Soccer Business Bits: MLS Bargains

rslThe MLS weekend starts off with a Friday night tilt at Rio Tinto.  RSL is promoting its Mangia service, which allows patrons to order food directly to their seats.  Mangia allows fans to order food by texting their order to Mangia.  The service has been piloted to a small section of Rio Tinto, but for the July 24 match against Dallas, the service will be available stadium wide.  Moreover, in an effort to promote the service, hot dogs will cost only a dollar and will deliver for free.  This seems like a fairly good idea for a sport like soccer that has no tv timeouts.  It will interesting to see if the service succeeds.

For their July 25th match against the Revs, the Dynamo are contributing $10 from each ticket to Nothing But Nets.  The well regarded charity purchases malaria nets for Africa families and children.  At the same time, the Dynamo are offering a Summer special for the game that includes 4 tickets for $55, 2 chicken sandwiches and 2 Happy Meals.  The promotion is offered in conjunction with McDonalds.

Finally, in conjunction with the Earthquakes’ Saturday night match against DC United, San Jose is promoting its Night of Champions pack.  On August 8, San Jose will play the first half of a doubleheader with Barca and Chivas playing the night cap.  The special offer is a ticket to the doubleheader and the July 25th match for as little as $45 per ticket.  Fans can also apply the deal to a number of other games.  The doubleheader will take place in San Francisco at Candlestick Park.

Stadium Fun: Downtown in Houston

houstonWhen the San Jose Earthquakes became the Houston Dynamo in 2005, part of the understanding was that a soccer specific stadium was just around the corner.  After years of playing in Robertson Stadium (home of the Houston Cougars), it appears that the dream of a downtown Houston stadium is closer to a reality.  The downtown location of the proposed stadium is right near Minute Maid Park (home of the Astros) and situated in a Tax Increment Reinvestment Zone.

According to the City of Houston website, Tax Increment Reinvestment Zones are:

special districts created by City Council to attract new investment to an area. TIRZs help finance the cost of redeveloping or encouraging infill development in an area that would otherwise not attract sufficient market development in a timely manner. Taxes attributable to new improvements (tax increment) are set-aside in a fund to finance public improvements in the zone. Zones in the City of Houston have been created for one of three reasons:

  • to address inner city deterioration
  • to develop raw land in suburban fringe areas
    or
  • to proactively address the decline of major activity centers

Total cost of the 21k stadium is expected to be about $80 million with the Dynamo ownership (primarily AEG and Golden Boy Promotions) funding about $60 million.  The rest of the funds could come from tax credits,  the TIZ money and from some of the stiumulus money floating around.  The TIZ program will also provide the property for the stadium.  According to Houston President Oliver Luck, multiple banks are lining up to provide financing for the contruction project.  As we have noted previously, this is a great time for construction, with the cost of materials and labor way down.  Also, these are the type of projects that can bring jobs and income into the economy.  The economic benefit of stadium projects is also debatable, but during a downturn there is a definite economic upside.

The renderings are out and design firm Populous has been selected for the project (also did Citi Field).  An important aspect of the agreement as far as obtaining city approval is the participation of Texas Southern University.  Although negotiations are ongoing, it is expected that Texas Southern football will also use the stadium for at least 30 years and a $2.5 million investment.

Importantly, this is not the first time Houston has gotten close to a stadium deal.  However, the pieces appear to be slowly clicking into place for a 2011 opening.  A downtown stadium in Houston will continue the trend that has been successful in Toronto and Seattle by placing the Team within close proximity to public transportation and population centers.  With Philly and New York set to open new stadiums in 2010 and other projects on the way in Portland, San Jose and Kansas City, this is a great time to be an MLS fan.


Soccer Business Bits: Attendance Worries?

mls With the first month of the season behind us,  enough games have been played to take a closer look at attendance around the League.  There have been successes (Seattle, Toronto), disappointments (Dallas, New York) and one pleasant surprise (Chivas).  Most of the teams in the League are off; some are way off.  The addition of Seattle’s big numbers mask the problem but the numbers are tracking well below those of 2008.  mls-daily.com does a great job of tracking the numbers here.

With the new stadium a season away, the Red Bulls get a pass, as do New England and Colorado with only one home date so far.  Despite its new stadium, RSL has also struggled to draw, but the weather excuse is probably most valid in Utah.  The Dynamo seem to be holding steady, and their history suggests attendance will pick up. Chicago is troubling, as are DC and San Jose.

Is it the economy?  The absence of Beckham? Bad weather?  Regardless of the reason, attendance is down for 10 franchises with some (Chicago & Colorado) down more than 30% from last year.  Perhaps most dire is the situation in Frisco, TX, where FC Dallas played before a remarkably sparse crowd (even the announced sub-7k attendance seemed very generous) in their weekend tilt against Toronto.  We have previously discussed the problems in Dallas, when this story raised some issues about the team’s pre-sale efforts.

We will keep tracking these numbers as the season rolls along and the weather warms.  However, summer is usually a low point for League attendance (especially in the South).  Let us know if you have any thoughts on the attendance issues facing MLS in 2009.

Interview With Houston Dynamo Senior Vice President Rocky Harris

houston-dynamo

We have previously posted on Houston’s promotional efforts ( a promotional date for every game) and some of their marketing efforts. Rocky Harris, a Dynamo Senior Vice President, was kind enough to chat with us about the Dynamo’s marketing plans in 2009, fan outreach and more.  Mr. Harris has been with the Dynamo for about one year following a six year stint in the N.F.L. with San Francisco and Houston.

Footiebusiness.com:  What is Houston doing differently in terms of marketing in 2009?  How has the economy impacted those efforts?

