Soccer Business Bits: New MLS Expansion?

barcaOvernight English language broadcast numbers are out for the USA/Brazil match, and the numbers are instructive.  Of the top 10 markets, only three are MLS cities, and two of the top five (Miami and West Palm Beach) were home to one of the League’s failed franchises.  Other  top markets like Hartford/New Haven and Richmond scored very well, despite only a passing association with exisiting franchises.  Las Vegas was a solid #2, perhaps suggesting heavy betting action on the game.

Regardless, the real story here is the South Florida market.  Remember Barcelona’s efforts to bring a team to Miami?  Remember the short lived Miami Fusion?  We admit, we were against the idea of MLS expanding back into Florida.  South Floridians are notoriously fickle sports fans; Exhibits A-C are the Heat, Panthers and Marlins.  But as these TV numbers suggest, soccer is definitely a premier attraction in the Sunshine State (this will likely be even more evident in the Spanish language numbers).

The question for MLS is can a franchise (with or without Barca) survive in South Florida.  As we have said before, the idea of 9,000 fans snoozing through Sunday afternoon game in 110 degree Miami August heat, is a nightmare scenario for supporters of the League.  Would the popularity of top-level international football translate into numbers for MLS?  As the US marched through the Confederations Cup, it became clear that soccer is plenty popular, just not MLS.

There are three levels of soccer fans in the US.  There are the MLS fans who cheer on their local team and their national team.  There are the “Euro” fans who follow the big European teams (or South American teams) and their national teams, but have little interest in MLS.  Finally, there are the “event” fans, who get caught up in the hype of a big event and/or will follow the US in any sporting event. The first group is small (but growing), and these are the fans that MLS needs to capture, especially in a market like South Florida, where soccer is king, but MLS is not.

One final expansion note, there was a story out recently that the Saputos are again announcing an effort to bring an MLS team to Montreal. Montreal has shown an ability to support soccer (remember that big Canada Cup crowd) and is close to securing a 21k soccer specific stadium. A third Canadian team would create a nice rivalry and Saputo is solid potential owner.  However, with Philly, Vancouver and Portland right around the corrner, there is a question whether the League can handle another franchise so quickly.  The dilution of the talent pool is a big concern.  That said, Montreal would be a great venue for MLS.

The Seattle Sounders at the Halfway Mark: Good Business

soundersJust over three months ago, we took a look at the business model for the expansion Seattle Sounders.  With the season at the halfway mark, we thought we would take another look at soccer in the Emerald City.  In an indication that demand remains strong for tickets, the Sounders recently announced that they are making more seats available, making it almost certain that the team will set an MLS attendance record.  Fans continue to flock to Qwest for arguably the best stadium experience in MLS, and perhaps most importantly, the Sounders continue to perform on the field.

The Sounders also continue to do the little things right; the Sounders’ web page is second to none in the League.  While other teams have deviated from the MLS web template, the Sounders have done an outstanding job of creating an interactive destination for their fans. Live chats with the Team are offered, links to multiple blogs, an oustanding ticket engine, promotion information and more. In addition, the presence of the Sounders’ band offers a unique element in MLS.

Media coverage continues to be outstanding, with multiple print outlets covering the Sounders from every angle.  The Seattle sports radio station features the Sounders prominently.  The same goes for local televsion stations (and TV ratings are reported as quite strong).  While this level of coverage is not unprecedented, it is far more than many MLS teams.  MLS fans struggle to find coverage of their teams in many markets, and the opportunity to seek information from multiple sources is simply another avenue for fans to connect to and support their team.

Will the success continue?  The same factors discussed in our original piece probably still apply.  The team needs to do well, the experience has to continue to provide fans with something unique and the Sounders have to continue to do well in their fan outreach.    However, 1/2 of the way into their first season, the Sounders continue to do well in all aspects.  With new teams coming in Philly, Vancouver and Portland, Seattle will continue to be a model franchise for expansion.  xboxThe success in Seattle looks like it is here to stay.

Soccer Business Bits: Deals, Deals, Deals

crew-jerseyAs we like to do on occasion, we are going to take a look around the League to see what teams are offering to help bring fans to the game.  In Columbus, the Crew are promoting a Gold Cup Two pack for a July 7 doubleheader and a select Crew Games.  Prices for the packages range from $33 -$40.  At the same time, the Crew are offering a “Crew and More Pack” that includes 4 tickets to a Crew game and 4 tickets to a local attraction including an amusement park, zoo or science center.  The tickets are going for as little as $22 per person.

