Business growth, especially in the sports industry is obviously never a straight forward game plan and clearly for soccer in the United States it is entirely more complex than simply building some teams and hoping fans will arrive and spend. Major League Soccer, its business model, and its structure are far from a prepackaged, made from a concentrated recipe for success.
- Increasing Attendance
- Improved TV Deal With Major Network
- $100 Million Expansion Fees
- New Consumable Content
- Gary Stevenson
Step 1.) Build more stadiums
Step 2.) Attract more fans with said stadiums
Step 3.) Use increased fandom to leverage better television deals
Step 4.) Use TV deals to leverage higher expansion fees
Step 5.) Continue growing
In spite of this however, there is a key word in the second concept that does accurately describe efforts made by MLS over the past year or so, albeit in a different sense of the word; concentrate. MLS has grown aggressively in recent years and I count myself as one who, while encouraged by the announcement of NYCFC as the 20th MLS club, was skeptical about the need for even further expansion with so much done recently already. Looking back at the past year, partnered with some key recent announcements it has become obvious though, that MLS has been working multiple avenues at once and is concentrating its efforts and structure to better fit the growth and expansion that the league has been experiencing recently.
One of the biggest and most widely known factors of praise for MLS has been its increasing attendance. In 2011, MLS surpassed average attendance of both NHL and NBA and as it stands, the NBA for the 2013 season, according to ESPN data boasted an average home game attendance of 17,383 and overall average attendance of 17,356. MLS attendance comparatively, according to in-house Business of Soccer analysis, is at 17,699. Though the season is only midway through, the level of attendance is certainly encouraging and most definitely an achievement to be proud of considering that one of the most repeated, and frustrating arguments against the potential growth of soccer in the United States is that it falls behind at least four other sports in simple popularity (the argument does hold merit but in a much more nuanced and detailed way than most people realize, and not simply to do with popularity).
Another step forward taken by MLS last spring was the sale of stake in their business and marketing extension, Soccer United Marketing, to Providence Equity Partners for what is believed to be between $125-150 Million, roughly a 25% stake. According to Don Garber the money will be used for MLS programming on NBC and Youtube, and further supported the investment move by highlighting the need to “to expose our players and our league to a broader audience” which does seem significantly more possible and likely with $150 Million dollars should it be invested in the manner he said it would.
Another advantage to Providence’s stake in Soccer United Marketing, created in 2001 after the acquisition of the rights to the 2002 World Cup, is the firm’s close connections with both Univision and YES Network. If anyone was wondering how the Yankees got involved with MLS and NYCFC, though certainly not the whole story, I’m willing to bet a few introductions were made through this connection if not more. Though Providence recently sold a solid portion of its stake in YES, the connection still exists to what is one of the best examples of specialized sports television monetization and innovation.
With Univision, looking past the obvious initial appeal of simply a Hispanic audience that is known to be a large part of support for soccer in the United States, MLS has access to a business entity that represents an angle at a new developing market described by Rick Castillo, President of RC Agency, a marketing consultant for Soccer United Marketing. With experience representing MLS, Mexican league teams, as well as initiatives with Barcelona FC, Castillo understands that the growing Hispanic population is currently at the stage where there are 4th and 5th generation children. It means that an appeal isn’t as simple as providing content in Spanish language (not that it ever was) but that there is a demographic that speaks English fluently but also watches Spanish language television and communicates in both languages through social media and the internet. Castillo sees the marketing field for Hispanic demographics getting “heavier and more consumer-content driven”.
This is backed by Soccer United Marketing’s head Kathy Carter who agrees with criticisms that while MLS has not yet fully grown into its own, it’s currently “arrived at halftime”. She talked with Forbes about how they maintain one of the youngest demographics in sports with the 18-30 age group with interest going as young as 12-16. These age groups and demographics fit with the same breakdown discussed by Castillo and and beyond being fans, there is a growing desire to play in the league as well. With Providence and Univision, MLS and USM has an introduction to a discussion that can be very productive for them. Providence was a very positive move for MLS and Providence’s recent partnership with the NFL can only open more doors.
Currently MLS has begun to build on the “bricks and mortar” that Carter mentions in her interview with Forbes where she discusses the focus on diversification within the league and new ownership. If ownership, new clubs and soccer specific stadiums are the bricks and mortar of MLS, then the paint and interior design has to be original content to build on the growing quality of the on field product.
NBC is bringing the United States the Premier League like it has never been seen this side of the pond. A significant part of what makes this project incredibly ambitious is the amount of original content that NBC will be broadcasting in addition to the games each weekend. MLS didn’t need NBC to show how important this type of initiative and content is, but they are only recently beginning to make their own inroads into new independent content development. MLS recognizes the need to engage its fans in a new way despite having done an excellent job of developing an atmosphere and fan experience in stadiums to create and cement a core and loyal fan base. The next step is new media and television development and “MLS+” is the response.
