Is MLS future in medium sized cities?

I think MLS's future, or at least a sizeable piece of it, may well be in mid-sized towns. FWIW, the Sports Business Journal article on expansion markets for all sports that we've kicked around here once or twice reported that from a pure economics criteria, somewhere between 80-100 cities could support MLS. (That is, they assumed it takes a certain amount of city net wealth to support a team, they looked at the net wealth of the town and subtracted for teams already playing there).

Now, of course you have to narrow that list a lot for cities that don't have the right geography, demographics, like those listed above, and you probably don't want to take many risks on cities that barely qualify. Then you have to narrow it down a lot more for cities that are unlikely ever to produce the I/O and stadium. How many would be left as reasonable candidates? I dunno. . 10? 20? 30?

 

Not the first year, no.

But after that?

I don't know, it seems to me like the ugliest girl in school just asked MLS to the prom and people are getting excited because she offered to pay for the Limo. I realize that's probably unfair to San Antonio, but I still think this amount of excitement for a smaller town in what we'd normally consider a lousy soccer stadium (field turf, dome, too large) seems a bit unwarranted.

 

Except for the actual stadium, which resembles Giants Stadium more than any other stadium in the league.

 

Giants Stadium, Gillete, and Arrowhead resemble each other more than any resembles the AlamoDome.

 

While going to some medium-sized cities is a good idea, there are still a few large soccer-rich cities that should be covered

Philly comes to mind the most - Plus this will emphasize the natural rivalries between DC, Philly, NYC and Boston - Even if baseball is top dog, Soccer will find a big niche - Maybe in the 'burbs

 

It's not a cost, it's an investment and it's yielding huge returns. How can you possibly spin this as anything other than a brilliant move?

 

If we're going to go down that road, this deal means she's also putting out, and the Spurs history suggests she just might be a good lay.

 

So the fact that Giants Stadium and the AlamoDome both have field turf don't make them more similar?

Look for two years this website has been covered with propaganda that the future of MLS is in SSS' stadiums with smaller capacities to improve atmosphere and so forth. The Alamodome is a mammoth stadium built for Football but generally multi-purpose, that has field turf. How in the world is a huge stadium, designed primarily for football but used for a variety of purposes, which has fake grass...

...how on earth is this anything at all like the model of SSS people have been talking about? It isn't, but since the rent is cheap everyone's excited. By my math skills, it only covers one of the three 'S's in SSS.

I hope to god this falls through.

 

I wouldn't, but of course an 'investment' is one type of cost.

 

No, they don't. The fact that the AlamoDome is reasonably decked makes it a bit closer to RFK, in my book. A pre-baseball, rent-free, ancillary-controlling, structurally-sound, reasonably-modern RFK.

 

I don't know if this has been mentioned, but the opportunity to advertise in medium-sized cities may be appealing to certain companies. MLS gives advertisers the ability to enter markets like Columbus, Salt Lake, and now possibly San Antonio.

 

I dunno I go to Kettering. I think the Flintoids might steal an MLS team

 

Uh, we only have 2 years history on the SSS...there are plenty of ways to do the accounting on it (amortization), but one thing I know: They had to pony up hard cash to buy the concrete, steel, buy the contractors, etc. That's $30 million poof...and then you hope for the revenue stream to cover..

Compare that to some mixed bond fund investment in which you probably coulda got 4-5% a year (or higher) with basically 0 risk. Hmmmm...

Listen, I'm GLAD they are building these things. But if it were my money, I would be EXTREMELY RESPONSIVE to the SA situation which gives me many of the bennies of an SSS at none of the initial cost.

You keep wanting to spin this idea of "why wouldn't you accept the same losses at a higher average attendence". Lets turn this on its head. Why wouldn't you accept a lower break even cost on average attendence. Let's say SA can make the numbers work at 12k vs. 18k fans per game. Isn't it better (thinking like a businessman now) to be able to break even at 12k.....for if you reach 18k (in same cost structure) you are big-time cash-flowing BABY!

You want to have that upside....in any investment

 

I don't discount that. I started out debating some of your position, though less hard-line. In fact, I suspect based on the effects of CCS and HDC, that the aesthetics you're talking about are worth somethere between 2,500 and 5,000 fans a game.

Nothing to be sneezed at! But that's not much more than about $2M per year. With present value accounting, it'll take you a long time to recoup a $30M investment on $2M a year, if that's what the comparison was. Lemme put it this way: it's iffy a bank would ever give you a $30M loan on a projected annual revenue of $2M.

Now, which is a better business move is a close call. I think I'd rather take the SSS palace, though that might be my emotions talking. The key point to remember though, is that this probably isn't the real comparison. An SSS in SA is unlikely in the foreseeable future. And since San Antonio's presence does not eliminate a good deal in any other city from happening as far as I can see, the real dichotomy is between "taking this deal" and "passing up an opportunity for growth."