Rocky Harris: We made a few marketing changes based on the economy. 1. Develop plans early – We knew early on that we needed to put our strategy together early so we don’t miss any opportunities. An example of this is that we finalized our entire promotional calendar before the season started so we could promote our games/themes/giveaways earlier and to get sponsors to commit to their nights and support their themed nights with media support. The promo calendar was complete before the season started and we have seen a lot of positive feedback from our sponsors and our fans. 2. Decrease media spend – We reduced our media spend and we justified it based on the following: the mainstream media is giving us more coverage, our unpaid promotional and media partnerships are more effective based on our partnership with the CBS affiliate, we signed a deal with Comcast delivering television advertising, better leverage of sponsor assets and we are shifting that money into sales and marketing initiatives that return direct ticket sales. 3. Going with what works: Our business plan was developed strictly on programs that have a history of success. The 50 programs we have in place will accomplish this goal. The marketing department took on a much greater role in helping the growth of our business. The marketing department is focused on creating or supporting programs that drive tangible business results.

The marketing department’s purpose is as follows: 1. Make a connection with a targeted audience/building fans, 2. Drive ticket sales, 3. Create sponsorship assets, 4. Build brand presence and major league image, 5. Provide valuable market exposure, 6. Help drive broadcast ratings, 7. Help drive camp registrations, 8. Support all departments.

Marketing’s general area of focus includes the following: advertising/media, promotions, grassroots marketing, Hispanic marketing, web-based marketing, production, game management and game day experience.

FB: How have the Dynamo utilized online avenues, such as social networking sites, SUM’s new online ad network, etc..- to promote and market the team? What is the endgame for these online efforts? Is there research that suggests such efforts will increase fan interest?

RH: We were the first MLS team to have a social networking site and we already have over 2000 members. We love it. It gives us a direct connection to our fans. Our executives and players can blog about insider information. Our COO writes a blog every few weeks about the status of the team.

There are three objectives: 1. engage and build fans, 2. Increase online revenue, 3. Sell tickets. We are also in the process of putting together a Twitter strategy. Yes, there is a lot of research to suggest this is the best way to reach our fans, specifically young and Hispanic fans.

FB: Is there anything unique or different about the Houston market that distinguishes it from other MLS markets? How do your advertising/fan outreach efforts account for that uniqueness?

RH: We have five (5) key target groups that drive our attendance. All of our business comes from these groups therefore all of our strategic efforts will focus on at least one of these targets. They are as follows: Youth Audience, Hispanic Community, Corporate Community, Adult Soccer-Playing Community and the General Market. We have identified and established 50 results-oriented programs and initiatives aimed at reaching these audiences and driving specific company-wide goals. These programs serve as the basis for our 2009 business plan.

FB: Although still in its infancy, Seattle is being trumpeted as a “model” franchise for purposes of marketing and fan outreach. Are their any lessons that an established franchise like Houston can take from Seattle’s efforts?

RH: Yes, it taught me that timing is everything in business. Plus, they have a solid plan to execute and deliver the promises they made to their fans. As you know, Seattle has some disgruntled fans with their NBA team’s departure so the fans have grabbed on to their positive image in the marketplace. They have a great international community and a solid soccer fan base. We looked at their marketing efforts and we see a lot of crossover to what every other MLS team is doing.

Thanks to Rocky Harris.  Check out our recent interview with Revolution COO Brian Bilello for his take on many of these same issues.

Soccer: The next big thing?

houston-dynamoA recent article in the Houston Press regurgitated the “MLS is minor league and will never succeed” argument and (not surprisingly) drew some heated respones from both sides of argument.  While we typically focus on news and not opinion, the author, John Royal, actually took the time to support his opinions with data; so we thought we would respond.  Unfortunately Mr. Royal and the angry soccer fans who wrote to him are debating the wrong issue.

MLS will never be the NFL, MLB or NBA.  Billion dollar T.V.  deals, 10 million dollar player contracts and 70k person sellouts aren’t coming to MLS any time soon. But so what?  Soccer occupies a growing position in American sports.  An average of 16, 310 fans attended each MLS game last year (within 1k of the NHL and NBA), new stadiums have opened in each of the last few years and multiple TV deals have been announced.

At the same time, major companies like Microsoft and VW are spending millions to buy ad space on the front of MLS jerseys, multiple groups are willing to spend $40 million for the right to own an MLS franchise in the next round of expansion and stadiums are going up in numerous cities to support local MLS teams.  That is hardly “minor league.”

TVdeals with multiple networks are now part of the League landscape (in this day and age, is ABC/ESPN really worse than NBC?  really?)  Comparing a league younger than 15 with the likes of the NFL (and even the NHL) is silly. (even if the Seattle Sounders sold 50% more season tickets than the Mariners).   Also silly, is comparing MLS with minor league sports because of the same ownership group owns two teams (Does Mr. Royal recall when the MLB owned the Montreal Expos or that multiple NHL franchises are presently teetering on the edge of collapse?).

I agree with Mr.  Royal that soccer apologists have been  wrongly proclaming it the next big thing for decades.  Far too many soccer fans get angry when someone takes the other view.  But both Mr. Royal and supports of the beautiful game should consider the bigger picture.  The League is gaining in popularity and awareness on a level unprecedented in American sports history.  More importantly, for the first time in American history, soccer is relevant in the U.S. and fans have their own League and own teams to support.

To Mr. Royal, however, I conclude with this:  You say, “if the MLS teams can ever draw legit crowds for actual games against other MLS teams that don’t involve David Beckham, then I might be willing to listen to you talk about the great so-called soccer boom

The Houston Rockets are averaging 17,426 this season.  In 2008, the Dynamo averaged 17,752.

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