Home Depot Center No More

Posted on March 5, 2013 by Ben Berger

galaxySince it opened in 2003, the Home Depot Center has been ground zero for American Soccer.  Home to the Los Angeles Galaxy for a decade, the Carson, California ground has played host to multiple MLS Cup Finals, the introduction of David Beckham, the Final of the 2003 Fifa Womens World Cup and many other big events.  During that time, the name Home Depot Center has become synonymous with soccer in the United States.

On Monday, the Sports Business Daily reported that effective June 1, 2013, the Home Depot Center will be reborn as the StubHub Center.  According to the reports cited by the SBD, the deal will be for six years and will encompass the entire AEG owned property, including the training facilities, tennis stadium and more.  Per SBD, “Shervin Mirhashemi, president of AEG Global Partnerships, said the value is greater than that of the deal Home Depot signed in 2003 when the facility opened. The old agreement carried a value of $70 million over 10 years.” The deal also gives StubHub exclusive marketing rights for the crown jewel of the Carson facility, the Los Angeles Galaxy.

The deal is part of a larger relationship between AEG and StubHub.  StubHub was recently made the exclusive reseller for all AEG venues.   The article includes a great graphic looking at recent naming rights deals for stadiums in MLS. According to the article, the typical MLS deal is for about $2 million per year with deals typically running 10-15 years.

This represents an end of an era, but shows the continued strength of the Galaxy brand and the AEG influence.  Despite the impending sale of AEG, the company has been of extraordinary import to the success of soccer in the United States.

 

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The Cascadia Debate

Posted on January 22, 2013 by Ben Berger

vancouverI have been extremely hesitant to cover the “controversy” over the league’s attempt to trademark the Cascadia Cup in Canada.  Yet with Commissioner taking time on Monday to address the issue, I thought it timely to provide some thoughts on the dispute.  By way of background, some supporters groups have reacted with outrage over the league’s alleged usurping of a fan created event for purposes of profit or business.   The Cascadia Cup tracks the matches between Vancouver, Portland and Seattle and crowns an annual winner based on total points in the series.  The Cup was created by supporters’ groups in 2004 and has been a publicized part of the MLS season since 2011.  For more on the background, click here.

In  late 2012, the league, which heavily promotes the Cup through its website and television partners, took steps to trademark the term “Cascadia Cup” in Canada. In the face of complaints from supporters, the league issued multiple statements indicating that the intent behind the trademark application was simply to prevent exploitation from outside groups and retain the intellectual property associated with the event within the league family.  The statement did little to mollify supporters who were concerned the league would take steps to attach a title sponsor to the event (a la the Subaru Rocky Mountain Cup), somehow cheapening the Cup.

There is no dispute that the Cascadia Cup competition was a supporter event.  These supporters are among the league’s most devoted fans and are highly invested in the success of their team and their league.  However, it is that level of devotion that makes the level of outrage curious.  I have frequently written about how American soccer fans are far more interested in the success of their fledgling league than fans of the other major sports.  Thus, even if the league’s plan (which it has not stated, but which is one of the big concerns stated by supporters) is to monetize the Cascadia Cup, these same invested fans should be supportive of such a relatively benign effort to improve the business of the league.  If monetizing the Cup allows the league to generate revenue and utilize that revenue to improve the league, this is a win-win.  Because of the passion of the supporters, the Cascadia Cup is one of the most marketable rivalries the league has.  In a year in which the league is emphasizing rivalries, the Cascadia Cup is especially valuable.  This should be viewed as an opportunity, not a controversy.

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Turnkey Sports: MLS Fans on Top

Posted on December 12, 2012 by Ben Berger

at&TThe Sports Business Journal is once again reporting on the fans of Major League Soccer’s remarkable connection to the corporate partners that support the league.  In reporting the results of the latest Turnkey sports poll, SBJ states that, “MLS sponsors were correctly identified as such by the league’s fans at a higher rate than the companies’ rival brands across all categories, according to the results of this year’s MLS Sponsor Loyalty survey conducted for SportsBusiness Journal/Daily by Turnkey Sports & Entertainment”

