Footiebusiness

During a session with the media at the 2011 All Star Game in, Don Garber responded to a question from the Philadelphia media about the possibility of an All Star Game in the City of Brotherly Love.  The Commissioner suggested that Philly would soon host the event and now it is official that the 2012 version of the event will go forward at PPL Park.  On July 25, 2012 the MLS All Stars will play host to an unannounced foreign side.  Once again AT&T will be the title sponsor of the game and ESPN2 will carry the US English based broadcast.  The game will also be telecast in Spanish and in Canada.  ESPN will also make the game available live in over 100 countries.  Season ticket holders will have the first crack at tickets.

RSL has announced a new television deal that will bring all of its locally televised matches to the Salt Lake City market in HD.  The team’s partner is the local ABC/CW affiliate.  RSL will become the first team to have all of its local broadcasts on over the year television.  Per the RSL Tribune, ” 10 RSL games will air on KTVX-Ch. 4 and 20 on KUCW-Ch. 30. It’s a sign of the stations’ commitment that not only will Channel 4 pre-empt local newscasts for nine of those games, but also a total of 15 will pre-empt network programming.”

Finally, the initial ratings for the FOX live broadcast of Arsenal/Manchester United are in and the result was fairly disappointing.  The overnight rating failed to reach 1.0 and stopped at .9.  FOX’s broadcast of Liverpool’s 2-1 defeat of Chelsea on Nov. 20  delivered a 1.1 household rating, with 1.67 million total viewers, according to Nielsen Media Research.    That telecast was a re-broadcast and not live.

Over the last year or so, we have discussed MLS’ efforts to measure the value of its television exposure through various local and national broadcasts.  Through the website criticalmention.com, MLS tries to alert media  to the “value” of its presence on various television programs.  Since a few weeks have passed since we last checked in on this metric, we thought providing a snapshot of this metric of MLS media exposure.

We’ll start with GoldenBalls, who is responsible for the rare soccer reference on E.  The Galaxy star re-upped for another two years with Los Angeles and the Entertainment network provided some footage of the press conference, Posh and Beckham’s kids.  MLS didn’t get a mention, but the Galaxy certainly did.  Team sponsor Herbalife also earned some free airtime thanks to their relationship with the team.  According to Critical Mention, the clip reached more than 280,000 viewers yet accounted for only $3300 in publicity for the league.  The broadcast aired at 7:00 a.m.

Elsewhere, the Seattle ABC affiliate offered more than one minute of Sounders coverage as part of their evening newscast.  The piece focused on the draft and included brief interviews with the team’s first two draft picks.  The sports anchor also announced the team’s home opener and footage of early preseason training was shown in the background.  Seattle is the 13th largest television market in the country.

Finally, the Kansas City ABC affiliate offered some coverage of Sporting’s recent signings.  The brief piece included some words from Peter Vermes and some game footage from last season.  The sportscaster also mentioned the start of camp.  The broadcast reached just about 5,000 people.  In total, Critical Mention picked up five clips that reached 413,000 people.

Lots of  business stories from the weekend. We’ll start with the broadcast of the Arsenal/Manchester United match televised, live on Fox.  The Sunday telecast was part of a large block of sports programming on the new FIFA partner that included the NFC Championship game from San Francisco.  Rob Stone anchored the pregame and halftime festivities, but the network relied upon its English crew for the play by play.  According to reports, the game was carried by more than 90% of Fox affiliates around the country.  In two weeks, Fox will again go live with the English Premier League as part of its Super Bowl Coverage.  Importantly, the network used the Championship game to promote its Super Bowl soccer telecast.

We’ll next move to Phoenix, were the US National Team hosted Venezuela in the first US Men’s match of 2012.  The game was played at University of Phoenix Stadium before more than 22k.  The match was not broadcast on English language television, but on ESPN3.com.  The broadcast was fairly disappointing but the duo will be back on ESPN3 for the upcoming match against Panama.  The was broadcast in Spanish on Galavision.

Even though MLS is still six weeks away from opening its season, the league was in the news all weekend thanks to top performances from some of its stars playing elsewhere this winter.  Robbie Keane scored twice in his first EPL game during the two month loan to Aston Villa, while former league stalwart Clint Dempsey managed three goals for Fulham.  Landon Donovan continued his strong run of form at Everton and David Beckham confirmed his return to MLS,.

