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Tapping Into a Gold Mine
by Ridge Mahoney, May 8th, 2007 3:04PM

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TAGS:  mexico, mls

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Major League Soccer is finding ways and means to exploit the rapidly growing Hispanic sports marketplace while it steadily grows and improves its own product.

Two years ago, a pair of international soccer games were played simultaneously in Southern California. Staged less than 30 miles apart they, in effect, took place on different worlds, so vastly different were the cultures they attracted and the atmosphere they generated.

Yet Major League Soccer held a stake in both of them, though only one involved players it employed.

Both matches involved national teams and both were promoted to a domestic fan base numbering in the millions, yet a Mexican fan attending his nation's friendly against Argentina at the Los Angeles Coliseum, when told another international friendly was taking place that same night, said incredulously, "Colombia y Estados Unidos? Dónde?"

Titan Stadium on the campus of Cal State Fullerton was where the United States, prepping for its Hexagonal schedule and the 2005 Gold Cup, beat Colombia, 3-1. Barely more than 7,000 people attended.

Nearly 52,000 were at the Coliseum to see Mexico and Argentina play a 1-1 tie. Ticket sales, parking fees and merchandising and concession revenues totaled more than $1 million. Collecting a share of that money was Soccer United Marketing, formed six years ago by the operator-investors of MLS to offer sponsors and companies a single entity through which to tap a disparate American soccer market that had for decades been subject to wildcat promoters, shoddy organization and occasional lawsuits.

"Soccer is a hard sport to navigate if you're not a soccer person," says SUM president Doug Quinn, who formerly marketed American football for NFL Europe. "In the American sports marketplace, you think about baseball and it's MLB, basketball is the NBA, football is the NFL. Yeah, you have the [college basketball] final four and in NCAA football you have to fill in a little bit, but with soccer you have club and country, federations and confederations, touring international teams, and the list goes on.

"If you're a novice to the soccer world and you're in the corporate community trying to navigate through that and try to understand how you can use soccer to help you achieve your objectives and build your business, it's going to be tough to do.

"If you're a soccer expert, it's still a challenge, because there is so much out there and identifying what it is you need and which of these properties you should use."

PROPERTY VALUES. It is SUM that brought order to a mishmash of Libertadores Cup qualifiers (once dubbed the "Pre-pre Libertadores Cup") played in the United States by Mexican clubs, and branded them InterLiga. It is SUM that shares ownership of the SuperLiga tournament with the Mexican soccer federation. It is SUM that promotes and regulates friendlies played by the Mexican national team in the United States. It is SUM that has signed deals to bring teams like Chelsea and Barcelona to America. SUM also holds commercial rights to U.S. Soccer.

SUM may not be all things to all people seeking a piece of the American soccer pie, but it is a major player in forging alliances with entities such as the German Bundesliga and paying Barca a reported $5 million to play three games.

"The Barcelona tour, for us, if it wasn't going to be profitable, we weren't going to do it," says Quinn, who giddily ticks off the attendances: 92,650 at the Coliseum against Guadalajara, 70,550 at Reliant Stadium in Houston for Club America; and 79,002 at Giants Stadium vs. New York Red Bull. Gate receipts alone totaled more than $6 million.

"It was profitable," Quinn says. "Three sold-out events. I don't think any of us expected in our wildest dreams we'd have three sold-out events. I'm not confirming or denying what they were paid, but we made money."

SUM marketed the Barca tour to both the Latino and Anglo audiences, though playing the two most popular Mexican clubs in heavily Mexican-American cities like Los Angeles and Houston spurred fans to buy tickets in advance rather than being denied entrance to a sold-out event.

"One thing we knew we had to do with these teams is get assurances they would bring their best players," says MLS/SUM Commissioner Don Garber. "The fans pay to see them, not a reserve team. We have that written into the contract. If Barcelona didn't bring their first team, it would cost them money."

During the Champions World international series in 2004, scathing criticism of the squad brought to the United States by Manchester United, to name one example, tainted the tour. United hurriedly flew over a few first-team regulars to finish out its commitment of games and hasn't been back since.

For decades, promoters would sweat out the days leading up to a Mexico friendly, anxiously watching the skies for inclement weather and desperately hoping a thinly disguised "B" team wasn't going to show up and cost them thousands of walk-up fans. Sellouts in San Diego for Mexico's game against Venezuela in February and in Oakland against Ecuador in March were driven not only by the popularity of Mexican coach Hugo Sanchez, but also aggressive promotion and widespread knowledge that he would bring as many of his best players as possible. SUM has also joined with NFL and MLB teams to bring international games to their stadiums.

"The Mexican national team and the federation have become amazingly good partners with SUM in terms of working with us," says Quinn. "Bringing Hugo Sanchez for a press conference in Oakland? We sold 5,000 tickets that day. [This was more than three weeks before the game was played.]

"We're promoting the hell out of these games way in advance, including in the Hispanic community, in tiendas and other places. We'd like to give SUM a little credit, that we're good promoters and we know what we're doing now. We partnered with the Oakland A's and the organization for the new MLS team [Earthquakes LLC] and they did a bang-up job."

