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How To Measure MLS Success
September 26th, 2007 6:30PM

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By Jeff L'Hote

I recently wrote an opinion piece highlighting the inappropriateness of comparing MLS to the NFL, MLB and NBA (the "Big 3".) The article prompted a variety of comments and questions, positive and negative. So let me clarify a few points:

How will soccer and MLS measure its success? When will that happen?

From a business perspective, when the league and its teams generate an operating profit, attendance reaches an average of 80 percent or more of stadium capacity and television ratings show significant improvement. From a sporting perspective, when the quality of play and match day experience become consistently compelling so that existing soccer supporters are enticed to attend games and watch matches on television. At this stage of the league's development, the sporting perspective will drive the business perspective.

MLS is not "major league" and also falls behind NHL, NASCAR and college sports!

While MLS certainly falls behind NASCAR, NHL and major college sports (football and men's basketball) in key metrics - sponsorship revenue, TV ratings and attendance - by any practical or academic definition it is certainly a major professional sports league (e.g., adidas' 10-year, $150 million deal, MLS average attendance about 16,000 per match -- ranking it among the top-12 professional soccer leagues in the world, etc). Just as it is inappropriate to compare an "infant" MLS to an "adult" Big 3, NHL, NASCAR and college football/men's basketball have been around for decades longer than MLS. Over the near term and unlike the Big 3, however, MLS has at least a possibility of competing on similar terms with NHL, NASCAR and college sports.

Soccer is a sport, not a business.

Actually, it's both. Soccer/Football/Futbol fans in other countries often struggle with the concept that their beloved team is accountable as a business entity (remember when Manchester United supporters amazingly voiced disbelief when their publicly-traded team was purchased by the Glazers?). Yet most every supporter wants to sign the best players and compete for trophies. In the U.S., we are more comfortable with the concept of sport as a business - as evidenced by our readiness to sit through TV time- outs. A frequent criticism of MLS is that it has been overly focused on its business model. However, without single-entity and measured expansion, MLS would likely not exist today. Soccer's unparalleled global passion (which has as much to do with history, nationalism/regionalism, and other social and anthropological factors as it does with the beauty of the game itself) will ultimately fuel its commercial success in the U.S.

Where does your financial information come from?

MLS and its teams do not release financial information, nor will that happen until the news is consistently positive (MLS has mentioned that a few of its teams - LA Galaxy and FC Dallas -- are profitable, but details have not been forthcoming). In other parts of the world, particularly certain European countries, revenue figures are publicly reported. Arsenal FC, for example, this week reported that its profits for the year ending May 31, 2007 were more than $100 million on revenue of $400+ million. A handful of consultancies (Deloitte & Touche) and media agencies (Forbes) compile financial information for soccer and other professional sports. LFCINTERNATIONAL gets details from clients and others on a confidential basis.

We keep hearing the same thing about soccer in the U.S. How are things different now?

MLS has secured its long-term future, something uncertain just a few years ago. Investors are increasingly interested in securing an expansion team (even if they may be enticed as much with the real estate component as soccer's growth potential) and sponsors and media outlets are committed for the long term. MLS, however, is increasingly competing against the dearth of quality soccer now available to existing supporters and ethnic communities. Even as MLS continues to mature and improve the quality of its product, game day atmosphere, marketing and TV production, it will not soon be able to compete with the Big 3 with regard to commercial revenue and key metrics. Soccer supporters and detractors alike must accept that fact and, as difficult as this is for we Americans, attempt to keep things in historical and international perspective.

Jeff L'Hote is the founder of LFCINTERNATIONAL, a New York City-based soccer consultancy focused on the global business aspects of the sport. He is also lead author of 'Soccer in North America: The Commercial Opportunities', a comprehensive industry report published by Sports Business International (UK). Jeff can be contacted at jefflhote@lfcinternational.com.

SOCCER BUSINESS INSIDER Letters To The Editor

Dear Editor,

Regarding Jim Paglia's thoughts about branding in the Sept. 11 issue of Soccer America's Soccer Business Insider, it is long past time for US Soccer to settle on a single national team uniform for both men and women. They need to stick with it instead of changing the uniform whenever an apparel sponsor thinks up a new idea. If necessary, the uniform could include both a standard dark shirt and a standard light shirt.

Every other nation whose team claims importance on the world soccer scene sports an established, well-recognized uniform. Witness, for example, Brazil, Argentina and Germany. And the uniform reflects the national flag. No messing around like the yellow-orange adorning the US women in China.

Over time, a standard uniform establishes tradition.

Tradition attracts support. A friend of mine who traveled to Argentina heard it said that, "if you put the blue and white vertical stripes on a dog, 10,000 fans will stand and cheer the dog."

Tradition also inspires pride. Players can say they wore "the" shirt.

Increased support and increased pride will go a long way toward making U.S. tradition a winning tradition.

Jim Madison

Menlo Park, CA

(Soccer America's Soccer Business Insider welcomes your letters. They should be brief and include the writer's name, address, hometown and telephone number. We retain the right to edit all letters. They should be emailed to lynn@socceramerica.com.)


 

 


 

 



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