Turnkey Sports: MLS Fans on Top

at&TThe Sports Business Journal is once again reporting on the fans of Major League Soccer’s remarkable connection to the corporate partners that support the league.  In reporting the results of the latest Turnkey sports poll, SBJ states that, “MLS sponsors were correctly identified as such by the league’s fans at a higher rate than the companies’ rival brands across all categories, according to the results of this year’s MLS Sponsor Loyalty survey conducted for SportsBusiness Journal/Daily by Turnkey Sports & Entertainment”

MLS fans’ track record of brand loyalty is a recurring theme.  Because of MLS’ relative newness to the sports scene, MLS fans have more “ownership” in the league’s success.  Unlike fans of the NFL, MLB and other mainstream sports, fans of Major League Soccer have real concern about their league and its place on the sports landscape.  Fans work hard to bring friends to games, introduce family to the sport and cheer for MLS teams in international competitions.  This personalized relationship to the sport lends itself to these same fans taking an interest in the corporate entities that keep the league solvent.  Moreover, because the relationships are promoted through means other than commercials (jerseys, signage, etc…), the names of these companies are always prominently displayed.panasonic

Some telling numbers from the survey (as reported by SBJ).   League sponsors such as VW, Gatorade, Pepsi and Allstate generally earned recognition scores in excess of 30%.  One major partner that fell below 30% was VW, at 28.5% .  However, among all sports/leagues, that 28.5% was second to only Chevy’s affiliation to NASCAR in the auto category.  AT&T”s relationship with the league was the biggest mover among all brands in the survey with almost a 16% year over year increase in fan recognition through its MLS partnership.   One final note, Visa’s brand recognition; “more than 44 percent of avid fans recognized the relationship, the highest rate of any of the league’s sponsors among avid fans.”

We will have more on this survey over the next few days.

 

Business Bits: United Stadium, TV Rights and More

unitedDC United’s efforts to get a stadium built in Prince George’s County took a small step forward with the Maryland House Appropriations Committee approving a bill to fund a study about the project.  United is seeking State and County funds to build a new soccer specific stadium near the Metro in Maryland.  With RFK crumbling and a stadium near the Anacostia River, PG County is likely the best option for United.  The vote is positive, but the 17-7 vote tally is concerning for such a minor measure.  Stadium projects are not popular in this economy and United may find itself without a home if it alienates the District.

UPDATE:  According to this note in the Washington Post, the Study may not go forward after all.  Because of an apparent misunderstanding of the separation of powers, the Legislature has over-stepped its authority and will have to reconsider the bill. 

According to this AP story, Fox Soccer has won the rights to televise Champions League games for the next three years.  FSC beat out ESPN for the rights: a large coup for the soccer-only channel.  At the same time, ESPN is apparently offering cable companies and other distributors the opportunity to accept an ESPN Classic for ESPNU switch. The proposal would move Classic to a sports tier, thereby significantly decreasing its availability.  In recent years, Classic was regularly used to show non-marquee USMNT games.  This switch may either force ESPN to keep soccer on ESPN/ESPN2 or significantly reduce the available viewing audience.

As we have previously reported, MLS has shown a  surprising ability to retain major sponsors in tough economic time.  According to this latest report from the Sports Business Journal, Pepsi is now part of the list of retained companies.  Interestingly, the deal will switch the sponsorship focus from Sierra Mist (which was omnipresent as an MLS marketer), to Pepsi and Gatorade.  MLS has continued to show remarkable resilience with its sponsorships on both a League and Team Level with sponsors like Panasonic and VW staying with the League.

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.

MLS in the Digital Age: Interview with Chris Schlosser

mlsChris Schlosser is the Director of Digital Strategy for SUM,  a graduate of Columbia Business School and a former employee at Microsoft in Seattle.  While at Columbia, Mr. Schlosser formed a relationship with Sunil Gulati and ultimately came to work at SUM.  He was kind enough to answer a few questions from footiebusiness.com about MLS’ digital strategy.

Footiebusiness.com: SUM recently announced the initiation of an online ad network that targets a variety of sites that soccer fans frequent.  What are the benefits to the sites and SUM in participating in the network?  What are the benefits for fans?

