The World Cup Bid- A Business Boon to MLS?

The date for FIFA’s announcement of the host countries for the 2018 and 2022 World Cups is just around the corner.  While the economic value of a successful bid to the US and individual cities can be debated, there have been a number of stories addressing the potential business impact to MLS.  Competition between cities to host World Cup matches could lead to significant efforts to curry favor with MLS and SUM. As a result, these franchise may obtain valuable public monies or tax credits towards stadiums, practice fields and more.

Perhaps more importantly, a US World Cup will be an extremely valuable television property.  Exposure to the tournament will generate significant interest among American sports fans, and the time zone compatibility with American audiences will significantly increase viewership.  Ratings for 2010 were exceptional, but prime time matches based in the US following months of lead-in exposure will likely generate enormous amounts of viewers in the US.

Cognizant of these advantages and more, SUM will have enormous bargaining power with the networks for the next round of MLS and World Cup properties.  The current ESPN contract runs through the 2018 World Cup.  However, SUM can leverage a US based tournament with ESPN and other potential network partners to secure significant rights fees and time slots for MLS.  For a great article that provides deep detail addressing this issue, we recommend CNNSI’s Steve Davis’ article here.

Bringing the Fans to MLS: Fans Maturing?

We have repeatedly posted about the internal tension in MLS when chasing fans and selling tickets.  In its early years, the league targeted families and some ethnic communities.  Through our interviews with league and team officials, it has become clear that most franchises have aggressively shifted their sales efforts to grabbing “hard core” soccer fans that elevate the in stadium experience and become loyal followers of the teams.  While these franchises continue to pursue group sales, they recognize that these one-off purchasers do not drive merchandise and concessions over the course of the season.

The Sports Business Journal recently published an interesting piece looking at the maturation of the MLS fan base.  According to some of the date in the article (based on research done by Scarbourough Research) shows that 36 percent of MLS fans earn more than $75k per year.  Another referenced study shows that 47 percent of MLS fans are between 18 and 44 with less than 10% between 13-17.  These studies reveal that MLS has successfully and frequently focused on the young adult market.

The article does a good job discussing the difficulties in turning the youth soccer/group sales market into season tickets and return customers.  Although a cost effective means of sales (youth tournaments are great marketing opportunity), such sales have often failed to cement relationships (although Erik Stover notes that youth sales accounted for a quarter of their sales).   From the fan terrace in Colorado, to the Nordecke in Columbus, the Rev Girls and a bar scene in Dallas, teams have been pushing the 20 something experience.

Another component of the article provides data about the number of MLS fans in the league’s various markets.  Based on telephone data, the SGMA survey shows that there are more than 2.3 million self described MLS fans in the New York/New Jersey/PA area and less than 140,000 in Salt Lake City.  Other areas with more tha 1 million fans are Los Angeles and Chicago.  Portland/Vancouver (combined), Columbus and Kansas city are the other regions with less than 210,000 MLS fans.

This is the next generation of marketing in MLS.  The league appears stable and this group of fans will be the backbone of the league in the coming decade.  For our previous series of posts on this topic, click here.

Happy Thanksgiving & A Call to Guest Bloggers

After a hectic day in MLS on Wednesday, it is time to take a breath and enjoy the Thanksgiving Weekend.  Happy Thanksgiving to all of our readers and thank you for reading!

Every so often, we get inquiries from some of you about opportunities to post on Footiebusiness about soccer business issues.  Over the last 20 months we have published a number of  guest posts on an array of topics and would be happy to post some more.  Whether you are interested in a regular schedule of posts or a one off, please drop us a line.  If there is a particular business topic or City that you believe deserves more focus on our site, please let us know. Whether your focus is news or opinion (or a mix of both), send us an e-mail.

E-mail address is: footiebusiness@gmail.com

Have a great holiday weekend.

Soccer Business Bits: TV Ratings, MLS Awards & More

One of the big business stories to come out in the last couple of days was the disappointing ratings of the MLS Cup Final.  According to multiple reports, the match suffered a 44% decline in its overnight rating.  The significant decline can be attributed to a number of factors including the lack of stars, competition from the NFL and a lack of recognizable teams.  Whatever the reason, the low rating (the lowest MLS Cup Final rating in more than a decade), must be cause for concern within the league hierarchy.  The team’s television deals are at a critical point and the poorly rated final will not help the league’s leverage.

