Soccer Business Bits: New WPS CEO, LiveStrong Business & More

Women’s Professional Soccer has announced appointment of Jennifer Pogorelec O’Sullivan as the League’s new Chief Executive Officer. O’Sullivan formerly served as the Vice President of Labor and Legal Affairs for the Arena Football League.  She is a law school graduate and sports industry veteran.   According to the league press release, “O’Sullivan joins WPS following its most successful season to date, setting new attendance figures and earning a 50 percent increase in revenue at the league level in 2011.”

Elsewhere, the Sports Business Journal is reporting that the owners of Sporting Kansas City, are leveraging the knowledge gained from operating LiveStrong Sporting Park as a tech friendly venue in a new consulting venture.  According to the SBJ,”the new business will consult with other pro sports teams and leagues on how to use high-density wireless technology and ultra-high-speed broadband networks — both of which the club is familiar with because of the high level of technology built into its new stadium.”   Livestrong has two one gigabyte wireless fees, 196 routers and connection speeds well in excess of Cowboy’s Stadium.  The new company will launch with 30 employees and will soon make a presentation to representatives of MLS, EPL, NBA and more.

Finally, the stadium construction efforts in San Jose continue their slow march forward.  Monday night offered an opportunity for local residents to weigh in on the planned stadium at a municipal hearing.  The stadium has been on hold as team owners wait for favorable business conditions to combine retail and residential at the site.  The project is expected to cost more than $40 million dollars and will seat 15-18k.

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Soccer Business Bits: NY Times Signs a Deal, Graphing the Cup

The New York Times announced a deal with California based Match Analysis to provide real time, data and statistics from the 2010 World Cup.  While the timing of the deal seems strange, the arrangement will give the Tiems access to a continuous stream of match and player data.  Match Analysis assigns five analysts to each game and then creates a library of real time and stored information.  According to the official press release, Match Analysis has worked with all current MLS franchises and a number of national teams.

British website Knowyourmoney.co.uk has produced an interesting graph looking at the economics of the World Cup.  The graph looks at the cost of stadium improvements and the investment of sponsors in the tournament.  Some notable numbers include the amount of investment of the different levels of corporate sponsors and partners and the $1.6 billion total sponsorship revenue generated by the tournament. The graph further indicates that the total cost of the Cup is $3.5 billion.

Finally, we recommend checking out this recent piece from Time Magazine on the television ratings at the World Cup.  The article looks at the impact of the World Cup’s recent popularity on MLS and soccer in the United States.

Selling the Gear: A Look at Soccer Merchandising

On the move for the next couple of days, so here is our quick take on a recent article about the sale of soccer merchandise in the United States and around the world. OregonLive presents an interesting article on Adidas marketing efforts for the 2010 World Cup.  The article provides in depth analysis on the soccer apparel industry and efforts to sell sporting goods in the current market.

The article focuses on Adidas’ worldwide efforts to market its product and the importance of the World Cup in spreading brand awareness.  Sales for the sporting goods giant are down significantly, and World Cup 2006 provided a significant boost that Adidas hopes to equal or surpass. However, for MLS fans, there is this juicy quote:

“To build its U.S. soccer edge, Adidas paid a reported $150 million over 10 years to sponsor and outfit men’s Major League Soccer, which is expanding to 18 teams and drew 3.6 million spectators this year. Stu Crystal, MLS marketing vice president, said annual sales of league-licensed merchandise has grown more than 600 percent, to $300 million, since the Adidas partnership began in 2005. “Being connected to Major League Soccer gives Adidas exposure to millions of soccer fans and reinforces its position with the sport,” he said.”

While the Beckham effect is certainly an enormous contributing factor to the exponential growth referenced above, this is obviously a good sign for the league.  Selling merchandise can have a snowball effect, as brand awareness can ultimate increase sales.  The article provides some great data and we recommend the read.

Covering the Coverage: Part II- Sports Radio

soccer radioWith the Summer winding down, we thought we would take a look at the coverage of American soccer in the United States.  Last week, in Part I, we took a look at the mainstream media.  To read that article, click  here.  Today, we are going to take a look at that seemingly inpenetrable bastion of major sports; sports radio.  In almost every city in the country the airwaves are filled with stations devoted to sports 24 hours a day.  Whether entirely locally produced, or reliant on ESPN, Fox Sports or TSN for content, these stations provide non stop sports, typically in a call-in format.

