Kaka, Ratings and More

milanYes it is true that we focus on the business of American Soccer here at footiebusiness, but when a transfer is so prominent that non-soccer fans are asking about it, it deserves a mention.  Real Madrid set a record with its record transfer purchase of Kaka from Italian Club AC Milan.  The $90 million transfer is approximately $15 million  more than than the $75.1 million transfer of Zidane to Real Madrid from Juventus.  The record had stood for almost a decade and now it has been shattered by the 27 year old Brazilian (although not shattering the record in Euros because of exchange rates).  For purposes of comparison, recall that the record transfer for an American is the $10 million paid by Villareal to secure Jozy Altidore’s services from New York.

From a business perspective, what makes these huge transfers interesting is the ripple effect.  AC Milan now has plenty of money to spread around to smaller clubs to purchase their rising stars.  In turn, these clubs will spend some of that money and down the line we go.  Interestingly, part of Kaka’s motivation for agreeing to the transfer is to help the financial stability of its old club.  Kaka had turned down a mid-season transfer to Manchester City for $100 million because he wanted to stay at AC Milan.  Now, because of the economic climate, he felt he could help his old club by leaving.  Interesting.

ESPN’s broadcast of the US/Costa Rica broadcast did not crack the cable top 20 last week (getting beat by Sponge Bob and John & Kate Plus 8 among others).  This is disappointing because US Men’s games tend to do well and the Costa Rica match was in prime time.  At the same time, the Sports Business Journal is reporting that MLS ratings on ESPN have remained flat this year at the .2 level.  For reference, this generally means just over 200k homes.  These numbers are disappointing, yet it appears that the new ESPN policy of changing nights for the MLS game of the week has had no impact on ratings  .2 has been the MLS rating for a number of years.

Finally, Toronto has announced its plans for Real Madrid ticket sales.  First pre-sale opportunities are going to season ticket holders followed by fans on the season ticket waiting lists.  Tickets will range from $140-$215 (Canadian), a steep price in a League where season tickets go for not much more than that.  There will be a small discount for season ticket holders.tfc Kaka will likely play in Toronto before Spain.

Getting Friendly: The Business of MLS Midseason Exhibitions

milanPart of the summer ritual in MLS is the invasion of powerful foreign teams for a slew of exhibitions.  These teams criss-cross the United States preparing for their season by playing MLS sides and each other.  This year, AC Milan, Real Madrid, Chelsea and Everton are among the European powers crossing the pond to participate in an American Summer.  Not surprisingly, these games are not all about soccer.  The European teams are desperate to spread their brand to an American audience in an effort to collect fans and sell jerseys on these fertile shores.

At the same time, MLS teams can generate a large pay day by selling seats to see the foreign teams play (and these European teams don’t come for free).  At the same time, MLS squads view these games as an invaluable oportunity to showcase their talents (and very existence) to soccer fans in the States who typically ignore MLS.  Some teams believe so strongly in these opportunities, that they readily shift MLS regular season matches to accomodate the games. Recall that the Galaxy made the AC Milan friendly an important part of their Beckham negotations.  Interestingly, some teams readily participate in these matches (Seattle, Los Angeles), while others show no interest.

In Toronto, the match is not included in the regular season ticket package, and MLSE will be bringing grass into BMO field to accomodate Real Madrid.  In Seattle, the games are included (hello Chelsea and Barcelona), but the numbers make more sense there, because they can still sell an additional 40k seats to that game over and above season tickets, while BMO field is restricted to 20k (almost all of which are season tickets, making the game not financially viable).  However, DC United is also not giving away its Real Madrid game to season ticket holders.  This is a bit surprising because with less than 10k season ticket holders and the game to be held at Fed Ex field, the team could probably afford the goodwill generated by giving season ticket holders a pass.

For some interesting discussion of some of the issues and collateral damage raised by the Real Madrid game, go here.  Are these games good or bad?   Should they be free to season ticket holders?  tfcWe think they are good for MLS.  We have continued to discuss the huge numbers of American soccer fans in the United States who ignore MLS.  Bringing these big teams to MLS stadia presents a great opportunity to introduce these fans to MLS teams.