The Cost of Losing MLS Cup?

By this time Monday, the 2014 MLS Cup Champion will be crowned and celebrations will be in full swing.  Players and staff will surely benefit from several weeks of well-deserved vacation following the long season, though for either the Galaxy or the Revolution, winning MLS Cup will certainly have its own benefits.

Current numbers from the Collective Bargaining Agreement (CBA) in progress aren’t available yet, but based on the previous CBA that ran through 2010 we know that one of these clubs will receive either $180,000 ($165,000 for MLS Cup Champion + $15,000 for playoff qualification) going to the winner or $75,000 ($60,000+$15,000 qualification) to the runner up. These are player bonus numbers though, meaning that the money is divided among the players with the distribution determined by the players, and had either team been regular season conference champion, then that $15,000 would have been $31,000.

Again those are previous 2010 numbers from the previous CBA, but what do clubs themselves receive if anything?  If there are monetary gains for clubs themselves for winning, it certainly is not public. The winning club though will also receive a berth in the CONCACAF Champions League, which allows a club more chances to play in front of their home fans and increase matchday revenue.  It also facilitates marketing efforts for ticket sales for the following season, specifically season ticket holders.

It is clear that winning produces financial benefits.  By this logic, it would make sense that the other eighteen losing teams must be hurt financially in some way, or at least, are missing out on opportunities that clubs who win MLS Cup enjoy.  So if a playoff team falls short, does that hurt the way a club does business next season?  The answer might be surprising.

The winning team will be able to market their club as “The 2014 MLS Cup Champions”, which sounds a lot better than “2014 MLS Cup Runner-Up” or “2014 MLS Playoff Contender”.  However, losing clubs will not market themselves this way.  The losing team can market themselves as Conference Champions.  Seattle Sounders can highlight their Supporter’s Shield trophy for best overall record in the regular season and CONCACAF Champions League berth next year.  Even clubs that ended their season early can continue to hitch their wagons to their star players, among other marketing vehicles.

For the other playoff teams in MLS, fans expectations will be unmet.  For sports fans, happiness exists when reality exceeds expectations.  It might be expected then that playoff teams that fail to meet the high expectations of fans might lose those fans next season.  In truth, losing has little to no effect on matchday attendance.  The figure below shows the average attendance for MLS teams that made the playoffs in 2013 and their average attendance in 2014.

Average Attendance 2013-14 Playoff Teams

Other than Montreal Impact, there is no discernible trend or correlation that exists with winning or losing either MLS Cup or in the playoffs with a direct impact to attendance figures the following season.  Consider the New York Red Bulls who won their first trophy, the Supporter’s Shield, in 2013.  Average attendance remained constant in 2014.  Real Salt Lake lost in MLS Cup in 2013 to Sporting Kansas City and saw an increase in attendance in 2014.  Expectations are high for playoff teams, but reality only allows for one champion. It appears that an early exit from the playoffs had little bearing on the clubs efforts to market the team, and they simply find other ways to highlight their club.

So what about teams who did not qualify for the playoffs?  Did losing have a negative impact on their club attendance?  The figure below shows 2013 non-playoff teams and their average attendance.

Average Attendance 2013-14 Non-Playoff Teams

Only Chivas USA saw a dramatic drop in attendance from 2013 to 2014, for several reasons beyond just the team’s poor performance on the pitch.

READ: Chivas USA Resolves Pending Employment Discrimination Suit

Otherwise, non-playoff clubs saw either no significant change or an increase in average attendance.  Perhaps this is why college football is looking to improve its attendance by studying MLS.

For teams like Toronto FC and D.C. United, a dramatic increase in attendance can, in part, be explained by the addition of several star players to draw curious fans to home games.  For D.C. United, on-field success led to an increase of 3,500 fans from the previous season, the most dramatic change in attendance from 2013 to 2014.

It has been said that winning solves a lot of problems for a sports team that is struggling financially.  D.C. United’s turnaround and New England’s stellar season certainly shows the power of winning, but clubs have found a way to stay relevant in their markets, win or lose.  Whether teams purchase new players, the allure of a unique stadium environment, or league rules that allow clubs to turn bad fortune around, people keep coming back for more.  After all, December 8th is the start of a brand new season…

 

What do you think about the impact of post-season performance, or lack thereof, on attendance figures the following season? Let us know in the comments section below, or via Facebook or Twitter.

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