Business Snapshot

July 12, 2010

After an exciting and remarkably popular (in the US) month of World Cup soccer, we thought it worthwhile to take a quick look at the business of American soccer moving forward from July 12, 2010.  The World Cup was a business success in the States, with ESPN’s significant investment of resources validated by the ratings earned both over the air and online.  Sponsors who invested in ad time were rewarded with viewership often 50% greater than pre tournament expectations.

In MLS, action has restarted after the World Cup break with strong attendance around the league.  An array of international friendlies will draw big crowds to MLS parks across the country as will the All-Star game at Reliant Stadium against Manchester United.  We also saw the opening the opening of PPL Park in Philadelphia.  Starting with the expected reveal of Thierry Henry of July 14, this coming week will see the formal introduction of Designated Players in DC, Seattle and elsewhere.  MLS fans will also be interested to see what what surprise players make the trip to MLS. At the same time, it will be interesting to watch MLS ratings and whether ESPN can continue its devotion to televised soccer.

American soccer fans will also be casting a business eye to Europe to follow the transfer market for American players based in Europe.  Following the World Cup, a number of American athletes will likely be on the move, parlaying their South African adventure into big contracts and impressive transfers.

WPS is settling into its second season with a new stadium in Atlanta, a successful All Star game and additional jersey sponsors entering the league.  WPS is now part of the American sports landscape and looking to grow.

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Posted by Ben Berger

Bringing the Fans to MLS: Part V-Video Games

August 24, 2009

video gameAt about the same time I was wrapping up high school in the early 1990′s, SEGA was the premier video game system.  Arguably the most popular game of that period was the EA Sports  hockey.  Whether in high school, college or elsewhere, boys around the country were gathering in basements and dorm rooms for tournaments of NHL hockey.  Although most knew little about the sport, regular game play brought names like Pavel Bure, Mike Richter and Ray Borque to the forefront of sports culture in the United States.  Soon thereafter, the Rangers won the Stanley Cup and the popularity of hockey exploded.  Video games weren’t the only factor, but the NHL had achieved an enormous amount of brand recognition through video games and created life long fans of the sport because of that first connection.  Can MLS achieve a similar success?

This is part five of our MLS attendance series.  You can see part I here,  part II here, part III here and part IV here. We have collected anecdotes from hundreds of friends, coworkers, fans, families, store owners and acquaintances in an effort to determine what will bring more fans to MLS. We have asked these questions at soccer matches of all levels, dinner parties, social gatherings and board meetings.  We have been asking these questions since February with an eye towards seeking out trends about MLS fandom and what brings people to Major League Soccer League stadiums.

EA Sports recently unveiled the cover of the 2010 version of “FIFA“.  Alongside Chelsea star Frank Lampard are American  (and Chivas USA midfielder) Sacha Kljestan and Mexian (and Chicago Fire forward) Cuauhtémoc Blanco.  Soccer has long been one of the easier sports to translate into video games (along with hockey and football), and thus millions of American males will dutifully purchase the game regardless of whether they know anything about soccer.  And from our interviews, it is readily apparent; the less they know about soccer, the more likely they are to play with teams from Major League Soccer (many soccer fans migrate to the EPL). As a result, it is these fans that may embrace the teams and players from MLS.

From  our interviews and discussions, it appears that video games are having this effect. I’ve spoken with a number of folks (adults and teens) who started to become soccer fans because of their video game experiences.  They caught some of the Confederations Cup and recognized players from their game.  Many have since seen MLS matches and have kept an eye on their favorite team. Will it continue?  Can MLS keep these  fans?  Are video games a legitimate method for attracting fans?  Let us know your thoughts.

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Posted by Ben Berger

Bringing the Fans to MLS: Part IV-The Soccer Hater

August 17, 2009

jim rome“Soccer is a girl’s game”  “There are no goals, it is boring” “It will never succeed”  “Why do they roll around on the ground all the time”

All soccer fans have heard these statements.  We all know people who feel this way about the “beautiful game”.  This is part four of our MLS attendance series.  You can see part I here,  part II here and part III here. We have collected anecdotes from hundreds of friends, coworkers, fans, familes, store owners and acquaintainces in an effort to determine what will bring more fans to MLS. We have asked these questions at soccer matches of all levels, dinner parties, social gatherings and board meetings.  We have been asking these questions since February with an eye towards seeking out trends about MLS fandom and what brings people to Major League Soccer League stadiums.

