Soccer Business Bits: Trouble in St. Louis, Durbin Speaks & Man

The big business news in the world of American soccer business is the recent announcement that WPS franchise Saint Louis Athletetica is shutting down mid-season.  Due to a funding crisis, the team cannot make payroll and the league has been paying player wages.  The WPS schedule will be reworked to account for the lost team and players will have the opportunity to sign with other league franchises.  This is a big blow for WPS coming so soon after the loss of the Los Angeles Sol.  “It’s incredibly difficult to lose a team in mid-season like this,” said WPS Commissioner Tonya Antonucci. “We looked at a few options as a league together with our Board and U.S. Soccer, but the operational hurdles and finances just didn’t work out. In the face of a severe funding gap in St. Louis, the local ownership group is shutting down the team at this point.”  WPS had been making strides with respect to sponsors and stadium construction, but now has to fight the perception, and perhaps reality, that the league is in trouble.

Click here for a report about a recent interview with MLS VP Todd Durbin by the New  York Post.  The original interview is wide ranging on a n umber of business issues, including reserve league, player loans and more.  The possibility of the reserve league coming back in some form is a welcome development.  Ultimately, a reserve league will improve the quality of play and further the development of American soccer.

Finally, Kansas City has started the process of promoting its Summer match with Manchester United.  Manchester United legend Denis Irwin visited Kansas City Wednesday to help promote the upcoming friendly between United and the Kansas City Wizards on Sunday, July 25 at New Arrowhead Stadium. Irwin was live on the Fox 4 morning show before an in-studio appearance on Sports Radio 810 WHB at 9 a.m. CT.

Americans in Hartford: A Business Recap of the US v. Czech Republic

Last night the US  Men played the Czech Republic in our backyard before more than 36k.  Because we were at the game last night, we thought we would revisit some of the business aspects of the match in East Hartford.   The total attendance was extremely impressive and the crowd was dominated by fans of the American team.  The crowd was an interesting mix of 20 somethings, youth soccer teams, soccer fans and locals out for the unique experience.

The price point was quite high for tickets, but that didn’t prevents fans from turning out in big numbers.  The parking lots were open 4 hours before game time and filled quickly with tailgaters and early arrivals.  Stadium prices were high; a hamburger, fries and water cost $14.  Beers were selling for $10 for a 10oz draft and parking was $15 a car.

Stadium signage included the usual USSF sponsors, including Castrol, Gatorade, Jose Cuervo and others.  McDonald’s sponsored the pre-game ceremonies with all 22 kids involved with the starting lineups wearing shirts with the Golden Arches.  The new Nike commerical ran at least twice in the stadium in its entirety and the ESPN feed ran throughout the game on the big screen.

Coverage in the local media was fairly extensive, especially after the game.  Most of the major networks ran multiple stories following the game both as part of their news coverage and sports reporting.  The local paper, the Hartford Courant ran photos of the game on both the front page and sports page, but pregame coverage in the paper was lacking.  The local ESPN affiliate broadcast its drive time show from the stadium, and guests included Sunil Gulati and Alexi Lalas.

Overall it was great night for the Greater Hartford area and a great audition for a future games with US Soccer.  The US Women will be in East Hartford in July.

Soccer Business Bits: Selling Tickets in MLS & Soccer Viewership Down

Major League Soccer announced the formation of the MLS National Sales Center to assist MLS teams with ticket sales and staffing.  The Center will offer a 45 day program that will graduate ticket sales professionals to employment with individual MLS teams.  The students will have the opportunity to craft sales strategies and get real life sales experience. “Ticket sales are the lifeblood of any professional sports team, and this new initiative will provide our clubs with a deeper and more talented pool of ticket sales professionals,” said MLS President Mark Abbott. “We believe the combination of classroom instruction and real-life sales experience will prepare these young men and women with the skills necessary to make an immediate impact when they join an MLS club.”

This is an innovative effort by MLS to improve ticket sales with a grass roots effort.  The willingness to invest in the Center seems like a great step towards improving attendance for comparatively little cost.  MLS teams will have a venue to trial ticketing initiatives and learn from the successful (and unsuccessful) campaigns developed in the new ticket sales incubator.