Guest Post: I have Been to the Mountaintop: Rethinking Success for MLS

On the road tonight, so here is an encore of the most popular guest post in Footiebusiness history.  The original generated a significant amount of comments. Back live on Monday.

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.

The draft is over, training camps are opening up and the season is less than two months away.  It has been a while since we looked at promotional efforts around the league, so we thought the early preseason presented a good opportunity to look at ticket sales efforts as teams gear up for the start of the 2012 campaign.  We’ll start in DC, where United is offering an autographed Dwayne DeRosario ball as part of its opening game ticket promotion.  The $118 package also includes 4 tickets to United’s March 10 home opener. The package is available at a number of higher price points and purchasers can get one ball for every four tickets purchased.

The Chicago Fire are offering a “Winter Four Pack” for their home opener.  The package comes with four tickets and four Fire scarves.  Tickets range from $92-$140 and does not include a shipping and handling fee for the scarves.

Teams aren’t only relying on ticket promotions to reach out to fans.  The always active RSL front office is throwing an open house as part of an effort to sell season tickets.  The team is opening Rio Tinto for a few hours on January 28, 2012 and will invite fans to tour the stadium, see the locker room and get photos in the facility.  Fans who successfully refer a new season ticket holder also get the benefit of a new RSL jersey.

Yesterday we wrote about the yet to be announced Chicago Fire jersey sponsorship deal with Quaker Oats.  The relationship became official today.  One of the biggest changes from the rumors to the truth is the deal is now worth a reported $8 million over three years, significantly higher than the previously reported less than $5 million over that time.   The Fire did a credible job with the announcement and roll out, offering this clever video now available on YouTube.  You can see that video here.

As with many of the jersey sponsorships, the deal is reported to include a number of additional items including business and marketing initiatives.  TThe deal includes placement at the MLS Cup and All-star game and a relationship with the Fire youth program.  According to the Tribune, the Fire have been working with Quaker since last Summer’s Manchester United match to bring the deal to the end.

MLS recently announced a relationship with the Boy Scouts of America.  According to the press release, “scouts participating in MLS markets will be provided access to MLS players, coaches, league and club executives, and unique programming tailored to the Scouts. Future plans include an opportunity for Scouts to conduct community service projects and be selected for in-game ceremonies at MLS stadiums, for “Scout Nights” that support local councils in the recruiting and retention of Scouts, and for local MLS players and executives to partake in formal discussions with Scouts on topics such as fitness and leadership.”

Finally, FC Dallas has entered into a 15 year deal with Legends Hospitality Management to run concessions at FC Dallas Stadium. Legends is a joint venture of the Dallas Cowboys and New York Yankees.

On Monday evening, Ed Sherman of Craine’s, broke the news that the Chicago Fire were nearing a $1.3-1.5 million dollar per year jersey sponsorship agreement with Quaker Oats. If the report is accurate, the new deal is a great score for a Fire franchise that went without a jersey sponsor in 2011 after Best Buy ended its relationship before the season started last year.

The finances of the deal are seemingly on the low side of those in place around the league.  On January 12, 2011, the Philadelphia Union of Major League Soccer announced a four year, $12 million dollar deal with Mexican food conglomerate Bimbo.   However, given how far MLS jersey deals have come (even in this down market), and that teams like FC Dallas and Colorado are still searching, a deal with Quaker would seem to be a winner for the Fire.  Last season, the BBC reported that seven EPL clubs carry sponsorship deals valued at less than $1.6 million dollars. According to a recent analysis conducted by SPORT + MARKT, the 18 remaining teams in La Liga (after Barcelona and Real Madrid are removed), average less than $2.5 million per jersey deal.  Similarly, with all 20 teams accounted for in France’s Ligue 1, the average jersey sponsorship is valued at less than $4 million dollars per team.

The Quaker Oats Company is one of the brands owned by PepsiCo and is based in Chicago.  A deal with Quaker would be a perfect fit for the Fire.  Quaker Oats is a local company with national cache that will be easily recognized at every venue around the country.  At the same time, this would seem to be a strange marriage for Quaker.  While some of the other PepsiCo brands would seem to be natural fits for the soccer demographic, Quaker Oats, despite its array of subsidiary brands, seemingly skews towards an older group.