The Los Angeles Galaxy are cross promoting their AC Milan friendly with the Sports Authority (interstingly a competitor to League sponsor Dick’s.  The promotion is essentially a give-away, with participants afforded the opportunity to win tickets, gear and other itmes simply by registering.  At the same time, the Galaxy are promoting $1 beer and $1 hot dog night for their game this weekend versus Houston.  The promotional prices are only available pre-game.

In Seattle, the Sounders outstanding website does a great job setting forth the various promotions run by the Team. These include arrangements with Microsoft, Jack in the Box and Great Clips and others.  At the same time the Revs are offering a 4 game “mini-plan” that includes a free T-shirt.  The T-shirt keeps the “Defend the Fort” theme front and center.

As the season goes on, we will continue to note some of these promotional efforts.  These quick glimpses provide interesting insights into the efforts teams are making to bring fans to the games.  For teams with their own parks, getting fans into the stadium is the best way to sell food, merchandise and their product.

Soccer Business Bits: Confederations Cup, Getting Friendly II and More

us-soccerOn a day when American soccer fans are busy celebrating the USMNT victory over the Red Fury of Spain, we thought we would take a quick look at coverage of the big win opn outlets around the country. Online, the victory has been the top sports story of the day, with the game getting first position on ESPN.com, Foxsports.com and CNNSI.com.  Even traditionally anti-soccer TSN gave the match a fairly prominent position.  On ESPN proper, Sportscenter led with the game as did the boys on PTI. Even radio stations like WFAN in New York featured the game on their 20/20 sports flashes and espn radio’s “Backpage” show carried a lengthy discussion about the significance of the win
(as compared to the “Miracle on Ice”)

Outside the sports world, the game also got prominent attention. The New York Times gave the match front page space as did the Washington Post.  The Yahoo! home page put the game front and center.  Even Slate got into the act with an article that we highly recommend (it has some interesting information about the ESPN.com poll about the game).  Foxnews and CNN also gave the game a prominent place on their respective web pages.

Americans love an underdog, especially when the underdog wins.  There will be a fair amount of attention on the US Men on
Sunday, a weekend game for the title will definitely generate some eyeballs.  The last time this Team garnered this much attention, it was before the 2006 World Cup; the team promply got washed 3-0 in the opening game.

In Friendly news, TFC has announced that all tickets for the Real Madrid match this summer are sold.  Given the size of the stadium and the demand for soccer, this news is not surprising. In DC, the Real Madrid friendly with United has already reached the 35k tickets sold number.  It seems that Kaka and Ronaldo are a great draw, and with 6 weeks until this game, a large crowd can be expected.

Finally, in WPS news, the DC/Boston game was “nationally” televised on Comcast Sports as part of the four game regional television package that was recently announced.This deal will provide the League with additional exposure in big sports markets and will include interviews, highlights, game replays and other coverage.

Stadium Fun: Downtown in Houston

houstonWhen the San Jose Earthquakes became the Houston Dynamo in 2005, part of the understanding was that a soccer specific stadium was just around the corner.  After years of playing in Robertson Stadium (home of the Houston Cougars), it appears that the dream of a downtown Houston stadium is closer to a reality.  The downtown location of the proposed stadium is right near Minute Maid Park (home of the Astros) and situated in a Tax Increment Reinvestment Zone.

According to the City of Houston website, Tax Increment Reinvestment Zones are:

special districts created by City Council to attract new investment to an area. TIRZs help finance the cost of redeveloping or encouraging infill development in an area that would otherwise not attract sufficient market development in a timely manner. Taxes attributable to new improvements (tax increment) are set-aside in a fund to finance public improvements in the zone. Zones in the City of Houston have been created for one of three reasons:

  • to address inner city deterioration
  • to develop raw land in suburban fringe areas
    or
  • to proactively address the decline of major activity centers

Total cost of the 21k stadium is expected to be about $80 million with the Dynamo ownership (primarily AEG and Golden Boy Promotions) funding about $60 million.  The rest of the funds could come from tax credits,  the TIZ money and from some of the stiumulus money floating around.  The TIZ program will also provide the property for the stadium.  According to Houston President Oliver Luck, multiple banks are lining up to provide financing for the contruction project.  As we have noted previously, this is a great time for construction, with the cost of materials and labor way down.  Also, these are the type of projects that can bring jobs and income into the economy.  The economic benefit of stadium projects is also debatable, but during a downturn there is a definite economic upside.

