The Monday After

Perhaps the biggest business news from the soccer weekend was the announcement  that storied Scottish club Glasgow Rangers is withdrawing from its 2010 American tour.  The tour was intended to include matches against Celtic in Boston and DC United at RFK.  The BBC article references the recent Boston Globe article that criticized Rangers’ fans and ultimately forced the Globe to withdraw the article and issue an apology.

Attendance across the league was varied with more than 10k in Dallas and the usual big numbers in Toronto in Seattle.  We’ve already discussed the sub 6k number on Wednesday in New England, so we thought we would focus on the solid numbers in Salt Lake City, where the defending champs are on pace to crush the attendance from 2009.  RSL is averaging 15,600 this year, up 25% from the first three games of 2009.  We’ve discussed RSL’s 2010 marketing efforts with team Marketing Director Davy Ratchford and it appears those efforts are paying off.  RSL is an exciting franchise to watch, as it garners significant press attention in its “smallish” market and puts an outstanding product on the field.  We will continue to monitor RSL’s attendance as the season moves into the summer.

The big attendance story for the weekend was the amount of empty seats in Atlanta for the Beat’s home opener against Sky Blue in WPS action.  While the crowd looked solid, you always hope to sell-out a stadium in its inagural match.  That said, kudos to WPS for streaming the game live and for free on the league website.

One final note.  The Seattle Sounders’  response to their big loss over the weekend to Los Angeles wasn an MLS first.  The team announced that season ticket holders will be refunded their money (i.e. credited on their account for next year).  This is a great P.R. move even if it is a bit strange.  Teams have bad games and franchises typically don’t offer refunds, but in this case the team will buy some good will with its fans while making headlines in media outlets across the country.

The CBA

As most American soccer fans know, the Collective Bargaining Agreement between MLS and the Players’ Union is set to expire at the end of this year.  Lately, we have been getting a number of e-mails asking for some detailed discussion of the CBA from a business/legal perspective.  We are starting to look into the issue and will have some detailed posts coming up.  In the meantime, take a look here, for a copy of the CBA.  For a recent update on the status of negotiations, look here.  For some thoughts from MatchFit USA on the issue, click here.

We’ve been working on part one of our story about converting soccer fans to MLS fans by speaking with an array of folks about what they want to see.  Check back tomorrow for part one.

Soccer Business Bits: American Transfer Season

milanThe transfer season is upon us and players are flying around the globe to and from MLS.  However, the most notable American transfer to date is the recently announced move of  Oguchi Onyewu to world power AC Milan.   While this is big news for American soccer fans, this may also be big business for AC Milan.  “Gooch” will be the first American in the highest level of Italian soccer since Alexi Lalas.  AC Milan will be touring the United States this summer, and will now feature a big American star.  All of the big European teams are very interested in tapping into the United States market, and featuring an American star signed for “free” could generate additional stateside interest in AC Milan.  Also, because AC Milan is regularly featured on television in the U.S., fans following Gooch will have multiple opportunities to follow AC Milan and (perhaps) become jersey buying fans.

The biggest outgoing MLS transfer of recent days involves the pre-contract signing of Yura Movsisyan.  The RSL forward is on his way to Danish club Randers.  Movsisyan made a name for himself in MLS last season by scoring some important goals on RSL’s run into the playoffs.  This is a disappointing transfer for MLS, because the Danish League is not typically considered a “big” League.  Players obviously want to move to bigger leagues to increase their income and their exposure.  In this case, MLS apparently cannot compete with the salary offered by a mid-sized team playing in a stadium smaller than those featured in MLS.  In order to increase its level of play, MLS must compete to keep its mid-level players, and losing players such as Movsisyan is a step backwards.

Also making news is the proposed incoming transfer (to Toronto) of Canadian International Julian de Guzman. de Guzman The signing of such a prominent internatinal caliber player as a “Designated Player” would be an intriguing business move for TFC.  One of the primary rationales  for the Designated Player rule was to bring additional fans to MLS  games, yet TFC sells out all of its games.  Moreover, de Guzman is not the type of player that would increase road attendance for TFC.