We didn’t comment on the league’s announcement of the executive award winners. Notably, RSL won the team PR Award, a fitting honor for the front office that we believe was the most active and effectinve in the league.  As we said when we announced our vote for RSL,  the team started in the offseason with a state-wide campaign to bring the championship trophy to all the counties in the State.  The team is aggressive (perhaps overly aggressive) on Twitter and has effectively engaged its fans on all levels of social media.  The team effectively marketed its Champions League games and drew a huge crowd for the final group stage match.  The front office built upon the team’s success from 2009 and managed to keep fans coming and keep the team in front of the local media outlets. RSL’s front office has managed to make the games a destination and continues to improve the fan experience.

PPL Park will host the 2011 Collegiate Rugby Finals.  The tournament will be televised on NBC.  The game will generate some exposure for the Union and MLS.

In our blog of the Cup Final, we noted the presence of Four Points Sheraton on the sign boards.  The company was the offical hotel of the playoffs and the MLS Cup Final.

Some Final Business Thoughts on Toronto

The coldest MLS Cup Final in league history is complete and Toronto was certainly a big part of the story from last night.  There were discussions about the weather, the fan protest and the field conditions.  For a few days, Toronto was the center of the MLS universe, with sponsors, fans, media and league personnel descending on the City.  A couple of our readers checked in with e-mail thoughts on what they saw and the media coverage.  We thought we would present those today.

A large booth city was setup outside the main gate with a large presence from Adidas, XBOX Kinnect and Home Depot.  Adidas had the typical kick soccer balls into holes for a prize promotion.  Kinnect had a bunch of XBOX stations set up with the various Kinnect games. I didn’t get a chance to check out the Home Depot area but they were giving away MLS construction helmets and had a sign-making station.

The local morning headlines were a subdued mix of “so what” and “decent game, but…” All gave the game fairly high marks and the crowd, slightly less. The reports I’ve read estimate the actual attendance at about 80%, somewhere around 17,500. Well-written and dead-on article from Gareth Wheeler, at the Toronto Sun, “MLS Cup was eh okay.”

The Toronto Star had a short op-ed: “No glamor, no buzz and no circulation in my feet” that claimed Torontonians were too good for MLS. There was a pre-game concert (which we missed) with Matt Good, a band popular in the late 90’s  – thus, too old to be relevant but not old enough to be nostalgic.  Can’t say how many people attended the concert but I can assure you people were likely more interested in play with the Kinnect.

Inside, regular merchandise stations were selling MLS cup, Dallas and Colorado merchandise. There was some TFC stuff for sale also.  Booths were not busy but did ‘brisk’ business.

Contrary to what other people have been saying I was quite happy with the turnout.  There was only one area way up in the corner that was visibly empty but there seemed to be a good presence in all sections.  Yes there was plenty of empty seats but that can be attributed by the growing anger at MLSE of TFC season ticket holders, the coldest sporting event held in Toronto since the SkyDome was built and 2 teams no one in Toronto gave a rats ass about.  Game was relatively quiet – save for the regular Danny Dichio chant in the 24th minute and again in the 24th minute of extra time – compared to a typical TFC game but the Rapids supporters were quite loud for the small group of them.

Obviously it was disappointing to see people leaving during a tie-game in extra time, but one thing to keep in mind – The main mode of transportation into BMO field is the Go Train. Which yesterday would have come once at 11 PM and once at midnight.  I have to assume a lot of people left to catch the 11 PM train.   Is that a good excuse? No, but typical of Toronto crowds. I went to a Raptors playoff game a couple of years back and people were leaving with 32 seconds left in a one possession game! CRAZY. (Raptors won)

Business Blogging: The MLS Cup Final

As we do for an number of big soccer events, here is a business blog of the MLS Cup 2010.  The match was broadcast on ESPN with Ian Darke making his MLS debut.  In the 30 minutes leading up to the game, ESPN provided two promos to its Sports Center and BCS viewers.  One of the promos included Darke’s first MLS moment. At 8:30, Max Bretos took over the coverage with Steve McManaman and Alexi Lalas after one of the typically well done intros that ESPN started during the World Cup.

