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MLS's Successful, Measured Approach

Business Week has a lengthy article about Major League Soccer's recent success. In 2007, the league saw attendances rise 8.2 percent to an average of 16,770. TV ratings were also up, helping the league secure its first national broadcasting fee in its history. The biggest jump came in sponsorship revenue, a 25 percent increase, and jersey sales, up a whopping 700 percent from 2006. However, as MLS Commissioner Don Garber says, it's all about slow, measured growth: "One way to certainly derail our current success is to move away from our slow and strategic growth strategy," he says. MLS operates under an unusual structure where the league controls and negotiates player salaries, mostly to keep spending in line with growth.

Success has driven up investor demand for obtaining new franchises. Earlier this week Seattle was officially unveiled as the 16th MLS franchise. The team's investors paid $30 million for the rights, compared to $10 million in 2005. As team majority owner Joe Roth says, "I didn't sign on to lose money. I am a soccer nut, but I am also a business person."

Meanwhile, the league is also starting to successfully tap the Latino market, for which it has the highest percentage of fans of any other sport in the country. For example, the addition of Cuauhtemoc Blanco has paid huge dividends in Chicago: following his arrival in July, the Fire's attendance rose 60 percent to 16,000 per game.

Read the whole story at Business Week »

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