Business Bits: Expansion in Motion, WPS & Montero

mlsTwo years before they kick off, the newly minted franchises in Vancouver and Portland are already competing off the field.  As we reported earlier this week, Vancouver had already sold 5,000 season ticket deposits less than one week after the franchise announcement.  Now, word comes out of Portland that within the first 48 hours of opening up sales, more than 1,000 season ticket deposits have been sold.  For both teams, present USL season ticket holders will have priority ahead of deposit holders, likely adding a couple thousand more to the season ticket rolls.

Fans of both teams already anticipate a heated rivalry on the field.  Off the field, the franchises will forever be compared because of their start dates and geographic proximity.  It will be fascinating to monitor these franchises as they prepare for 2011.  Advertising dollars, ticket sales, broadcast deals and sponsorships will all provide means to compare the franchises for the next two years.

As we have previously discussed, the WPS kicks off this weekend from the Home Depot Center.  The Washington Post is reporting that more than 10k tickets have been sold for the L.A. Sol/Washington Freedom opener. The game will be nationally televised on FSC and the rest of the League will open the following week.  Check out our interview with WPS Director of Communications Robert Penner for more on the WPS’ business model and expectations.

Colombian Fredy Montero made a big splash on the field in his debut last week.  The performance was so impressive that Seattle fans were already dreaming of multiple MVP awards, or the possibility of a large transfer fee.  An article in the Seattle Times suggests that neither may come to pass.

According to the article, Montero is on a one year contract stemming from a loan agreement.  Seattle GM Adrian Hanauer acknowledged to the paper that Seattle only controls Montero for one season (despite Montero leaving the door open to a second year).  MLS typically orchastrates its loan agreements with an option to buy,  so a one year loan without such an option would be rare.  Nevertheless, a young player with such promise will be a hot commodity on the transfer market, and there are reports that MLS owns some percentage of Montero’s sale rights, thereby affording the League a chance to recoup some money on a Montero transfer. sounders

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.

Business Bits: Invasion of the Super Clubs

milanFour of the World’s largest soccer clubs will be touring the U.S. this summer in the “World Football Challenge”  The event boasts Inter Milan, Chelsea, Club America and AC Milan in a series of matches across the U.S.  Venues include the new Cowboys’ stadium, Foxboro and Palo Alto.  The event is run by Creative Artists.

Summer tours by big time clubs have become an annual ritual, as European teams gear up for their new seasons in the comfortable weather of North America.  The tours typically include some MFL and MLS competition, participation in the MLS All-Star Game and draw great numbers every year.  The popularity of these events continues to show the reach of the World’s Game in the U.S.  MLS has to harness these fans and convince them to keep coming for the MLS product.

After trying to package their AC Milan friendly with the season opener, the Galaxy are already selling the game as a stand alone event.  That is a pretty disappointing circumstance for the League’s most visible franchise.  Opening night attendance was very poor for the Galaxy despite the effort to pair the match with the Milan game.  The team is also offering a $1 beer and hot dog promotion prior to their next home game.

Newly designated expansion franchise Vancouver has announced that it has already sold its initial allotment of 5k season ticket deposits; the deposits were snapped up in less than 48 hours.  According to the team, the new deposits will slot in line behind current Whitecap season ticket holders in the rush to reserve season seats.  Remarkably, kick-off for the MLS version of the Whitecaps is still two years away.  bc-place

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

Welcome to the Party Vancouver

bc-placeThe Vancouver Sun is one of many media outlets announcing that March 18, 2009 will be the day that Vancouver is announced as the next MLS expansion franchise. The team will begin play at a renovated BC Place in 2009.  According to reports, the Vancouver Whitecaps of the USL  (following the Seattle model), will transition to MLS.  Multiple outlets are reporting that the official announcement will be made on Wednesday in Vancouver.

The $40 million expansion fee will certainly pump up League coffers.  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.

