Soccer Business Bits: BMO Stays on as Sponsor, Portland Tickets & More

The Sports Business Journal is reporting that BMO has re-upped its sponsorship of Toronto FC through the 2015 season.  BMO will remain on the front of the TFC jersey.  The deal is worth a reported $4 million per year, a dramatic increase over the previous $1 million to $1.5 million.  The deal also puts TFC with the Galaxy at the top of the sponsorship pyramid.   Right now, nine franchises (plus Red Bull) have jersey sponsors with deals ranging from $1 million to the Galaxy’s $4-5 million.

This is good news for MLS.  BMO represents the second renewal for the league (after RSL).  The bank is making a significant statement about their belief in the future of Major League soccer.  However, with a number of teams still waiting for sponsors and a number of renewals are coming due.  The next year will be an important indicator of the league’s attractiveness to potential sponsors.  In the article, SBJ also reports that Canadian broadcasts are averaging 50-100k viewers per game.

In Portland, the Timbers are reporting that ticket sales and corporate investment are ahead of schedule. Merritt Paulson is reporting that more than 7,000 season ticket deposits have been put down.  He also also indicated that the franchise will likely cap season ticket sales at around 12k.

Finally, initial reports are very positive about the PPL Park’s opening. Click here to for one take on the City of Chester’s view of the stadium.

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MLS vs. US Soccer: Anecdotes of a Gold Cup

revsI made the trip up to Foxboro this weekend for the Gold Cup Tripleheader.  It was a night of perfect weather, a great US/Hati match and a stinker of an MLS game.  I made the trip with a buddy with whom I played soccer in college.  While I have immersed myself in MLS and US soccer over the past decade, he had been neither to an MLS game nor a US game.  He drove up from the City of Brotherly Love and is a big Philadelphia sports fan.  He has expressed some lukewarm interest in the Union, but wanted to “see the product” before he buys.

His experience was unfortunately instructive.  The US game was scintillating.  Fans of both teams were into the game, the soccer was back and forth and there was tension throughout.  The Revs/Wizards game was a different animal.  The soccer was of poor quality, the crowd quiet and the match lacked drama.  On the way back (sorry Grenada, we didn’t catch the third game), my buddy expressed how entertaining the US match was, while noting that he almost fell asleep during the Revs game.

In defense of MLS, both teams were missing many of their best players both to injury and the Gold Cup, and every League, all over the world, puts up stinkers. Yet a common issue on this blog is the big question facing MLS; how does the League bring the multitudes of American soccer fans into the fold?  Displays like Saturday night are not the answer.

The new franchises (TFC, Seattle, RSL) have managed to bridge this divide.  The Revs, Red Bulls, etc… have not.  Behind me at the game was a teenage youth player of an apparently high level.  He was at the game with a relative who knew little about soccer, yet this youth player regaled his relative with the biography and history of all of the US players.  This youth knew nothing about the MLS teams involved, knew none of the players and was dismissive of their skill. “Individually they are ok, but they can’t play in tight spaces.”  Of course the player that commented was directed at was two time Argentinian World Cup veteran Claudio Lopez.  This youth player had no idea that athletes of that caliber were plying their trade in MLS.

The League is making strides; we’ve documented those repeatedly.  Yet it was remarkable how many fans came to the triple header after the Revs game was over because they had zero interest in MLS.  I’m not describing anything new; we’ve certainly posted about this issue many times.  However, I thought the anecdotes were instructive.  My friend? He promised to give the Union a try, but has decided against season tickets.

Soccer Business Bits: American Transfer Season

milanThe transfer season is upon us and players are flying around the globe to and from MLS.  However, the most notable American transfer to date is the recently announced move of  Oguchi Onyewu to world power AC Milan.   While this is big news for American soccer fans, this may also be big business for AC Milan.  “Gooch” will be the first American in the highest level of Italian soccer since Alexi Lalas.  AC Milan will be touring the United States this summer, and will now feature a big American star.  All of the big European teams are very interested in tapping into the United States market, and featuring an American star signed for “free” could generate additional stateside interest in AC Milan.  Also, because AC Milan is regularly featured on television in the U.S., fans following Gooch will have multiple opportunities to follow AC Milan and (perhaps) become jersey buying fans.