What is almost universal in these stations, is the absolute lack of soccer coverage.  In many markets, even soccer scores (whether USMNT or MLS) are hard to come by.  Hosts rarely (if ever), mention soccer and those who do often limit their comments to a few snide remarks.  Callers are often discouraged from making “soccer calls” either by the lack of soccer coverage or by the producers who screen calls and don’t want to see their hosts embarassed.    Those calls that do get through are typically limited to World Cup or a remarkably big event (Beckham, etc..).

ESPN does occassionally devote segments to soccer, and some stations do have the occassional regular soccer show (like Balboa’s in Colorado).  Some stations also broadcast their local MLS game (although even for me soccer on the radio can be a bit tough to take), yet still ignore their teams.   In fairness, some hosts are willing to give soccer a go (e.g. Planet Mikey in Boston), and will at least entertain callers on the sport.  However, their soccer IQ is typically low.

Soccer fans have of course found their alternative medium.  Call-in pod casts are gaining popularity and provide an outlet for soccer fans looking to chat about their sport.  WSD was also a popular soccer call-in program.

The big question for soccer fans is whether it matters.  Should soccer fans be content to be confined to “soccer media” or should they try and break through by filling the airwaves with their calls?  Is soccer not discussed because nobody calls to discuss it, or does nobody call to discuss it because it is never discussed?  Tell us about your city; does soccer get play on the local airwaves?

Soccer Business Bits: Wall Street Journal Weighs In, Welcome Back Wynalda

mlsWith the Summer of Soccer in full swing, the Wall Street Journal is the latest mainstream publication to provide coverage of the Beautiful Game’s recent burst of  popularity.  The article discusses the Confederations Cup run, the big crowds watching soccer live this summer and of course the youth participation rate.  The article also includes quotes from Don Garber and Sepp Blatter, discusses the attendance in Seattle and the World Football Challenge.  The piece also looks at an issue we devote much of our time discussing, the question of how to capture American soccer fans and make them MLS fans.  Though breaking no new ground, it is important for American soccer and MLS to appear in such a publication, and the article certainly gives American soccer and MLS a fair shake.

Elsewhere, former US International and ESPN broadcaster Eric Wynalda has resurfaced as Nick Webster’s new co-host on Fox Football Fone-In.  Former host Steven Cohen got into trouble last season after making controversial remarks about Liverpool’s past Hillsborough tragedy.  Wynalda is no stranger to controversy, and his presence will provide a knowledgeable and familiar American voice to a show that has long been EPL-centric.   The show is set to debut on August 10.

Finally, it is All-Star time in MLS.  Kudos the Galaxy for promoting a viewing party at a Pasadena bar.  The event will include Galaxy players, free admission and more.  Another interesting All-Star business note:  Adidas is outfitting 3 MLS All-Stars with unique cleats for the big game.  Montero, Casey and Holden will wear signature one of a kind boots for the match.  Fans are also offered the opportunity through adidas to personalize their own cleats.  Click here for more.

MLS to Miami? Does South Florida deserve a second chance?

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When MLS officials announced the next round of expansion, St. Louis, Montreal and even Portland were among the favorites to land the new franchises.  Passed over in the prior round of expansion, St. Louis, lead by Attorney Jeffrey Cooper, landed a stadium deal and big name investors like Albert Pujols.  Nevertheless, MLS has long had concern about Cooper’s financial stability.

When Montreal  and Atlanta dropped out of the race (leaving Portland, Ottawa and Vancouver among the possibilities) the Gateway City seemed almost guaranteed a spot for 2011.  Then a dark horse entered the race in the form world famous F.C. Barcelona.

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The Spanish powerhouse combined with Marcelo Claure and Florida International University to     submit a bid to bring MLS back to South Florida.  As MLS fans well know, the Miami Fusion entered the League as an expansion team in 1998 and were contracted just four years later.  That background, combined with South Florida’s rather weak history of supporting its teams (Florida Marlins anyone?), has lead many to scoff at any move back to the Miami area.  Add in the lack of a Soccer Specific Stadium (the team would share with the FIU Football team) and the Miami bid seems like a sure loser.

However, the leadership of MLS seems to disagree.  Apparently wowed by the glam of FC Barcelona and the billions in Claure’s pockets, the league seems eager to embrace South Florida.  Commissioner Don Garber just announced that if the Miami bid is accepted, the team would start play in 2010, a year ahead of schedule and at the same time as Philadelphia.