The renderings are out and design firm Populous has been selected for the project (also did Citi Field).  An important aspect of the agreement as far as obtaining city approval is the participation of Texas Southern University.  Although negotiations are ongoing, it is expected that Texas Southern football will also use the stadium for at least 30 years and a $2.5 million investment.

Importantly, this is not the first time Houston has gotten close to a stadium deal.  However, the pieces appear to be slowly clicking into place for a 2011 opening.  A downtown stadium in Houston will continue the trend that has been successful in Toronto and Seattle by placing the Team within close proximity to public transportation and population centers.  With Philly and New York set to open new stadiums in 2010 and other projects on the way in Portland, San Jose and Kansas City, this is a great time to be an MLS fan.


Soccer Business Bits: Confederations Cup, MLS and More

us-soccerIt has been a very busy last few days in American Soccer.  The Confederations Cup has moved through the group stage, MLS is reaching the halfway point, Superliga is under way and the WPS is moving forward in its inagural season.  The big soccer business controversy of the week occurred on Wednesday night when the highly anticipated Seattle/DC match from Qwest Field was bumped from ESPN2 for extra innings of a College World Series game. Despite a 30 minute pre-game show buffer, it was into the second half before the baseball was over and the soccer game on the screen.  Unfortunately for MLS fans, the 3-3 tie was one of the best of the season and could have served as a great showcase for the League. MLS fans were (wrongly) angry with ESPN for failing to switch off the baseball to show the start of the MLS match.

Unfortunately for soccer fans, ESPN has a policy of staying with live events until their conclusion.  The game was made available on ESPN360 and replayed later in the evening.  Moreover, soccer fans must realize that the College World Series generates better ratings than MLS on the ESPN networks.  Commissioner Garber addressed the situation in his latest “Commissioner Speaks”.  MLS has done the right thing by making the game available for free on its website.

ESPN made another interesting programming decision during broadcasts of the Confederations Cup.  On Sunday, the Italy/Brazil and USA/Egypt matches were played at the same time, yet interestingly, ESPN chose to put the USA game on ESPN2 while the other game was on ESPN (complete with a 30 minute pre-game show).  Italy and Brazil are certainly two of the most prominent soccer playing nations in the world, but we strongly disagree with the decision to  have the USA play second fiddle in its own country.  However, it does say something about the relative popularity of these teams within the United States.  ESPN made its decision based on what they believed would draw the most interest.

SuperLiga 2009 is underway with small crowds in Chicago, Los Angeles, New England and St. Louis for the first match day.  The “St. Louis experiement” was not particularly successful, with less than 6k in attendance for a Wizards “home match”.  League-wide, MLS attendance was fairly typical with a big number in Seattle on Wednesday night with 29k at Qwest.  By playing in Oakland, San Jose was able to draw 17k against Los Angeles, in a game that got a TV lead-in from the Confederations Cup.  Houston did well with about 17k and New York was a pleasant surprise with 14k in a rain storm. There were 11k in Colorado and 8k in Dallas.  As always, we reccomend MLS Daily for a great attendance break down.

Finally, in WPS action, just over 3k were in Boston for a Wednesday night game, while only 2500 were in attendance for a weeknight game in New Jersey.  Just over 2700 were in St. Louis for a match against Washington.  For a League that had been doing well at the gate, this was a fairly disappointing weekend.  wps

Superliga 2009: Fierce International Competition or Big Waste of Time?

superligaWe are just days away from the third iteration of the now annual Superliga tournament.  The 8 team event features 4 teams from MLS and 4 teams from Mexico’s Primera Division.  Placed into groups of four (consisting of two MLS teams and two Mexican teams), the teams play one game against each team in their group before a semi-final and final.  The New England Revolution are the defending champions after a penalty kick victory over Houston last year in an all MLS final.

Last year the event tried to build off the success of year one, when David Beckham’s Los Angeles Galaxy lost in penalty kicks to Mexican champion Pachuca and Superliga 2008 drew consistently good television ratings, surpassing local Major League Baseball numbers.  All matches will  be televised in the United States on the Telefutura Network and by Televisa and TV Azteca in Mexico; english language broadcasts are carried by Fox Sports Canada.