We reported yesterday on the fairly disappointing 1.1 rating earned by Fox for the Champions League Final. Now the Sports Business Journal is reporting that Fox Soccer Channel averaged 141,000 viewers for its cable Champions League matches.  This is significantly fewer viewers than ESPN last year.   However, the big news from the article is that MLS viewership on ESPN2 is down 23% this year over last year with about 193,000 viewers per game.  FSC ratings for MLS are reportedly flat in a year over year comparison.

The Monday After: Champions League Final on Fox

UPDATE:  SBD is reporting that the ratings for the game were not good, only a 1.1.  That is slightly better than last year on ESPN. 

It was an outstanding attendance weekend in the world of MLS with typically outstanding numbers in Seattle and Toronto, big numbers in Houston and a solid showing in Los Angeles.  Only a smallish number in New York on Thursday dampened an otherwise outstanding showing at the gate.

However, the big story in American soccer over the weekend was a match played in Madrid on Saturday.  For followers of the business of American soccer, Bayern-Inter was not notable for the result, rather, it was Fox’s decision to televise the game to a national broadcast audience across the country.  Fox felt so strongly about the ratings potential for the game that the network elected to show the match in lieu of its typical Saturday afternoon baseball.  The Yankees/Mets game was bumped back a couple of hours and the Final was shown in its entirety.  Some sources indicated that Fox was hoping to reach 2 million households with the game.  The final last year was seen by just over 1 million households on ESPN.  The game had been scheduled to be broadcast on FX, but the network (which owns the American rights to three years of UEFA broadcasts), moved the game to to its main network.

The broadcast was sponsored by GEICO, Nike and Heineken and included a pre-game show hosted by Fox NFL Sunday’s Curt Menefee.  He was joined by Bruce Arena and Eric Wynalda.  Fox used Martin Tyler to broadcast the game and the coverage was generally high quality and the pictures came courtesy of the international shared feed.  Fox preceded the match with a pregame show on FSC.

It was obviously quite significant that a major American network elected to devote a Saturday afternoon soccer game from Europe to stateside audiences.  The final ratings will determine whether Fox made the correct decision, but with the World Cup just weeks away, soccer will be front and center in the American sports conscience.

Footiebusiness Vault: Red Bull Arena-Will it Matter?

Coming off of a night when the Red Bulls performed before less than a sell out at Red Bull Arena, we thought we would revisit a post from the Fall when we pondered the impact Red Bull Arena would have on attendance for the team and on the presence of the league.  Let us know your thoughts about Red Bull Arena.  Does it matter?

We have repeatedly posted about the excitement surrounding Red Bull Arena and all that it could mean for the franchise and MLS.  The stadium is beautiful, is intended to help revitalize Harrison, NJ and will be a showpiece for soccer in the United States.  However, the questions remains; will the new stadium impact Red Bull attendance or the team’s profile in the New York media market?  Based on our experience Saturday night in Newark, the answer is still very much in question.

For those who don’t know, in October 2007, the Prudential Center opened in Newark, NJ as the home of NJ Devils of the NHL, Seton Hall basketball and more.  The stadium is state of the art, cost more than $375 million to build and was intended as part of a downtown revitalization for the City of Newark that included retail, residential units and more.  The Devils are a perennially good team, and have won three Stanley Cups over the last 15 years.  Newark and Harrison are essentially neighbors, so the Prudential Center represents an interesting comparison for Red Bull Arena.

On Saturday Night, I took in my first game at the “Pru” as the Devils hosted the team formerly known as the Hartford Whalers. I had dinner with 5 friends in downtown Newark and then walked to the Arena among a sea of red jerseys.  We had purchased tickets on Stub Hub for essentially 60 cents on the dollar.  The facility was beautiful, yet remarkably, only about half full.  And this is the issue.  Just starting its third year, the bloom is already off the rose.

Our seats were 15 rows from the ice and we could have walked down much further and found 6 seats together.  The most expensive seats were essentially empty (although many are reportedly sold).  The upper level was more crowded, but whole sections were largely unoccupied.  Attendance was reported as 15k, but the sense from those around me was that the number was closer to 10k.  In sum, a beautiful new New Jersey Arena in its third year, with a powerhouse team as a tenant, was half empty on a Saturday night in October.  It is also worth noting that the New York Mets couldn’t generate sell-outs for their new stadium in year one in Queens.