MLS fans’ track record of brand loyalty is a recurring theme.  Because of MLS’ relative newness to the sports scene, MLS fans have more “ownership” in the league’s success.  Unlike fans of the NFL, MLB and other mainstream sports, fans of Major League Soccer have real concern about their league and its place on the sports landscape.  Fans work hard to bring friends to games, introduce family to the sport and cheer for MLS teams in international competitions.  This personalized relationship to the sport lends itself to these same fans taking an interest in the corporate entities that keep the league solvent.  Moreover, because the relationships are promoted through means other than commercials (jerseys, signage, etc…), the names of these companies are always prominently displayed.panasonic

Some telling numbers from the survey (as reported by SBJ).   League sponsors such as VW, Gatorade, Pepsi and Allstate generally earned recognition scores in excess of 30%.  One major partner that fell below 30% was VW, at 28.5% .  However, among all sports/leagues, that 28.5% was second to only Chevy’s affiliation to NASCAR in the auto category.  AT&T”s relationship with the league was the biggest mover among all brands in the survey with almost a 16% year over year increase in fan recognition through its MLS partnership.   One final note, Visa’s brand recognition; “more than 44 percent of avid fans recognized the relationship, the highest rate of any of the league’s sponsors among avid fans.”

We will have more on this survey over the next few days.

 

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Soccer Business Bits: MLS Sues Black & Decker AND MLS in Minn?

Posted on December 29, 2009 by Ben Berger

Sports Business Daily is reporting that MLS has sued tool manufacturer Black & Decker over an alleged “ambush marketing campaign” by B&D division DeWalt.   MLS fans know that competing tool company Makita is a long time MLS sponsor, and the suit alleges that DeWalt improperly used MLS logs and materials to “confuse” hispanic fans into believing that DeWalt is a sponsor of the League.  We will pull the relevant information on the suit in the coming days from the Court website, but proving damages in such a claim could open up some privately held MLS business information to public scrutiny.  In order to prove they were damaged by the ad campagin, terms of MLS sponsorships will likely need to be revealed.  Because MLS holds this information so tightly, the discovery process in this suit could provide new access to MLS revenue and advertising information.

Makita first signed a three year deal with MLS (reportedly in the mid-seven figures), in October 2004.  The deal was Makita’s first sports sponsorship and was designed to target hispanic audiences.

At a recent Metro Sports Commission Meeting, Chair Paul Thatcher suggested that the Vikings are interested in bringing an MLS team to the Twin Cities.  Unfortunately, the article doesn’t offer much more detail than that.  Minnesota has never been a top contender for an MLS team, despite a successful run at the lower rungs of American soccer.  Stadiums are being built in the State, but it seems unlikely that MLS will find its way to Minnesota in the near term.

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Digital MLS: How Did They Do?

Posted on December 11, 2009 by Ben Berger

The posting has been a bit light this week; there has been a “new arrival” in the family which has changed sleep/work patterns a bit, but we expect to be back on schedule next week.  For now, check out this March interview we did with SUM Digital Strategy Director Chris Schlosser about MLS’ plans for digital media and online advertising in 2009.  Read the interview, and give us your thoughts….how did MLS do? Did you notice the ads?  Did you use the Brand Thunder Booms or notice the revised website?

Chris Schlosser is the Director of Digital Strategy for SUM,  a graduate of Columbia Business School and a former employee at Microsoft in Seattle.  While at Columbia, Mr. Schlosser formed a relationship with Sunil Gulati and ultimately came to work at SUM.  He was kind enough to answer a few questions from footiebusiness.com about MLS’ digital strategy.

Footiebusiness.com: SUM recently announced the initiation of an online ad network that targets a variety of sites that soccer fans frequent.  What are the benefits to the sites and SUM in participating in the network?  What are the benefits for fans?

Chris Schlosser: Over the past seven years SUM has built significant relationships with the US commercial community, we spend every day selling soccer to Fortune 100 companies. We are using this network of clients and our experience selling soccer to drive incremental revenue for our member sites. There are lots of other ad networks out there but I can guarantee you that none of them have more experience or more focus on selling soccer. In addition to driving revenue we are working with a number of our partners on content sharing and joint marketing to grow the collective soccer audience. From a fans perspective the SUM Digital Network should over time provide significantly better content and features, as revenue grows it is our hope that this will enable our member sites to invest more money in content and features which will increase traffic and continue to drive value for both fans and the commercial community.