I think I'll take the former.

 

BTW- I tried to give you rep because I respect your style of argument (even if i disagree), but I 'got to spread it around'

 

Yeah but if you reach 18k, then why can't you simply then say that if 18k is break even, if you reach 24k...

Remember the motivation for the Burn moving to Southlake? Cutting costs, they wanted to stop paying rent at the Cotton Bowl. And we see how that worked out. You can only chinze on this crap for so long before your customers get the impression you're offering them a 2nd rate product. How the hell do you expect your customers to value your product when you abandon quality control with a rigid desire to value cost controls over anything else?

MLS more than anything needs to grow. It should be choosing markets and teams based on what are the best growth opportunities. A large football stadium with artificial turf in a smallish market doesn't seem to fit that profile. If all we care about is keeping costs low enough to be able to have soccer, than the A-league should suit our purposes just fine. If you want more than that, then growth is imperative.

 

Not much difference, really. To follow the analogy, you're 6,000 over the breakeven point either way.

On Southlake, cutting costs by moving into a 65k stadium is a far different matter than doing it by moving into an 8.5k stadium.

Why? Why make the best growth opportunities the enemy of good growth opportunities? Are we anywhere near the point where giving one expansion franchise has to cost us not giving out another? And is there a conrete deal in a non-MLS city that looks any better? Is there anything close?

 

But if you're buying the whole thing free and clear, then obviously there are other factors. For starters, you ain't buying it in San Antonio, you're buying it in Detroit or Philly or, to stay in the same region, Houston. Then you're adding several other additional uses like concerts, rodeos or whatever. The natural grass gives you a better opportunity to host international soccer matches for more revenue. Then you're talking not only about the additional revenues every year, but also the increased asset value and franchise value of the team by owning the stadium.

I am suspicious of the growth potential of the current offer from San Antonio. The likelihood of having 10,000 fans a game watching Tigres USA in an echo chamber seems to me to be rather significant and I just think there are likely better growth opportunities out there. I think MLS is letting their Giants' Stadium experiences cloud there thinking here. I think it's very telling that MLS is being offered the AlamoDome for free. Some think that's great, I happen to think it's price may very well be indicative of its worth.

 

I think it does yes. We have essentially 4 spots left before I think we should stop and think about other ways of expanding.

And I don't see San Antonio as a good growth opportunity, I see it as non-growth as it is currently structured. If we simply hand Rochester a franchise, we get at least 10,000 a game and an SSS in a market only slightly smaller than San Antonio with a much higher average disposable income. Not a whole lot of growth potential there either, but it comes equally as cheap and we get a virtual guarantee of decent attendance and a better stadium out of the deal.

 

The reason that's not the comparison is that the SA deal does nothing to prevent you from still also doing what you describe.

The artificial turf is better for everything else you just listed. And SA has had no trouble scheduling friendlies of late.

One thing you should know about San Antonio is there's a profound lack of competition.

Not only is there a relative lack of other sports teams, but there's a relative lack of things to do. Oh, sure there's the traditional bowling alleys, restaurants and movie theaters, but there's not much party scene like Austin, not much culture, museums or opera or whatever. It's not a State Capital, there's no major University a la Austin, Columbus, Salt Lake.

There's one good annual festival, Fiesta Week, but most of the stuff to do in San Antonio is for tourists, and you'll be tired of it by the time you've lived there 6 months. Unless they screw the pooch on how to do it, MLS in San Antonio will be an event, moreso than in any other MLS town. It will grab media attention (such as it is), and everyone in town will know the name of the team. If there are any good players, they'll know that, too.

 

The problem there is you're building a pretty large argument on your own personal opinion. There's very little chance MLS will stop at 16 if there are more good offers. I personally think there's very little chance they'd stop at 20, but that's beside the point right now.

I don't see what you've gotten in exchange for mostly casting aside that growth you were just talking about, though. Rochester's stadium, unless you *are* willing to put several million dollars into it, is too small to allow for much growth from that base, and the town itself is not growing, where San Antonio is. Plus, I'm not willing to concede that you can't draw from the heavily latino communities in South Austin (which I consider a better bet than a Rochester team drawing from Buffalo).

 

Is it easier to go from 12k to 18k fans in a smaller market, than it is to go from 18k to 24k in a larger market? The Galaxy averaged 17,632 in 1999 as a hint.

Look we can be the A-league, that's fine. But don't lie to me about it when it comes time to talk about how much MLS is growing. If everyone is content with MLS being small potatoes in perpetuity, then have at it. I'd like for the league to grow into something better than this. If I should give up on that, let me know and I will.

 

Please don't go here. The points you were raising up to now were all rational and valuable, even if I did not find them decisive. But this starts to slide down the slope to mere prejudice.

 

absorb some clubs from USL