Count me among the unconvinced.  The “beloved” Miami Dolphins strugle to sell out their games, the Panthers are barely a blip on the Miami scene and Marlins are an annual embarassment.  Why would MLS be any different? The idea of 9,000 fans snoozing through Sunday afternoon game in 110 degree Miami August heat, is a nightmare scenario for supporters of the Leage.   MLS may love the idea of Barca dumping money into its coffers, but like Chivas before them, I see little chance of a big time soccer power adjusting to life in Major League Soccer.  League rules will not permit “Barca USA” to serve as a farm team of the parent club or as a way station for up and coming talents.  MLS should have no interest in serving as a marketing opportunity for the Spanish Giants.  As much as Barca might love the idea of selling jerseys in North America, I think the League would be far better served  taking $40 million from St. Louis and and Portland in 2011.

Should Beckham Be Released from MLS Contract to Join AC Milan?

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With David Beckham’s long rumored transfer to AC Milan seemingly imminent , it is worth examining the implications of the move.  First, a little background:  Beckham came to the L.A. Galaxy on a “free” in 2007 after finishing out his contract with Real Madrid.  While the exact terms have always been sketchy, it has long been understood that Beckham signed a five year deal including less than $50 million in guaranteed money, with most of the remaining $200 million wrapped into jersey sales and image rights.  Most importantly (for purposes of the move to AC Milan), there is an “opt out” clause that lets Beckham walk away from Major League Soccer after three years (November, 2009).

After the 2008 season, Beckham (with MLS’ blessing), secured a short term loan deal to AC Milan until March, 2009. His stated reason for taking the loan was to stay in shape for the upcoming world cup qualifying.  He was expected back with L.A. in plenty of time for the season opener at the end of March.  While in Italy, Beckham proved himself capable at playing at the highest level, and soon, AC Milan was banging down MLS’ door for a full transfer.

Given the forces at play, it seems unlikely that MLS will hold onto Beckham.  Selling him for a reasonable sum now would certainly seem to trump letting him walk for free in November.  However, a whole host of sponsorship deals and television contracts were signed with the understanding that the world’s most famous athlete would be wearing Galaxy colors.  Given the economic climate, it is not unreasonable to suspect that some of these companies may come back to the League looking for money.  Herbalife got far more than even they thought, when Galaxy jerseys sporting their logo became the “must have” uniform worldwide.  With Beckham gone, those sales are sure to plummet during the last three years of their (no surprise) five year deal.

beckhamFor MLS, the departure of Beckham is a definite mixed bag.  There is certainly an argument that his two years raised awareness of MLS to new heights both nationally and internationally.  MLS is now part of the worldwide soccer landscape and is part of the U.S. mainstream sportsvernacular.  Attendance increased league wide during his two years, especially during Galaxy away matches.  On the other hand, TV ratings stayed flat and the impression that Beckham is fleeing MLS could be taken as a black eye for the league.  There is a good discussion of both sides of this issue with sportswriter Stefan Fatsis on NPR.

I tend to think now is a good time for Beckham to be moving on.  When he came to MLS, the move was derided as a sunny retirement in L.A. for an aging superstar.  Fans of the European game refused to believe that a talented European would choose to play in the States if he was good enough to play across the pond.  Two years later, teams are clamoring for Beckham’s services, and MLS has become a destination for international talent and launching pad for budding Americans like Jozy Altidore, Clint Dempsey and Michael Parkhurst.

Off the field, I think the benefits of Beckham have peaked.   MLS raked in huge amounts of money with ticket sales, jersey sales and TV deals.  Arguably, the surge in soccer stadium construction is partly attributable to the Beckham effect and the upcoming changes in the Collective Bargaining Agreement will definitely be impacted by the increased interest in MLS.  There is no use keeping a player who wants to leave (and who can do so soon).  MLS will be best served selling Beckham for $15-20 million and perhaps reaping some additional benefits from AC Milan.  They can then turn that case into more players and as a crutch to ride out the economic storm.

UPDATE: According to Soccer By Ives, MLS has given L.A. and AC Milan until Friday to resolve the potential Beckham transfer:  http://www.soccerbyives.net/soccer_by_ives/2009/02/mls-ac-milan-has-friday-deadline-to-buy-beckham.html

With sponsorship deals under negotiation and tickets being sold, it only makes sense for the League to press.  They don’t want to get caught with sponsors claiming some sort of breach.