Expansion Update: Vancouver 2011

bc-placeWith all the tumolt surrounding Portland’s 2011 expansion effort, its cousin in MLS expansion, Vancouver, has quietly slid under the radar.  With opening kick for Vancouver just 86 weeks away, thinks are quietly moving towards a successful opening.   Vancouver is well set up for success.  The ownership group seems solid.  Billionaire Greg  Kerfoot has long been a friend of soccer and Steve Nash adds glamor and splash to the ownership.  The Whitecaps have done well at the gate and the market is hungry for higher level soccer.   BC Place is well situated and funding is in place for a substantial renovation (well over $200 million U.S.) that will add a retractable roof.  Soccer capacity will be limited to 20k.

The team has set-up a slick website, that is unfortunately updated infrequently.  The site contains links to BC Place renovations, and a brief discussion of the hoped for waterfront stadium.   There were reports soon after the announcement of the franchise that more than 5k season ticket deposits had been received.

In the three months since the franchise was awarded, it has been very quiet in Vancouver.  However, with almost two years until Vancouver first kicks off in MLS, that is probably a good thing.  Portland’s bid has been in the news for all the wrong reasons, while stadium renovations in Vancouver are continuing without dispute.  Promoting a team that won’t play a game for two years is a delicate balance.  The Sounders did an outstanding job of building momentum up to their 2009 debut and avoided peaking too early.  Vancouver can quitely promote their MLS squad through the current Whitecaps, while quietly putting together the support system necessary to maintain and succeed in MLS.  We will continue to monitor developments in Vancouver.

Soccer Business Bits: New MLS Expansion?

barcaOvernight English language broadcast numbers are out for the USA/Brazil match, and the numbers are instructive.  Of the top 10 markets, only three are MLS cities, and two of the top five (Miami and West Palm Beach) were home to one of the League’s failed franchises.  Other  top markets like Hartford/New Haven and Richmond scored very well, despite only a passing association with exisiting franchises.  Las Vegas was a solid #2, perhaps suggesting heavy betting action on the game.

Regardless, the real story here is the South Florida market.  Remember Barcelona’s efforts to bring a team to Miami?  Remember the short lived Miami Fusion?  We admit, we were against the idea of MLS expanding back into Florida.  South Floridians are notoriously fickle sports fans; Exhibits A-C are the Heat, Panthers and Marlins.  But as these TV numbers suggest, soccer is definitely a premier attraction in the Sunshine State (this will likely be even more evident in the Spanish language numbers).

The question for MLS is can a franchise (with or without Barca) survive in South Florida.  As we have said before, the idea of 9,000 fans snoozing through Sunday afternoon game in 110 degree Miami August heat, is a nightmare scenario for supporters of the League.  Would the popularity of top-level international football translate into numbers for MLS?  As the US marched through the Confederations Cup, it became clear that soccer is plenty popular, just not MLS.

There are three levels of soccer fans in the US.  There are the MLS fans who cheer on their local team and their national team.  There are the “Euro” fans who follow the big European teams (or South American teams) and their national teams, but have little interest in MLS.  Finally, there are the “event” fans, who get caught up in the hype of a big event and/or will follow the US in any sporting event. The first group is small (but growing), and these are the fans that MLS needs to capture, especially in a market like South Florida, where soccer is king, but MLS is not.

One final expansion note, there was a story out recently that the Saputos are again announcing an effort to bring an MLS team to Montreal. Montreal has shown an ability to support soccer (remember that big Canada Cup crowd) and is close to securing a 21k soccer specific stadium. A third Canadian team would create a nice rivalry and Saputo is solid potential owner.  However, with Philly, Vancouver and Portland right around the corrner, there is a question whether the League can handle another franchise so quickly.  The dilution of the talent pool is a big concern.  That said, Montreal would be a great venue for MLS.

The Seattle Sounders at the Halfway Mark: Good Business

soundersJust over three months ago, we took a look at the business model for the expansion Seattle Sounders.  With the season at the halfway mark, we thought we would take another look at soccer in the Emerald City.  In an indication that demand remains strong for tickets, the Sounders recently announced that they are making more seats available, making it almost certain that the team will set an MLS attendance record.  Fans continue to flock to Qwest for arguably the best stadium experience in MLS, and perhaps most importantly, the Sounders continue to perform on the field.

The Sounders also continue to do the little things right; the Sounders’ web page is second to none in the League.  While other teams have deviated from the MLS web template, the Sounders have done an outstanding job of creating an interactive destination for their fans. Live chats with the Team are offered, links to multiple blogs, an oustanding ticket engine, promotion information and more. In addition, the presence of the Sounders’ band offers a unique element in MLS.

Media coverage continues to be outstanding, with multiple print outlets covering the Sounders from every angle.  The Seattle sports radio station features the Sounders prominently.  The same goes for local televsion stations (and TV ratings are reported as quite strong).  While this level of coverage is not unprecedented, it is far more than many MLS teams.  MLS fans struggle to find coverage of their teams in many markets, and the opportunity to seek information from multiple sources is simply another avenue for fans to connect to and support their team.

