Happy New Year From Footiebusiness.com

We just wanted to take this opportunity to wish a Happy New Year to all of our readers.  Thank you for a great 2010 and we look forward to analyzing the business of American soccer in 2011.  It will be our third season of MLS and WPS coverage and we hope it will be our most comprehensive season of reporting to date.

Enjoy the long weekend and be sure to follow us on Twitter during the holiday @footiebusiness.


Looking Forward to 2011

Yesterday we recapped our top five 2010 stories from the world of American soccer business.  Today, we thought it worth taking a look at the coming year to predict the big business stories for 2011.  We’ll dispense with the list format, but here are some thoughts on what will make headlines in 2011.

The Womens World Cup will go forward this Summer from Germany and American sports fans will again have the opportunity to embrace womens soccer.  The struggling WPS could certainly use the boost and a successful run by the American team could generate interest in the fledgling league.  The Cup may represent the last, best, chance for the league to generate publicity and bring fans to their stadiums.  At the same time, this version of US team is lacking some of the dominant personalities of past teams, and neither the team nor the individual players have captured the attention of the casual fan.

Sticking with the National Team, the 2011 Gold Cup will be played throughout the United States.  Although arguably played too frequently, the tournament is a big revenue generator as it provides ex-pats from a number of countries the rare opportunity to see the teams from their homelands playing live.  Unlike some versions of the Gold Cup, the 2011 version will likely feature the top players, as the teams are vying for a spot in the 2013 Confederations Cup.  The games have been scheduled for a mix of soccer specific stadiums and larger football venues.  For a stadium like Red Bull Arena, the game provides both an opportunity to generate game day revenues and show the beauty of the stadium to another audience.

MLS stadiums and expansion are a last big business story for 2011.  Stadiums will open in Kansas City, Vancouver and Portland.  The Timbers and Whitecaps will join the league giving MLS a further hold in the Pacific Northwest and Canada.  Attendance for these new teams promises to rival some of the better attendance numbers in the league.  One big question will be whether television ratings follow.  We have documented the ongoing negotiations between MLS and FSC.  Ratings for MLS have been flat despite success at the gate and the popularity of international soccer.  Will footholds in more markets equal better ratings?

Top 5 Soccer Business Stories of the Year

It is the season for lists, so here is our list of the top five soccer business stories in the United States.  Let us know y0ur thoughts….what did we miss?

5. WPS Struggles

Two years ago, WPS launched with great fanfare, including the signing of world star Marta, a relationship with PUMA, a television relationship with FSC and a promise to provide quality soccer without budget busting salaries.  Early in 2010, the league announced its first league specific stadium in Atlanta and expansion plans.  Yet by the end of the year (despite a new team in Western New York), more teams had folded, (including the reigning champions), players were scrambling for teams and the league’s finances looked shaky.   The league is moving forward with 6 teams in 2011, but WPS’ failure to gain traction on the eve of Womens World Cup year could prove the league’s death knell.

4.  Soccer Stadiums

The rush to build soccer specific stadiums in the US and Canada continued in 2010, with the opening of Red Bull Arena, ground breaking in Kansas City and renovations in Portland.  A new stadium opened in Atlanta and another in Philly.  Houston moved closer to a stadium reality while Vancouver continued its renovation of BC Place.  In the last five years, soccer stadiums have become fixtures in American cities across the country and more stadiums are coming in 2011, but 2010 was watershed year for stadium construction, planning and financing.  Stadium construction cams and 3D stadium viewers became  “must clicks” as fans followed construction progress across the country.

3. Twitter

Few sports fans are as devoted to social networking sites as soccer supporters.  Because of the lack of soccer coverage in mainstream media, soccer fans are forced to the web to follow their favorite teams and games abroad.  Twitter has provided the perfect vehicle for fans to keep track of live matches, interact with players and journalists and discuss the beautiful game 140 characters at a time.  Anecdotaly, Twitter use among soccer follower has exploded in 2010, with even technophiles recognizing the value of Twitter as a source for information on the beautiful game.