SUM obtained rights to the Mexican national team after MLS operator-investors complained about a deal struck between FMF and AEG to promote Mexico's games in the U.S. League operation agreements include a non-competitive clause by which operator-investors are not permitted to independently promote non-MLS soccer events and properties without approval by the Board of Governors.

LEAGUE ISSUES. The first acquisition by SUM were English-language broadcast rights to the 2002 and 2006 World Cup competitions, which it bought for a reported $40 million, yet it has boosted its portfolio with properties that appeal to a rapidly growing American Hispanic audience whose annual buying power is estimated to be a staggering $800 billion. That's not irony, or luck. It's business.

"The objective of securing that property was to secure the stability of soccer in the United States and to assure that English-language television was available for the soccer fan," says Quinn. "Hopefully, the benefits of the U.S. national team and frankly, the growth of soccer in the country would then impact the development of Major League Soccer. That's why we do anything and everything."

Not everyone in MLS is convinced SUM business decisions always reflect league needs. Though staff members have been added in recent years who work solely on SUM projects and responsibilities have shifted, MLS executives Don Garber and Deputy Commissioner Ivan Gazidis and have logged grueling hours handling both MLS and SUM duties.

"Forming SUM was very smart," says D.C. United president and general manager Kevin Payne, whose team has a vocal and loyal Latino following. "The idea of aggregating as much of the soccer content as possible under one roof, our roof, was a smart idea.

"I think that sometimes we should recognize that a property like the FMF is a distinct property from Major League Soccer. I'm glad that it's us selling both properties and not someone else, but just because we might have success selling the FMF doesn't necessarily mean that Major League Soccer is benefiting from that. The ownership generally is benefiting, but it's not necessarily a translation to MLS per se."

Yet sponsors can benefit in unforeseen ways. Nearly three months before an MLS game was played, the Mexican team of which Visa had previously become a jersey sponsor, Necaxa, won the Interliga tournament in a sold-out Home Depot Center before a live TV audience on Fox Sports en Espanol.

"I can tell you that Visa and Chase came on board this year as a brand-new partner," said Quinn. "Before we had an MLS game played, they were part of InterLiga. That was a positive for them. They won their position in the Copa Libertadores in that game, wearing that logo. The fact that game sold out surprised them, and the environment just blew them away."

TV TIME. The ideal melding of MLS and SUM interests may be SuperLiga, an eight-team competition matching American and Mexican teams with $1 million going to the champion. The games will be televised on Univision and TeleFutura, which is putting considerable resources into its regular Sunday MLS telecasts.

"I saw the game between Houston and the Galaxy," said Chivas USA president Javier Leon of Telefutura's first telecast. "They did a very good job of production. It had the feel of a Mexican league game, with the stats done the same way. It's incredibly important."

The combination of coverage on Fox Sports en Espanol (approximately 10 million viewers and TeleFutura (46 million) gives MLS a much greater reach into the Hispanic market through television. Cross-promotion between the Latino and Anglo soccer communities may boost Mexican-American attendance at MLS games.

League schedules and other MLS materials were handed out to fans at the Mexico-Ecuador game. MLS promos ran during Univision's telecast of the Club America-Guadalajara match March 18 that drew more than 4 million viewers, the largest viewing audience ever recorded for a league game.

Approximately two-thirds of the estimated 42 million Hispanics living in the United States are Mexican-Americans, who may be lured to MLS games in greater numbers in the wake of the league signing Cuauhtemoc Blanco and the spirited, if losing, performances displayed by D.C. United and Houston against Mexican opposition in the CONCACAF Champions Cup.

Latino fans may also be attracted to players like Guillermo Barros Schelotto and Juan Pablo Angel for their flair as well as their style in a league those fans often consider staid and predictable.

"I certainly hope it will help," says Payne. "I do believe that the Latin fan reacts very well to Latin players. There's a certain style of play that they appreciate and they want to see. A guy like Schelotto in Columbus or in our case, Christian [Gomez], and we'll see about the young player [Carlos Marinelli] in Kansas City, but I think those things all help. If in the future even some bigger names come in, it will help even more."

Yet the value of head-to-head competition in convincing Mexican-American fans the MLS product is worth their notice is clear. Most of D.C.'s Latino fans, which Payne says comprise one-third of the team's fan base, originate from Central America rather than Mexico, but that demographic is changing.

"Our numbers are still nowhere near the size of a market like New York or LA, but I believe the Mexican-American segment is the fastest-growing group in our market," says Payne. "It's still not as large as Central American. El Salvador is the largest country of origin, followed closely by Honduras and Guatemala."

A lot more than SuperLiga and better Latino players are on tap this summer. D.C. has already sold more than 15,000 tickets for the August visit of the Galaxy and David Beckham, and Revs management believes a crowd of 50,000 is possible for his trip to Gillette Stadium. Four broadcast partners are chipping in $20 million a year to televise MLS games nationally.

Come July and August, though, comes the American and Mexican club teams, mano a mano.

"It will be in their preseason but I think the format is a good one and will help us," says Payne. "I don't have any doubt that our teams can compete with theirs. It was very challenging for us to be playing in March and April against them but I think we'll see our teams be pretty damn competitive this summer."

 

 

 

 



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