Will the success continue?  The same factors discussed in our original piece probably still apply.  The team needs to do well, the experience has to continue to provide fans with something unique and the Sounders have to continue to do well in their fan outreach.    However, 1/2 of the way into their first season, the Sounders continue to do well in all aspects.  With new teams coming in Philly, Vancouver and Portland, Seattle will continue to be a model franchise for expansion.  xboxThe success in Seattle looks like it is here to stay.

Stadium Fun: Downtown in Houston

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

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

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

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

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

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

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


Soccer Business Bits: Commish Speaks, KC Stadium and More

mlsWith the Confederations Cup in full swing and another MLS weekend behind us (for attendance figures and a nice year by year comparison, check here), we thought we would note some key business moments from the week that was.  In MLS, Commissioner Don Garber continued his occasssional “blog” posts with another edition of the “Commisioner Speaks“.  His comments are not notable for their content, but more for the fact that they exist it all.  We have repeatedly discussed the importance of soccer utilizing non-mainstreatm media sources to spread its message and the necessity of being ahead of the technology curve.  Occassional blog posts from the commish is a way to accomplish that.  MLS fans are far more invested in the League than fans of other major league sports (are Twins fans really concerned about the viability of MLB??)  It is a smart move for MLS to have the Commissioner participate in these occassional blogs and fan Q&A in order to keep that connection strong.

We have also posted on numerous occasions about the efforts to build a stadium in Kansas City.  Well, some first renderings are out as the project remains targed for a 2011/2012 opening.  These new stadiums are great for fans, great for the League and fun to think about.  Obviously, the final construction doesn’t always look like the initial renderings, and the pictures remind us all that this will be large complex with a stadium attached.  Nevertheless, kudos to KC for moving this forward.

Speaking of stadiums, here is the interior webcam of Red Bull Arena in Harrison.  This should be one of two new MLS parks opening in the Spring of 2010. The other, in Philly, seems to have some catching up to do. It is pretty exciting for the League to have these two new venues opening in such close proximity.  With the stadium struggles in DC and the total lack of movement in New England, it seemed that the Eastern Conference would never catch up to the West in stadiums.  Now there will be two new stadiums to enjoy on the East Coast.

Finally, soccer websites have been abuzz for the last few days with the news that Schalke midfielder Jermaine Jones has apparently announced his intention to play for the United States.  Jones is the son of a German mother and American father who has lived his entire life in Germany.  For footiebusiness, we are interested not in the prospect of such a talented midfielder suiting up for the Red White and Blue, but for the FIFA ruling that allowed this to happen.  The new ruling does away with the age limit (21) for players to switch national teams unless the player has already participated in an official competition.  This will allow players who participate in youth matches for national teams but do not get called up for the full national team in anything but friendlies, to switch if their careers take a differnt turn.  This will also add to the layers of legal manuevering to ensure that promising players are “cap tied” at an early age.

Soccer Business Bits: RSL Revenue, Attendance Review and More

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.

Soccer Business Bits: Hello Philly!

phillyWe promised a post on soccer gambling, but with the big announcement in the City of Brotherly Love, we’ll put gambling to the side for now.  At City Hall, the Philadelphia Union were officially announced in front of more than 500 “Sons of Ben” and other supporters.  With the League Commissioner and City Mayor in attendance, the Blue and Gold colors and sharp new logo of the team were also unveiled. The team is set to start play in 2010.

As we have discussed, the Union will play in a brand new 18,500 seat stadium in Chester, PA.  Importantly, the new stadium will be served by both highways and SEPTA (South Eastern Pennsylvania Transportation Authority).  With the dissapointing attendance at some of the suburban stadiums (Chicago and Dallas) and recent success of urban stadiums (Seattle and Toronto), the accessibility of the new stadium in Chester to Philly will be important.

Season ticket sales in Philly have lagged behind those in other expansion cities, but with 11 months until First Kick, plenty of time remains to sell tickets.  Interestingly, the Union have created a supporters section where you can only get tickets if you are a member of a supporters group.  According to reports, the Sons of Ben have more than 5,000 members already. All ticket prices are here.

The success of Philadelphia is important for MLS.  It creates a link between the East Coast cities in the League while bringing one of the larges TV markets into the fold.  Philly fans are passionate; it remains to be seen whether they are passionate about soccer.  The City of Brotherly Love will get a taste of soccer this summer when the CONCACAF Gold Cup rolls in for a double header at Lincoln Financial Field (home of the Eagles).  These games may be an important bellewether for the popularity of soccer in town.

