SBJ/Dec. 16-22, 2013/Leagues and Governing Bodies

Finalists also winners on the balance sheet

Major League Soccer remains in search of profitability leaguewide, but MLS Cup champion Sporting Kansas City and finalist Real Salt Lake were both in the black in 2013.

“We will show a net profit this year,” said Real Salt Lake owner Dell Loy Hansen, speaking on the eve of MLS Cup at Sporting Park in Kansas City. “And we expect to do even better in 2014.”

As for Sporting Kansas City, which has sold out 36 consecutive home matches, co-owner Cliff Illig described the club’s profits the last two years as “marginal” but also offered a long-term perspective.

“We don’t make a ton of money yet,” said Illig, co-founder of the health care information technology company Cerner Corp. and one of five owners of Sporting Kansas City. “Making huge money was never our objective, but being profitable is important so we can continue to invest it in the club.”

SKC and RSL stand out among MLS’s 19 clubs, and not only for their profitability. They reached the league’s championship match despite having two of the lowest payrolls in the league — each club paying its players about $4 million. By comparison, the New York Red Bulls, Los Angeles Galaxy and Seattle Sounders all had payrolls exceeding $9 million this season.

Real Salt Lake and Sporting Kansas City did much with modest payrolls.
Photo by: CHRISTOPHER BOTTA / STAFF
Hansen said sponsorship sales have been key to RSL’s profitability. Hansen bought 49 percent of the club in 2009 and then took over as majority owner 11 months ago, when club founder Dave Checketts sold his stake.

“When I arrived in 2009, we had $3.8 million in sponsorships,” he said. “This year, we’ll finish close to $11 million.”

Included among the team’s latest deals is a jersey sponsorship with Utah-based LifeVantage. That 10-year, $30 million deal, effective next season, is one of the league’s largest agreements and is three times more per year than what was being paid by XanGo, the team’s jersey sponsor since 2005.

Hansen, the founder of real estate company Wasatch Property Management, explained why he believes Utah’s corporate community has embraced Real Salt Lake.

“We don’t have what New York, Los Angeles and Chicago have, but what we do have is a Green Bay Packers style,” Hansen said. “Our ability to compete well against those franchises, and ones in Dallas, Seattle and others that do such a great job, shows Salt Lake that we’re on par with the big cities. I believe businesses have responded to that.”

Real Salt Lake brought in $7 million this season in ticket revenue, playing to 95 percent of capacity at 20,500-seat Rio Tinto Stadium. According to Hansen, Real Salt Lake spends about $50,000 a month combined in print, digital, broadcast and billboard advertising.

“We have an army that can get a lot done on a small budget,” said Hansen about team President Bill Manning and the RSL staff. “I have an amazing group of talent here that maximizes the dollars given to them and really knows what to do with it.”

As for Sporting Kansas City, Illig declined to provide specific financial data for SKC but pointed out that a significant revenue stream could be coming via stadium naming rights. Those rights became available in January, when the club canceled its charitable agreement with Livestrong, Lance Armstrong’s foundation, after the cyclist admitted to using performance-enhancing drugs.

“We don’t see any rush to complete a new deal for Sporting Park,” Illig said. “We’ll be patient and continue to build the team and our relationships with the fans until the right deal comes along.”

On the subject of MLS finances leaguewide, Commissioner Don Garber, speaking before MLS Cup in a one-on-one interview, said, “As a league, we are still not profitable. We want to get to the point of at least breaking even.”

GARBER LOOKS TOWARD ATLANTA: Garber did appear to tip his hand in the days leading up to MLS Cup that Atlanta is a front-runner for an expansion club.

Commissioner Don Garber: “We want to get to the point of at least breaking even.”
Photo by: USA TODAY SPORTS
According to a source, Home Depot founder and Atlanta Falcons owner Arthur Blank has taken an increased interest in soccer in recent years, traveling to U.S. national team and MLS matches. The Falcons’ planned 65,000-seat stadium opening in 2017 is being designed to accommodate a soccer club as a tenant, as well.