2.  MLS Collective Bargaining Agreement

It was just a few months ago that the MLS season seemed in doubt.  The league and Players Union couldn’t agree on on a new CBA and Free Agency seemed an impossible sticking point.  The league was determined to hold onto its single entity structure while he players clamored for more freedom to change teams. Then following a marathon mediation session just days before the season was set to kick off in Seattle, the parties announced an agreement on March 20, setting the stage for five years of labor peace.  There is now a flicker of free agency in MLS, a growing youth setup and expanding rosters.  Both sides can be happy with the deal, as it allows the league and players to move forward with financial security.

1.  World Cup Coverage

In June of 2010, the World Cup was the biggest sports story in the United States.  ESPN devoted hundreds of hours of progamming to the tournament, sports radio was forced to provide intervies and commentary and newspapers across the country led with game stories and photos of South Africa.  Despite mid-day start times, ratings were extradordinary and soccer became watercooler fodder across the country.  Whether the tournament becomes a stepping stone to a greater place in the American sports hierarchy for the beautiful game remains to be seen, but for one month, soccer ruled the airwaves in America.

That is our top five.  Do you agree?

Soccer Stadium Update: 2010 Summary

Time for our last stadium update of 2010.  It has been an exiting year for the development of soccer specific stadiums in this country.  Perhaps the signature stadium moment for 2010 was the opening of Red Bull Arena.  The new structure met and exeeded expectations in almost every way and has become the showpiece edifice of Major League Soccer.  From the gorgeous sitelines to the first in industry smart cards, Red Bull Arena hit every high note.  Crowds increased markedly over the team’s last few years at Giants Stadium and the team earned a significant revenue burst as it controlled concessions and other stadium sales for the first time.

If Red Bull Arena was story number one, not far behind was the quick progress towards a new stadium for the team formerly known as the Kansas City Wizards.  On January 20 we wrote that “A final agreement has been reached on the Wizards’ plan to build a new stadium as part of a $414 million dollar development in Wyandotte County.  The deal will be paid for in part by $ 85 million in state money and more than $144 million in STAR bonds.  In addition to the stadium, the project will include a new office complex, youth fields.  Based on a vote of the County government, construction is set to start as early as today.”  Now, less than a year after that post, construction is moving forward towards a June opening date.  The team has aggressively involved fans in the process, by allowing them to sign a beam as  a keep sake, take early tours of the site and more.  The opening of the new stadium will be a hallmark day for that franchise.

Not to be forgotten was the opening of PPL Park in Philly.  After a brief delay at the start of the season (where the team played at the Linc), the Union opened their own home in Chester, PA.  The stadium provides great riverfront vistas, wonderful site lines and great atmosphere.  Despite its location outside of Philly, it is convenient to public transportation and is probably the top end “second level” stadium in the league.

The expansion twins in Vancouver have also made progress towards the opening of their new stadiums.  In Portland, PGE Park hs been undergoing its two phase renovation as the former home of minor league baseball becomes the new home of the Timbers.  In Vancouver, renovations continue at BC Place, with an expected Summer of 2011 re-opening.  Until then, the Whitecaps will play their games at Empire Field, a 20k seat venue.  There has also been stadium movement in Houston and San Jose, a lack of movement in DC and New England. Slowly MLS is becoming aleague replete with great venues in which fans and owners can take great pride.

Posts of the Year: The Mediation Process

Perhaps the biggest business story of the year was the CBA negiations between MLS and the Players’ Union.  Fans waited anxiously as the league and players headed towards the season without a deal.  As the date to start the season got closer, the parties agreed to submit their dispute to mediation.  As the mediation process got underway, we put our lawyer hat on and discussed the mediation process.  Th  George Cohen was the mediator and he successfully brought the parties together.  Soon after this post, the parties had a deal and the MLS season started on time.