Chicago Fire Attendance: Do You Know the Way to Bridgeview?

chicago-fireAttendance issues are all the rage in MLS circles with pundits and fans floating the economy, the absence of Beckham and a multitude of other reasons for the slow-down in ticket sales this year.  In Chicago, the Fire have added a new possibility to the equation:  maybe the fans can’t find the stadium.  The Sun-Times is reporting on a study commissioned by the Fire to evalute the causes of their attendance slowdown.   According to the study, a large number of fans either think they know Toyota Park is inconveniently located, or, believe that it is.  Remarkably, fans assumed that the stadim is 70 minutes away, even though many of the surveyed masses lived within 20 miles of the stadium.

The article goes on to discuss the public transportation options to shuttle fans to Bridgeview.  Public transportation options are limited, and Chicago fans are used to having their stadiums downtown.  Interestingly, the study also revealed that the Fire and MLS are an integral part of the Chicago sports landscape.  90%  of fans were aware that Chicago has a professional soccer team and 65% knew of the Fire without prompting (this may not sound impressive, but 10% of New Yorkers probably have never heard of the Yankees).

Ultimately, it seems to come down to location, location, etc…. The suburban/urban city debate has raged in MLS for years, with Dallas, Chicago and New England among the teams outside city limits, with Toronto, Seattle and Columbus holding down more urban locations.  The location debate is part of the larger marketing debate we have been discussing for months.  Stadium in the suburbs = familes and soccer moms.  Stadium in the City = younger, rowdier fans.  Right now, the city teams seem to be doing better. Will it continue?

Expansion Update: Portland in Trouble?

pgeWe have discusssed Portland’s expansion bid on multiple occassions.  Recently, these stories have focused on the “funding gap” between the money promised by Merritt Paulson, the City of Portland and other sources.  Specifically, there is more than a $28 million hole, even if the City is able to sell more than $35 million in bonds in a tough market (if not, the gap is much larger).  Now citizens in Portland opposed to the deal are speaking out in an effort to kill the deal.  The Oregonian is reporting that a number of local architects are working to preserve Memorial Coliseum by placing it on the National Register of Historic Places.  If that effort is succesful, it would block the two-step required to get the Timbers their own stadium.  Portland’s minor league team is supposed to get a new stadium in place of the Coliseum while the Timbers are supposed to move to PGE Park.

Sensing the shifting winds, Mr. Paulson submitted an op-ed piece to the Oregonian in support of the deal.  In the article, he discusseds the proposed improvements to PGE Park, the importance of the Beavers and Timbers to Portland and the financial benefits of the new construction.  Also important is the connection between the stadiums, the Rose Quarter and downtown Portland.  At the same time, other columnists are taking a different view.

Just a few weeks ago, MLS fans were ecstatic about the prospect of a three team rivalry in the Pacific Northwest.  Now, the Portland deal is facing a number of hurdles that might slow down the process.  These challenges are typical for stadium construction projects nationwide.  Building multi-million dollar public/private projects is difficult and such efforts rightfully face significant amounts of scrutiny.  We will continue to monitor the efforts in Portalnd; it will certainly be a developing story over the next two years.

Soccer Business Bits: Soccer Stimulus in Colorado, President Obama’s World Cup Appeal and More

rapidsThe Colorado Rapids Offical Blog announced a marketing effort between the Team and the City of Denver to increase tourism in the Rocky Mountain Region.  Through a joint announcement between the Rapids and Denver Mayor John Hickenlooper, the City will be promoting discount packages for a variety of events including Rapids Games, cultural attractions and restaurants.  The deal includes 2 free tickets to a Rapids game in return for booking a hotel room for a summer night in Denver.  The Rapids are the only Denver area sports franchise participating in the campaign.  Importantly, the “free tickets” are only vouchers that must be redeemed at Dick’s Sporting Goods Park.  There will not be stacks of Rapids’ tickets sitting in hotel lobbies.  More information is available at www.denver.org.

FIFA announced some time ago that World Cup host countries for the 2018 and 2022 World Cups will be announced in December 2010.  It is no secret that the United States has long been interested in capturing one of those bids.  According to the New York Times, President Barack Obama is lending his support to the bid with a direct appeal to Sepp Blatter.

In the letter, President Obama relates his personal history with the sport as both a player and a fan.  Given the President’s worldwide popularity, his assist with the bid could be an enormous lift.  The benefits of a U.S. World Cup have been apparent ever since the success of the 1994 Cup.  No country can bring bigger crowds to the tournament than the United States. FIFA works in weird ways and Sepp Blatter runs something of a fiefdom.   However, given the President’s unique popularity, even Sepp might feel compelled to give the U.S. a long look.

Finally, Commissioner Don Garber has taken great pains to deny a rumor that the Red Bulls are close to being sold.  Denials come in many forms, but this denial certainly falls in the “strong” category.  The denial comes at the same time that the Red Bulls announced their “topping off” ceremony for Red Bull Arena.  As we have previously discussed, Red Bull Arena is set to open in 2010.

red-bulls2