team.  Everyone we spoke with was shocked that FC Dallas struggled to fill the stadium; they all mentioned how popular soccer is in Texas.  Interestingly, almost everyone we spoke with knew where the stadium is located, knew how to get there and said it was “close.”

We saw no advertising for the team, whether on signs, buses, television or newspapers.  There was no evidence of FC Dallas merchandise at Dallas-Forth Worth airport and we heard no commercials on the radio for upcoming games or events.  The team is marketing through its website; pre-game happy hour anyone?  Other marketing efforts are certainly being made (our trip was pretty quick), yet they were not apparent.

Our survey was obviously informal, yet it was instructive.  In recent trips to Kansas City, Washington and other MLS cities, we have seen evidence of the local soccer team in a number of different media.  People were aware of the local franchise and some had been to games.  In Dallas, the team’s impact on the sports consciousness was minimal.

The question is of course why.  If you have any theories, let us know.  Why is this once proud franchise struggling on the field and at the gate?


Quick Hits: Business Dealings Around MLS

March 1, 2010

Sports franchises are always looking for ways to interact with the community, impress season ticket holders and generate good will.  Here are a couple of examples of these types of events around MLS.

In New England, the Revs are offering a season ticket holder referral program.  If existing season ticket holders can convince friends/family to purchase season tickets, the Revs are ready to provide incentives.  Two season tickets gets you a personalized 2009 jersey, while 20 tickets gets you a VIP trip to the MLS All-Star game.  In between there are trips to away games, locker room visits, concession credits and more.  We think this is a nice idea;  although the rewards are fairly small it is a nice gesture.  Query why is the team giving away a 2009 jersey and not a 2010 version?  Also, this push is coming late in the season and likely would have been better suited to the immediate post-season period.  It will be interesting to see if anyone claims the 29 ticket prize.

In Houston, the Dynamo are again offering “Centers for Excellence” in 2010.  The youth training camps are sponsored by Statoil, and offer a curriculum based on the Dynamo youth model.  The program costs $300 per student and scholarships are available.

The Chicago Fire are getting set for their “Season Kick-Off” function on March 24, 2010.  The event will include a reception, lunch and acution and the entire team will be in attendance.  All proceeds benefit the Chicago Fire Foundation. Tickets are $70 each and tables can be purchased for $650.  The first 20 purchased tables get assigned a Fire player to sit at the table.


At A Loss….And Some Real News

February 26, 2010

What to say?  The eyes of the American soccer fan are focused in only two directions right now:  South Africa (and by extension Amsterdam) and a bargaining table in New York.  The “deadline” for CBA negotiations has come and gone and there is no deal, no strike and no lockout.  What does it all mean?  Everyone has a different opinion.

Some say the players are holding the strike option for the most opportune time, right before the season or mid season.  Others think that the players don’t have the votes or the will to strike, while others think that the threat of a strike can do real harm to the owners because it will slow the ability of teams to sign sponsors.  Regardless, we are now one month from the season and there is no labor agreement and no labor peace…yet the games go on.  We will keep monitoring the situation, but for now….

Some final notes on the PPL/Union deal:  The stadium will run completely on renewable energy, the first MLS stadium to do so.  According to the Philadelphia Daily News, the field’s turf will be Patriot Bermuda grass, a dense, high-performance turfgrass known for its ability to remain lush in extreme conditions.  The paper also reports that more than 10k season tickets have now been sold.

TFC continues to do it right. The Reds are one of the teams participating in the inagural Walt Disney World Pro Soccer Classic.  They are televising the pre-game tournament going on in Orlando providing their fans a glimpse into what the season holds.


Soccer Business Bits: Philly Deal Finalized, DeRo’s money & More

February 25, 2010

As we discussed a couple of weeks back, PPL will be the naming rights sponsor for the new Union stadium on the Chester waterfront.  The deal was just officially announced.  The agreement has been announced at $20 million dollars for the life of the deal and the new facility will be called PPL Park.  In addition to stadium naming rights, PPL will also get hospitality events and experiences at the stadium, TV and radio advertising, signage boards and sponsorship rights in the youth soccer programs in which the Union have a foothold.  Given Pennsylvania’s recent de-regulation of the power industry, PPL is making a calculated gamble that now is a great time to enter the world of sports marketing. Despite economic conditions, the deal compares favorably with those of other MLS stadiums.  Dick’s Sporting Goods Park is a 20 year, $30 million dollar deal, BMO is 10 years and $23 million and Toyota Park is 10 years and $7.5 million.  The outlier is the 10 year $70 million dollar deal for the Home Depot Center.

The article also mentions that season ticket sales are almost at 10k with about one month until the season starts.  Individual game tickets are also now on sale for the home opener with tickets ranging from $28-$100.  The new stadium will open on June 27 after the first set of games will go forward at the Linc.

The Globe and Mail has an intersting story on the financial plans of midfielder Dwayne DeRosario.  The article provides some interesting insight into how a forward thinking athlete can plan for his financial life after the sports career ends.  It is pretty infrequent that athletes discuss their finances so openly and it is a credit to DeRo that is so forward thinking and willing to share.

Finally, you can take your pick of dire CBA news, from Grant Wahl to Jeff Carlisle to Andrea Canales.  Since a fair amount of what we do here is cover the media that covers soccer, it has been interesting to monitor the “big” names in American soccer press cover the CBA negotiations.  In some ways, the livlihoods of these scribes depend on the viability of MLS while their success in many ways depends on their sources within the game   As a result, there are some competing interests at play as sports journalists are forced to cover an unfamiliar topic while relying on agenda driven information.