Should MLS attempt to bring “soccer haters” to the game?  Are they worth converting?  During our interviews, the sentiments set forth at the top of this page were repeated over and over.  Most of the people who fit in this category would rather watch anything other than soccer.  They are annoyed that ESPN even bothers to carry the games and cannot believe that the game gets “so much attention.”  Most think it is a kids’ game or sport for girls.  They decry the lack of content, lack of scoring and lack of commercials.

Yet, among the people we spoke with, there were a couple of passionate MLS supporters that say they started as soccer haters.   All remember getting dragged to a soccer event and having a surpisingly good time.  All of these converts are more dedicated to their local MLS side than many season ticket holders.

However, these folks are the significant minority.  Most of these soccer haters detest the game and have no inclination to give it a chance.  Overwhelmingly, these folks describe the NFL as their favorite sport.  They typically like sports radio and turn it off if there is a soccer conversation.  They told me they believe just about every negative soccer stereotype, and many related that they disliked the guys that played soccer in high school or college.  They don’t want to be “won over” or sold the game.

So the question is, should MLS try?  Is it worth devoting marketing dollars and efforts to convince these potential fans to come to MLS?

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Posted by Ben Berger

Stadium Fun: Downtown in Houston

June 24, 2009

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.


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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: RSL Revenue, Attendance Review and More

June 9, 2009

rslWe neglected to comment on a story from last weekend about RSL’s Rio Tinto attendance and its impact on revnue.  According to this story from the SL Trib, attendance in Salt Lake City is down this year, but revenue is way up.  Despite the lowest attendance in Team history, revenues are up more than 25%, a clear indicator of the importance of controlling your own stadium.  While the weather has been miserable in RSL this year, the Team is still bringing in the money thanks to controlled revenue streams and the absence of rent payments.

Just as interesting, was the discussion of the dreaded free ticket.  According to the article, RSL is giving away about 1k seats this year as compared to 3-5k in past seasons.  The great debate about the value of handing out free seats.  Does it create interest?  Does it devalue the seats so that people expect free seats and won’t pay for the privilege of coming to the stadium?  The Team seems to believe it is in a good place, but only summer attendance will tell.  The last two games (including the tie on Saturday) were sell-outs, so for now things seem to be moving in the right direction (special thanks to a certain American Idol runner-up)

For the rest of the League, attendance was something of a mixed bag.  Toronto brought the usual sell-out.  For all of the numbers, check here.  It was a strange slate of games for MLS this week, with a Thursday, Friday and two Sunday games.  True to form, these games were not well attended with only Chicago breaking the 13k barrier.  Most distressing was Dallas, were less than 6k announced were in attendance at Pizza Hut Park.  We have addressed the Dallas problems repeatedly, so we won’t do it again today.  Suffice to say, things are getting bad fast.

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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

Soccer Business Bits: The Morning After

May 25, 2009

mlsAnother week of American soccer is in the books, with a full slate of games in MLS and WPS and the annoucement of a new U.S. National Team Camp for the upcoming World Cup Qualifier.  As has been a theme in MLS this season, there were more ties than actual results, with four games ending in a draw.  This was another week without an ESPN game, but national telecasts on Fox Soccer for the WPS and MLS and Telefutura for MLS.  Advertisers such as Panasonic and Dick’s stayed as a consistent presence in these telecasts.

Attendance wise, Toronto led the way with a sellout, while KC followed suit.  Just over 16k saw a scoreless draw at RFK, while a suprising 16,500 made their way to Colorado to watch Seattle and the Rapids.  This is a big number for the Rapids.  New York and Dallas struggled again at the gate, with just over 10k at Giants Stadium and FC Dallas bringing in less than 10k for a match up against the Galaxy.  What would the attendance have been with a Beckham appearance? The big shock of the week was 12,500 in Houston.  The Dynamo generally do a great job with promotions for every game, yet, this was a small draw in a game against their shadow selves in San Jose.