F.B.  How will the ads be targeted?  Who will decide which ads get placed on which sites?

C.S.  Our sales team will work with our advertising clients to create custom ad plans tailored to efficiently meet the needs of our clients. Many of our official site partners (MLS, EPL, US Soccer, etc.) have significant corporate sponsorships already in place, many of these sites maintain a category system with certain sponsors retaining exclusivity, we are used to working in this environment and will work across our network to protect existing commercial relationships. We also are focused on premium ad placements and clients, we are not going after the “fat belly” ads that are so common on many sites today.

F.B. Far more than most sports fans, MLS supporters take a direct interest in the League’s efforts to generate revenue.  How will the League be compensated?  How about the sites?

C.S. Our fans are amazing, in fact a recent SBJ study stated that MLS fans show more brand loyalty than any other sports fans in America, we even out indexed NASCAR which is built around branded experiences. We see the digital space as a significant revenue opportunity over the next 3-5 years and are investing accordingly. As a member of our network sites will see incremental revenue compared to what they are currently seeing from remnant networks or in house sales teams. Additionally SUM will see revenue from more deals and larger deals as we continue to build our presence in the digital space.

F.B. What other electronic innovations should fans be looking out for in 2009?

C.S. We have a ton planned for 2009, including some very interesting launches. You will see us launch redesigned club pages for 11 of our 15 teams this afternoon, additionally we are launching improved video experiences, team social networks (see mydynamo.net for an early example), customizable and shareable highlight videos, and much more. 2009 will be an exciting year on MLSnet and our team sites. One great example of how the league is focused on improving the online experience for fans is that we are going to double the quality of our live game streams while keeping the same cost to fans as last year at only $19.95 for the season. That means you can watch more than 100 games for less than 20 bucks, now that is a great deal.

F.B.We’ve heard about the League’s new relationship with Brand Thunder.  We will the first “booms” be unveiled?  Who will be responsible for content?  The League?  The Teams?

C.S. The first browser should launch this week, we have a league deal but will work with each team to manage content and design on the browser.

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Soccer Business Bits: Quick Hits

Posted on October 16, 2009 by Ben Berger

rslWith a big set of MLS action coming up, we thought we would provide you with some MLS business news in advance of the weekend.

With all the debate over the financial viability of soccer stadiums (any stadium really), the fighting usually ceases once the building is up.  As a result, the “success” of the project is typically ignored.  Check out this piece in the Salt Lake Tribune about Rio Tinto’s financial impact.  Most importantly, revenue for RSL is up over 40% from its time at Rice Eccles Stadium.

Speaking of stadiums, grass is down in Red Bull Arena.  Click here for an interior camera.

Speaking of grass, it appears that it is confirmed that TFC will be playing on the natural stuff next season. Apparently in Canada, spelling is a bit different.

Speaking of different, one wonders how AC Milan will prosecute this absurd claim.

Finally, solid attendance on a chilly night in SLC for a big win for the home side.  More than 16k on a Wednesday night is a great number.

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The Business of the Champions League: Is it Worth It?

Posted on July 29, 2009 by Ben Berger

mlsTuesday night marked the opening of the CONCACAF Champions League competition for the 2009/2010 season.  24 teams from around from around the region are competing for the right to represent CONCACAF in the Club World Cup.  This is the second season for the competition in its current iteration.  The play-in portion of the tournament started in RFK before a paltry crowd typical of the tournament. Over the next couple of weeks, 16 teams will complete the home and home portion of the tournament in order to earn spots in the group stage.

In Europe, the Champions League competition is the most prominent of club events.  Club teams throughoout the continent claw for the money, exposure and glamor of a spot in Europe.  In CONCACAF, the tournament barely registers a blip on the radar screen of the region’s soccer fans, especially in the US.  Teams must invest time, money and energy to compete in the event without the substantial rewards offered in the European version of the event.  The teams face extensive travel and generate limited revenue from ticket sales.  So from a business perspective, is it worth it?