In addition to declaring a US/Mexican champion, Superliga provides a unique marketing opportunity for both MLS and its Mexican counterpart.  The Mexican teams get an opportunity to play meaningful games in the U.S. before Mexican ex-pats, while MLS gets to showcase its teams before a Latino fan-base still warming to American Soccer.  Last year the event was somewhat marred by tension between the MLS Players Union and the League.  The union announced that the $1,000,000 championship bonus – in a league where the salary cap does not exceed $3,000,000 – was a bit of mirage.  As a result, there was a bit of a protest when the Revs won the trophy.

Attendance at the 2008 version dipped a bit and this year the big time Mexican clubs will be absent with no Chivas, America or Pachuca involved.  Chivas and America are the teams with the biggest followings in the States, and thus attendance may suffer this year as well.  However, with the Chicago Fire involved, it does mean that Blanco will be part of the proceedings.  Blanco is always a big draw in the Mexican community.  Add in a Chivas USA/Chicago Fire game in Los Angeles and Group A may have some significant draws at the gate. The tournament will feature a couple of doubleheaders and a game in St. Louis (KC match).

Coming mid-season, the event is a bit controversial as it forces teams to take a break from League play.  MLS teams are then forced to make up games with some additional mid-week games during the rest of the season.  In addition, SuperLiga does detract from the Champions League that also pits teams from MLS, Mexico and other CONCACAF countries.  However, as a business model, SuperLiga is a fantastic idea.  We have repeatedly discussed how there are enumerable soccer fans in the United States, many of whom do not pay attention to MLS.  Many of these fans are far more interested in Mexican Soccer and Superliga does serve as an entre to MLS.  Ultimately, we view the tournament as neither a fierce competition or a waste of time, but a golden business opportunity.  Whether that is a proper use of the teams’ time is a different issue

MLS Charities: Helping Through Soccer

mlsPart of our focus on the business aspects of soccer in the United States involves the occassional look at the charitable works around the sport.  In San Jose, the Earthquakes are hosting a “Fight for the Cure Day” as partof their June 20 match.  Sponsored by Comcast, the event includes recognition of cancer survivors and the provision of pins to the first 5,000 fans at the game.  The team is also putting together packages for the game that include seats, food and transportation. A portion of the proceeds will go to various cancer charities.

US Soccer continues to promote its Passback program.  The Passback program is an initiative to provide soccer equipment to underprivileged communities.  The program collects used equipment, including cleats, balls and more.  The program also includes an array of traveling clinics for young players in disadvantaged communities around the country.  In Columbus, The Crew will be holding a collection effort at their upcoming June 27 home game.

Finally, MLS Works continues to be the go-to charitable effort in MLS. The two year old effort combines community outreach programs and involvement with an array of charities.  The MLS Works Auctions provide fans with an opportunity to purchase game worn jerseys and other team gear with the proceeds going to charity.

Obviously, this is just a brief look into the world of soccer’s charitable efforts.  However, it is important to recognize that the teams and players do devote a fair amount of time to community interaction.  From a business perspective, this gives the Teams an opportunity to connect with potential fans while creating a positive image for soccer.

Soccer Business Bits: Commish Speaks, KC Stadium and More

mlsWith the Confederations Cup in full swing and another MLS weekend behind us (for attendance figures and a nice year by year comparison, check here), we thought we would note some key business moments from the week that was.  In MLS, Commissioner Don Garber continued his occasssional “blog” posts with another edition of the “Commisioner Speaks“.  His comments are not notable for their content, but more for the fact that they exist it all.  We have repeatedly discussed the importance of soccer utilizing non-mainstreatm media sources to spread its message and the necessity of being ahead of the technology curve.  Occassional blog posts from the commish is a way to accomplish that.  MLS fans are far more invested in the League than fans of other major league sports (are Twins fans really concerned about the viability of MLB??)  It is a smart move for MLS to have the Commissioner participate in these occassional blogs and fan Q&A in order to keep that connection strong.

We have also posted on numerous occasions about the efforts to build a stadium in Kansas City.  Well, some first renderings are out as the project remains targed for a 2011/2012 opening.  These new stadiums are great for fans, great for the League and fun to think about.  Obviously, the final construction doesn’t always look like the initial renderings, and the pictures remind us all that this will be large complex with a stadium attached.  Nevertheless, kudos to KC for moving this forward.

