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.

Business Bits: Invasion of the Super Clubs

milanFour of the World’s largest soccer clubs will be touring the U.S. this summer in the “World Football Challenge”  The event boasts Inter Milan, Chelsea, Club America and AC Milan in a series of matches across the U.S.  Venues include the new Cowboys’ stadium, Foxboro and Palo Alto.  The event is run by Creative Artists.

Summer tours by big time clubs have become an annual ritual, as European teams gear up for their new seasons in the comfortable weather of North America.  The tours typically include some MFL and MLS competition, participation in the MLS All-Star Game and draw great numbers every year.  The popularity of these events continues to show the reach of the World’s Game in the U.S.  MLS has to harness these fans and convince them to keep coming for the MLS product.

After trying to package their AC Milan friendly with the season opener, the Galaxy are already selling the game as a stand alone event.  That is a pretty disappointing circumstance for the League’s most visible franchise.  Opening night attendance was very poor for the Galaxy despite the effort to pair the match with the Milan game.  The team is also offering a $1 beer and hot dog promotion prior to their next home game.

Newly designated expansion franchise Vancouver has announced that it has already sold its initial allotment of 5k season ticket deposits; the deposits were snapped up in less than 48 hours.  According to the team, the new deposits will slot in line behind current Whitecap season ticket holders in the rush to reserve season seats.  Remarkably, kick-off for the MLS version of the Whitecaps is still two years away.  bc-place

Welcome to the Party Vancouver

bc-placeThe Vancouver Sun is one of many media outlets announcing that March 18, 2009 will be the day that Vancouver is announced as the next MLS expansion franchise. The team will begin play at a renovated BC Place in 2009.  According to reports, the Vancouver Whitecaps of the USL  (following the Seattle model), will transition to MLS.  Multiple outlets are reporting that the official announcement will be made on Wednesday in Vancouver.

The $40 million expansion fee will certainly pump up League coffers.  The ownership group seems solid.  Billionaire Greg  Kerfoot has long been a friend of soccer and Steve Nash adds glamor and splash to the ownership.  The Whitecaps have done well at the gate and the market is hungry for higher level soccer.   BC Place is well situated and funding is in place for a substantial renovation (well over $200 million U.S.) that will add a retractable roof.  Soccer capacity will be limited to 20k.

As we have said before, there is some downside here.  Vancouver is way off the typical sports beaten path (just ask the Grizzilies of the NBA), and would add even more lengthy travel to the MLS season.  BC place is not an ideal soccer venue and is not a “soccer specific stadium”.  Moroeover, MLS was established in large part to further the development of U.S. soccer.  With the addition of a second Candian franchise, the League may be guilty of chasing dollars at the expense of its initial mission.

Nevertheless, this will likely be a great move for the League.  As we have said previously, the money is there, the support is there and as a “mid-size city” (for sports purposes), I think it is a good fit for MLS.  There will be a natural rivalary in the Pacific Northwest (especially with Portland the next possible franchise), and a Canadian rival in Toronto.

Congratulations to Vancouver!  Two years until kickoff!vancouver

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

MLS Expansion: Vancouver in 2011?

vancouverAs part of our ongoing examination of MLS expansion targets, it is now time to explore Vancouver’s bid for 2011.  Jeff Mallet, Greg Kerfoot, Stev Luczo and Steve Nash (yes that Steve Nash), are the men leading the charge to bring MLS to Vancouver in 2011.  The proposed team would play at BC Place Stadium following a renovation and in a Soccer Specific Stadium sometime thereafter.   Vancouver is already home to the Whitecaps of the USL and would add a second Canadian team to MLS.

The ownership group seems solid.  Mr. Kerfoot has long been a friend of soccer and Steve Nash adds glamour and splash to the ownership.  The owners have the money; Kerfoot is a billionare.  The Whitecaps have done well at the gate and the market is hungry for higher level soccer.   BC Place is well situated and the proposed soccer stadium is also in a solid location.

All that said, color me unconvinced.  The stadium situation is murky (there is no guarantee the sss wil be built), and BC place is not an ideal soccer venue.  More importantly, I question how much the League really wants a second Canadian franchise.  Montreal was a unique creature; both because of its rivalry with Toronto and high level support (just see the massive support Montreal got for its Champions League game).  Vancouver is way off the typical sports beaten path (just ask the Grizzilies of the NBA), and would add even more lengthy travel to the MLS season.

All that said, I think the Vancouver bid is attractive for many of the same reasons I support Portland.  The money is there, the support is there and as a “mid-size city” (for sports purposes), I think it is a good fit for MLS.  With the target date for announcing new franchises approaches, we will continue to monitor Vancouver and the rest of the bids.bc-place