Footiebusiness

The Cascadia rivalry gets most of the attention in MLS, but Dallas and Houston are doing their best to promote the matches between the two teams.  The Dynamo recently purchased a billboard mocking Dallas’ lack of championships and prominently showcasing the two Dynamo trophies.  Houston is not the first MLS franchise to purchase an ad in opposing territory, but this represents the first battle in what promises to be a season long PR war between the teams.  According to the linked article, Dallas is already planning its revenge and both teams plan to ramp up the pranks and hijinks as the season moves forward.

Elsewhere, the weekend saw the first installment of the Seattle/Portland rivalry over the wekend and the atmosphere was as advertised.  Qwest Filed was hopping, the game was nationally telecast and the soccer was entertaining.  Major League Soccer needs more of those days, but the last few years in Portland, Toronto, Vancouver, Philly and Seattle show that such evenings are possible and becoming more frequent.  While some of original MLS franchises are still searching for some of the magic shown by these newer teams, league and team execs hope that the atmosphere will become infectuious.  Regardless, Saturday night was special and the league hopes that it will become the new normal.

Finally, The Sporting News is reporting that MLS is continuing to pursue the dream of a franchise in Las Vegas.  While most leagues have been reluctant to be associated with the gambling capitol of the United States, the possibility of a team in the desert has been talked about for years.  A stadium is a necessity, but the idea of a team in Las Vegas is definitely intriguing.

On Wednesday, the Red Bulls visited Montreal for a friendly against the Impact.  Because I was in town last week, I took the opportunity to review coverage of the match and MLS surrounding the game.  French language television and newspapers provided a fair amount of air time and ink to the game.  Prior to the match, La Presse, a Montreal based paper, devoted the entire sports front page to the match with a focus on Henry.  After the game, the sports pages and sports reports were full of highlights, interviews and discussion of the match.  At the same time, English language of the game was non-existent.  The Globe & Mail provided no coverage of the friendly, nor any pre-game coverage of TFC’s Saturday match with Chicago.  There was also no coverage of the Red Bulls on TSN, however MLS scores were consistently part of the SportsCentre Bottom Line.

On the attendance front, it was a mixed bag for Major League Soccer. The mid-week games included more than 19k in Philly for the Galaxy match, while Dallas announced just over 8k for their Wednesday game.  Vancouver had more than 15,500 for their Wednesday match.  On Saturday, the Revs had more than 14k while DC had 12,500 and TFC had 18,500.  Dallas had just over 12,000 while 16,300 were at Rio Tinto and just under 20k at the HDC.  More than 36k came to Seattle for the Portland/Seattle rivalry. San Jose just crawled over the 9k mark. Finally, Red Bull Arena hosted just over 16k for the Red Bulls Sunday night matchup.

One final attendance note, the US Women hosted Japan at Crew Stadium on Saturday.  The crowd was reported at just over 5k.

Once again, we are fortunate to have a guest post from Dave Laidig.  Dave is a contracts attorney for a large corporation who occasionally submits posts about soccer.  He resides in Minnesota, which is not an MLS market.  And he may be a little bitter about that.  Thanks to Dave for some great thoughts and insight.  Drop a comment below to continue the conversation. And yes, I will take any excuse to drop the Whalers logo into a post.
 

A unique cult exists, American in nature, that patiently awaits the day of revelation.  The day when the masses are converted to Soccer – the beautiful game.  That soccer incites global passions is a true as America’s relative ambivalence to the sport is puzzling.  For those accustomed to early morning pub crawls to catch global stars ply their trade on Europe’s pitches, talk often slurs toward the debate, “when will Soccer make it here.”  The bitter may wonder how soccer can ever make it in a land where the NFL is supreme, MLB owns nostalgia as America’s pastime, and NBA stars catch out attention with excessive locker room gunplay.  Others dreamily believe the next MLS star, or the next achievement for the national team, will yield soccer devotion similar to other countries.  But success is not a sporting achievement, or a marketing campaign.  Success is a self-sustaining league that is competitive with the top European leagues.  And the MLS can compete with the EPL, Serie A, La Liga, and the Bundesliga without replacing the NFL, MLB or the NBA.  In fact, it’s another domestic league – the National Hockey League (NHL) – that might provide a better benchmark for MLS to compare itself against.
 
