Should Garber go big on the New York Stadium

Damn universal negatives! Though, to be fair, even if the Cothmoth (yes, pronounced akin to Barthelona) built a stadium over the ice-rink at Rockefeller Center, it wouldn't be MLS building it, would it?

 

Actually While citi field is about that size without standing room, Yankee Stadium seats over 50k and the yanks do have attendance above 40k, but I see your point, they are the Yankees and are thus the execption to the rule so what you said still holds weight. Just a correction, sorry to nitpick.

 

There's no way on god's green earth MLS is going to sponsor construction of a huge stadium. MetLife Stadium reportedly cost, what, $1.6 billion? Even if it was shrunk by a third the cost is prohibitive.

Personally, I don't think MLS will even end up owning the stadium, not the majority owner anyway. I think MLS is simply trying to get the stadium deal done -- a plan for a 25,000 expandable SSS that has the requisite approvals so that the owner of an expansion team can step into the project. That would remove the most uncertainty surrounding an expansion team in New York, and MLS could market the package (expansion franchise + stadium) to potential ownership groups.

 

ny has a stadium ready to go. its called citi field.tched a soccer game there. not bad. It gives an investor a chance to build a fan base, and, then, a new stadium could be built in the future. if someone comes up with $120 million, that someone can partner with Wilpon,and a ny2 can be done.

 

Why do people keep talking about Wilpon ?

He's in the middle of trying not to pay 162m in the settlement from the Madoff crap. Much bigger fish to fry.

 

In seriousness, I know building a stadium in NYC is danged hard, even if you're paying for it yourself. On the other side of it, I see MLS seriously slowing down the expansion. The bigger you get, the less important it is to add more teams, and I don't think we'd have gone as fast as we already did if it weren't for almost all of the new franchises having pre-exising fanbases. When the list gets down to the Vegas/Minneapolis/Orlando region the way it seems to have done, there's just not as much imperative. IOW, NYC2 could be among the first 22 teams, and that still could be 8 years from now.

 

You raise two interesting points. First, with the benefit of hindsight, the rapid pace of expansion has been fueled by absorbing teams from a league that was failing (and, yes, I understand that coincided with some reshuffling of the ownership groups). That's something of a rite of passage for a league -- the NFL, NHL and NBA all have done it, and now MLS has too.

But just as the NFL's absorption of the AAFC teams didn't result in continued rapid expansion during the 1950s, I'm not sure MLS' absorption of Seattle, Portland, Vancouver and Montreal signals continued expansion with USL/NASL sides. I submit the reason more established leagues have added teams from competing leagues has had less to do with opening new markets via expansion and more to do with absorbing their strongest competitors. Bluntly, the best organizations and markets (for now) are in the fold, and there is little reason at this time to take the others (with the possible exception of Orlando, which is an open question).

The second point is a hard one for people in markets without teams to accept, but when adding de novo teams in new markets the bar continually gets higher. Having hit critical mass -- MLS has enough teams to field a first division comparable to the largest first division leagues elsewhere in the world -- new markets now must demonstrate that they can do more then make up the numbers, they have to demonstrate that they can grow the MLS pie substantially and add real value to the league. For a league that's now successful enough to be choosy, that's not easy to do.

So I agree with what you've said.

Now, if you put the former USL teams to one side along with San Jose, which was really about keeping a pledge to restore a team to a market that had lost one IMO, there have been two ways to demonstrate "added value" in the eyes of MLS when looking at expansion teams.

I would argue both Chivas USA and RSL where more about the "who" then the "where." The league wanted Dave Checketts involved, and Dave Checketts got to pick his spot. Chivas USA is even more clear that it was the Chivas brand that appealed to MLS, so much so that the team was awarded before the city the team would play in was finalized.

(As an aside, I concede some of the motives may be mixed. You can make a case that Seattle was also partially about the "who", as the reconstituted Sounders brought Paul Allen into the fold following MLS' long courtship with him, just as you can make the case that part of the motivation for Chivas USA was to respond after USSF blocked Vergara from putting an FMF club in LA and thus find a settlement to remove a possible competitor from another league).

But more recently, I think it's been the "where" that mattered most. Look at the last three markets where MLS has entered fresh without absorbing a pre-existing USL team or restoring a team to a market -- Philadelphia, Toronto and Houston. All big cities (metro populations over 5.5 million) and big media markets.