 

Chris Schlosser: Over the past seven years SUM has built significant relationships with the US commercial community, we spend every day selling soccer to Fortune 100 companies. We are using this network of clients and our experience selling soccer to drive incremental revenue for our member sites. There are lots of other ad networks out there but I can guarantee you that none of them have more experience or more focus on selling soccer. In addition to driving revenue we are working with a number of our partners on content sharing and joint marketing to grow the collective soccer audience. From a fans perspective the SUM Digital Network should over time provide significantly better content and features, as revenue grows it is our hope that this will enable our member sites to invest more money in content and features which will increase traffic and continue to drive value for both fans and the commercial community.

 

 

F.B.  How will the ads be targeted?  Who will decide which ads get placed on which sites?

 

C.S.  Our sales team will work with our advertising clients to create custom ad plans tailored to efficiently meet the needs of our clients. Many of our official site partners (MLS, EPL, US Soccer, etc.) have significant corporate sponsorships already in place, many of these sites maintain a category system with certain sponsors retaining exclusivity, we are used to working in this environment and will work across our network to protect existing commercial relationships. We also are focused on premium ad placements and clients, we are not going after the “fat belly” ads that are so common on many sites today.

 

 

F.B. Far more than most sports fans, MLS supporters take a direct interest in the League’s efforts to generate revenue.  How will the League be compensated?  How about the sites?

 

C.S. Our fans are amazing, in fact a recent SBJ study stated that MLS fans show more brand loyalty than any other sports fans in America, we even out indexed NASCAR which is built around branded experiences. We see the digital space as a significant revenue opportunity over the next 3-5 years and are investing accordingly. As a member of our network sites will see incremental revenue compared to what they are currently seeing from remnant networks or in house sales teams. Additionally SUM will see revenue from more deals and larger deals as we continue to build our presence in the digital space.

 

 

F.B. What other electronic innovations should fans be looking out for in 2009?

 

C.S. We have a ton planned for 2009, including some very interesting launches. You will see us launch redesigned club pages for 11 of our 15 teams this afternoon, additionally we are launching improved video experiences, team social networks (see mydynamo.net for an early example), customizable and shareable highlight videos, and much more. 2009 will be an exciting year on MLSnet and our team sites. One great example of how the league is focused on improving the online experience for fans is that we are going to double the quality of our live game streams while keeping the same cost to fans as last year at only $19.95 for the season. That means you can watch more than 100 games for less than 20 bucks, now that is a great deal.

 

 

F.B.We’ve heard about the League’s new relationship with Brand Thunder.  We will the first “booms” be unveiled?  Who will be responsible for content?  The League?  The Teams?

 

C.S. The first browser should launch this week, we have a league deal but will work with each team to manage content and design on the browser.

Interview With Tim Martin of Gallagher Sports

mlsEarlier today, Footiebusiness.com posted about San Jose’s recent sponsorship deal with Amway. Tim Martin, a 10 year veteran of the sports marketing field and the President of soccer marketing entity Gallagher Sports, lauded the deal in a recent article for ESPN.com.  Mr. Martin has worked for a number of major brands in an array of sports marketing categories and has negotiated tens of millions of dollars of sponsorship agreements.  He was kind enough to answer a few questions posed by Footiebusiness.com:

Footiebusiness.com:  Despite the obvious positives of bringing money to San Jose,  some fans have wondered whether adding Amway to the League’s other two multi-level marketing jersey sponsors (Xango & Herbalife) either diminishes the standing of the League or creates an association that could be harmful. Do you think those are legitimate concerns?

 

Tim Martin: They are certainly legitimate concerns, because each of those MLM’s has had noteworthy and seemingly legitimate legal and/or scientific complaints registered against them in the past.  At the end of the day, however, it needs to be a decision weighed, and ultimately made, by the club, based off of its unique goals and objectives.  We are also in an unprecedented economic environment where almost no industry is immune to public scrutiny when it comes to where they are spending what may be perceived to be the public’s money.  Two years ago an observer may very well have listed major financial institutions and auto makers as two of the best and most stable of industries from which a club could secure a shirt sponsor.  That was before congressional hearings and TARP funding became staples of the evening news broadcasts and cast major sponsorship funding in an entirely new light.  At times like this, there is risk in just about any sponsorship.  If there were 15 multi-level marketing companies across the front of MLS jerseys, it may be indicative of a problem.  3 of out 15, however speaks to sponsor category diversity.


