MLS Expansion: Not As Easy As You Might Think

One of the most important aspects for a go to market strategy to be sure that you have nailed down is to understand what/who your target market may be. Once this is established and a company or product has a firm foothold in one market, typically the next move is to expand to new markets, whether that’s a new city, a new part of the country, or even a different part of the world.

One of the biggest mistakes of companies that attempt to take this leap make is that they fail to reassess who/what their target market may be in the new market, given the many variables that come with changing locales. In other words, many companies that fail in a new market but were successful in another do so because they think that they can take the same model and go to market strategy that worked in the first and apply it to the next without modifying it in any way to meet the needs of each region to which they move.

Just like language, food, and clothing styles change as you travel, so too do the business principles and models that will lead to success. Not all of them, but some most certainly do – and to ignore them will often lead to a company’s downfall in that market. Successful companies will understand their target market in each area and will know what vehicles they can activate against, that are in line with their core competencies, to best reach them so that they optimize the consumer experience and engagement with their brand.

This holds true across all business models, including sports, and to be even more specific, MLS.  The different audiences across regions is evident in the local TV deals that either have, or have not been executed this year for broadcasting MLS matches.

For example, a team of D.C. United’s caliber and history in MLS couldn’t even get it’s local TV station Comcast Sports Network (CSN) to cover the its full season. CSN will only be covering 16 of United’s 26 matches that aren’t nationally televised according to an article in the Washington Post (link). Essentially, CSN has to cover all of the production costs for every game, quoted at approximately $35,000, and they don’t believe that it’s worth the investment to cover every single match not on national TV. That alone speaks volumes about the TV ratings for D.C. United in its local market.

Robb Heineman SKC Image from mlssoccer.com

Robb Heineman, Sporting Kansas City
Image from mlssoccer.com

Business of Soccer had the opportunity to sit down with the CEO of one of MLS’s most successful clubs in recent years, Robb Heineman of Sporting Kansas City. We asked Robb what he thought about MLS Commissioner, Don Garber’s comment in a  Yahoo! article that there is simply too much soccer on TV today:

We’re at a real inflexion point around figuring out what the right strategy is for us around schedule format, what our TV format looks like. It may make sense for us not to have as many of our games on TV, but have a more concentrated approach for when those games are shown. I think those are the things that we’re looking at, at the league level.

At first it sounds like a negative strategy, to pull out some of the TV air-time for MLS matches. But, consider other major leagues in the United States, like the NFL, as Garber did in the Yahoo! article. They have only 3 days a week where the public can watch live games, making them something that the fans have to wait for and yearn for, creating that pent up demand, and they are obviously very successful as a league. Granted, there are other things that this success can be attributed to other than TV strategy, but it’s definitely something to consider.

Heineman continued to comment on MLS TV strategy moving forward:

I also think that in a way we have to figure out who are the matchups and what are the games that we really want to have on the air? Are there different types of teams that play differently away from home than they do play at home? For the good of the league for the good of the strategy if we had very few nationally televised games here, if that’s the right decision, I can live with that. Because at the end of the day we care about those national ratings in a big time way, and we’re fine with just growing our local market here and building from there.

Heineman’s comments suggest that MLS leadership are trying to challenge the status quo and figure out just what is the best use of national air-time for the league, and not just one individual club, which is a very good thing to see and something that will lead to the league’s longevity and continued success.

Heineman had this to say about the Kansas City market specifically:

Kansas City is an interesting dynamic in that we’re incredibly relevant at the local level. Our local TV ratings are very solid. Guys like Matt Besler who’s not a designated player, in our league who is probably as, or more relevant in this market than most designated players are in their local markets. But I’m not sure how to take the blueprint that we have here and turn it into big national ratings.

Having locally relevant talent is certainly a large help in grassroots efforts for a club, and MLS is starting to get better at figuring out how to leverage these assets to its benefit in each region. We asked Robb if Sporting KC works with other teams around the league to identify and share best practices in areas like local TV strategy that could potentially help out teams like a struggling D.C. United, mentioned earlier:

We work with all the teams in different ways, and other teams work with us in different ways. I think we’re trying to pick and choose and look at what different clubs do best to determine best practices but some of this stuff is very local market specific. It’s not as if there’s a blue print that you can kind of hand around the room and just say hey go do this, but we all work on it.

If we take this into account, it helps explain why some clubs are so successful in their respective markets, whereas others that you would think might flourish, aren’t quite meeting expectations.  MLS is still young as a league, and we’re still figuring out what the best expansion strategies are for each of the 19 teams depending on where they’re located, what assets they have at their disposal, and what makes sense for the team and the league as a whole.

After speaking with Robb Heineman, it seems like the ownership group get it – that they can’t just take what works for one club and apply it to everyone else and expect the same results. It has to be a strategic approach that applies the successful ideas and principles in a way that align and marry up with each club’s core competencies, their target audience characteristics and tendencies, and activating against the best marketing vehicles that deliver the best ROI for sustained growth.

What do you think about MLS’s future and expansion strategies at the league/club level? Let Business of Soccer know either by leaving us a comment in the section below or via Twitter.

Reporting on the business side of the world's game.