In WPS action, 4,400 were in attendance when Chicago hosted St. Louis.  More than 6200 were in attendance when FC Gold Pride hosted Marta and Los Angeles.  The DC match was part of doubleheader for the United Game.  The WPS kicked off first, and reports indicate that many of the United supporters stayed in the parking lot during the WPS match.  Attendance for the two games were joined, so the WPS gets the benefit of the 16k.

Next week, MLS has a full slate with two midweek games and the return of ESPN, smartly televising the Los Angeles super classico.  We will be traveling again this week and will check back at the end of the week, perhaps live blogging some of the business aspects of the ESPN2 broadcast.

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Posted by Ben Berger

The Deal Down in Dallas

May 22, 2009

fc dallasWe have discussed the attendance woes in Dallas on a number of occassions.   Attendance in Big D (or Frisco) is down this year by almost 40% But for Kansas City and its forced limited attendance, Dallas would be bringing up the rear with its average of 9,300 (that includes an opener of almost 16k) over four games.  With a fairly new stadium in Pizza Hut Park, a local population in Dallas that plays soccer en masse, premier online, independent coverage and a long history as an original team in MLS, FC Dallas would seem to be an obvious choice for success at the gate.  Yet, the team is averaging just over 9k and attendance is dropping fast.

The big question is of course, Why?  There are theories about front office ineptitude, poor performance on the field or a suburban stadium too far from downtown Dallas (does anyone actually live in downtown Dallas??).  We were in Dallas this week and performed a bit of marketing reconissance to check on efforts to promote FC Dallas  in Big D.  We asked everyone we met, from cab drivers to waitresses to business assoicates about FC Dallas and Pizza Hut Park.  The results of our anecdotal survey were pretty dramatic.

Almost everyone we met had heard of Pizza Hut Park, but nobody had every been there.  Most associated Pizza Hut Park with the Roughriders, a Double A baseball team playing at Dr. Pepper Park in Frisco, TX (same location as Pizza Hut Park).   We spoke with season ticket holders for the Mavericks, Stars and Cowboys, all of whom knew nobody that had seen an FC Dallas game, yet almost everyone knew about the Team.  Everyone we spoke with was shocked that FC Dallas struggled to fill the stadium; they all mentioned how popular soccer is in Texas.  Interestingly, almost everyone we spoke with knew where the stadium is located, knew how to get there and said it was “close.”

We saw no advertising for the Team, whether on signs, buses, television or newspapers.  There was no evidence of FC Dallas merchandise at Dallas-Forth Worth airport and we heard no commercials on the radio for upcoming games or events.  The Team is marketing through its website; pre-game happy hour anyone?  Other marketing efforts are certainly being made (our trip was pretty quick), yet they were not apparent.

Our survey was obviously informal, yet it was instructive.  In recent trips to Kansas City, Washington and other MLS cities, we have seen evidence of the local soccer team in a number of different media.  People were aware of the local franchise and some had been to games.  In Dallas, the Team’s impact on the sports consciousness was minimal.

The question is of course why.  If you have any theories, let us know.  Why is this once proud franchise struggling on the field and at the gate?

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Posted by Ben Berger

Soccer Business Bits: More Deals

May 5, 2009

red-bulls2Teams across the League continue to offer creative promotions and deals to entice fans into the stadiums.  In New York, the Red Bulls are offering a 4 tickets and 4 T-shirts for $90 deal.  Given some of the options we have discussed previously, this one doesn’t seem like much of a bargain.  The Red Bulls are not drawing well and appear to be simply biding their time until Red Bull Arena opens in 2010.  The latest on the stadium is here.

In Houston, the Dynamo are offering a Fireworks night for their next home  match.  The first 5,000 fans will also get a rally towel as part of Houston’s promotion for every game schedule.  As we noted yesterday, the upcoming Houston/Dallas match on May 9th is also an ESPN game of the week.  By combining fireworks, rally towels and the Dallas/Houston rivalry, the Dynamo are certainly working to fill Robertson Stadium.

Finally, the good folks at Chivas USA (one of the quiet MLS success stories on the field and at the gate this year), are offering a $50 5 game “stiumulus plan“  The package includes a seat to five games and a “free” ticket to a match against the Galaxy.  Chivas has certainly found ways to build up its brand at a time when many teams are struggling to pull fans.

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Posted by Ben Berger

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