We say yes.  As the tournament gains traction (especially in some of the newer markets), the exposure to international competition creates an enormous opportunity for exporting the League to the rest of the region.  At the same time,  the elusive American soccer fan who watches only European football gets a chance to see more MLS on FSC in a tournament that makes perfect sense to them.

At the same time, players within MLS have the opportunity to show their wares to an array of potential suitors.  Ultimately, this creates transfer opportunities which can generate revenue for the teams and the League.  Similarly, front offices in MLS have an opportunity to evaluate talent from around the region, as they watch potential transfer targets play against MLS competition.

This process will take time, and likely will be a money loser for some time.  Yet the Champions League is an important business opportunity for Major League Soccer.  Ticket sales will come, as will television revenue and popularity over time.  Of course, it would help of MLS teams show well in the event.

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Soccer Business Bits: Legal Analysis of the Jaqua Situation, July Fourth Round-up and More

Posted on July 6, 2009 by Ben Berger

soundersFor the second time since the season started, a Seattle Sounders forward has had his name linked with sexual assault allegations.  The first instance involved Freddy Montero, and those charges were quickly dropped.  Over the weekend, a civil complaint was filed against Montero’s strike partner, Nate Jaqua.  The claim primarily sounds in battery, but includes graphic descriptions of alleged sexual conduct between Jaqua and the female plaintiff.  The plaintiff is a former college soccer player.  Other defendants include the Los Angeles Galaxy, MLS and the Houston Dynamo.  We will reluctantly put on our lawyer hat for a moment and discuss these allegations.

Importantly, this is a civil case, which means that while Jaqua does not face potential criminal penalties (e.g. jail), he does face potential financial damages.  In addition, the standard of proof is typically lower in civil court, where fact finders are asked to use a “more likely than not” or 51% standard.  Because this is a civil action, the plaintiff’s identity has been made public.  Moreover, this is an action that is being pursued by her and not the State of Oregon.  Reports indicate that the police have never investigated these charges.

The inclusion of multiple co-defendants smacks of significant over-reaching by the plaintiff.  While this certainly adds deep pockets  to the case (and can help settlement),  the claims against the defendants other than Jaqua sound in “vicarious liability”.  Put differently, the plaintiff is alleging that these defendants are responsible because Jaqua was acting on their behalf in perpetuating the assault of the plaintiff.  However, under the traditional framework of vicarious liability utilized in Oregon, a plaintiff must prove the following three elements to make out a prima facie case of vicaroius liability:   (1) the conduct must have occurred substantially within the time and space limits authorized by the employment; (2) the employee must have been motivated, at least partially, by a purpose to serve the employer; and (3) the act must have been of a kind that the employee was hired to perform. It is hard to see how any of those elements exist in this case.   A copy of the complaint is here.

We will of course monitor this case as it moves forward.  Suffice to say, Jaqua has forefully denied the allegations.

Independence Day has come and gone, and with it, another week of MLS, WPS and Gold Cup Action.  In Colorado, just under 20k enjoyed the annual July 4th festivities, as the Rapids came up short against Chicago.  In RSL, a dissappointing crowd of 17,400 watched RSL escape with a tie, while 20k were in Los Angeles to see the Galaxy hold off New England.  Red Bull road woes continued, as more than 14k watched New York come up short against Dallas, while a packed house saw Kansas City fall short to Houston at Community America Ballpark.  As always, we recommend that you go here for a detailed look at MLS attendance.

In WPS action, just over 4k were in Chicago for a mid-week game against DC.  A distrubingly low crowd of 1,800 were in New Jersey for a July 4th match between New Jersey and Boston. An apparent crowd of about 5k was in DC for their Sunday evening tilt with Las Angeles.

In Gold Cup play, a small crowd of just over 15k saw the United States beat Grenada and Honduras beat Hati in Seattle.  The July 3 doubleheader in Los Angeles, featuring Costa Rica, El Salvador, Jamaica and Canada brought a 27k sellout.  Games will move to Foxboro, Dallas, Philadelphia for the next rounds with the semi finals in Chicago and finals in New Jersey.

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Superliga 2009: Fierce International Competition or Big Waste of Time?