An honest review of MLS should give hope for soccer, not a sense of futility.  First, it’s true, as soccer-haters point out, that American sports leagues are currently dominated by the National Football League (NFL), Major League Baseball (MLB), and the National Basketball Association (NBA).  However, league dominance does not last forever.  In 1967, baseball’s World Series was the pinnacle of American Sports, and the Superbowl was a blandly titled AFL-NFL championship game with tickets to spare.  Now, the World Series skips Mondays in order to avoid competing with a regular season NFL game.  Sport dominance does not necessarily last.  
 
                Second, Americans already support the best soccer players in the world.  Exhibition games with European teams – and often playing a significant number of reserves – typically average more than 30,000 fans, with Manchester United versus the MLS All-stars drawing 71,000 last summer.[1]  In fact, the 2010 World Cup final had higher TV ratings than the deciding game the World Series and game 7 of the NBA Finals.[2]  And importantly for comparison purposes, the World Cup finals did not involve American players and did not have an American centric time slot.  To argue that Americans do not support soccer is to ignore the facts.
 
 Ultimately, if MLS had the resources of the NHL, America’s fourth-place sports league, then MLS can compete with European leagues for the best talent, leading to an American soccer boom.  The NHL institutes a salary cap of $59.4 Million, which if applied to a 23 man soccer club, would work out to about $2.5 Million per player.  While salary figures are notoriously sketchy for European soccer clubs, the average EPL salary has been reported as $2.3 Million per player. [3]  Thus, quick analysis supports the argument that the fourth best league in America could compete with top European leagues for players. 
 
However, my salary daydream extends into hypothetical rosters available for $59 Million.  For starters, the combined guaranteed salary for last year’s MLS All-Star team was about $9.3 Million.[4]  The starting XI made up about $4.5 Million of the total.[5]  The fourteen alternates – including Bornstein who did not play due to injury – added another $4.8 Million.[6]  And who wouldn’t feel comfortable fielding the current MLS All-Stars, especially if they had time to develop into a cohesive unit. 
 
And if the All-Stars were not appetizing enough, then we would still have $50 Million for players.  We could throw in Dimitar Berbetov ($6,700,000) and Diego Forlan ($7,169,746) for some attacking flavor.  We could then add Michael Essien ($5,500,000), Ji-Sung Park ($4,700,000) and Ryan Giggs ($6,300,000) to manage and spark the midfield.  And John O’Shea ($6,800,000) and Christian Chivu ($5,013,000) and keeper Petr Cech ($7,400,000) to back them up on defense.[7]  Similarly, my hypothetical also assumes that a Canadian team would acquire Nigel de Jong ($10,500,000) because Canadians’ respect the role of enforcer, and we could use someone to hate.  Of course, the reality of transfer fees would cut into the amount spent on player salaries.  But many would still watch a league that had these players scattered about.  And the key question is: how close are we to the day that these types of players play in MLS?  
 
For that, we can look at our benchmark league, the NHL:
 
 NHLMLS
Teams in League (2011)
 30/18
U.S. Metro Areas in
Top 10/Top 30/10/17/8/12
Number of League Games
 1,230/306
Avg game attendance (year)
 17,151 (2010-2011)16,677 (2010)
Avg ticket price (year)
 $54.25 (2010-2011)$22.47 (2007)
TV Deal
 Versus-NBC
 $70 M/year
(+ team specific deals)FSC
$6.25 M/year (est. 2011)

 
Looking at our benchmark league, the NHL and MLS have similar per game attendance levels.  But the NHL has four times as many games, at twice the average ticket price, and a better geographic footprint.  Further, the NHL has more revenue from its TV deals. 
 