Again, absent some low hanging fruit (or moral obligation), that's the recent pattern for de novo teams -- big cities.

That's were the great upside is.

It's also why posts like "RBNY doesn't draw well and until they do the next team should go to [insert favorite city here] instead of New York" miss the point. MLS doesn't have to go anywhere. If it does expand, it wants the potential home run.

Which is why, although many fans here appear to hate the idea, New York II has caught the league's immigration IMO.

It makes sense to me too.

 

One counterpoint to your "where" argument- the league has had a lot of success expanding into markets where there were only 1-2 other professional sports teams. That is the case in Seattle, Portland, Vancouver and SLC. Sports fans in those markets were relatively underserved and MLS was able to take advantage of this.

On the other hand, the New York sports market is already heavily saturated with teams. I doubt there is a significant percentage of NY sports fans who feel underserved by the available options. Several of the already-existing teams (Nets, Devils, Islanders) aren't super popular. A hypothetical NYC2 would be competing for sports dollars against titans of professional sports like the Yankees, Knicks, Giants and Jets. That's a really competitive market for a second-tier league. An expansion team in a market like Orlando would be competing against only one other team.

I agree with you that large markets catch the eye of MLS, and rightfully so. But a large market that is already saturated with sports options isn't an automatic home run for the league.

 

"1-2 teams" is technically true, but the principle lying underneath that is really the case in Seattle. They have a NFL team and a MLB team, and those are the two that really 'drain the pool', both by dominating headlines and by sucking up a lot of higher-end sports product dollars (sponsorships, suites, etc). (And in a seeming irony, each benefits from the relative frequency of games--the NFL because its games are so rare that each of them is major event, and MLB because it has so many that there's always a game story to cover.)

Comparatively, the tension between MLS and NHL/NBA teams is of a much lower order.

That feeling is probably right, and probably counts for something. Statistically, however, the feeling isn't true; in reality there are fewer pro sports per available dollar in NY than there are in Orlando, and that has to count for something too.

On balance, when explaining the Beckham Era expansions, the presence of a population that's ready to follow the team is, overall, a bigger factor than the amount of sporting competition in the market, even though that latter is a factor.

 

Orlando, one pro sports team, 238,300 people = 1 Team per 238,300
NYC, 11 pro sports teams, population 8,175,133 = 1 team per 743,194

They both have a WNBA team, (it'd be 119,150 to 681,261 if they were included)

 

I think you have to look at metro areas if you want a fair comparison. It's 2.1 million versus 18.9 million. Ignoring the WNBA (because pretty much everyone else does), you end up with 1 team per 2.1 million versus 1.7 million, respectively.

 

Who says I want a fair comparison

The big issue is what putting +1 team there would do. Orlando would be left with 1.05m/team, New York would have 1.58m/team.

Lies, Damn Lies, and Statistics

 

Have you ever seen this chart?

http://www.portfolio.com/resources/SportsChart.pdf

It's pretty interesting. It does support the argument that there is plenty of sports entertainment money floating around in NYC.

 

"Capacity score" is something I'm going to need help figuring out. I like that every city in North America has an MLS capacity score of 100

 

They're starting not with population but cumulative disposable income (ie bigger cities are better, but also richer ones). Then they're taking how much disposable income 'it takes' to support the sports teams they have (they probably arrive at that number by correlating existing teams' success on the income ledger with a city's disposable income, other teams being factored out), and figuring out what's left over.

The 'it takes' number for MLS is very low, probably way too low, because they're measuring more where MLS has been as it has grown than the point they're trying to get to. This is why there are a lot of cities on that list MLS wouldn't really touch. (In other words, they're saying, "given the amount of money there is in town, if the people in it made a decision to accept MLS soccer, could they draw 14,000 fans a game?" Which is not the actual question MLS is asking these days.) You'd probably be better off, when consulting that chart, chucking the MLS numbers and going with the NHL ones (in cases where there isn't already a team).

 

The chart is based on the assumption that a city needs an economy of a certain size to support professional teams. Whereas you might need an economy of $10 billion to support an MLS team, you might need an economy of $100 billion to support an MLB team (my numbers are pulled out of a hat). The more teams in a market, the less money left to support a new team. So, if you look at Akron, Ohio, it has a $26 billion economy and no pro sports teams. The $26 billion is only 30% of what you need to support an MLB team, but it is sufficient to support an MLS team.