As we have said before, there is some downside here.  Vancouver is way off the typical sports beaten path (just ask the Grizzilies of the NBA), and would add even more lengthy travel to the MLS season.  BC place is not an ideal soccer venue and is not a “soccer specific stadium”.  Moroeover, MLS was established in large part to further the development of U.S. soccer.  With the addition of a second Candian franchise, the League may be guilty of chasing dollars at the expense of its initial mission.

Nevertheless, this will likely be a great move for the League.  As we have said previously, the money is there, the support is there and as a “mid-size city” (for sports purposes), I think it is a good fit for MLS.  There will be a natural rivalary in the Pacific Northwest (especially with Portland the next possible franchise), and a Canadian rival in Toronto.

Congratulations to Vancouver!  Two years until kickoff!vancouver

Opening Week 2009: Step Forward Seattle

soundersFirst Kick 2009 is just days away, and the League’s newest franchise is directly in the cross hairs of MLS fans.  They have sold the tickets; more than 20k season ticket sales have been announced for 2009.  They have landed the big name sponsor; Microsoft has signed on for $ 4 million for over five years.  They have marketed aggressively; billboards, scarves and advertising have been plastered all over the City.

They have signed an impressive local broadcast deal, allowing a revered local voice to bring Sounders soccer over the air. They will also have a presence on cable.    According to to David Falk, the man in charge of the comprehensive Seattle Soccer website, Fox Sports Northwest will sponsor a weekly Sounders show and run game replays.  They have spent on players, including a DP, and have created an outstanding website.

If MLS Executives were to imagine the perfect off the field scenario for an expansion team, Seattle, circa March 16, 2009 would be the dream.

Now it has to continue going forward.  Fans have to keep buying tickets, the media needs to keep agressively covering the Sounders  and Seattle needs to make it happen on the field.

What do you think about Seattle?  Big successes will continue or is it a passing fad?  Please vote in our inaugural Footiebusiness poll.

Business Bits: Marketing in Seattle

soundersWe’ve posted before about how Seattle seems to be doing almost everything right in the lead up to its inaugural MLS season.  The Sounders  have now upped the ante with a bit of “guerrilla marketing” around the Emerald City. Park benches, statues and more have been covered with Sounders gear. The pictures definitely are worth looking at.

Remarkably, this is all part of the Sounders’ Scarf Seattle Campaign.  The team is encouraging fans to show their support while getting some free marketing in the bargain.  Add in their oustanding billboard campaign, and the team certainly gives the appearance of doing a great job  getting the city and its fans excited about the MLS season.

Other clubs really need to “go to school” on what Seattle is doing.  While it is true that Seattle is starting from the ground level and thus can experiment a bit, the franchise is working hard to get an entire city excited about soccer.  The other teams need to take a long look at what is going on the Pacific Northwest and give some creative marketing a try.

Elsewhere, expansion talk keeps heating up, with Jeffrey Cooper, the head of the St. Louis bid, expressing confidence to the St. Louis Post-Dispatch.   Since the Miami bid faltered, fans have been guessing that Portland and Vancouver are next in line for 2011.  Don’t forget St. Louis.  While the League has long been nervous about Cooper’s ability to bring big money to the table, he has a strong stadium deal already in place.

In Portland, a city commission organized to review the MLS bid gave cautious approval to Merritt Paulson’s plan to bring a team to PGE Park.  Meanwhile, in Ottawa, proponents of MLS and the CFL continue to bicker about stadiums and funding. pge

Around MLS: San Jose Announces Marketing Campaign

san-joseJust weeks after announcing a sponsorship deal with Amway Global, the Earthquakes have announced their 2009 marketing campaign.  The campaign will combine 4 television ads, billboards and bus advertising.  The Quakes will highlight Joe Cannon and Darren Huckerby through all of the mediums utilized by the campaign.

San Jose also announced a new radio partnership with KNBR 680/1050, a sports radio station in Northern California.  The partnership will include advertising, the production of a daily 5 minute Earthquakes report and promotional activities.  According to the press release, there will also be an increased Earthquakes’ presence on the station’s website (not yet apparent).

