Soccer-Specific Stadiums Prove Important Investment for MLS Succss

Over the course of its nineteen year history, Major League Soccer (MLS) has seen a great deal of changes.  From 1996 through today, MLS franchises have expanded, contracted, and relocated, playoff formats have changed, and game play has been modified to align more closely with the way the rest of the world plays the game.  One thing that still distinguishes MLS from other well-established leagues around the world is soccer-specific stadiums.

In many cases around the world, clubs that play professionally in second or third division leagues even have their own stadium.  This is a testament to the popularity of the sport world-wide.  Because of the crowded sports market in the United States and Canada, not every MLS club has been able to build a stadium almost exclusively devoted to soccer.  Understanding the financial impact of a soccer-specific stadium in a given market can help organizations and fans alike understand the implications of building these stadiums.

MLS Commissioner Don Garber has made it clear that expansion teams should have a plan for a soccer-specific stadium before the league considers expanding to a new locale.  The rules have been bent for teams such as New York City FC (NYCFC) and Atlanta, both planning to play in non-soccer specific stadiums when they enter the league in 2015 and 2017 respectively.  Garber’s belief in the importance of soccer stadiums is not unfounded.  Below is a graph that shows the average home attendance for each season Kansas City played between 2006 and 2013.

 

 

Can you guess when Kansas City moved from the football stadium to their new soccer-specific stadium?  Since building Sporting Park, Kansas City is one of the most touted soccer cities in the United States.  A similar trend is seen in New York, where the MetroStars/Red Bulls played in cavernous Giants Stadium since the beginning of MLS.  Below is the average home attendance for each of their seasons between 2006 and 2013.  It is easy to tell when Red Bull Arena was built.

 

 

The increase in average attendance for these two teams leads to increased profits in ticket sales, merchandise, food/beverage sales, and other match day related forms of revenue.  Matchday revenue is not the only revenue source that makes soccer clubs money, and over time it has become less important as other sources of revenue such as sponsorships and broadcasting have become more relevant, but it is still core to a soccer club’s success.

READ: How do soccer clubs make money?

Skeptics might conclude that Kansas City and New York each spent more than $200 million to build a stadium that attracts only a few thousand more fans on average.  The slight increase in matchday revenue would not cover the massive costs of building the stadium, making the stadium a poor investment.  Recognize that by building the stadium, the club is also building a brand.  Commercial revenue (sponsorships) and television revenue work in conjunction with matchday revenue, not in isolation.  A club will not gain commercial or television interest without establishing a consistent and successful matchday experience.  Success for a club begins with matchday.

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