Edit: Though, just being "sufficient" is probably not enough for MLS. Maybe Akron can support an MLS team in theory, but there is no way MLS would put an expansion team in that city.

 

I think that's probably right. They assigned a minimum amount of Total Personal Income ("TPI") needed to support a franchise -- MLB, for example was $86.7 billion, but I've not found what that value was for MLS, although the chart posted earlier suggests it is about $13.45 billion. That's consistent with Jacksonville, with excess TPI of $14.33 billion, which was deemed to have enough to support an MLS team. By contrast, both Rochester and Tulsa, with excess TPI of $39 billion, had the lowest surplus income needed to support an NHL club, and in fact the earlier chart suggests the minimum is about $37.93 billion. To me, that's about right for MLS now.

I like this version of the data -- click the sport's logo to bring up the cities that could support clubs for that sport.

http://www.portfolio.com/interactive-features/2009/12/stadium-seating

Here's an interesting point -- if Stan's right and the TPI for an MLS ream really is about $38 billion, Orlando doesn't quite have enough surplus income to support that -- but Miami does -- while Montreal at $90.44 billion, has well over double what was needed.

Some of the biggest cities with surplus personal income include Riverside, California, Las Vegas, Austin, Bridgeport, Providence and Norfolk.

 

Yankees - Arsenal
Giants - Chelsea
Jets - Fulham
Mets - Hotspur
Knicks - West Ham
Islanders - QPR
Nets - Millwal
Devils - Cristal Palace
Red Bulls - Charlton Atletic
NY2 - Brentford

NYC area - pop. 22 million

London area - pop. 13.7 Million

 

One thing we should note is that, should this chart be trusted as correct, a lot of talked-about expansion candidates go down the drain (to me, anything not 100 is down the drain, considering around 90 percent of cities have a 100).

Atlanta has a score of 31
Baltimore, the possible new home of DC United, has a 19.
Raleigh, a possible site for a Carolina team, scored a 38.
San Diego has a score of 88, which is "borderline" but considering most cities scored 100, 88 isn't good.
Charlotte (another possible site for a Carolina team), Detroit, Phoenix, St. Louis and Tampa all scored a 0.

Cities that scored a 100 include Las Vegas, Miami-Ft. Lauderdale and Orlando.

A NY2 team would mean 11 teams in the New York market. Spreading $583 billion amongst them would give NY2 a $53 billion pool of disposable income to draw from, enough for a 100 score. Of course, the money isn't spread evenly amongst teams in the 5 sports. But the minimum a team needed to score a 100 was around $16 billion (coincedentally, the city of Columbus falls right above this threshold).

 

Hate to be a stickler. It's Tottenham, Tottenham Hotspur or Spurs, never Hotspur. Well, at least not for a 100 or so years. Or if your Ossie Tottingham.

I lived in London for a long time, you can't compare London to New York. First a multi-sport city contrasted with a predominantly one sport city doesn't lend it self to accurate comparisons. Not to mention some of those sports don't run concurrent with each other.

Football in London is tribal, 8 to 15 miles in any direction and people hate the people were you departed from. So there are traditional regional strongholds of support. It's not really the same as the Knicks and Nets even though they play in different states (at the moment). I've been to West Ham matches where we had to walk with mounted police escorts. Actually I thought that was common as a young football fan. I didn't realize that it wasn't common practice until I was older and realized what idiots football supporters could be. Depending on which way you travel from Upton Park you're less the 10 miles away from "Spurs Territory", yet it's so heated.

Those sort of rivalries I don't really see with a potential NY2. Obviously NYC residents define themselves by their particular boroughs but I don't think it's comparable to London to assume that a New Yorker would definitely latch onto a New York team over the Red Bulls because they play in the City. At least not to the exent which would warrant a new club based on potential fan base. Still I understand the potential commercial and media potential of having another major market club. To me though the MLS should be focusing on building fan bases in current cities.

 

Exactly -- and, again, I share Stan's view that these days MLS is (or should be) looking at a number closer to the income needed to support an NHL team ($38 billion), which is well over double what these measurements reflect. Simply put, the ability of the cities you highlighted to support an MLS team is probably even worse then the study indicated.