MLS may be able to leverage cup and champion’s league competitions to add more sports content, but more TV exposure and revenue will certainly affect the viability of the league.  And this leads to the chicken and egg metaphor in a sports context: what comes first, the audience or TV coverage?  Perhaps the answer is neither.  Solid investors/team owners and expansion could lead to greater exposure in more markets and greater TV value, just by geography alone.  With more TV revenue – and perhaps a few more games – revenue could justify higher player salaries. 
 
Instead of chasing fans, the league should be chasing committed owners with expansion of the mind.  And the sales pitch to the moneyed investors?  MLS is close to becoming a world-class league; a league with the added benefit of a financially sustainable model.  As the increased fees for new franchises show, investors are interested in the last, great entrepreneurial opportunity in sports – getting value out of an underdeveloped global sport in the world’s largest consumer of sports entertainment.[8]  As an added incentive, MLS may be even more competitive over the next five years as UEFA’s financial fair play regulations attempt to drive down salaries in Europe.  Further, once MLS begins poaching players, the price of adding follow-on talent will drop as others will see that they can make money, challenge themselves, remain visible internationally, and know they will not be discriminated against come time for World Cup play.
 
I wouldn’t expect the MLS to announce an aggressive expansion strategy, as that might reduce potential fees for new teams, but I do hope the league focuses on identifying and supporting new investment groups.  If the league can find itself squarely set up with a handful of new markets in the next 7-8 years (as UEFA’s rules start to hurt European acquisitions), we might have Saturday afternoon pub crawls with slurred discussions of what is was like before soccer made it in America.
 
[1]  Murray, K., Cass to Keep City on Soccer Kick, Balt. Sun, Aug. 2, 2010 at 1D (52,000 for Manchester United v. Kansas City; 44,000 for Manchester United v.  Philadelphia; 33,000 for Manchester City v. Mexico’s Club America; 32,000 for Celtic v. Sporting Lisbon; and 27,000 for Club America v. San Luis FC).  
[2]  Grathoff, P., MLS wants to capitalize on America’s interest in the World Cup, Kan. City Star, Jul. 13, 2010.
[3]  Premier League Salaries Skyrocket!, Apr. 10, 2010, available at http://soccer365.com/english_premiership/story_28410191410.php
[4]  MLS salaries are from the MLS Players Union.
[5]  The MLS All-Star staring XI consists of Donovan Ricketts ($160,000), Omar Gonzalez ($157,000), Chad Marshall ($320,000), Jamison Olave ($240,000), Kyle Beckerman ($250,000), Dwayne De Rosario ($443,750), Javier Morales ($252,500), Marco Pappa ($108,000), Guillermo Barros Schelotto ($241,250), Edson Buddle ($188,448), and Landon Donovan ($2,127,777.78).
[6]  The MLS All-Star reserves are Nick Rimando ($131,000), Kevin Alston ($124,000), Jonathan Bornstein ($100,000), Heath Pearce ($207,500), Wilman Conde ($200,000), Sebastien Le Toux ($122,000), David Ferreira ($300,000), Brad Davis ($258,062.54), Shalrie Joseph ($475,000), Jeff Larentowicz ($150,000), Bobby Convey ($307,500), Juan Pablo Angel ($1,918,000), Brian Ching ($350,000), and Jaime Moreno ($185,000).
[7]  All of these international players are the highest paid athletes in their country as reported by ESPN Magazine.  Best Paid Athletes from 181 Countries, ESPN Magazine, May 2, 2011 at 60-61.
[8]  The same arguments apply to the sports networks.  As demonstrated by the ratings for the last World Cup, a network that significantly invests in the MLS, and commits to promoting the sport, can find itself holding a top-shelf, internationally-recognized sports property.

Some quick business hitters from around the league.  We’ll start with the announcement that the 2011 MLS Cup will be held at the Home Depot Center for the first time since 2008.  Los Angeles is a favored location for the championship game because of the allure of the City, the importance of the AEG owned venue and the typically sizable crowds that turn out.  The game will be televised at 9:00 ET, putting it in prime time on the East Coast and not too late for those in attendance to get home on a Sunday night.  LA is also easy to get to from everywhere in the country.