Speaking of stadiums, here is the interior webcam of Red Bull Arena in Harrison.  This should be one of two new MLS parks opening in the Spring of 2010. The other, in Philly, seems to have some catching up to do. It is pretty exciting for the League to have these two new venues opening in such close proximity.  With the stadium struggles in DC and the total lack of movement in New England, it seemed that the Eastern Conference would never catch up to the West in stadiums.  Now there will be two new stadiums to enjoy on the East Coast.

Finally, soccer websites have been abuzz for the last few days with the news that Schalke midfielder Jermaine Jones has apparently announced his intention to play for the United States.  Jones is the son of a German mother and American father who has lived his entire life in Germany.  For footiebusiness, we are interested not in the prospect of such a talented midfielder suiting up for the Red White and Blue, but for the FIFA ruling that allowed this to happen.  The new ruling does away with the age limit (21) for players to switch national teams unless the player has already participated in an official competition.  This will allow players who participate in youth matches for national teams but do not get called up for the full national team in anything but friendlies, to switch if their careers take a differnt turn.  This will also add to the layers of legal manuevering to ensure that promising players are “cap tied” at an early age.

Interview with Chivas USA Director of Marketing Alex Gallegos

chivasIn a year in which most MLS teams are struggling at the gate, one of the success stories has been Chivas USA.  According to these numbers, Chivas attendance is up more than 6%.   As part of our ongoing interview series with MLS marketing personell, we had an opportunity to chat with Alex Gallegos, the Chivas USA Director of Marketing.  Mr. Gallegos is a graduate of Pepperdine University.  He has spent time as Manager of Street Promotions for DMG Records and more recently, the Director of Promotions for KFWB 980 Dodgers Radio Baseball Netork and NFL Radio Network Los Angeles.  Since 2004 he has been the Diretor of Marketing for Chivas USA.

Thanks to Mr. Gallegos.  Please check out some of our other interviews with MLS marketing executives including Davy Ratchford, Director of Marketing for RSL, Dynamo Senior VP Rocky Harris, Revolution COO Brian Bilello and Kansas City VP of Marketing and Communications Rob Thomson.

Footiebusiness.com: What is Chivas doing differently for marketing in 2009?  How has the economy changed/impacted those efforts?

Alex Gallegos: We have instituted a ton of different programs either marketing, community or sales based, they are as follows:

All You Can eat Section
Stimulus mini- 5 game plan

Practices in the Community

Partnerships with the City of Hope, Special Olympics and the American Lung Association

School of the game

Band of the game

Family and kids packs

All aimed at community involvement, affordable entertainment and fan development

FB: In 2009, many teams in MLS seem to be struggling at the gate.  Yet Chivas seems to be doing quite well, and to date, numbers appear to better than last year.  To what to you attribute that success?

AG: A stronger market presence, diversified advertising avenues

A sales dept that is more veteran and versed in the soccer sales ways

Leadership from our CEO Shawn Hunter

A great team that makes it easy to highlight what we do on the field and off

A stronger presence in the community

Great media and corporate partners

FB: How have Chivas utilized online avenues such as social networking sites, SUM’s new online ad network, etc… to market the team?  Do you find that these efforts increase interest in Chivas or impact attendance?

AG: We have had or launched myspace, facebook, txt message, viral video and online ad programs. We are analyzing twitter and launched mychivasusa.com all to give our fans a better place to congregate, tell more fans and spread our word for us. It is helping little by little.

FB: What unique challenges does Chivas face as one of two teams in Los Angeles?  Most teams just compete against teams in other sports, while Chivas must compete against the Galaxy in their own stadium.  How do you deal with the further segmenting of the potential MLS fan base?

AG: We simply identify what makes us Chivas and let the consumer make the choice, we’re not trying to make anyone chose a side,  we’re open to anyone that likes soccer, that likes entertainment or that wants a fun environment and experience for their family.  We touch on things like our game atmosphere, price affordability, access to our players, community programs, customer service etc…

FB: Is it inconsistent/challenging for teams to target “hard core” supporters, non-soccer sports fans and families?  How do you resolve those inconsistencies/challenges?

AG: We make a lot of invites, we have a lot of guests that we invite to our games on us.  We do this so that they can experience our games and make the decision to come back on their own, more often then not they love our games and really are receptive to coming back and telling their friends. Were building fans through multiple programs, one fan at a time.

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