MLS Single Table - A financial comparison

The release of MLS teams’ season ticket totals by Sports Business Journal last week begs for some hard analysis, with a dose of informed speculation, that I’ll call my MLS Financial Single Table.

I graded all 14 MLS teams on five financial criteria on a 10-point scale (10 = high, 1=low).

Ticket Sales: Season tickets are an important component, but the FST also looks at historical trends.
Stadium Situation: Got your own? Score no less than 6. Can’t fill it? Score no better than 6. Playing in the NFL or NCAA’s house – score no more than 5.
Major Corporate Support: Teams with jersey sponsors and lucrative stadium revenue streams earn kudos here.
Designated Player or Coach: Two places where an exuberant owner can really set his team apart – for better OR worse.
Financial Intangibles: Championships sell merchandise and build long-term fan bases. So does long-term grassroots work, including academy formation, having a 501-c-3 foundation, a meaningful broadcast partners and consistent brand building in the marketplace. Being irrelevant in any MLS market is not good here.

So without further ado, we start with the one club that would face sure-fire relegation if financial performance alone were the yardstick:

14) Kansas City (13 points out of a possible 50): They say KC is 100% Chiefs’ country, but with the spendthrift, hopeless Royals as your only other Major League competition, the Wiz/Wizards should have made more inroads in 12 years. They rank dead last in MLS historical per game attendance (not including Miami – financial mismanagement in an entirely otherworldly orbit). They have no jersey sponsor, no shovel in the dirt for a stadium and they’re facing two years of oblivion in a minor league baseball park. On the bright side, new ownership hasn’t been afraid to make big changes: Curt Onalfo might be one of the smartest, most genuine people in the sport; they hired away an MLS stadium veteran from HOK to coordinate their stadium development and the signing of DP Claudio Lopez might make them a contender. Still, the franchise remembered as the home of the ‘Zard Card, Price Chopper promotions and Jetsons’ sound effects exists only because Lamar Hunt had a wallet even bigger than his heart.

13) Chivas USA (21 points): The knock on the best soccer team in California is that no one ventures to the Home Depot Center to watch them. Are they really relevant? Kudos for blockbuster sponsorships (including Comex on the jersey), a great coach and product on the field. But they tied their own hands by trading their DP slot, are the clear secondary tenant in their stadium and the fan issue. Why do so few people show up to watch them? Let’s just say they charged $10 for every ticket in the house… Would more than 7,000 fans per game show up?

12) San Jose (22 points): I have bad vibes about this one. It’s tough to appear “major league” when you play in a small college’s small soccer stadium – even with enhancements. (I’ve been there.) The Bay Area is a notoriously difficult market and about 11 GM’s failed in the ‘Quakes first incarnation. The A’s are known in the baseball world as some of cheapest operators, and there’s no indication they’ll loosen the purse strings for soccer. Yes, they get a grace period – and they have a graceful coach – but they look atrocious on the field on paper and empty seats in a 10,000-seat stadium will get ugly quickly. Not that anyone reads newspapers here anymore, but I never understood why the SF Chronicle offered such measly coverage of the Quakes. They rank ahead of Chivas USA because they appear to have a stadium plan and committed local ownership.

11) Red Bull New York (24 points). The ‘Bulls are held to a higher standard because they compete in the toughest entertainment market on the planet. Glitz, glamour and big ambitions sell in New York – but it wanes if it’s not backed up with mega-success. Red Bull, the drink, unfortunately inherited the atrocious legacy of the MetroStars – dismal crowds, miserable stadium atmosphere, horrendous player signings, wasted money on big-name coaches – get the picture? The only reason this team ranks this high is that Red Bull has poured so much money into the Harrison stadium plan, two designated players (one of whom, Juan Pablo Angel actually performed the way MLS hoped DP’s might) and a (second chance) high profile coach. Remember the buzz and the 30,000-odd curiosity seekers when Red Bull played its first game? Hey drink guys! This isn’t airplane stunts and bad 2 a.m. drinks. Gimmicks don’t work. You gotta just win.

