Soccer Business Bits: Stadium Trouble in San Jose, TV Bonanza & More

san-joseDuring the season we have provided updates on San Jose’s efforts to build a stadium.  When MLS awarded Lew Wolff an expansion franchise it was largely understood that the deal was partly contingent on promises to build that stadium.  Now however, Wolff has announced that the planned opening of the stadium will not go forward as previously planned.  According to Wolff, a naming rights deal is required to fill a $50 million gap in funding.

The city of San Jose had previously agreed to chop $40 million off the purchase price of a 75 acre parcel that will include the Stadium and additional mixed use development. Mr. Wolff will now pay $89 million for the site (purchased by the City for $81 million). The stadium will seat 15,000 (with additional seating for 3,000 more on a berm at the stadium’s open end) and will use 14 acres of the site. However, his need for this additional funding will create a further setback and further delay.

Elsewhere, the plethora of soccer available on American television this summer was underscored on Wednesday night.  Without even considering the games on during the afternoon, Wednesday night saw the Fire/Galaxy on ESPN2, Houston/Metapan on FSC, a Champions League replay on CSN, a Bundesliga replay on GolTV and WPS playoffs on FSC.   Seemingly every night, there are quality games available on televsion.  The explosion of available soccer has been remarkable, and will continue with the availability of EPL games on ESPN.

Finally, it was interesting to see the promotion of the new EPL/ESPN relationship during the Galaxy/Fire game.  The games were certainly mentioned during the broadcast.  Will ESPN promote its MLS games during itsEPL games?  Despite using the British feed, there will be opportunities to promote their MLS coverag.  Will they?

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

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.