Garber was effusive in his praise of Blank. “Arthur is a fabulous visionary and entrepreneur,” Garber said. “He’s cut from the same cloth as Lamar Hunt, Robert Kraft and Phil Anschutz, our league’s founders. He would be the perfect owner for us. We’re also excited about the market and the stadium.”

A potential club in Miami that would be owned by David Beckham and Simon Fuller — and perhaps LeBron James — could complete an agreement with the league in the coming months, if it gets local approvals to build a stadium.
NYCFC and Orlando City begin MLS play in 2015. Garber said any other expansion clubs would not join the league until 2016, at the earliest.

In Garber’s State of the League address during MLS Cup week, a map was unveiled that highlighted Miami, Atlanta and three other cities as possibilities for expansion: San Antonio, Minneapolis and St. Louis.

NYCFC IN THE BRONX?: Speaking of NYCFC, a source said that the Manchester City/New York Yankees-owned expansion club is likely to play its first season in 2015 at Yankee Stadium. In addition, a leading possibility for the club’s potential new stadium is a site in the Bronx, near Yankee Stadium. This comes after earlier talk that a site near Citi Field in Queens was a preferred destination, but league and club officials have struggled to complete a deal there.

NYCFC Chief Business Officer Tim Pernetti represented the club at a board of governors meeting in Kansas City.
In a statement, NYCFC said about its stadium plans, “NYCFC is looking for a home, not simply a place to play. As we have said from the start, we are reviewing sites all over the city.”

 
Low temperatures kept attendance light at Soccer Celebration.
Photos by: CHRISTOPHER BOTTA (2)
COLD WEATHER AFFECTS GAME, ACTIVATION: The temperature at first kick of MLS Cup was 20 degrees, and the day grew colder as the event went on — through 120 minutes of play and 10 rounds of penalty kicks. The previous low temperature for an MLS Cup was 40 degrees, when Toronto hosted the match in 2010.

Justin Bland, head sports turf manager for Sporting KC, and his crew kept the natural-grass pitch in playable shape despite the deep freeze. Bland had a tarp on the field and machines blowing warm air on the pitch until the afternoon of the match. “We didn’t want it to be the frozen tundra of Lambeau Field out there,” said Bland, a former groundskeeper with the Kansas City Royals and Chiefs before joining SKC in 2007.

Understandably, the frigid weather resulted in light attendance at Soccer Celebration, the sponsor activation zone in a parking lot across from Sporting Park. A man tasked with wrangling fans to a data collection and autograph booth for Allstate (featuring former U.S. men’s national team goalkeeper Tony Meola and current Portland midfielder Will Johnson) displayed a sense of humor, yelling into his megaphone, “The best part is, instant gratification! No waiting!” A Microsoft cart, where fans could play games and check stats on a Surface tablet, had the steadiest stream of customers. It was situated right at the front of the activation space.

SCENE & HEARD: Negotiations will begin in the offseason for a collective-bargaining agreement between MLS and the Professional Soccer Referees Association in time for the start of the 2014 season. The CBA would be a first for MLS referees. The union, formed in April, is led by Steven Taylor, an assistant referee in MLS for 17 seasons before retiring a year ago. Taylor was in Kansas City over MLS Cup weekend. … MLS and its clubs have invested $20 million in player development since 2007, when the league first required that all clubs create youth soccer academies. “It’s a 10-year vision,” said Todd Durbin, MLS’s executive vice president of player relations and competition. … Although Volkswagen has opted not to renew its shirt sponsorship deal with D.C. United, it is likely to remain a league partner when its current deal (signed in 2008) expires after the 2014 season. “Soccer is still the best sport for us, and we like the brand exposure that MLS provides, especially in the Hispanic market,” said Clark Campbell, Volkswagen Group of America’s general manager of experiential marketing. “Our intention as of now is to keep the relationship going.” … Depending on the finalist with the best record, the setting of next year’s MLS Cup could be just as cold or colder as this year’s event. Because of the two-week break scheduled for the FIFA World Cup next year, Garber said the 2014 MLS Cup could be played later than Dec. 7.

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