MLS+ is the league’s new content creation and distribution entity that will work with all of the league’s distribution partners to spread new content that will include “television shows, digital series, mini-documentaries, mobile applications, lifestyle features, user-generated content, viral video stunts and more.” Part of the social media plan has already been implemented with a significant update to the MLS Matchday app that includes a completely new interface.
A more important part of this plan though, is the MLS Insider program. Recognizing the emotional and storyline connection that inherently exists within sports and makes sports such a great commodity, MLS has brought in one of the best sports storytellers currently in the game, so to speak. Howard Handler, chief marketing officer for MLS has brought in Jonathan Hock, the Emmy award winning director who is known for his work on ESPN’s “30 for 30” programs. Handler expresses this need to appeal to an audience outside of the match day attendees perfectly by explaining “there was a missing piece in my mind, and that was telling the stories behind the game and helping people see things they couldn’t normally see if they were just attending a game.” Handler believes that MLS+ “could be one of the more powerful things we do in terms of growing our fan base” and Hock looks like someone capable of facilitating that.
As important as all the growth, the new clubs, the expanded Television coverage, and content are, the real missing piece for the MLS has to be and organizational framework. Underneath all the enthusiasm and support for the rapid MLS club expansion and growth has always been a small degree of uneasiness and unbalance and it was difficult to pinpoint the source of it. It wasn’t until recently in the treatment for the growth nerves, that the source of it was evident.
In addition to SUM’s partnership and the creation of MLS+, Don Garber saw fit to create a new body within the business development side of MLS and call it MLS Business Ventures. In MLS Business Ventures, the source of the nervousness around further expansion was revealed to be a perceived lack of framework around all the clubs. Not that the individual clubs did not have the infrastructure or framework to succeed, rather it was the perception that the league itself was spinning around the country and that centrifical force would draw the league’s focus away from its steady movement and growth towards more erratic unsustainable behavior. This fear of course was removed at the same time it was finally realized by the creation of MLS Business Ventures and more importantly the appointment of Gary Stevenson
Stevenson is the calming force among all this activity. As a sports marketing and business veteran, Stevenson’s CV seems very well suited to this position with many focusing on his work with the PAC-12 Network. His work with the college sports conference is indeed noteworthy. He left the network in fantastic financial and organizational shape. His last year of work had the network broadcasting around 500 collegiate athletic competitions with the expectation of a 50% growth in that number next year. Beyond that the network showed a positive revenue stream to be distributed among the colleges and universities in the conference as well as a state of the art building for the network itself. To support this, the network maintained an organizational structure of over 1000 employed and trained college students underneath the network’s umbrella with expected heavy growth in that number as well.
His accomplishments are impressive on their own and the detractors who mention a lack of a deal with DIRECTV for the network are adequately countered by the understanding the DIRECTV wanted special pricing on distribution rights while the other distributors had agreed on a single price. The more important attribute of Stevenson’s work history though, is his sports agency OnSport. OnSport was created in 1997 and in a profile of Stevenson by Sports Business Daily there is a perfect description of what could very well become the greatest attribute of Stevenson’s work with MLS Business Ventures; “If we’re doing our job right, we’re invisible.”
Stevenson’s job is to coordinate MLS+, SUM and the various other business initiatives of MLS. Stevenson’s organizational capabilities and aptitude shown in the success of the Pac-12 network will be vital but what will also be key is a doctrine of OnSport regarding the importance of working behind the scenes. Don Garber does enough visible, public speaking for the whole league on every aspect of the kind of work going on. What is clearly necessary is someone to focus on the logistics of the background work, a coordinator to manage everything going on behind the scenes that make the public face of the league and the product what it is and Stevenson looks clearly capable of achieving that. He instilled a culture in OnSport that was “disciplined, yet egalitarian; fiercely proud of the work, but devoid of any arrogance.” This is the type of culture needed to push past halftime and into continued growth in what was initially considered an upstart league playing a sport that was considered 5th best not just by the nation it played in, but the world as well.
Game attendance is there, media coverage is getting there, and new content is in development. Not that it was easy to get where MLS is today but the belief that MLS should pause a little, and take a breath is one that should be fiercely fought. Further expansion should definitely be put on hold if nothing else for overall logistical reasons, but that in no means is a reason for the league to stop and gaze at their achievements. This is the time to keep heads down, and push through the grit of the second half. The inclination of course is to admire achievements but the appointment of Gary Stevenson is a positive response to any potential stagnation as well as a resolution to concentrate efforts further and focus MLS towards larger goals. Stevenson appears to have the passion, the support and with his new business vehicle he has the framework. Eyes are certainly on him and Don Garber alike, but hopefully Stevenson’s work will be as effective and stealthy as his appointment to the position was.