MLS succeeding in this economy?

by Dave Clark on Oct 1, 2009 9:35 AM PDT in Other Professional Soccer (non-Sound)

Sure, the attendance numbers for MLS aren't that strong, down about 700 per game. But it is still the 4th best season for the league by any attendance measure.

No it doesn't compare strongly to the NBA (slightly up) or NHL (also slightly up), but does to MLB (down 6%) and NFL (in danger of 20% of games being blacked out).

But that isn't what is showing that MLS is remaining relatively strong in the down economy. I am also not going to point out the continuing demand for American businesses to expand into soccer in the USA/Canada, be it by jersey sponsorship or through buying into the league. We know these stories.

The stories you likely don't know are that clubs around the world are so debt laden that they are failing to pay their players. This includes Premiership side Portsmouth who were just bought by al-Fahim. Their players were not paid last month. While the blame doesn't lie with the new owner, as he hadn't completed the take over, this isn't the only English club with significant financial issues. The story around Newcastle is fairly well known, but did you know that two clubs currently sit in Administration? And that Southhampton teeters on the edge and has all summer? Clubs throughout the English pyramid are suffering during the economic crisis. Attendance is trending down for the Premiership, down 9% at this early point in the season.

But that's just England, the troubles are actually much larger. Recall the delayed start to the Argentine season, and the Setanta drama as relates to the Scottish Premier League. The A-League down under just announced that they would be delaying expansion by a year. Even players in La Liga go unpaid at times, and TFC gained the best active Canadian player due to it.

The fact is that the glory days of international football rested on spending huge amounts of debt, and now that debt has gone nearly worthless. It is a burden that is dragging foreign ownership into every major European league, and it is dragging teams with long histories from the top divisions.

There are large amounts of criticism in America and Canada towards Don Garber and his slow & steady growth plan, but the fact is that while other leagues are losing huge amounts of money (Argentina and Scotland) from TV, or teams are just not paying their employees in the USA the league is strong. The league is growing in scope, and likely even in quality.

The worst financial crisis in the modern era barely dented MLS, while it has hammered many other leagues around the world.

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If you remove Seattle from the attendance numbers, how does MLS look YoY?

by on Oct 1, 2009 10:19 AM PDT reply actions

Down 4% with Seattle
Down 11% without Seattle

That MLS could afford to add four teams during the down economy though is significant. Something that other leagues can’t/won’t do.

by Dave Clark on Oct 1, 2009 10:34 AM PDT reply actions

i credit this to huge overpayments to international football players.

it is funny – in the thread on goal seattle where we were discussing attendance numbers between the EPL & MLS, the discussion of the EPL compared to the NFL came up (with regards to popularity in each respective country). It wasn’t until the discussion veered there that i did some of my own research and was amazed to see how few EPL teams were actually turning an operating profit. All but 3-4 were operating under constant losses year-in, year-out. Why? I’m guessing they’re paying the players more than they’re making (duh).

Maybe the EPL needs to examine salary caps.

by ABT on Oct 1, 2009 1:19 PM PDT reply actions

More evidence that MLS is doing better than say MLB

Mets to Lower Season Ticket Prices

The average price for full-season tickets will fall more than 10 percent, and the price of some seats will fall more than 20 percent. Prices for all season tickets will decline, the team said. By contrast, the Yankees said they would keep most ticket prices steady next year and lower prices for the most expensive seats.

Yes, that’s the Yankees and Mets lowering prices for next year.
Seattle Sounders on the other hand… and even Dallas going up, if just slightly.

by Dave Clark on Oct 1, 2009 6:57 PM PDT up reply actions

Whenever someone says, “yeah but what if you take Seattle’s numbers out” I think, why on Earth would you want to do that? If anything, I think previous numbers need an asterik for not having Seattle. Seattle and the northwest have always been a hotbed of domestic soccer, and should have been included in MLS from the beginning, but couldn’t for reasons that are likely well known here.

by WendellGee on Oct 1, 2009 9:59 PM PDT reply actions

Taking out Seattle’s numbers allows us to see the effect we’ve had on the league. Nobody is saying discount those numbers, they’re trying to see their true value.

by McKenzie Clark on Oct 2, 2009 1:52 AM PDT reply actions

Thanks for putting this together, Dave.

One of my personal interests is the growth of the league. It is great to see that in relative terms MLS is succeeding. One of the advantages to the caution Garber has shown is that he has helped prevent the bubble affliction so many other major league sports leagues are suffering from.

Like most businesses, there has been an ongoing assumption in all of the other major league sports (and it sounds like in other soccer leagues) that easy credit was a permanent reality. They based their business decisions on highly leveraged, low cost credit and thus have taken extreme risks. You see this is Yankee stadium, Cowboy stadium, the Phoenix Coyote bankruptcy, etc.

I’m sure the cautious growth approach can be frustrating for some, but like the parable of the ant and the grasshopper: it is better to be deliberate and thrive than flashy and fail (see the AFL).

What gives me hope is that there is still so much room to improve. MLS is realizing success even when it is not taking full advantage of its potential. There are lots of little improvements that could lift the league. I’ll be spending some time writing on this subject once the season is over, and I have no doubt you all have a lot to add to that conversation.

by Zach on Oct 2, 2009 1:27 PM PDT reply actions

“See the AFL”…? Unless you’re talking about something other than the American Football League of the 1960s, it’s hard to see how challenging the existing major league and winding up with a merger in which all your teams are adopted into that league is anything other than a major success.

by James Walley on Oct 2, 2009 5:19 PM PDT reply actions

I am both a huge soccer and baseball fan. Dave, I don’t think you can really use the lowering of ticket prices for baseball as MLS doing better than MLB.
The Mets opened City Field and the Yankees opened up the New Yankee Stadium. Both teams greatly raised (overpriced) their ticket prices from last season.
So, they will both reduce prices to more normal ticket prices than the money extortion they both had attempted.
But, your larger point of the MLS being in better current financial than other football/soccer leagues is a good one.

by Coug1990 on Oct 2, 2009 5:53 PM PDT reply actions

James, the AFL reference is likely to the Arena Football League. Which had a flash where it looked to be the the 5th major team sport, and then folded when the economy went to pot.

Coug, I think MLB’s issues are larger, but those stories were in the news that very day.

Zach, I’m big on the micro and the macro. Its the mid-level that I ignore.

by Dave Clark on Oct 2, 2009 7:16 PM PDT reply actions

Wow. The losing consortium is going to supply Portsmouth with a loan for the players’ payroll. The group that did not win the bidding process for the club, is going to support al-Fahim in his efforts to keep them out of administration.

Not as surprising is that the Premiership will do whatever they can to avoid administration.

by Dave Clark on Oct 2, 2009 8:57 PM PDT up reply actions

A.F.L. = “Arena Football League”…? Makes sense.

by James Walley on Oct 4, 2009 5:25 AM PDT reply actions

I’m sorry I’m late back to this thread.

AFL = Arena Football League.

I think they are a valuable example of how you can ride cheap credit and hype to some success, but if you don’t develop a sustainable business model you fail when times get tough.

There is room for a successful 5th professional sport in America. I think MLS is well positioned to own that a slot and put some pressure on 4 in the coming decade.

by Zach on Oct 7, 2009 12:12 PM PDT reply actions