10) Columbus (24 points). Congrats on the jersey deal – but Glidden splashed on the front hardly compensates for the misfortune of not being able to sell the name of the first soccer-specific stadium in 1999. Crew Stadium proved to skeptical owners that this league could survive, and thrive, in team-owned venues. This will be one of Lamar Hunt’s many legacies. But after 1999, the Crew never again led MLS in attendance and had the ignominy of not being able to fill its venue for marquee MLS games. A town that didn’t even have the NHL when the Crew were announced has blown it – supporting the club only to the most mediocre of levels, despite personalities like Brian McBride, Frankie Hejduk, Dante Washington, Jeff Cunningham and Sigi Schmid. The Crew will still be here 20 years from now – in the middle of the pack, without a title and with hardly a sellout. Unless… unless they become the first MLS team to build a SECOND soccer-specific stadium and Columbus finally catches Crew fever.

9) FC Dallas (25 points). Remember how difficult the process of building in Dallas, McKinley, Frisco was? Maybe there was a reason. I have really rooted for this enterprise to be successful, and I know the demographics suggest that Frisco will be surrounded by homes eventually, but it feels like driving to the West Texas desert every time you go to Pizza Hut Park. Is the honeymoon over? Season ticket sales are DOWN from a year ago. Perhaps it’s because the stadium is uninspiring – with the exception of the stunning Verizon Wireless Club. Unfortunately, MLS needs 20,000 fans paying $20/game more than it needs 500 VIP’s paying $100 each. FC Dallas’ bold moves internationally with Brazil’s CA Paranaense and Mexico’s Monterey Tigres could pay off in the long run – far more than the ill-fated DP signing of Denilson. Big sponsorships are nice at the stadium – but where’s the jersey sponsor?

8) Colorado (25 points). Ambitious owner Stan Kroenke set out to remake this franchise as part of his sports, television and real estate empire in Colorado, but empty seats at Dick’s Sporting Goods Park last year were an ominous sign. The Rapids have never drawn consistently other than July 4th, and a decade of mediocre soccer has caught up with them. On the bright side, I have a feeling that DSG Park’s soccer complex will eclipse Pizza Hut Park as the destination for youth soccer in the summer, giving stimulus to the Rapids in a city whose teams have had broad regional appeal for decades. A meaningful relationship with Arsenal could also jumpstart this club.

Later this week, I’ll present the top of table – seven clubs that have made the right moves financially and appear to be growing into the MLS franchises envisioned when Mssrs. Rothenberg, Hunt, Anschutz and Kraft first dreamed up the details in 1995. I’ll also give my early take on the future expansion teams – Seattle & Philadelphia.

Comments

[KT]

THAT'S WHY HE'S HERE!

[mike]

Good stuff, Steve.

[Nic]

Steve, with the rapid expansion of the MLS seemingly unable to match the number of potentially interested cities (high stress on seemingly and potentially), how long do you think it will take for a Kansas City or Columbus to move? Which present MLS team will be the first to move?

[chad]

interesting article! can't wait for part 2.

[Dan]

"Let’s just say they [CUSA] charged $10 for every ticket in the house… Would more than 7,000 fans per game show up?"

Since that would represent anywhere from a $5 to $10 increase for their fanbase, I'm gonna go with no.

[Steve]

Thanks all, for the comments. Nic - "Seemingly" and "potentially" are the key words. There's a long road from "interested city" to having the hundred million $$ probably required to either purchase a team outright, purchase and expansion franchise and/or develop a stadium. I think MLS will stabilize at 18 teams by 2012-2014 or so. If KC really gets their stadium built in Bannister area, they'll be there at least a decade. So, I'd guess that Chivas USA might be the most likeliy to move ...

[Tony Felich]

You're too hard on Kansas City.

OnGoal just took over the team. It's only the second year of the Onalfo era- really the first that bears his image.

The stadium is coming and will be here in some form in 2010.

They'll field a competitive team in a stadium that is not ideal, but much better suited size-wise to attract fans.

Your analysis really didn't mention the new ownership change and how drastically that has altered the optimism around the team.