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

December 29, 2009

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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Posted by Ben Berger

Digital MLS: How Did They Do?

December 11, 2009

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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Posted by Ben Berger

Soccer Business Bits: Quick Hits

October 16, 2009

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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Posted by Ben Berger

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

July 29, 2009

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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Posted by Ben Berger

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

July 6, 2009

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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Posted by Ben Berger

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

June 18, 2009

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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Posted by Ben Berger

Soccer Business Bits: The Morning After

June 1, 2009

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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Posted by Ben Berger

Blogging the Broadcast: Chivas USA vs. Chicago Fire

May 29, 2009

mlsIt has become fashionable to live blog sporting events, and we thought we would give it a try for the MLS game of the week (as long as we can stay up).  However, our focus will be on the business aspects of the broadcast.

As an initial matter, the lead in from the re-broadcast of the Champions League final was smart; the lack of advertising during the game was not.  Nevertheless, the broadcast started on time (something of a problem for ESPN MLS broadcasts).  After a brief intro, the booth team of Harkes and Delacamera passed the baton to the “Espnsoccernet.com pregame show, presented by VW” where Rob Stone and Alexi Lalas provided some insight and discussion.

VW was the initial advertiser during the first break, followed by the Marines (a longtime sponsor of MLS) and then the ever present Home Depot (advertising Behr Paint).  AT&T continued its increased presence with a spot, before the parade of local commercials began.

A couple of other notes, it is unfortunate that the Chivas/Blanco matchup is up against the Mexican final.  This is probably the one game that Mexican soccer fans might be interested in watching.  That said, the 10:50 start time is rough for us East-coasters (a 7:00 start time in L.A. would be much better and would probably draw stronger ratings).

Second break started with a “Round Up” spot (new), followed by a 30 second ad for Mike’s Hard and a return of the 15 second Round-up ad and then back to the local commercials and PSAs.

Once back to the booth, we get a dose of ESPN Axis (neat technology) before some insight from Allen Hopkins. Crowd looks good behind the goals, but not so much in the middle levels (but filling in)…and it is game time.

The sign boards are active early, with adidas, Bud, Dick’s and Frazee Paint making early appearances. It takes about 12 minutes for the spots to repeat themselves.

At the 7:20 mark, a VW logo appeared in the top left corner for a brief second.  The sound quality of the broadcast is pretty good and the stadium sounds alive on TV.  A couple of additional microphones in the stands might be nice.

The Philly Union got a mention in the 22nd minute, including the 7k plus in season ticket deposits.

Minute 28 brought Hopkins back in and then minute 31 brought some colorful language that probably should have been edited since the replay was 5 minutes old. Good to see some cross marketing for FSC and Telefutura.

Taco Bell popped up as a sponsor at the death of the half along with VW.

That is one half in the books…we will call it a night.

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Posted by Ben Berger

Soccer Business Bits: Pimping Europe, Red Bulls Seats and More

May 29, 2009

espnWe’re back from our travels and one thing is clear: America loves UEFA (or at least ESPN does).  In a truly remarkable ad blitz, ESPN promoted its broadcast of the Champions League final across all of its airwaves.  During the broadcast of the NBA playoffs, pop up ads hyping the Barca/Man U match were omni-present, ESPN.Com offered live coverage of the match and extensive pre and post analysis and Sportscenter anchors devoted substantial time to discussing the merits of Ronaldo and Messi.  This was the type of coverage that MLS fans have been begging for and yet it was bestowed upon a foreign final (for the record, ESPN is replaying the game as I type this, at 9:00 Eastern on Thursday).

ESPN has long recognized the enormous market for soccer in the United States (remember the 10 million that watched the USA v. Mexico qualifier a few months back?), yet the Worldwide Leader also has seen disappointing ratings for MLS.  As we have blogged on many occassions, MLS has struggled to attract the “hard core” fan  that loves soccer, but not MLS.  From ESPN,  the disparity in coverage is shocking.  Finding MLS coverage on ESPN.com is a challenge, while EPL and La Liga are front and center.  The “Bottom Line”  regularly scrolls European results while MLS  often appears only during soccer coverage.

There definitely appears to be a “chicken or egg” issue.  Does MLS need better ratings and a better product before ESPN will actively promote the League, or does ESPN need to hype MLS to generate the interest the League needs to grow?

In other news, according to the Sports Business Journal, the Red Bulls have announced prices for the 30 luxury suites in Red Bull Arena.  According to reporting by Tripp Mickle, prices will range from 65k-75k per season.  The boxes include food and beverage (not alcohol) and seat at least 13 people.  It will be fascinating to watch sales of these boxes in this economy, especially with the Red Bulls hoping to sell multi-year leases.

Finally, in DC, Steve Goff is reporting that Real Madrid and DC United have reached an agreement for an August 9 friendly at Fed Ex Field in Maryland.  The matches will not play in RFK, in part, to tap into the Redskin fan base at FedEx.  This will be one of two MLS friendlies for Real this summer. united

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Posted by Ben Berger

Soccer Business Bits: Seats in Seattle and More

May 14, 2009

soundersA bit of business potpurri today.  Building on its sellout success, the Seattle Sounders have announced that they are opening additional seats for the rest of the season at Qwest.  The Sounders have averaged almost 30k during the season and are now adding some additional seats for the rest of year, bringing capacity to 32,000, the same amount of seats that were available on opening day.  With 22,000 season tickets and a large amount of additional demand, the additional capacity will enable more fans to experience Sounders’ soccer this year.  It will also increase MLS average attendance for the season.  The team also recently announced new 9 game packages and confirmed friendlies with Barcelona and Chelsea.  With those games included in the 9 game packs (along with MLS CUP), the Sounders may hit that 32k for the rest of the year.

It will be interesting to see if the Sounders can sell the additional seats for every game.  As we have said before, Seattle has continued to hit the right notes with all of their business moves and this seems like a calculated gamble that will increase revenues for 2009.  There is risk if the team finds that it cannot find takers for all seats to every game.  The Sounders might unwittingly find where attendance is capped.  That could create a ripple effect whereby there is less demand next year and some negative press if they ultimately close the newly opened sections.

In Salt Lake City, RSL is looking to build on its solid attendance showing from last week.  As part of that effort, The Team announced a buy one get one free promotion with Kentucky Fried Chicken.  Fans can obtain the vouchers at 35 KFC Restaurants around the Salt Lake area.  The promotion is part of an ongoing relationship between KFC and RSL.

Finally, in Los Angeles, Chivas looks to continue its strong start on the field and at the gate againt DC United on Saturday.  As part of those efforts, they are offering a “kid’s pack” which offers a free ticket for any child under the age of 16 with the purchase of a full adult ducat.  The same package is offered for a number of upcoming games and is capped at 8 sets per purchase.  The numbers have been impressive for Chivas this year and the big “Blanco game” is on the horizon.  It will be interesting to see if the Goats can keep the fans coming.

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Posted by Ben Berger

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