This is the nightmare scenario for the the Red Bulls.  Build a sparkling new stadium with all the amenities, public transportation accessibility, natural grass and fill it with star players.  Pack in crowds for all 25k seats for a few games and then slowly watch attendance drop off.  Sure, the new revenue streams will be outstanding (recall that Rio Tinto has raised RSL’s revenue 42%).  But will Red Bull be happy with 13k on a Saturday night in August? Many in the New Jersey/New York area have no idea the new stadium exists and thus there is limited excitement about its debut.

Many American soccer fans think that the stadium will be a savior for a franchise that sits dead last in MLS.  Others believe that Red Bull management has been playing opossum, saving resources for the big opening.  The latter may be correct, but the former seems a bit of a strectch.  Stadiums generate revenue, but they are no guarantee of long term attendance increases (hello FC Dallas).  My experience at the Devils game was oustanding (even if the Whalers went down to defeat), but shocking in the emptiness of the building.

So the question remains; will it matter?  Will Red Bull Arena take the franchise to new levels and elevate soccer in New York, keep interest at the same level or something different?  We take a middle view…if the team does well in its new digs, interest will increase, but a middling team will continue to receive middling interest in any venue.

Soccer Business Bits: Goldman Sachs World Cup Report, Revs Promotions & More

With less than one month until the World Cup, Goldman Sachs presents its fourth World Cup Report (look at the bottom of the link for the adobe report).  Goldman solicits the opinions of its worldwide client base for predictions about the World Cup.   The authors of the report include bankers and diplomats of international recognition.  The report combines analysis of the games with the economics of the various countries.  There are also discussions of world cup bids, Euro-2012 and more.  The report is a fascinating combination of finance and sports from one of the world’s most prominent companies.  The report is lengthy, but worth the read.

The Revs may have invited Benefica to Foxboro as a way to increase interest in the franchise, but as the Boston Ultras blog notes, they are also working with local pizza staple Papa Ginos on a ticket promotion.  The promotion offers Revs’ fans opportunities to accumulate points at Papa Ginos to use for discount tickets to select Revs games.  This is a smart promotion for the Revs as it builds brand awareness through a company that is widely recognized in the Boston area.

Finally, the draw for the CONCACAF Champions League was held and MLS teams involved include Los Angeles, RSL and Seattle.  The first time appearance of some of these teams will make for an iteresting study of attendance interest.  MLS is trying to improve its performance in this tournament, but fans support has lagged. There is a strong liklihood that fans in Seattle and Salt Lake City will turn out in fairly strong numbers for these games.  Will it impact the result on the field?

Hello Henry?

The big story around MLS circles today is seeming imminence of French star Thierry Henry’s voyage to America.  According to multiple sources, the Barca winger will make his MLS debut this Summer following the World Cup.  At 32, Henry will immediately become the league’s 2nd most prominent player in history and will provide an instant shot of attention to the Red Bulls and MLS.  Fans of MLS and New York now have a secondary rooting interest in the World Cup.  A great run by the French and Henry will make his appearance all the more dramatic for the team and the league.

Jack Bell of the New York Times recently wrote a blog entry opining that Brazilian star Ronaldinho should be the big target for the Red Bulls.  In his article, he suggests that the Brazilan might increase attendance at RBA by 5-10k.  Although Henry was the apparent team target, the question of attendance growth remains relevant.  Will Henry increase attendance by that much at RBA?  Will there be an attendance increase on the road?

We think that there will be a marked increase in road attendance with Henry in the league.  He is a recognizable star to most soccer fans and with each MLS team getting only one visit from the Red Bulls per year, he will be a major attraction.  In New York, a 10k increase is overly optimistic over the course of the year, but 5k is probably reasonable in year one.  The key for the Red Bulls will be to use the increased visibility in 2010 to increase their fan base and interest in the team.

It will be interesting to see how Henry’s image is used by league sponsors to market their products.  Will he become a household name to mainstream soccer fans?  Will companies other that Gillette pony up dollars to put Henry in front of American eyeballs? This is an exciting time for the league and one that will provide an array of fascinating business issues over the next few months.

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