FB: The League has been working hard to market the game to a younger, “hard core” fan base for a while now.  Do you think Amway’s product line a good match for this type of crowd? Who are they trying to attract?

TM: I do not think that Amway’s products are necessarily a good fit for such a target, however, without having a working knowledge of Amway’s marketing strategies, its difficult to say exactly who they are targeting, particularly because they are so diverse.  The one thing that I believe is safe to assume is that they find the Quakes (and MLS) a global medium for broadcasting their brand, and must feel that the impressions they will receive around the world are worthy of the investment.


FB: There are now four clubs without jersey sponsors.  Do you think sponsorships deals are in the works for those clubs?  Fans are amazed that teams like the Revs, Rapids and Dallas (with the power and business acumen of  Kraft, Kroenke, etc..)  have not landed a sponsorship.  In your mind, what are those teams looking for, and what should they be looking for in a deal?

T.M. I’m fairly certain that any club without a jersey sponsor is actively pursuing one.  Its far too great of a potential financial resource not to be.  Each club, however, will assign a different value to the front of their shirt, and by value I don’t just mean a certain sum of money, but also cognizance of the brand they are associating themselves with.  This is very relatable to your first question in that it all comes down to the goals and objectives of the club.  It’s possible that these remaining clubs have had offers from multi level marketers, or casinos, or tobacco companies, and simply choose not to go into business with them due to an organizational belief system (I have no first-hand knowledge of any such offers, just using that as an example).


F.B. Some of the first deals have now been in place for a couple of seasons.  Do you think that the sponsors have realized the intended benefits from these deals?

T.M. Again, not knowing each sponsors specific goals and objectives for striking these deals in the first place it’s impossible to say for certain how they feel these deals are working for them.  I think that at least one success story would be Glidden and the Columbus Crew.  First and foremost, they bought the sponsorship at what would today be considered a great value price of $1M per year.  Little could they possibly have known at the time that a former Boca Juniors legend would guide the franchise to its first title while providing the brand with unprecedented exposure in South America, on top of what they also obviously received in the States.  It can also be reasonably assumed that Herbalife has received adequate value back on their $4M+ investment through worldwide Beckham jersey sales alone, and the exposure that they provide.

Once again, many thanks to Tim Martin of Gallagher Sports. To the readers of Footiebusiness.com, what do you think about Amway coming into the League, or about shirt sponsors in MLS?

crew-jersey

MLS Sponsorships: The Name on the Front of the Jersey

san-joseOn January 29, 2009 the San Jose Earthquakes announced a three year deal with Amway, for a reported $2-3 million per season.  According to reports, all San Jose apparel, including game jerseys, would immediately begin carrying a prominently placed Amway logo.  With the deal, San Jose became the 11th MLS side to announce a primary jersey sponsorship.

We’ve previously discussed Seattle’s $4,000,000 per year deal with Microsoft. In 2008, DC United inked a long term deal with Volkswagen for a reported $3.7 million annually and the Chicago Fire announced a three year deal with Best Buy.  Best Buy, Volkswagen and Microsoft are well known commercial entities with an international footprint and an established pedigree.  MLS fans were elated when such prominent companies invested in the League.

Despite its long history, soccer fans reacted differently to Amway’s entry into U.S. soccer.  In the minds of some, the Amway deal joined Herbalife’s five year sponsorship of the Galaxy and RSL’s groundbreaking deal with Xango by adding another multi-level-marketing enterprise to the League’s list of sponsors.  These critics believe that such sponsors besmirch the reputation of MLS and give fodder to mainstream media critics.

I take the view that sponsorship money is a hot commodity right now and fans should be ecstatic that an internationally recognized company is investing in the League.  Amway has deals with the Orlando Magic and AC Milan.  Given some of the sponsors of teams around the world, Amway is no better or no worse.  xboxMicrosoft, Glidden and Comex are fine, but be grateful for the investment, and go buy so makeup!