Because of the amount of events that surround the Final (especially for sponsors), and the various opportunities for fans, media, team officials and even the Commissioner, we remain convinced that a neutral site venue is ideal for the league. While many fans pine for a match hosted by the highest ranked team, we continue to support the concept a weekend event for the game.  It allows fans and others involved in the league to plan a weekend long excursion well in advance and makes the game a destination.

Elsewhere, the annual Sports Business Award nominees are out for 2011.  The awards cover 15 categories and include a number of soccer nominees.  Red Bull Arena has been nominated as the facility of the year and MLS as professional sports league of the year. The fourth annual event will be held on May 18.

Finally, we recommend this article on the Salt Lake Tribune about the national broadcast choices made by MLS.  In sum, Scott Pierce missed the boat by not putting RSL on national tv more often.  Given the brand of soccer that RSL plays, it is hard to argue the point.  While its true RSL cannot match the star power of New York and Los Angeles, educated soccer fans unfamilar with MLS would be impressed watching the team play.

For sports fans, May is a great time of year.  Baseball is in full swing, the NBA playoffs are slowly moving forward, the MLS season is shaking out and the Stanley Cup Playoffs are bringing night after night of heart stopping excitement.  A bit of a personal statement here; I am not a hockey fan.  When the Hartford Whalers left town more than a decade ago, I swore off pucks forever.  However, when the NHL playoff season starts, I find a close game to be riveting television, despite having no rooting interest and very limited knowledge of the players on the ice.

Over the last few years, many soccer fans have opined that the beautiful game is overtaking hockey as the “4th” American professional sport.  Yet the recent NHL/NBC/Versus television deal belies that belief.  ESPN pays $8.5 million annually for MLS rights, yet that deal is part of a larger SUM/ABC/ESPN package that includes USMNT games and FIFA World Cup.  In contrast, the NHL recently announced its new deal which upped its annual fee from $77.5 million per year to over $185 million per season.  The deal includes games on Versus and NBC and requires the national telecast of every playoff game.  The difference between the deals is shocking and shows the gulf MLS still has to cross to reach the Big 4.

What makes the difference between the deals even more difficult for soccer fans to stomach is the relative similarity of the regular season television ratings garnered by each sport.  Prime time games on Versus averaged 353,000 viewers this year. MLS ratings have been pretty consistently around 250,000 per match, with some games reaching numbers at or above the NHL telecasts.  Despite these relative similarities, and the fact that local MLS broadcasts often outdraw local NHL broadcasts in the same market, MLS isn’t close in the all important tv revenue department.

MLS was trying to get $20 million per year from FSC for 2011 and the deal fell woefully short.  The ESPN deal runs through 2014, but ratings are flat.  MLS’ national profile has dramatically increased and the league is moving forwards in leaps and bounds, but claims that hockey has fallen behind are grossly overstated.

Time for our weekly Monday wrap on the weekend that was.  Before we get to attendance at ratings, we recommend that all readers of this site take the time to look at the annual release of MLS player salaries.  The list is put out by the MLS Players Union and always includes a few surprises when considering both the under and over paid.  In the aftermath of last year’s newly negotiated agreement between the league and the union, the increase in minimum salaries is readily apparent.  The list also brings the dramatic salary discrepancies between the top and bottom of teams like New York and Los Angeles directly into focus.

On Saturday night, ESPN2 televised the Red Bulls/Galaxy matchup from the Home Depot Center.  The game pitted the two MLS teams with the most star power and in Beckham, Donovan, Marquez and Henry the game including names with appeal to a wide range of casual and passionate soccer fans. Yet the game was televised at 11 on Saturday effectively missing a significant chunk of a potential East Coast audience.  For a league that is suffering to a generate a television audience, dumping its marquee match into an 11:00 Eastern start was an unfortunate circumstance not intended to maximize television viewership.