Darke and Harkes got their first air time about 8 minutes into the broadcast after a hand-off from Bretos (who was on site for the match).  Harkes and Darke have a comfort level from South Africa.  Darke quickly brought in Rob Stone who was down on the field reporting on the weather (as did Bretos and Darke).  Back to the “studio” team to break down tactics. Pregame sponsored by VW

First set of commercials started with a VW ad, followed Allstate, Dick’s, Pepsi, adidas and assorted local sports.  After the break, ESPN provided back story on Kevin Hartman.  While many fans loathe these types of features, they do offer context for mainstream sports fans taking a casual interest in the game. ESPN then showed the RCMP walking the MLS Cup into the stadium followed by the players coming into the stadium and Garber shaking hands with the players.

ESPN exited for the national anthems and brought ads for “Faster”, Continental, Dick’s, CARFAX (seemingly a first time ad buyer), Gatorade and the MLS soccer spot (which is one of the better ads the league has run over the years).  There were also a series of local ads.  It is rare to see movie ads during MLS matchups, so it is interesting to see the studios taking an interest in the game.

Darke and Harkes did a brief intro before Stone got an interview with Hyndman.  Empty seats visible at kick-off. Visa, Gatorade Continental Tire, AT&T, Makita, Degree and adidas along the side boards.  The electronic boards were turning quickly with a number of the usual sponsors (first time I remember seeing FourPoints on an MLS board).  Castrol and adidas were inviting fans to hit social media/text  after reading the boards.  VW had the first on-screen advertisement. Dick’s was second and followed by Pepsi.  Darke read a couple of in game spots in the 11th minute.

Darke had clearly done his homework and was familiar with the players and some of the relevant history. Stone was brought in for the first time in the 33rd minute to announce that Zach Loyd would be coming on for injury.  Darke waited until the 45th minute to pump the halftime, which included an interview with the league Commish.

The halftime commercials included VW, Gatorade, Pepsi, Allstate, Michelin (how is this possible given the Continental relationship) and a multitude of local spots.  The Garber interview was the halftime highlight, with Garber describing a number of changes to the competition structure of the league.  He reiterated the return of the reserve league, the addition of 2 additional playoff teams (10 teams become 8 through a play-in).  No solution to the East/West issue.  He suggested a way to incentivize teams to go for the Supporters Shield, including money, draft position and a “simulated” pro/rel.  There was also a plug for USA Bid.

Crowd slow to return to their seats after the half.  Stone piped in just after the half with a bit about Daniel Hernandez. More of the same after the break, with the same in-game ads.  Darke’s  Mo Johnston reference shows a remarkably surprising knowledge of the league, as did his mention of Jeff L’s pay issues with the Revs.  Harkes started off a bit chatty, but Darke and Harkes have done well.   Stone came back in the 60th minute after a chat with Hyndman.  His proximty to the benches does offer some insights during the course of the match.

A couple of Barca/Real Madrid promos during the game

Really a good broadcast.  Game is going to an extra 30 minutes.  We’ll put this up now and update as necessary.

Soccer Business Bits: WPS Moves On, MLS Cup Hits Toronto & More

After another period of uncertainty and confusion, it appears that WPS is ready for its third season of action.  According to the league’s most recent press release, the league will consist of six teams in 2011.  Included in that six team grouping is Western New York, an expansion team that will have full access to the league’s list of  unprotected players.  Not returning for the third year of play will be defending champion FC Gold Pride.  Chicago has been granted an extension until December 15 to obtain investors and make necessary payments to remain in the league.

MLS Cup is edging closer and the City of Toronto has taken notice.  The local papers are filled with articles about the league and features on the players/teams.  Locations around town are decked out with MLS logos and symbols, and players from the Rapids and FC Dallas have descended upon the City.  Media availability started on Thursday and the teams will continue to have determined periods of media availability throughout the weekend.  Other events include photo-ops, a press conference with the Commish and more.

Some other quick business notes.  Vancouver has signed US international Jay Demerit as their first official player for 2011.  MLS announced that 11 players have graduated from the Generation Adidas program.  These players will now count against the salary cap.

One final note.  We will do business blog of the MLS Cup broadcast on Sunday night.   Let us know your thoughts on the broadcast.

Welcome to the Party Kansas City?

The big business story in American soccer today was the long awaited re-branding of the team formerly known as the Kansas City Wizards.  With more than 1000 fans in attendance, the Wizards unveiled their new identity, uniforms crest and colors.  The Wizards will now be known as Sporting Kansas City.  As part of the announcement the team’s 2011 designated player, Omar Bravo was in attendance. The press conference was carried on local sports radio.