Nevertheless, the addition of de Guzman may be shrewd business move by MLSE.  After a number of disappointing seasons, a short term contract offer to de Guzman may placate suffering TFC fans.  Such a move would also likely increase TFC’s television popularity in Canada, while increasing the team’s international profile.

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.

Kaka, Ratings and More

milanYes it is true that we focus on the business of American Soccer here at footiebusiness, but when a transfer is so prominent that non-soccer fans are asking about it, it deserves a mention.  Real Madrid set a record with its record transfer purchase of Kaka from Italian Club AC Milan.  The $90 million transfer is approximately $15 million  more than than the $75.1 million transfer of Zidane to Real Madrid from Juventus.  The record had stood for almost a decade and now it has been shattered by the 27 year old Brazilian (although not shattering the record in Euros because of exchange rates).  For purposes of comparison, recall that the record transfer for an American is the $10 million paid by Villareal to secure Jozy Altidore’s services from New York.

From a business perspective, what makes these huge transfers interesting is the ripple effect.  AC Milan now has plenty of money to spread around to smaller clubs to purchase their rising stars.  In turn, these clubs will spend some of that money and down the line we go.  Interestingly, part of Kaka’s motivation for agreeing to the transfer is to help the financial stability of its old club.  Kaka had turned down a mid-season transfer to Manchester City for $100 million because he wanted to stay at AC Milan.  Now, because of the economic climate, he felt he could help his old club by leaving.  Interesting.

ESPN’s broadcast of the US/Costa Rica broadcast did not crack the cable top 20 last week (getting beat by Sponge Bob and John & Kate Plus 8 among others).  This is disappointing because US Men’s games tend to do well and the Costa Rica match was in prime time.  At the same time, the Sports Business Journal is reporting that MLS ratings on ESPN have remained flat this year at the .2 level.  For reference, this generally means just over 200k homes.  These numbers are disappointing, yet it appears that the new ESPN policy of changing nights for the MLS game of the week has had no impact on ratings  .2 has been the MLS rating for a number of years.

Finally, Toronto has announced its plans for Real Madrid ticket sales.  First pre-sale opportunities are going to season ticket holders followed by fans on the season ticket waiting lists.  Tickets will range from $140-$215 (Canadian), a steep price in a League where season tickets go for not much more than that.  There will be a small discount for season ticket holders.tfc Kaka will likely play in Toronto before Spain.

Soccer Business Bits: Beckham is Back and More

galaxyIt’s been a while since we’ve discussed David Beckham in this space, but with the recent statement from MLS Commissioner Don Garber, Goldenballs is back in the news.  According to the Commissioner, MLS will receive $10 million from AC Milan and Beckham to extend the loan deal into July.  As we have previously discussed, there were a number of components to the Beckham deal.  These included extension of the loan, an AC Milan Friendly and the payment of a fee by Beckham.  As we have also discussed, Beckham’s contract has an out clause at the end of the MLS season.  However, with Becks riding the pine in Italy and MLS attendance struggling, one wonders if the League will find a way to hold on to its marquee attraction.

There is an interesting post about the business of MLS by Jeffrey Marcus at the New York Times.  Mr. Marcus discusses a point that we have previously raised, i.e. how to make MLS appeal to the legions of U.S. based soccer fans.  If 10,000,000 people watched the U.S. play Mexico, and pubs are over flowing with people watching Liverpool play Aresenal on Sunday morning, how does the League capture those fans.  In the post, Mr. Marcus quotes Commissioner Garber discussing the way to increase the League’s appeal by bringing more stars to the States.  Mr. Garber recognizes that the League needs to increase the quality of play (or at least create the impression that the quality has improved). The early years of of MLS unfortunately drove a large numbers of soccer fans away from MLS because of low quality.  The quality has improved over the years, but these fans have not come back.  The various promotional campagins we have discussed this season are largely targeting these fans and the League is making progress.  The League hopes that the economy won’t get in the way.

Business Bits: Expansion in Motion, WPS & Montero

mlsTwo years before they kick off, the newly minted franchises in Vancouver and Portland are already competing off the field.  As we reported earlier this week, Vancouver had already sold 5,000 season ticket deposits less than one week after the franchise announcement.  Now, word comes out of Portland that within the first 48 hours of opening up sales, more than 1,000 season ticket deposits have been sold.  For both teams, present USL season ticket holders will have priority ahead of deposit holders, likely adding a couple thousand more to the season ticket rolls.

