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.

Expansion Notebook

bc-placeWith an alleged announcement about expansion on the near horizon, some of the remaining candidate cities have been making news in the last few days.  In Portland, Merritt Paulson has reportedly reached a tenative agreement with city leaders on $60 million in loans to renovate PGE Park and build a new stadium for his AAA baseball team.  In making the deal, Paulson has made the loans virtually risk free by agreeing to make rent payments even if the teams fold. At the end of the loan term, ownership of the stadiums remains with the City.

Remarkably, the loan package is still not guaranteed safe passage through the City Council.  Some City money is still required, even with Paulson contributing 80% of the funds.  A vote may go forward as early as March 11.  Additional details of the Portland expansion bid can be found here and here.

Paulson is definitely putting his money on the line in this deal.  Ultimately, this comes down to needing one more vote on the 5 member City Council.  Two votes are confirmed for the franchise, but three others remain uncommitted.  As supporters of the Portland bid, we think that the City should move forward.  This is a much better deal than some other cities have secured and the City seems primed for a second major league franchise.

In Canada, the Globe and Mail is reporting that Vancouver will likely receive one of the two 2011 bids. The bid spearheaded by billionare Greg Kerfoot would follow the Sounders’ model, by moving a successful USL franchise into MLS.  Kerfoot has supported Canadian soccer for years and  has the dough to support a franchise.  While the idea of a renovated BC Place is not ideal, its proximity to downtown and public transportation are ideal.  The 24th Minute makes the case for BC Place here.  We  discussed the Vancouver bid here.

Amazingly, Jeffrey Cooper’s St. Louis bid seems to be lagging behind the Pacific Northwest.  Despite an in place stadium deal, the League has repeatedly expressed worries about Cooper’s finances.  With an announcement expected before the end of March, it appears that the Gateway City might find itself on the outside looking in: again.

As we have repeatedly stated, we strongly believe that the “mid size” model is a great one and both Portland and Vancover fit the bill.  An MLS franchise will immediately become part of the sports landscape in those cities, wherease a St. Louis team would quickly fall to fourth in the sports pecking order.  Add in St. Louis’ reputation as a baseball hotbed in the summer, and Portland and Vancouver may be the best choices .portland

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

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.  Footiebusiness.com will keep tracking all of the expansion bids.  We of course welcome your comments on the viability of this bid as well.  mls

MLS Expansion: Portland?

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As part of an occasional series of posts on MLS expansion contenders, I thought it worth taking a look at Portland’s efforts to join the League in 2011.  The bid centers on a proposal to upgrade PGE Park, the home of a minor league baseball team and the Portland Timbers of the USL.  According to the folks at mlsportland.com, a $40 million upgrade will take PGE to MLS standards.

Interestingly, the driving force behind the Portland bid is Merritt Paulson, son of the former Secretary of the Treasury.  Paulson is seeking $85 million in public money to support the bid, renovate the stadium and construct infrastructure.  Given the economic climate, and his father’s prominent role in the bailout, there is no small irony in Paulson’s leading the charge for a raft of public money.

Soccer has been successful in the City of Roses at the USL level and as a “one sport town” Portland is an attractive market.  This is especially so, when that one sport is the NBA (with only a small amount of schedule overlap).  Using Columbus as a model, there is good reason to believe that a Portland franchise backed by big money and a solid stadium, can succeed.

The bid was recently rocked by scandal, when Portland mayor Sam Adams, a strong proponent of the bid, admitted to an inappropriate relationship with a teenage female.  With franchise announcements expected in about a month, it will be interesting to see whether the Mayor’s problems will drag down Paulson’s efforts.  Portland has long been a soccer hotbed, and with Seattle entering the League in 2009, there is great potential for a natural rivalry.

I think Portland is a great fit.  I’ve long believed that medium markets like Columbus, Salt Lake City and San Jose are perfect locations for MLS franchises. Yes you need the big cities, but in New York and Boston, MLS is barely a blip on the sports landscape.  In smaller cities, the teams are a focus of local medial and a source of community pride.

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