On the attendance front, there were a number of mid-week games and stadiums hosting two matches in just a few days.  The week got started in DC with just over 11k for United’s win over Seattle.  Houston had just over 13k.  DC followed that number with about 11,500 on Saturday night, while the Revs got a couple hundred more for their Saturday evening game.  Columbus was the low number, with less than 8k at Crew Stadium, while Chicago brought just over 11,600 to Toyota Park.  RSL had a small crowd for Rio Tinto with just over 14k, while Toronto had more than 20k at BMO Field. LA sold out its match against NY (27k) and Portland was also full with more than 18k.  Overall, it was a fairly unimpressive weekend at the gate for MLS.

Earlier this week we discussed the ongoing efforts at the MLS ticket sales center.  Today we would take our semi-regular look at ticket promotions around the league.  We’ll start in Columbus, where the Crew are offering a contest promotion in conjunction with car rental giant Thrifty.  Thrifty is the official airport parking partner of the team and they are offering a sweepstakes type promotion that provides fans the chance to win 12 tickets and a suite to a future Crew event.  The offering is not tied into a particular game is available to anyone over 18 who completes an online entry.

RSL is offering a series of game day events as part of their upcoming Saturday matinee against Chivas USA.  The entire array of events is presented by OhMyCrafts.com.  The first 1,000 Moms through the door will receive RSL cinch sacks, while “Carnival Real” will start two hours before the start of the game.  A number of RSL corporate sponsors including Burger King, State Farm and others wil have booths at the event.  There will be music, soccer themed events, food and more.

We’ll finish in DC, where United is offering a number of promotions for their May 7 match at RFK, which is also their second home game this week.  The team will be offered a number of “Events for Kids“.  There will be mascots from a number of local mascots from a number of local non-professional teams.  There will be a number of soccer themed events, goodie bags, video games and more.  The team will also offer a meal deal that includes 4 tickets, 4 hot dogs and 4 sodas for $94.  For those seeking a more expensive experience, tickets will go up to $186 for the package.

The Sports Business Journal is reporting that the recently opened MLS National Sales Center is expanding its offerings after a successful first year of operation.  Major League Soccer announced the formation of the MLS National Sales Center to assist MLS teams with ticket sales and staffing last May.  The Center was slated to offer a 45 day program that included placing graduate ticket sales professionals in employment with individual MLS teams.

At the time it opened we reported the following:  “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.”

The newly increased offerings will include regional outreach and week long sessions directed at existing MLS sales personnel.  According to the SBJ report, 39 of 41 program graduates have found employment with MLS franchises.  FC Dallas, which has had a successful ticket sales year, has hired 5 program graduates.

This remains 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.  At the same time, the opportunity to use the center to train existing employees will ensure that current staffers are kept informed about new techniques and constantly increasing their knowledge base.

Over the last couple of weeks, we posted our Q&A with Timbers VP of Marketing Cory Dolich our interview with Revs COO Brian Bilello and our chat with FC Dallas Director of Marketing and Digital Media Justin McCord.  Today we are lucky to have an interview with Emigdio Gamboa, the Fire’s VP in charge of Marketing and Communications.  Mr. Gamboa was kind enough to provide some thoughts on Chicago’s 2011 marketing efforts and use of social media.

Footiebusiness.com: How is Chicago utilizing social media?  Some teams are aggressively relying on Twitter, posting frequent training camp updates, linking to blog posts about the team and providing teasers about signings and ticket promotions, while others have been slower to adopt the technology.   How do you anticipate the team using Twitter and Facebook going forward?  Does the team have a policy on players using Twitter?

Emigdio Gamboa: For the past couple of seasons we have made social media a focal point of fan interaction. Over the past two seasons we have developed and implemented a progressive Facebook and Twitter strategy that has seen our Facebook numbers go from 8,700 in Feb. 2010 to over 50,000 fans at present. We see Twitter and Facebook serving different purposes & objectives moving forward.  Our Twitter is a complimentary tool to Facebook in our overall social media strategy.  As it relates to Facebook, we are continuously focused on improving the quality of engagement with our followers paying particular attention to the type & frequency of our postings.  We want to make certain that the content that we are posting is relevant and entertaining so that it is creating a two way dialogue with our followers.