Fans of both teams already anticipate a heated rivalry on the field.  Off the field, the franchises will forever be compared because of their start dates and geographic proximity.  It will be fascinating to monitor these franchises as they prepare for 2011.  Advertising dollars, ticket sales, broadcast deals and sponsorships will all provide means to compare the franchises for the next two years.

As we have previously discussed, the WPS kicks off this weekend from the Home Depot Center.  The Washington Post is reporting that more than 10k tickets have been sold for the L.A. Sol/Washington Freedom opener. The game will be nationally televised on FSC and the rest of the League will open the following week.  Check out our interview with WPS Director of Communications Robert Penner for more on the WPS’ business model and expectations.

Colombian Fredy Montero made a big splash on the field in his debut last week.  The performance was so impressive that Seattle fans were already dreaming of multiple MVP awards, or the possibility of a large transfer fee.  An article in the Seattle Times suggests that neither may come to pass.

According to the article, Montero is on a one year contract stemming from a loan agreement.  Seattle GM Adrian Hanauer acknowledged to the paper that Seattle only controls Montero for one season (despite Montero leaving the door open to a second year).  MLS typically orchastrates its loan agreements with an option to buy,  so a one year loan without such an option would be rare.  Nevertheless, a young player with such promise will be a hot commodity on the transfer market, and there are reports that MLS owns some percentage of Montero’s sale rights, thereby affording the League a chance to recoup some money on a Montero transfer. sounders

Suing in the EPL: West Ham v. Sheffield United Continues

Although we typically focus on U.S. soccer here at footiebusiness.com, the potential legal action in England  between West Ham and Sheffield United caught our attention.  It was recently reported that the Clubs reached an out of court settlement in the litigation stemming from the Tevez issues a couple of years back.  However, the dispute may not end there.  Fortunately, sports law guru Dan Fitzgerald has written a detailed article on the continuing squabble. We recommend that you check it out.

Beckham Deal Finalized: Refunds for fans?

galaxyDavid Beckham’s long rumored “extended loan” has finally been announced; the Galaxy midfielder will complete the Serie A season with AC Milan before returning to MLS in the Summer.  Reports also state that Beckham will contribute a substantial amount of his own funds to the deal.  As part of the agreement, AC Milan will play a July friendly against the Galaxy in Los Angeles.  The friendly with AC Milan will necessitate the rescheduling of the Galaxy’s match with New York  from July 19 to July 16 (a Thursday night).

Given ESPN’s new MLS schedule, it makes sense that the League and the Network will bill the NY game as Beckham’s return performance and showcase the match in prime time.  The Beckham games at Giants Stadium have been very well attended, and have provided some of the best soccer of his MLS tenure.  As part of the announcement, the Galaxy also stated that they will be discounting tickets by 10% for the season and refunding 10% to those who have already purchased tickets.

The 10% refund is reflective of the difficulties in building a business model around one player.  A large number of fans bought tickets to see David Beckham, not the Galaxy or their opponent (certainly there has been a huge upside for the League as awareness and exposure is way up over the last three years).  Teams have continued selling 4 game packages and other promotions around Beckham’s visit to their stadium.  However, when he is hurt (as in his first year) or not around (as for most of the 2009 campaign), you get disappointed customers.  At the same time, the “hard core” fan gets turned off by the focused promotion.

Whether you think the Galaxy, MLS or AC Milan won or lost these negotiations (and opinions certainly run the gamut), Beckham’s overall economic impact on the League cannot be disputed.  We discussed that at length here.  For now, the Galaxy have a little extra cap room to utilize because Beckham’s “max” cap number will be pro-rated, and for a few months, the League can focus its attention on the coming expansion announcements and the inagural season in Seattle.milan

MLS 2009 Salaries Released

mlsThe MLS Players’ Union has released 2009 player salaries.   With the upcoming negotiations over a new collective bargaining agreement, it will be interesting to consider how these numbers will change in the coming years.  We’ll be discussing these negotiations at length over the next few months, but for now, enjoy the numbers.

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