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MLS fans bring the dough
February 23, 2009, 9:54 AM
Filed under: MLS, MLS Expansion, Toronto FC

Last week Columbus Crew blogger Nordecke Luchador sent me his analysis of the Crew’s bottom line.

On Sunday the wires reported that top Spanish club Barcelona’s planned expansion into Miami is likely a no-go, due to “the cost of financial risk [to Barcelona].”

The world’s finances sure are in disarray, and though sports fans would rather look at their team as a form of escapism, there’s no escaping the fact the global financial crisis is bending the industry over the table.

Collapsed insurance giants AIG will not renew its sponsorship deal with Manchester United, and bailed-out banker Citi has faced criticism for its barmy $400 million naming of the New York Mets’ new park. Minor league franchises across the nation have folded this year, as has the Arena Football League, albeit “temporarily.”

With its “fifth-sport” status, soccer in the United States has always felt the squeeze. At the turn of this century, as Forbes magazine points out, Major League Soccer looked doomed as it was “hemorrhaging money.”

But the league hung in there, and continues to do so despite the credit crunch and still posting an overall loss.

Three MLS teams were in the black in 2007: Los Angeles Galaxy, FC Dallas and Toronto FC. Sure, that season was well before the tumble, but the fact is there were profits, proving soccer here can mean good business.

Toronto was the big surprise, given other first-year franchises have struggled to land both loyal fans and sponsors. But as MLS comish Don Garber said, with perhaps just a hint of hyperbole, “Toronto FC was one of the most successful launches in pro sports history” [Forbes].

He could be right: in its inaugural season, Toronto sold out its entire 20,500-seat BMO field.

That’s very much relevant as the fans are, essentially, bankrolling the clubs. Soccer United Marketing, which controls the league’s $23 million in national TV deals, handed each club less than $1 million last year. A club averaging 15,000 at $20 a ticket, on the other hand, is pulling in $300,000 for each home game.

Soccer fans not only buy tickets, replica shirts, sodas, beer and Darren Huckerby bobbleheads, but to an advertiser they’re like magazine subscribers—a commodity in a niche market. A club that pulls in 20,500 fans every week has more value to a potential sponsor than one that barely breaks 10,000.

With Golden Balls David Beckham on its roster, there’s no real surprise the Galaxy has been sounding a loud “ka-ching” since 2007, and is knee-deep in sponsors and fair-weather fans. But with his return in limbo, who knows how the club—and the league—will cope with the financial ramifications of a Beckham-less 2009.

No wonder Galaxy owners AEG balked at AC Milan’s pathetic $3 million reported offer.

As El Luchador reports in his analysis, the Columbus Crew won its first championship last year despite being the league’s stingiest club in terms of salaries.

The club is still one of the league’s poor boys, struggling to pull in local sponsors and even fans—the Crew even ranked 10th (out of 14 clubs) in attendance during last year’s championship season.

However, Crew GM Mark McCullers said business this year is at double where it was last year, and season tickets are selling strong. Winning a championship can only have helped.

So what are MLS clubs doing to pull in a crowd and raise their bottom line? Putting out a quality and entertaining team should help, but special season-ticket rates seem to be the vogue. Some clubs this year are offering 18-game packages for the price of a single scalped Boston Celtics ticket.

Check out these deals:

* Chivas USA’s All-Star Pack, a five-game package starting at $50.

* Colorado Rapids’ 18-game Burgundy package, starting at $216 (ticket prices have not risen for two straight years).

* New England Revolution’s Fort season-ticket package, starting at $200.

* Seattle Sounders’ 18-game package, including an exhibition against Chelsea FC, starting at $288 (our Seattle Soccer Examiner reports that 20,000 tickets have already been sold).

* Kansas City Wizards’ general admission season-tickets for $180.

* FC Dallas’ opening-day family packs, which include four tickets, pizza and drinks starting at $79.

* Columbus Crew’s 18-match Gold package, starting at $204.

Shrinking the MLS team roster sheet to 20 squad players and four development players this year, along with ditching the reserve team, should help free up some dough, too. We’ll see how that impacts depth as the season wears on.

 

And with 11 of 15 clubs now with shirt sponsors—including new franchise Seattle’s five-year, $20 million jersey-plus-playing-surface Microsoft agreement and the San Jose Earthquakes recent Amway deal—the MLS’ hemorrhaging could yet dry to a trickle.

Source: Click Here

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