At the end of last week it was announced that the MLS Players’ Union and MLS had submitted their ongoing CBA negotiations to mediation before George H. Cohen, the Director of the Federal Mediation and Conciliation Service.  The announcement left fans scrambling as they wondered about the ramifications of mediation and the possibility of a resolution.  We thought we would provide some quick thoughts on the process and the mediator.

Most importantly, mediation is a non-binding process. Though often confused with arbitration, mediation is typically much less formal and more importantly, is not binding.  The parties simply engage the services of a non-party neutral (Mr. Cohen) and ask for his assistance in reaching a resolution.  Typically, the parties offer their positions either in written or oral form to the mediator in advance of the sessions to set the baseline for negotiations.

Once the parties stake out their position and address any issues that the mediator needs to be resolved with the entire group , the mediator will  typically engage in “shuttle diplomacy”  by separating the parties and moving from group to group trying to advance towards a resolution. Once this process starts, the parties typically no longer talk to each other, but address concerns and solutions through the mediator who has the power to determine the pitch and mechanism of the delivery.   Ideally, proposals and counter proposals go back and forth through the neutral until all issues resolved.  At the end of the process, none of the proposals are binding unless the parties have reached an agreement.  There is a truism about mediation that a successful mediation means that neither party is totally happy. The process forces compromise and seems like a perfect route for the stalled labor negotiations.

Mr. Cohen’s is an experienced and well thought of labor negotiatior, who spent much of his career as an attorney on the side of labor unions.  He has a high level of expertise in labor law and collective bargaining and will likely lend a fair amount of credibility to the process. Despite his pro-labor leanings, the non-binding nature of the process and the high level personnel involved in the negotiations should obviate any potential bias.   Before receiving a nomination from President Obama  to his current role, he was also an adjunct professor at Georgetown School of Law teaching “The Art of Collective Bargaining.  For more on Attorney Cohen, click here.

Like all fans of MLS and American soccer, we are hopeful that the mediation process is successful and believe that the parties have chosen a good path to follow to bring this matter resolution.

Top Posts of the Year-Part I

Over the next few days, we will craft some new posts and re-post of some of the most popular articles from 2010.  We’ll start with our interview with Union VP of Marketing, Cara Joftis.  The Union had a remarkably success first season, and this interview from January provided some interesting insight into the team’s marketing plans.

Enjoy this entry from our top posts of 2010.

We are now about two months away from the Philadelphia Union’s primetime opener on ESPN2 against Seattle.  With a new stadium on the way and an excited base of fans, Philly is set to become American soccer’s latest success story.  As we did last year, we hope to bring you a series of interviews with MLS marketing professionals to provide insight into how teams seek to promote their brand. We thought we would start 2010 with the Philadelphia Union.

Cara Joftis has been the  VP of Marketing for the Union since September, 2009.  Prior to joining the club, she was Vice President of Sponsorships and Brand Promotions at Citizens Bank for more than six years.  She managed brand presence and messaging  for Citizens Bank properties in 13 states, including Citizens Bank Park.   Thanks for Ms. Joftis for taking a few minutes to discuss the Union’s efforts to market the team in a tough economic climate in a city full of competition for attention from fans and media.

Footiebusiness.com  The Union is starting play in a fairly rough economic climate.  What impact does the economy have on the message of your marketing campaign?  Do you have to tailor your methods of marketing because of the economy?

Cara Joftis:  We try to be aware of all issues facing our fans.  We haven’t had to adjust our marketing campaign at all.  Our tickets are the most economically priced out of the Philadelphia major league sports teams.  Our marketing methods remain the same, with a focus on the passion of the game and of our fans.

FB:  The Union are moving into a brand new facility during the season.  Yet the team is starting the season at the Linc.  How does the team balance efforts to market the new stadium with the reality that the team will play a number of games elsewhere?

CJ: There really hasn’t been a need for any balance.  Again, the focus is on the passion of the game and the fans and that is relevant in either of the buildings.

FB: How does the Union plan to utilize online avenues such as social networking sites, SUM’s online ad network, etc… to market the team?  What is the goal of such online marketing efforts?

