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MLS' ALAN ROTHENBERG ON STARTING A LEAGUE FROM SCRATCH
Published February 24, 1995
Following his tenure as Chair & CEO of the 1994 World Cup Organizing Committee and President of the U.S. Soccer Federation, Alan Rothenberg became CEO of Major League Soccer, the most recent attempt to bring pro soccer to the U.S. Rothenberg spoke with THE SPORTS BUSINESS DAILY yesterday on the challenges of starting a new league in the face of skepticism about soccer's appeal to U.S. fans. The league is scheduled to start in April '96. THE DAILY: What is the difference between staging an event such as the World Cup and running a league? ROTHENBERG: An event is something that is ongoing and an organizational challenge, but you have a clear time frame and a clear direction. In that sense, it is easy to make happen. What we are trying to do in starting a league is a daunting enterprise. Nobody in this country has started a successful professional sports league at the major league level from scratch since the NFL 75 years ago. THE DAILY: Is there a different approach towards sponsors when you are trying to attract them to a league? ROTHENBERG: There are two different issues. One, the World Cup is an international event and so you had a lot of sponsors who were in it for the international impact primarily, if not exclusively. Where we are a domestic league, the sponsors are going to look at it from a domestic standpoint. The second thing is that World Cup, as big as it is, is a one-shot deal, and sponsors obviously gear their promotions and advertising and everything else towards that; whereas, with the league, we expect a more permanent relationship. Sponsorship for the World Cup, even though we were in nine cities, tended to be national, whereas here a lot of the sponsors are going to want to do some things locally. For example, an Anheuser-Busch or Coca-Cola, they are going to go to their distributors and bottlers in each market and say, 'OK, if we have this property, what would you do with it from a promotional standpoint in your city.' So it becomes more locally focused than the World Cup. THE DAILY: How are the relationships with World Cup sponsors? ROTHENBERG: There were basically three kinds of World Cup and Federation sponsors: people who have always been involved in soccer; people who were curious, they were new, had their eyes open and said we will wait and see; and people who were really in it for one shot. Obviously the latter category is gone -- the ones in the international scope didn't care about the domestic market. The longtime soccer people are going to stay, it is just a question of negotiating favorable terms for both parties. Of the ones in the middle, the reaction is very favorable. You had in that last World Cup cycle, companies like McDonald's, Master Card, GM -- never previously involved -- who got involved in a big way with both the World Cup and the Federation. All the early signs are they want to continue a relationship with soccer, both at the Federation and at the MLS levels. THE DAILY: What would be your ideal presence be on TV, at the outset and in the long-term? ROTHENBERG: What we are going to start with is probably close to what we would end up with long-term, and that is a combination of cable with ESPN and network with ABC. It is a total of 35 games, which gives us a couple of games a week during the season, which is mid-week, prime-time, and the late afternoon weekend. That is probably the format we would carry through for a pretty long time. ... We don't expect in the early years to have gigantic ratings, and therefore, huge rights fees. We think it is much more important that the public get exposed to the product at the highest level with the best quality, and, over time, the ratings and rights fee money will follow. THE DAILY: What efforts will there be to tap into the grassroots of American soccer? Any programs similar to those employed by other leagues, Hoop it Up, etc.? ROTHENBERG: We are going to do even more than that. The one great thing about soccer is that it is much more organized than most other sports and we will have relationships with the major youth organizations and we will have relationships with the major camp and clinic programs, and, in effect, become partner to all of those people. THE DAILY: How will the ownership rules be structured to avoid the type of problems revenue sharing wise and labor problems that have plagued other sports? ROTHENBERG: We have a single entity. MLS will be owned by all of the investors, and therefore, hopefully, we will be able to avoid the problems of other sports. Then, to the extent that some of the investors will also want to operate a team, we will enter into an operating agreement with them so they can run the team in their market. But the league will control all of the TV, all of the sponsorship, players and then allocate it out to the teams. So if the league puts in a salary cap -- which it will -- it can absolutely enforce it. The league will be the only entity that signs players, so the contracts will be between the players and the league, then the teams will draft off of the pool that the league creates. The same way with TV and sponsors. THE DAILY: Is the league also going to manage the merchandising and the logos of the franchises? When should we look for names and logos? ROTHENBERG: Yes, the league will manage those. I think we are going to introduce them somewhere in the May-June period, again starting from scratch. The beauty of it is we have all those sporting goods companies as our partners -- the Nikes, Reeboks and Adidas' of the world with all their graphic artists and their creative genius working with us to develop logos and merchandise. We are going to the pros in the business, saying give us the best and the brightest of your talent, and work with us.