The Business of Real Salt Lake

rslThe week of RSL’s big home opener at Rio Tinto stadium has brought a number of stories about how RSL is functioning as a business in its new digs.  From “Behind the Shield, RSL’s official blog, comes word of “ticket insurance” in case of precipation at the home opener.  Unlike traditional rain check policies (where a game is rained out), the RSL policy allows fans the option of coming back for a game in August even if the game goes forward.  If there is any rain or snow between 6-10 p.m. the night of the game, all scanned tickets get a second game.  This is a clever policy, but suggests that RSL is concerned about attendance for opening night.  Check below for the opening night attendance.

The Salt Lake Tribune is reporting on the RSL’s elite “100 Lions Club“.  For a base fee of $15,000, admission to the Club provides VIP seating, food service, V.I.P. parking and more.  The program also includes additional up close  meetings with players, concierge service and first rights to non-soccer events at Rio Tinto.  These are the types of programs that teams in all major sports rely upon as  an important revenue source.  These are also the types of programs that are struggling in this economy.   It will be interesting to see if RSL can keep selling these seats and selling them out.

We recently wrote about RSL announcement of Jet Blue as an official sponsor.  The deal includes signage, promotions and special offers for RSL fans.  According to this article, RSL has also signed on with Burger King, Anheiser-Busch and more.  Rio Tinto stadium is a big draw for these advertisers, because the signage and stadium advertising includes events other than soccer.  The article also announces a new TV deal for the team.

During the broadcast, Crown Royal, Heineken, Pennzoil and McDonalds were among the national advertisers.   Sponsors such as Panasonic, Chase, and Gatorade were among the signage sponsors in front of another disappointing crowd.

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Business Bits: United Stadium, TV Rights and More

unitedDC United’s efforts to get a stadium built in Prince George’s County took a small step forward with the Maryland House Appropriations Committee approving a bill to fund a study about the project.  United is seeking State and County funds to build a new soccer specific stadium near the Metro in Maryland.  With RFK crumbling and a stadium near the Anacostia River, PG County is likely the best option for United.  The vote is positive, but the 17-7 vote tally is concerning for such a minor measure.  Stadium projects are not popular in this economy and United may find itself without a home if it alienates the District.

UPDATE:  According to this note in the Washington Post, the Study may not go forward after all.  Because of an apparent misunderstanding of the separation of powers, the Legislature has over-stepped its authority and will have to reconsider the bill. 

According to this AP story, Fox Soccer has won the rights to televise Champions League games for the next three years.  FSC beat out ESPN for the rights: a large coup for the soccer-only channel.  At the same time, ESPN is apparently offering cable companies and other distributors the opportunity to accept an ESPN Classic for ESPNU switch. The proposal would move Classic to a sports tier, thereby significantly decreasing its availability.  In recent years, Classic was regularly used to show non-marquee USMNT games.  This switch may either force ESPN to keep soccer on ESPN/ESPN2 or significantly reduce the available viewing audience.

As we have previously reported, MLS has shown a  surprising ability to retain major sponsors in tough economic time.  According to this latest report from the Sports Business Journal, Pepsi is now part of the list of retained companies.  Interestingly, the deal will switch the sponsorship focus from Sierra Mist (which was omnipresent as an MLS marketer), to Pepsi and Gatorade.  MLS has continued to show remarkable resilience with its sponsorships on both a League and Team Level with sponsors like Panasonic and VW staying with the League.

The Morning After: MLS, WPS, USMNT

wpsIt was a big weekend for U.S. soccer fans.  The National Team was in El Salvador for a qualifier, WPS kicked off in Los Angeles and the MLS completed its second week of games.   ESPN2 televised the National Team (after not showing an MLS game this week).  Captain Morgan’s featured prominently as an advertisor (I don’t remember them investing heavily in soccer previously) and there was otherwise a fairly typical mix of national and local advertising.  Heineken and Southwest also purchased ad time.  The crew was on site (as opposed to a booth in Bristol) and the production went fairly smoothly throughout.

FSC televised the WPS opener at 6:00 EST on Sunday.  Mark Rogondino manned the booth for play-by-play.  As a founding partner, Puma featured prominently throughout.  Super Eight Hotels, American Airlines were among the sponsors along with ususal suspects ProActiv and Soccer Shop.  Just under 15k attended the event at the Home Depot; a nice opening for the League’s first game.

League-wide, attendance in MLS was disappointing in week two despite another strong showing in Seattle.  The Rapids and RedBulls opened with less than 12,500 in New York and less than 12,000 in Commerce City.  Columbus raised its championship banner in front of less than 15k.  San Jose sold out for the second consecutive week and about 16k came to RFK for United’s home opener.  Sunday was the most distressing number, with less than 7k showing up at Pizza Hut Park.