Local media marketing is always important.  Simply getting MLS on the radar screen of mainstream media and the denizens of sports talk radio is a significant challenge.  Seattle has done this quite well (Freddy L. was trotted out over all the local airwaves when he was signed), while the Revs have gained a foothold thanks to WEEI’s “Planet Mikey“.  Generally, however MLS teams struggle for recognition in local sports talk, so San Jose’s deal with KNBR seems like a good idea.

In stadium news, Steve Goff is reporting that DC United has narrowed its potential Maryland stadium sites to three.  According to Goff, United will submit a contract on one of the sites soon.  Goff also reports that the stadium will be planned with transit in mind.united

The sooner the stadium site is selected, the quicker the process of securing approvals and funding can begin.  As important as RFK has been to the League and U.S. Soccer, it is time for United to get its own home.

MLS Expansion: Vancouver in 2011?

vancouverAs part of our ongoing examination of MLS expansion targets, it is now time to explore Vancouver’s bid for 2011.  Jeff Mallet, Greg Kerfoot, Stev Luczo and Steve Nash (yes that Steve Nash), are the men leading the charge to bring MLS to Vancouver in 2011.  The proposed team would play at BC Place Stadium following a renovation and in a Soccer Specific Stadium sometime thereafter.   Vancouver is already home to the Whitecaps of the USL and would add a second Canadian team to MLS.

The ownership group seems solid.  Mr. Kerfoot has long been a friend of soccer and Steve Nash adds glamour and splash to the ownership.  The owners have the money; Kerfoot is a billionare.  The Whitecaps have done well at the gate and the market is hungry for higher level soccer.   BC Place is well situated and the proposed soccer stadium is also in a solid location.

All that said, color me unconvinced.  The stadium situation is murky (there is no guarantee the sss wil be built), and BC place is not an ideal soccer venue.  More importantly, I question how much the League really wants a second Canadian franchise.  Montreal was a unique creature; both because of its rivalry with Toronto and high level support (just see the massive support Montreal got for its Champions League game).  Vancouver is way off the typical sports beaten path (just ask the Grizzilies of the NBA), and would add even more lengthy travel to the MLS season.

All that said, I think the Vancouver bid is attractive for many of the same reasons I support Portland.  The money is there, the support is there and as a “mid-size city” (for sports purposes), I think it is a good fit for MLS.  With the target date for announcing new franchises approaches, we will continue to monitor Vancouver and the rest of the bids.bc-place

MLS Portland Heating Up?

portlandLast week, we  posted about Portland’s efforts to land a Major League Soccer Franchise in 2011.  On Tuesday, Merritt Paulson, the owner of the Portland Timbers and driving force behind the Portland bid, took his pitch to the Oregon Legislature.  Paulson is asking the Legislature to revisit a 2003 bill that would use Major League Baseball player salaries to pay for stadium construction (remember when Portland was chasing an MLB franchise?).

Giving the economic climate, Paulson wisely couched his message in terms of jobs creation.  Because his project includes the renovation of PGE Park and the construction of a new home for his minor league baseball team, Paulson can pitch his project as a two-for-one.

Action is also taking place on the city level, because Paulson is seeking funding on all fronts.  In a remarkable display of chutzpah, Paulson took his argument directly to the people, through a commentary piece in the Oregonian.  In his article, Paulson states that he is seeking $35-38 million from the City to improve PGE Park, and trumpets his willingness to pony up the $40 million franchise fee.  Of Course, it is only a few paragraphs later when he notes the need to build a new home for his baseball team.

As I have stated before, I think Portland would be a great venue for MLS.  With limited competition for sports dollars and media coverage, and a strong repuation as a hotbed for soccer, Portland seems like perfect destination for the League.  The deadline for City action is March 15. will keep tracking all of the expansion bids.  We of course welcome your comments on the viability of this bid as well.  mls