Here is a link to the team’s new website and here is a link to a discussion of the new branding.  The link includes a discussion of the team’s new shield and the various elements of the design.  The team also includes a new blog.

Immediate response to the rebrand is mixed with some fans applauding the change while others have been extremely critical.  The change coincides with the team’s move into their new stadium.  The team denies that the rebrand represents a “Europeanization” of the team and claim that the new identiy reflects the team’s relationship with the local community.  Under the Sporting Kansas City name, the club will field teams in other sports.  The team believes the logo and name will permeate the Kansas City area and become synomoymous with sports in the region.

The team will apparently open its stadium on June 9 on ESPN.

The Commish Speaks: State of the League

Every once and a while, our business coverage dovetails with more traditional coverage of MLS.  Today is one of those days.  Commissioner Garber gave his annual State of League address and highlighted some important business changes.  We thought we would address some of these here.

The address started with the Commissioner noting the importance of the league presenting a new champion in 2010.  Garber stated that soccer is now “mainstream” following the USMNT performance in South Africa.  He discussed the opening the PPL Park and Red Bull Arena and noted that Philly was the 4th most attended team in the league and noted the importance of supporters groups.  He also suggested that there has been a recognizable increase in interest and awareness in New York for the Red Bulls.  He also discussed the new DP rule and how it has increased awareness of MLS.

He also mentioned that there are now 20 homegrown players that have seen first team play through the new program.  “They are the future of our league” and stated that MLS is the only North American sports league where young players can train “in the shadow of the stadium” where they will make their professional debuts.

Sponsorship business has grown (as it has every year).  The consumer products business is up 15%.  Two new big international sponsors, Continental and Castrol were added this year.  He also stated that new jersey sponsors are coming and that he thinks all teams will have a jersey sponsor within a year.  $20-30 million dollars in revenue for the clubs earned through this source.

He also suggested that caps will be dropped on home grown player signings.  Salary budget increased 15%.  Most clubs spend $3.5 million to $4.5 million in salary budget that doesn’t include allocations. Allocations are now up to $10 million dollars in 2011.  This money is used to “goose” the salary budget.  Rosters increased to 30 players for the first team.  Spots 25-30 are for players 24 years and younger and those players will not count against the budget.  Reserve division announced.  It will include 10 games and an 8 game playoff.

34 game regular season starting in mid-March with MLS Cup on November 20.  There will be one stand alone “first kick” match. Salary budget space will be increased for teams making the knockout rounds of Champions League.  Unclear if this applies to 2010. All CCL teams will get additional budget space.

Portland and Vancouver are doing well in ticket sales and commercially.  Two new stadiums coming next year.  KC, Vancouver and PGE Park (two are renovations).   Believes that TV footprint will expand in Canada.  Focused on new team in New York.

Good discussion about TV ratings.  Its not about marketing according to Garber.  It has to do with schedule, broadcast quality and promotion.  7 of the best ratings were post-World Cup.  Said ESPN will have a major promotional effort behind the game. League is engaged with FSC about renewal.  MLS is also discussing with Versus and others regarding soccer broadcasts.

Covering the Coverage

The MLS Cup Final is set, with Colorado and FC Dallas making the trip to Toronto.  With both teams typically receiving limited coverage in their media markets, we thought it worth taking a look at the coverage of the teams in the local papers.  Before we do, we wanted note the double shot of MLS coverage in the most recent Sports Illustrated.  SI offered a brief paragraph on the retirement of Taylor Twellman last week.  In the same magazine, Grant Wahl offered a one page take on the MLS Cup Playoffs.

In Dallas, the Hoop’s playoff victory happened to coincide with a Dallas Cowboys’ victory, the Dallas News did offer a series of articles on the victory.  Longtime soccer writer Luis Bueno authored all three articles in the paper.  Bueno is based in California and did a credible job covering the match from an FC Dallas perspective.  However, it is telling that the paper didn’t send its own reporter to cover the game.  Moreover, it is apparent from the paper’s website, that soccer is not a priority; the link to soccer is halfway down the “other” section of the sports page.

In Colorado, the Denver Post’s post game coverage included three articles on the Rapids’ victory.  One of the articles was commentary and another looked ahead to the FC Dallas/Galaxy match.  Today’s paper included a summary of the Western Conference Final and started looking ahead to the MLS Cup Final.  The page also includes links to international soccer stories and AP coverage of the MLS Cup playoffs.

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