It is not terribly surprising that a rainy night in New York for the Bulls’ last campaign at Giants Stadium drew poorly, but the numbers in Colorado and Columbus are fairly disappointing.  The weather wasn’t great in DC either, but for one of the League’s perennial attendance powerhouses, it is a low number.  We have previously discussed the attendance woes in Dallas, but this number is exceptionally bad.  Fans of the team have been clamoring for a change in the front office, and if the sub 10k numbers continue, changes might follow.

The FSC game had the usual mix of Home Depot and ProActiv commercials combined with a fair amount of MLS Works and PassBack spots.  RSL’s broadcast (of  its game against Seatle), was heavily sponsored by KFC, and a local bank.  In San Jose, Amway again featured prominently on stadium singage and a half time interview with the Quakes’ VP of Marketing touched on the new campaign and the addition of a new beer garden and other stadium improvements.  We touched on that campaign here.san-jose

MLS: A Peek Behind the Curtain

mlsFew sports leagues guard their finances more closely than MLS, but efforts to bring a franchise to Portland brought many long hidden numbers to light.  In a report prepared  by HVS, many MLS financial numbers became public for the first time.  The report is here.

The report projects MLS finances from 2011 (when Portland enters the League), until 2015 and aggregates data from past seasons.  Total  MLS stadium revenues for 2011-2015 are projected at $14-15 Million per year.  This includes ticket sales, advertising, naming rights, concessions and more.

The report also addresses season ticket sales for 2007 and 2008 with Toronto the high (16,641 in 2008) and Chivas the low (837 in 2008).  The report does not include Seattle’s 22k for 2009.  Most teams fall in the 3-5k range, but the League did show a 26% increase from 2007 to 2008 (including the addition of San Jose in 2008).

Because the report focused on the viability of a stadium in Portland, many of the numbers focus on seating, concessions, merchandise and other game day items. Around the League, Club prices range from $5,000 (both L.A. teams) to approximately $1,000.  Suites range from $154,000 per year (Galaxy) to $21,000 per year (KC).  Some teams sell suites by the game, while most offer only annual purchases.

Stadium naming rights are also discussed; The Home Depot Center is a $70 million deal for 10 years, while Pizza Hut Park is $25 million over 20 years.  Dick’s Sporting Goods Park is a $40 million two year deal and Rio Tinto is a $1.5-$2 million dollar annual deal (for 15 years)The report also projects annual ticket sales in Portland (well below the mean), ticket prices, revenue from non-soccer events and more.

This is a facinating picture of the League’s current, past and future finances. Based on these numbers, the City of Portland and presumably investors in Vancouver, Portland, Philly and St. Louis were eager to buy into MLS.  The report makes for fantastic reading (in its entirety) and will definitely make for interesting conversation.

What are your thoughts?  Are their numbers in the report that surprise you?  Impress you?  Let us know.

WPS: Interview with Robert Penner

wpsOn March 29, Women’s Professional Soccer will kick-off its inaugural season with a nationally televised match-up at the Home Depot Center.  Pitting the Los Angeles Sol against the Washington Freedom, the opening match will feature Brazilian star Marta and U.S. National Team scorer Abby Wambach.

Rising from the ashes of the WUSA, the WPS is seeking to gain a permanent foothold in the U.S. sporting scene.  A  national TV deal, a partnership with MLS and a reduction in team costs are all part of the “new model” .  WPS director of communciations Robert Penner was kind of enough to chat with footiebusiness.com about some of the business aspects of the WPS.  Mr. Penner is a veteran of sports media and marketing and has worked with the A.T.P.,  U.S. Open and NBC.  Most recently, Mr. Penner worked with Puma, a founding partner of the WPS.

Footiebusiness.com: Who does WPS view as the target demographic? When affiliating with the League, who are your sponsors looking to reach?

Robert Penner: Our core demographic is of course the young female soccer player age 8-18 who plays at the club and recreational level, but we also want to reach their parents, fitness-minded women in their 20s, 30s and 40s, as well as soccer fans in general. With our world class product and athletes on the field, we think we can accomplish that. The sponsors that we have met with and those that have signed on with WPS, know that we can help deliver this hard-to-reach demographic to them through many different activation platforms.


FB: How does the media relationship with FSC differ from the media model pursued by the WUSA? What efforts are being made to secure local TV deals?

RP: First, we wanted a network that spoke to the core of what our league stands for, in this case world class soccer – so FSC was a great fit for us. In addition, we wanted appointment television so our fans know exactly when and where they can watch WPS every week. FSC has made the commitment to promote our league across their various media partners and online, so that was important to us. At the local level, we are working with two potential regional television partners and hope to know our regional TV schedule very soon.


FB: How closely will WPS work with MLS? What are the advantages/disadvantages of a close relationship?