Currently, we do not have a written policy on players using Twitter. We encourage our players to use Twitter & do so in an appropriate fashion.

FB: With respect to ticket promotions, some teams heavily utilize game day promotions to drive traffic while others have moved away from that model.    Should fans expect game day promotions in 2011?  Similarly, some teams have started using Groupon to sell individual game tickets.  The Fire used Groupon to sell season tickets.  Was that a successful relationship? Will you use Groupon to sell individual game tickets in 2011?

EG: Yes, fans should expect to see game day/ticket promotions in 2011.  Currently, we have been promoting a “family pack” offering that includes 4 match tickets, 4 hot dogs & 4 refreshments.  However, we have made a stronger emphasis on improving the overall game day experience.  We understand that we have a diverse and passionate fan base that expect and appreciate different aspects of a game day experience so we try our best to cater to our entire fan base. From the different activities in our fan fest area, to the food, the bi-lingual public-address announcements, etc., this is an area that will continue to evolve.

Our relationship with Groupon has been successful in the sense that it gave individuals who might have not otherwise experienced a match live the opportunity to do so.  Once you experience a match, the likelihood of returning is obviously much higher.

FB: What do the Fire offer as season ticket incentives?  Do fans get special values from being part of the team’s season ticket base?  How many season tickets has Chicago sold this year? How does that compare to previous years?

EG: Following the 2010 MLS campaign the Fire evaluated their ticket sales philosophy and integrated fan input to propose the most progressive season ticket campaign in the club’s 14-year history. Gaining feedback from its supporters about the kind of offers and incentives they want in a Fire season ticket package the Fire developed  a season ticket campaign built by-and-for a supporter. Starting with an unprecedented  move in Chicago sports, the club offered free and reduced parking to a majority of season ticket holders and a 12-month payment plan that allows Fire Season Ticket Holders to pay as low as $15 a month. In addition, the Fire created a referral program, allowing current Fire Season Ticket Holders to receive a 20 percent credit on referral purchases. Those referred receive a five percent savings on the purchase of their 2011 season tickets. The result has seen the club sell over 2,800 new season tickets in the offseason, breaking the previous club best of 1936 season tickets sold set in 1998, the Fire inaugural year.

Our season ticket holders are given a wide range of incentives from access to exclusive team events, gifts and other special offers including free parking (depending on the ticket package), discount on merchandise & concession items.  We strive to provide our supporters with an authentic soccer experience while providing them with extensive access to the club at a cost effective price point.

FB: What type of marketing efforts does the team make to attract soccer fans in the Chicago area who follow the sport (in Europe, Latin America, etc…) but not the team?  Do you use billboards and newspapers or a more targeted approach? Do the friendlies you play against club sides from around the world have a measurable effect on your regular MLS ticket sales?

EG: We have a heavy emphasis on grassroots marketing activities focused on areas in our community where the sport is being played from soccer fields on the south-west of Chicago to fields in places like Palatine, Naperville and beyond. We’ve developed a number of strong relationships with youth and adult soccer leagues to engage individuals who are playing soccer to help drive them to Fire matches.

We do have a targeted approach in placing billboards and other forms of advertising keeping different audiences in mind.  Friendlies have a minimal effect on our regular MLS ticket sales.   However, they serve multiple purposes from branding to different communities, building international relationships to simply improving our level of competition.
FB: The Fire had a long relationship with Best Buy as their jersey sponsor.  That relationship recently ended.  What efforts have you made to secure a new sponsor?  Do you expect to announce a new relationship soon?

EG: Our effort to secure a new sponsor is an on-going process, the jersey sponsorship is a unique opportunity & we continue to meet and discuss the opportunity with potential sponsors.