Posted on June 18, 2009 by Ben Berger

superligaWe are just days away from the third iteration of the now annual Superliga tournament.  The 8 team event features 4 teams from MLS and 4 teams from Mexico’s Primera Division.  Placed into groups of four (consisting of two MLS teams and two Mexican teams), the teams play one game against each team in their group before a semi-final and final.  The New England Revolution are the defending champions after a penalty kick victory over Houston last year in an all MLS final.

Last year the event tried to build off the success of year one, when David Beckham’s Los Angeles Galaxy lost in penalty kicks to Mexican champion Pachuca and Superliga 2008 drew consistently good television ratings, surpassing local Major League Baseball numbers.  All matches will  be televised in the United States on the Telefutura Network and by Televisa and TV Azteca in Mexico; english language broadcasts are carried by Fox Sports Canada.

In addition to declaring a US/Mexican champion, Superliga provides a unique marketing opportunity for both MLS and its Mexican counterpart.  The Mexican teams get an opportunity to play meaningful games in the U.S. before Mexican ex-pats, while MLS gets to showcase its teams before a Latino fan-base still warming to American Soccer.  Last year the event was somewhat marred by tension between the MLS Players Union and the League.  The union announced that the $1,000,000 championship bonus – in a league where the salary cap does not exceed $3,000,000 – was a bit of mirage.  As a result, there was a bit of a protest when the Revs won the trophy.

Attendance at the 2008 version dipped a bit and this year the big time Mexican clubs will be absent with no Chivas, America or Pachuca involved.  Chivas and America are the teams with the biggest followings in the States, and thus attendance may suffer this year as well.  However, with the Chicago Fire involved, it does mean that Blanco will be part of the proceedings.  Blanco is always a big draw in the Mexican community.  Add in a Chivas USA/Chicago Fire game in Los Angeles and Group A may have some significant draws at the gate. The tournament will feature a couple of doubleheaders and a game in St. Louis (KC match).

Coming mid-season, the event is a bit controversial as it forces teams to take a break from League play.  MLS teams are then forced to make up games with some additional mid-week games during the rest of the season.  In addition, SuperLiga does detract from the Champions League that also pits teams from MLS, Mexico and other CONCACAF countries.  However, as a business model, SuperLiga is a fantastic idea.  We have repeatedly discussed how there are enumerable soccer fans in the United States, many of whom do not pay attention to MLS.  Many of these fans are far more interested in Mexican Soccer and Superliga does serve as an entre to MLS.  Ultimately, we view the tournament as neither a fierce competition or a waste of time, but a golden business opportunity.  Whether that is a proper use of the teams’ time is a different issue

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Soccer Business Bits: The Morning After

Posted on June 1, 2009 by Ben Berger

mlsAnother full slate of games in MLS and WPS this weekend and a world cup qualifier on the horizon.  This week represented the return of the ESPN game of the week, and the Worldwide Leader got a good one with the Thursday night Chivas/Blanco match-up.  Please see our live business blog of that match here.  Chivas USA got the attendance week off to a good start with a reported 20k+ in attendance the day after less than 9k were in Columbus for a mid-week game.

Strong attendance continued with almost 16k in New England on Saturday night (this is what passes for good attendance at Gillette these days), 16k in Houston, about 20k in Los Angeles and almost 30k in Seattle.  These are solid numbers for all of these franchises and may represent a Spring upswing for some of these teams.  Los Angeles is nowhere near the numbers of the past years, but the ability to draw a solid 20k without Beckham is a good sign for the club. Dallas and New York also deserve recognition for pulling solid numbers, with 13k in Dallas for a Sunday afternoon match and a reported 12k at Giants Stadium.

There were three weekend games in WPS, with action in Los Angeles, Washington and New Jersey.  6200 saw Marta and the Sol defeat St. Louis 2-0.  In Washington, the League continued its tradition of not reporting attendance, while in New Jersey less than 3500 were in attendance.

More than 30k were in attendance to see Jamaica and El Salvador in  World Cup warm-up at RFK.  This is a big number in a stadium that has become a familiar ground for El Salvador.  As noted above, the US Men get back into action this week.  We will post a business blog of that game to touch on the ads, production and more of the match from Cost Rica.

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