CJ: Online marketing efforts have the same goals as our traditional marketing – drive awareness and ticket purchases.  Facebook and Twitter are important communication channels for us in interacting with our fans.

FB: Philadelphia is a sports mad city with strong passions for teams that have been passed down through generations.  What can the Union do to penetrate those mainstream sports fans?  Should that be a goal of marketing efforts?  Is it important to gain exposure on mainstream sports outlets like WIP?

CJ: A recent Wharton study showed that approximately 1.5million people in Philadelphia DMA identify themselves as avid soccer fans.  There is an extremely strong fan base for soccer.  We talk to those people and do not go after people who are not interested in soccer.  Approximately 80% of our founding members do not have season tickets to any other professional sports team in town.

FB: What lessons can the Union take from the marketing success of Seattle and Toronto?  Similarly, what lessons can the Union take from some of the marketing mis-steps of the early years in the League?

CJ: Seattle and Toronto have done a terrific job of staying true to the sport and authentic to their fans.  That is definitely something that we also strive for.

Thanks again to Ms. Joftis for responding to our questions.

Soccer Business Bits: SI Coverage, Dynamo Training Complex

The most recent Sports Illustrated presented the magazine’s review of sports media, but the issue exemplified the repeated and varied soccer coverage in SI.  Soccer featured prominently throughout, including an interview with new ESPN hire Ian Darke, and a discussion of ESPN’s “The Two Escobars”.  The magazine also offered a summary of the Akron victory in the College Cup and a note that FIFA ’11 had set the record for the biggest sports video game opening.  Sports Illustrated regularly offers coverage of soccer led by top soccer writer Grant Wahl.   When combined with CNNSI.com’s excellent coverage, SI’s multiple platforms have become a go-to destination for mainstream coverage of soccer.  CNNSI.com offers great MLS coverage from Steve Davis and Avi Creditor along with substantial European and international writers.  SI has never shied away from putting soccer on the cover and providing comprehensive coverage of big soccer events.

In a story we neglected to cover, the Sports Business Journal, reported that the City of Houston  is nearing completion of a $15 million soccer training complex in Southwest Houston.  The City contributed the entire purchase price for the land and the entire construction price.  The facility is scheduled to be completed in February and the Dynamo will take control at that time.  The team will contribute approximately $1million per year in operating costs and will have the right to manage and charge usage fees at the complex.  The Dynamo will also have the right to sell founding partnerships for the new training facility and will contribute a significant amount to the build out of the locker room.

Finally, we tweeted about the SBJ report on the FSC/MLS negotiations and the apparent MLS demand for $20 million in rights fees.  Lost in the SBJ report was the statement that MLS and Versus (long believed to be a potential MLS suitor) hadn’t spoken in a couple of months.  The article also noted that the parties had never discussed rights fees.  The $20 million figure is a huge number for both MLS and FSC.  The two probably need each other, FSC has a huge hole to fill in the Summer and it is difficult to tout FSC as America’s soccer network without rights to the primary US soccer league.  At the same time, FSC provides the league a vehicle to connect with the most hard core fans.  We believe a deal will get done, but it will be interesting to follow over the next few months.

Business Thoughts on the MLS Home Openers

As part of its ongoing (and successful) effort to keep MLS on the minds of fans during the winter months, the league has announced the home openers for all of the teams.  We thought we would take a quick business look at some of the initial match-ups. For the first time, the league will open its slate with a stand alone match on a Tuesday.  The ESPN broadcast will feature Seattle and Los Angeles at Qwest Field before what promises to be a large and vocal crowd.  The game will feature a number of high profile Designated Players, including Donovan, Beckham, Angel and Montero.  The presence of these players will allow MLS and ESPN to aggressively promote the opening match.  On the downside, the broadcast is scheduled to start at 9:30 ET, which likely means a 10:00 ET kick.  As a result, the league will lost a large part of its Eastern audience.  In addition, the the Tuesday night game will not expose the “bar crowd” to the match.