The biggest outgoing MLS transfer of recent days involves the pre-contract signing of Yura Movsisyan.  The RSL forward is on his way to Danish club Randers.  Movsisyan made a name for himself in MLS last season by scoring some important goals on RSL’s run into the playoffs.  This is a disappointing transfer for MLS, because the Danish League is not typically considered a “big” League.  Players obviously want to move to bigger leagues to increase their income and their exposure.  In this case, MLS apparently cannot compete with the salary offered by a mid-sized team playing in a stadium smaller than those featured in MLS.  In order to increase its level of play, MLS must compete to keep its mid-level players, and losing players such as Movsisyan is a step backwards.

Also making news is the proposed incoming transfer (to Toronto) of Canadian International Julian de Guzman. de Guzman The signing of such a prominent internatinal caliber player as a “Designated Player” would be an intriguing business move for TFC.  One of the primary rationales  for the Designated Player rule was to bring additional fans to MLS  games, yet TFC sells out all of its games.  Moreover, de Guzman is not the type of player that would increase road attendance for TFC.

Nevertheless, the addition of de Guzman may be shrewd business move by MLSE.  After a number of disappointing seasons, a short term contract offer to de Guzman may placate suffering TFC fans.  Such a move would also likely increase TFC’s television popularity in Canada, while increasing the team’s international profile.

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.

Business Bits: Bigger BMO?

tfcMultiple sources are reporting that Maple Leaf Sports and Entertainment is strongly considering a significant expansion of BMO Field. The current stadium seats about 20k, and could be expanded by an additional 8k seats.  TFC has repeatedly capped season tickets at 16,500, boasts a waitingt list 14k long and sells out every game.  According to the Toronto Star, only 700 folks were moved from the wait list to ticket holders in 2009.

Given the level of interest, it certainly appears that there is revenue to be had in Toronto.  An additional 8,000 seats would fill MLSE coffers and add even more noise to the Leagu’s most intimidating venue.  Club officials have been careful to point out that an expansion is not yet definite, but it seems like a no-brainer.  BMO is owned by the City but expansion would be at MLSE’s cost.  However, if interest remains high after year three in Toronto, expect TFC to move ahead with an expanded stadium.

As we reported yesterday, Vancouver is in for 2011, but interestingly, the $40 million expansion fee is not.  According to reports, the Whitecaps will pay $35 million to enter the League in 2011.  While $5 million more than Seattle in 2009, the fee is still shy of the expected $40 million.   In an interview with local media, League Commissioner Don Garber cited the economic situation as the reason for dropping the price.

Mr. Garber also dropped hints that the next expansion announcement is coming soon.  One more team is expected to be added for 2011.  Portland remains the leader coming into the home stretch.

Finally, we reported some time ago about the MLS partnership with Brand Thunder.  A bit later than expected, it looks like the roll out is starting.  Kansas City appears to be up first.  The rest of the clubs should follow.  If you try it out, drop us a line and let us know what you think.  The partnership is part of the League’s ongoing efforts to increase its digital content.

wozards

T.V. Tibits: MLS announces Direct Kick 2009

mls

According to a League press release, MLS has announced the 2009 Direct Package.  The 2009 version will provide up to 130 matches during the MLS season for a flat rate of $79.  Available through both cable and dish, the package will include playoff games and regional pre and post game shows.  The package does not include games televised on ESPN, FSC, ABC and Telefutura.  The package will be offered to commercial establishments for a flate rate of $100.

The package continues to offer great value to MLS fans.  Between the national television packages and Direct Kick, fans are provided a full slate of games from across the country and a peek into the voices and advertising of local markets. While production value is often lacking, it is fun to watch broadcasts from around the country. 

In other TV news, it was recently announced that Maple Leaf Sports & Entertainment has purchased an 80% stake in GolTV Canada. The purchase was designed to expand MLSE’s penetration into soccer television while providing TFC with its own broadcast outlet.  Like its American counterpart,  GolTV Canada broadcasts matches from European and South American Leagues.

Interestingly, the network does not yet have MLS broadcast rights.  However, the Nutrilite Canadian Championship and CONCACAF Championship will featured on the network.  The station is exploring such broadcasts and intends to offer shows covering TFC and MLS to its schedule.  TFC already does an oustanding job with broadcasts through its website.  Using GolTV’s platform seems like a great next step to expand TFC’s footprint throughout Canada.