RP: We have gained a tremendous amount of insights from MLS. They are our sales arm through our agreement with SUM, so officially we are business partners on the sales side of things. In other areas, there are overlapping synergies with operations for some teams and several teams share stadiums such as Chicago, Bay Area and Los Angeles. DC United and the Washington Freedom have announced several doubleheaders and our new franchise in Philadelphia has had a lot of discussions with the MLS Philadelphia franchise that is coming on board next year. There’s a lot we can learn from MLS, they’ve done a great job building their league to where it is today 13 years after their launch.


FB: What are the League’s goals/expectations for attendance/ratings in the first two years?

RP: We’ve said all along that we want to keep our expectations in check and we are shooting for 4,000-6,000 fans per game for the opening season, which we think is reasonable and will still make our league model profitable.


FB: We have heard about Amway’s deal with the Sol. Who is responsible for securing jersey sponsorship (i.e. the teams or the League)? Can we expect additional announcements about such sponsors prior to the season?

RP: Team shirt deals, the inventory on the front of the jerseys, is for sale by the teams. From what we’ve heard there have been some other fruitful discussions so we are hopeful that there will be other announcements over the course of the season.


Thanks to Robert Penner.  WPS opens play this weekend on FSC.

Business Bits: Expansion in St. Louis & the Monday After

st-louisWith MLS announcing Portland as the League’s 18th Expansion Franchise, St. Louis appeared to be the big loser.   Since the announcement, Commissioner Garber worked hard to dispel that belief.  In an article published in the in St. Louis Post-Dispatch, Mr. Garber indicated that the League would work hard to steer investors to join Jeffrey Cooper’s bid.  We have written about Mr. Cooper’s bid before, and noted the League’s frustration with the lack of financial backing; it appears that the League is now going to work hard on Mr. Cooper’s behalf.

Mr. Cooper is a bridesmaid again, despite a solid stadium deal and a city with a strong soccer history.  With one more round of expansion scheduled for the coming years, he is running out of time to cement a team for the Gateway City.

Week one of MLS action is complete, and League wide, attendance was just OK.  Houston, Dallas and Chivas brought in about 16k, while KC and San Jose sold out their smaller parks.  Seattle was a sell out on Thursday night with more than 32k and the Galaxy brought in 18k (probably the most disappointing number of the weekend) for the Sunday game.   The Crew/Dynamo match-up of the last two Cup winners was also surprisingly lightly attended.  Dallas was higher than anticipated, but the presence of Blanco may have been a contributing factor.

The League debuted their new MLSlive features this weekend and the product seemed to work well.  For less than $20 for the season, the package is a fantastic bargain.  Direct Kick was free this weekend as part of the League’s annual preview.  With the price again at $79 for the season, this is also a great deal.  These packages do not include the games broadcast nationally on ESPN, FSC and Telefutura.  Interstingly, the local broadcasts prominently displayed advertising in the upper corners of the screens, adspace not used by EPSN2.  For the matchup on Telefutura, occassional screen advertising was present, but only for infrequent interludes.  Gildden, Nakita and Addidas were among the prominent stadium signage around the League. mls

The Business of Opening Day

soundersWith the curtain going up on the 2009 campaign, we thought we would offer some comments on the business aspects of the Seattle/NY game.  We”ll touch on advertising, presentation, attendance and more.  With the match going up against March Madness, the NIT, the NBA and the WBC, it will be interesting to see how many viewers ESPN2  draws.   Also, check the bottom of the post for a note about RSL.

ESPN came just a few seconds away from bungling opening night when the NIT game almost went into overtime (still went about 10 minutes over).  X-Box Live was definitely prominent in the stadium during the intro and the VW pre-game with Stone and Lalas was well done.  There was some interesting comments about the business aspects of the Beckahm circus from Lalas, and a teaser for an expansion announcement at half time.  The commercials started off with some big names, VW, Dick’s and Penzoil, but soon degenerated into some pretty poor local spots.  Seems that MLS is still not a big target for national sponsors buying ad time.

I was also surprised by the lack of in game sponsorship.  There were no ads in the corner of the screen or “this portion of the match sponsored by”.  Such ads are repugnant to some European soccer fans, but represent a potential strong revenue source for MLS.

At the half, the Commissioner all but announced Portland as the next expansion team and laid out his case for why MLS won the Beckham saga.  The crowd looked and sounded great and the home team didn’t dissapoint.  All in all, a great night for MLS and a great night for Seattle.

RSL announced Jet Blue as an official sponsor today.  The deal includes signage, promotions and special offers for RSL fans.  Salt Lake City is Jet Blue’s second biggest hub.  According to this article, RSL has also signed on with Burger King, Anheiser-Busch and more.  Rio Tinto stadium is a big draw for these advertisers, because the signage and stadium advertising includes events other than soccer.  The article also announces a new TV deal for the team. rsl