MLS’ as yet unannounced Saturday night broadcast partner (see our tweet about negotiations with FSC), will likely get the battle of Canada, when Vancouver opens at home against TFC.  We are typically against using the opener for rivalry matches (why waste such a game on opening night), but this game could generate significant interest in Canada.  Canadian tv ratings have been tepid, but the addition of Vancouver could be the stimlus needed to pump those ratings.

The same TV partner may elect to go with Seattle/New York on that Saturday night, with Henry and Marquez as the lead stories.  While a tough start for Seattle, this will be a great chance for the Red Bulls to generate a big crowd for a game full of big names.

The Timbers and Sporting KC will both start on the road while their stadiums are finished.  Last year we spoke out against Philly’s decision to open in the cavernous Linc rather than wait for PPL Park.  Sporting is taking a different route, and their home opener won’t be until June 9.  That puts a tremendous burden on the team and on ticket sales for a crowded home slate in the second half.  Portland only has to wait until April 14 to open the new PGE Park.

The league has done a nice job mixing rivalry matches, good broadcast fodder and compelling story lines for the opening weeks of the season.  Once the TV relationships are secured, we should expect to see the rest of the schedule rolled out and national broadcast games assigned.  We will provide some business thoughts on those events when they happen.

Selling Tickets in Toronto

Toronto FC has announced that it has sold its entire season ticket allotment for 2011.  In order to fill out its season ticket roster, the team transferred 700 members from its waiting list to replace tickets that were not renewed.  Given the state of the team, lack of a coach, lack of success on the field and the disappointing display at MLS Cup, this represents a remarkable achievement for the franchise.  In its 5th year of existence, TFC has now sold out its season ticket allotment in each season.

There are reports that the waiting list is 10,000 strong.  These members have the right to pursue partial season ticket plans and walk-up tickets on the day of game.  The partial plans are for 9 games, which include 6 MLS matches, 2 premium games and a Canadian championship match.  The team wisely holds about 25% of the stadium for partial plan holders and walk-up tickets.  This allows non-season ticket holders to stay connected to the team and makes season tickets more desirable.  The league has rewarded these fans with an All-Star game and an MLS Cup over the last few years. Now it is time for the team to reward its own fans by winning on the field and making  run towards MLS Cup.

Toronto has yet to make the playoffs in MLS, yet it continues to enjoy support in the Toronto area.  The team has expanded the stadium, added a grass field and brought two DPs to BMO Field.  Although there have been some disputes with Supporters, the team has generally been responsive to its fanbase and the players have generated significant loyalty among its customers.

Soccer Business Bits: WPS Moves Forward, Gold Cup & More

After an exciting day of action on Wednesday in the re-entry draft, there are a number of smaller stories that are generating interest in American soccer.  We’ll start in WPS, where the struggling league has announced that the six remaining teams will conduct the college draft on January 14.  The four round draft will be streamed on the league website.  Following the suspension of operations by Chicago, the shuttering of champions FC Gold Pride and more, it has been a shaky off season for WPS.  However, the draft will hopefully allow the league to turn the page and work on getting stronger for its 2011 campaign.

Elsewhere, the sites for the 2011 Gold Cup were announced.  Headlining the venues will be the new stadium in KC, as it joins Red Bull Arena and the Home Depot Center as soccer specific stadiums assigned to host.  It will be interesting to see if the league schedules MLS matches as part of doubleheaders for those dates in an effort to generate attendance and interest.  The final will be held at the Rose Bowl (CONCACAF is certainly hoping for a US/Mexico final), with the semi-finals in Houston at Reliant stadium.

Jose Romero is reporting (via Ives Blog), that at least six MLS clubs will train at the same venue in Arizona.  We wrote about Grande Sports World a while back and it seems that the venue is becoming the pre-season destination in the league.  In addition to warm temparatures and great facilities, the center will offer fans a great vacation opportunity to travel and watch their teams train and play.  Spring Training has long been a destination for baseball fans, in part, because of the close proximity of the teams and the warm weather.  This new venture may offer a similar experience.