Again, I offer this only because if you look at the numbers, you can see the league's rationale for putting a second team in both New York and LA. There is the money there to support it, something that isn't true in places like Atlanta or Orlando (at an NHL income level) unless they a team can effectively take dollars following to other teams and re-direct them, which is not such an easy thing to do.

It's a critical distinction that the league seems to make but many posters don't. RBNY and Chivas USA draw as they do not because the money isn't there to support them, but because they haven't persuaded people to part with that money to watch the team they put on the field. For a new team in either NY or LA, that's at least potentially correctable, and far different from a team that struggles to draw well or find sponsorships because there simply isn't enough money in that market to go around.

Your point that Columbus has just personal income to support an MLS team is telling, because I think they are the prime example of team and fan base that have done just about everything right -- first to sell a lot of season tickets, first to build a stadium, active supporters groups -- but the Crew continue to hit a glass ceiling because they really need the dollars another half a million people in that market would bring.

How can they fix that?

Still, the league can (and should IMO) continue help a couple teams like the Crew in markets where there isn't enough personal income to go around through revenue sharing (such as KC, Salt Lake City or Denver), but it makes no sense to continue to add more of them. This isn't about making up numbers to get MLS to a certain size for a viable league anymore. These days new markets have to have enough personal income to give expansion teams a big upside if they can capture those dollars, and New York does. As a bonus, it also helps with sponsorships because so many corporations have a presence there.

The money is there not only to support another New York team, but for it to thrive.

It makes sense.

 

That website does a great job of analyzing this topic. But one slight weakness it has is that it in no way factors in college sports, which in some regions can seriously tap into the available money. In Austin the Texas Longhorns are wildly successful and I'm guessing take a substantial sum out of the available money in Austin for sports.

 

Also don't forget to factor in how a potential team might help expand the league's geographical footprint in a way such that negotiations in TV contracts would be improved for MLS.

In that sense, MLS might be more open to letting in an Orlando team just to get a team into the Southeast even if the numbers aren't quite perfect from the available money point of view.

TV is where the mega money comes in the modern sports world.

There are 40 million people total in the states of FL, GA, SC, AB, TN, MS but no MLS team remotely close to those states. Add in another 8 million for NC and those people are still at least 4 or 5 hours from DC United.

Adding some team in the SE region will help MLS in negotiations for the national TV deal.

The TV aspect won't cause MLS to ignore the value that a second NYC team could have from revenue from potential ticket buyers, but I don't think a second NYC team helps MLS in its national TV deal that much.

 

I'll combine both of your posts in this reply:

I agree, it's unclear how they evaluated the impact of big time college sports in many of these markets, which suggests that the dollar pool may be more shallow in markets like Austin or Columbus then what they present.

While the impact isn't as great, I suspect some big minor league clubs also impact the analysis a bit. For example, Portland already had its hands on some of this income before they came to MLS, and assuming they held onto those dollars they didn't need as much surplus personal income in their market to thrive as they have.

As for the TV point, I agree. In fact, I think if you were building a decision making model for MLS expansion I think it would be something like this:

1. Is there enough disposable income in the market to support a new MLS team?

If the answer is "no", you stop right there. If the answer is "yes", you move to question 2, which is:

2. Will those potential customers buy what MLS is selling?

Here's where you need a good market study. Again, RB and Chivas USA appear to struggle at the gate not because there aren't enough fans with enough money to buy the tickets, but because not enough people are buying what they are selling.

Still, if the conclusion is "yes", the final question IMO is:

3. Beyond the Expansion Fee, will this new team add value to the rest of MLS?

Here's where you start looking at TV markets, IMO, along with corporate sponsorship and free media opportunities.

So, while there is sufficient personal income in Providence to support a team and a market study may indicate people would buy the necessary tickets for it to survive, is there really a pressing need to add the 52nd largest TV market to the mix given it's between New England and New York?

If MLS can answer yes to each of these questions, I think it makes sense to add a team.

But as with any decision making system, you need to answer the questions in order because each represents a hurdle that must be cleared.

So, if there isn't the disposable income, the team isn't viable for the long term without league support and there is no reason to go further.

If there is the requisite income but the team can't sell its product and persuade customers to use that income to buy tickets, again, it isn't going to be viable and there is no reason to go further.

Mistakes are made when a league desires to add to it's "footprint", but ignores the perils of the first two threshold questions IMO.