The MLS SuperDraft is over and teams are now gearing up for the start of training camps later this month.  As typically happens this time of year, some of the best exposure for MLS came in the form of local newspaper articles about draftees.  By covering the success of their locals products, these hometown papers expose the league and its teams to new audiences that typically don’t receive coverage of soccer in their paper.  One great example is this piece from the Lancaster Intelligencer-Journal, the primary paper in Lancaster County, PA.  For the second time in as many years, Lancaster County has been home to one of the top picks in the MLS SuperDraft, and the paper has responded with solid coverage of both drafts.   The News Tribune in Tacoma Washington weighed in with this coverage of local product and Revolution draftee Kelyn Rowe.

CONCACAF announced changes last week to the C’hampions League format for the 2012/2013 version of the tournament.  The federation will do away with the “play-in” portion of the tournament, instead dividing the 24 teams into groups of 3.  One first place team will emerge from each group and enter the quarterfinals.  This will significantly reduce travel costs for the teams and will likely ensure that more MLS teams advance to the quarterfinal round.

CONCACAF was not the only tournament to announce big changes last week.  The US Open Cup is moving forward with a significant alternation in the fabric of the event.  All MLS teams are entered now and the host team will no longer be determined by sealed bid.  A total of 64 teams will enter the event with all matches concluded in August.

The MLS SuperDraft was held on Thursday and broadcast live on ESPN2.  After two hours of televised coverage, the feed switched to ESPN3.com. Adrian Healey manned the desk while Alexi Lalas and Taylor Twellman handled much of the commentary heavy lifting and despite some hiccups, the broadcast was generally well done.  The ESPN talent was not afraid to touch on some of the big issues facing the league during the event and Twellman and Lalas were able to provide some insight into the top picks in the draft.  On the downside, interviews with player were in short supply and the network lacked good college footage of the players.  Whatever the value of a 30 second highlight package, fans enjoy seeing the future wearers of the colors in their college days. We continue to believe that televising the SuperDraft is exceptionally important for the league.  Commissioner Garber has long talked about creating special moments, and the memory of seeing top picks receiving their scarf and shaking Garber’s hand will burn into the brains of fans, journalists and youth players

Not surprisingly, Twitter was awash in draft talk and carried the burden for those not sitting at home in the middle of the day.  Commentary, trade talk and general observations drove the Superdraft up the “trending” list for the social media site.  The league and teams effectively used the medium to connect with fans and broadcast information about the draft, picks and more.

One big business item that we mentioned on Twitter was the disappointing lack of coverage on new league partner NBC Sports’ website.  Other than a brief AP story, there was no evidence of the MLS draft on the site.  The front page, which includes a wide array of sports news, was totally devoid of coverage.  This was a big opportunity for the network to make an impression with skeptical MLS fans and the fell short.

Advertisers included presenting sponsor adidas, Weight Watchers, Geico and local ads.

As we do every so often, we thought we would take a look around the web to see how mainstream websites and publications are covering the annual SuperDraft.  We’ll start across in the pond in England, where  the Guardian continues its regular (and impressive) MLS coverage with a team-by-team look at the upcoming draft through the eyes of various team supporters. The piece is well researched and clearly required a substantial amount of effort to put together.   The comments after the entry are also instructive and worth a read.

Over at CNNSI.com, Avi Creditor has weighed in with a detailed piece looking at prospects and draft targets.  The article does a solid job listing some of the top talent from the college ranks.  Creditor also weighs in with an article looking at the various team needs across the league.  The effort from CNNSI should be contrasted with the absence of the usually excellent coverage on ESPN.com.   The draft is largely MIA on the Worldwide Leader’s website despite the upcoming broadcast on ESPN2.

Elsewhere, Canada’s TSN offers some thoughts on Montreal’s first Superdraft and adds some insight into Jess March’s thinking as the season gets closer. Staying North of the border, the Vancouver Sun’s soccer blog chimes in about the relevance of the Superdraft in MLS 2012.  Elsewhere in CONCACAF, the Jamaica Gleaner weighs in on the MLS prospects of local product Darren Mattock.  The day after the draft is typically replete with these types of articles from town newspapers covering the success of community residents.