 

For the first question, NY2, Miami, Orlando and Las Vegas pass the test of the much-talked about expansion teams. For NHL, all score 100 except Orlando with a 94. We will count Orlando as a 100 since we are nearly tripling the minimum financial standards and Orlando still nearly scores a perfect score. They are more than financially viable.

What adjusts these scores? For NY, its the massive amount of sports teams. I talked about this previously.

Miami has the Dolphins, Marlins, Heat and Lightning, but still has the avilable income to support an MLS team.

For Las Vegas and New York, its the non-sports entertainment dollar. Las Vegas is a near purely tourist city, plain and simple. LV takes a huge hit in this regard, despite not having any other major pro teams. New York is not affected so much, because there is enough money to go around to all of these entertainment events. But Las Vegas is the fastest growing of the top 30 TV markets, which means it maybe be more of a lock in the future.

Orlando has the Magic, Disneyland, and not much else. Which is a very good thing.

Still no luck for the Southeast. But what cities (some of which no one is talking about) could possibly support a team? These are cities in the top 50 TV markets (I choose 50 since RSL is the smallest market at #50).

Atlanta? DOA. See my last post.
St. Louis? Same.
Charlotte? Same.
Virginia Beach at #36 is doable, with no other major sports teams in Virginia. But this would be the 2nd smallest TV market in the league.
Nashville? Nope.
Memphis? Nope.
Louisville? If you want to count them as the south, they are viable but again a small market at #42.
Richmond, VA is viable at #43.
I could go on, but you get my point. The money is simply not there in the south in any individual city. But many proponents of a team in the Southeast promote a theory that fans throughout the south will rally around a single team to represent them all. So how do these cities do combined?

Atlanta, St. Louis, Charlotte, Nashville, Memphis, and Birmingham combined are barely viable. It is only when you add in the Virginia cities that things look better. It depends on the location to finagle with the numbers and get a viable market, which isn't a good thing. And this doesn't include the behemoth college football teams.

In conclusion, MLS is making a financially prudent decision in avoiding most of the Southeast for now.

A localized version with just Carolina cities produces a team which draws on $23B dollars + a small amount from Virginia and the rest of the South. On the plus side, Raleigh and Charlotte are two of the fastest growing major markets in the US. Raleigh, Charlotte, and Colubmia combined make a top 20 TV market, which is viable. We can include them in our passable cities.

So back to our original cities. In terms of being able to support the team, the only of the 4 which can be asked questions of is Las Vegas. That narrows us down to NY, Orlando and Miami as viable, high quality TV markets (NY is 1, Miami is 9 and Orlando is 28 and "Carolina" is 16). I predict these will be the next 4 cities getting teams. NY, Miami and Orlando being the next 3 in any order, with Carolina being the last of the 4.

There are darkhorses though All that is needed in some cities is a rich owner and they pop right into the race. Here are some cities that pass our original test with a decent sized TV market.

Riverside, CA has $119B in disposable income, but LA teams take a lot away from this. However, combined with San Bernardino and Ontairo it makes the 13th largest TV market in the US.

Sacramento, CA had about 5 minutes of fame on the MLS website as a city fielding a bid. It is indeed a viable city, with $45B in disposable income, only one major sports team to compete with, and 24th largest TV market.

San Antonio, TX is in a similar situation to Orlando, with the 24th largest TV market and with $34B in disposable income scores 93 score on the NHL scale (which, again, we will count as a 100 for MLS despite our higher standards). One thing we must note is that while Florida has no MLS team, Texas already has two.

Austin, TX at $62B has much more disposable income than SA, but is the 35th largest TV market, ranking lower than even Columbus.

And it is at this point where we stop considering any new cities. Even Austin and Riverside are big stretches. We can realistically stick to the three I've mentioned before (NY, Miami and Orlando) with the possibility of adding Las Vegas and Carolina down the line.

Going after a stadium in New York is definitely a worthwhile venture, but it should not come at the expense of avoiding Miami and Orlando should they have the complete package (owner + stadium). Carolina should remain on the BoG's radar.

Since I haven't yet entered the fantasy-land that is part of most YBTD post, I'll say that the order of new expansion teams will be as follows:

Orlando
NY2
Miami
Carolina (in any one of the Triangle cities)
San Antonio

And that brings us to 24 teams. After that, there is no way to predict anything. This also means there are 10 teams in the West and 14 in the East, meaning Houston and KC will be back in the West in this situation.