News: Rapids lost $1.3 million in 2012

Discussion in 'MLS: News & Analysis' started by JasonMa, Nov 29, 2012.

  1. JasonMa

    JasonMa Member+

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    Down from $2.3 million in 2011. Per tweet from MLSSoccer.com writer Chris Bianchi:

    (Hinchey being Rapids President Tim Hinchey, who Chris interviewed this week)

    I figured some concrete numbers qualified as MLS:N&A news. ;)
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  2. triplet1

    triplet1 BigSoccer Supporter

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    It's interesting, but the Rapids corporate structure is so balkanized I don't know what that really means.
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  3. youth=glory

    youth=glory Member

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    Rapids are actually a really good team to base other teams projections off of. No DP's/no kits sponsor so we know there money comes from "core business" and we know they aren't paying 500K plus for any one player. That and then a lower half attendance number. Makes you really wonder how many teams could possibly be in the red if the Rapids are that close to break even.
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  4. RapidStorm

    RapidStorm Member+

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    Attendance jumped approx. just 400 fans per game on average. EDIT: it's apparently too late for math for me, but I don't think that slight bump completely accounts for the $1m cut in losses.

    I just don't know where those cuts could have been made - no major sponsor deals that I remember, not many minor sponsor deals, and Caleb Folan's contract wasn't that huge.

    I also don't like the potential lesson that finishing a full 12 points worse than last year = $1 million less to shell out, but hey, it's hard to turn off the cynicism after following this team for so long.


  5. Totoro

    Totoro Member+

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    When was the credit union deal done?
  6. RapidStorm

    RapidStorm Member+

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    Westerra? In the 2010 offseason. I think they re-upped again this year, so maybe that deal included a bump in the sponsoring price, but I'd be surprised if that were so.
  7. Totoro

    Totoro Member+

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    Hmm, and certainly not a million bucks' worth or even close.
  8. yellowbismark

    yellowbismark Member+

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    maybe merchandise sales went up a little bit to go with the slight increase in attendance?
  9. ielag

    ielag Member+

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    Did ticket prices increase at all compared to 2011?
  10. youth=glory

    youth=glory Member

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    New coach likely on a cheaper deal. Bump in total tickets as well as overall cost? Maybe less travel expenses (no CCL right?)? Maybe a few lower key new sponsors in conjunction with a few re-ups with a slight bump.
  11. MLSFan123

    MLSFan123 Member+

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    Anyone have a guess as to whether this loss included debt service on the stadium? If so, this is a great number.
  12. RapidStorm

    RapidStorm Member+

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    We'll get more details in the soon-arriving articles, I'd imagine. But I sincerely doubt this includes financing related to the stadium, as in the past they've reported those numbers separately (for example, and I can't find the post, but it was reported last year that the stadium made a profit).
    Travel costs is probably the big element - no CCL, only 11 trips to the east (9 regular season + one to Tampa and one to KC for the Open Cup). Plus there's the other element of the CCL - opening up the stadium 3 extra times for minimal crowds.

    They slightly changed the pricing scheme from last year, but I don't know last year's ticket costs off the top of my head well enough in order to be able to say if it was a cost bump.
  13. Autogolazo

    Autogolazo BigSoccer Supporter

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    Any lucrative friendlies?
  14. tab5g

    tab5g Member+

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    Not being involved in the CCL shouldn't be a (significant) "travel cost savings," as Concacaf covers the travel costs (in part) of teams that participate in the the CCL.

    http://www.concacaf.com/staticFiles/7b/72/0,,12813~160379,00.pdf

    This is from the 2011-12 regulations:

  15. tab5g

    tab5g Member+

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    Exactly.

    There are likely several items that are off of the Rapids club books, potentially such as SUM disbursements, that this data doesn't paint a full picture.

    Although it does give an interesting look at year over year changes, assuming the book-keeping was consistent, and the reported figures are analyzing the same metrics and items from 2012 v 2011.

    Additional details, if they're made available would be helpful for any accurate or broader analysis.
  16. JasonMa

    JasonMa Member+

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    Swansea, but given the low attendance and some comments made in passing by FO people I think we broke even at best on that.

    The first response is the key though. KSE has sub-divided domestic soccer operations so much that the difference could easily be which column they put a given loss or revenue stream in for 2012 compared to 2011. All KSE teams run merchandising through Altitude Authentics, ticketing through Ticket Horse, and TV through Altitude, which are all separate KSE companies. then stadium ops at the Dick is a separate company, as is the stadium field comples outside the Dick.

    There was the big deal with Porsche for the naming of the executive suites in the middle of last season and the sponsorship of the Rocky Mountain Cup by local Honda dealers this year that would have been added to the full 2012 season.

    Regardless, I think it's safe to say that KSE's domestic soccer ops are profitable.
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  17. RapidStorm

    RapidStorm Member+

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    Vs. Swansea at DSGP on a Tuesday night? Your guess is as good as mine as to the profits, but I'm not expecting it was much.
  18. triplet1

    triplet1 BigSoccer Supporter

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    That's a great and helpful description. It wasn't until you posted something similar some time ago that I really looked at the Rapids structure, and, to me, it's one of the most difficult to penetrate in MLS because there are so many affiliated Kroenke companies involved. To be clear, I'm not suggesting there's anything inappropriate, or even all that unusual, in all of this, but you need a lot more information to really figure out what's going on.

    Still, I think it's fair to work on the assumption that the fact they would bother to announce showing less of a loss means it is a good thing and I appreciate you posting it. And, while it's often decried as wishful thinking, personally I see more people in the seats. If true, that's a better thing.
  19. OleGunnar20

    OleGunnar20 Member+

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    [​IMG]
    this is something i just put together and is relevant to this thread.​
    i used the HSV Portland study as a baseline for Average Ticket price. in 2007 they had the league average ticket at $22.50 so conservatively i've put the "average" team's ticket price at $25.00 and tried to place the other teams around that average in a way that makes sense based on what we know of ticket prices, demand, other average ticket prices from the HSV Portland study, and teams who have opened new stadiums.​
    i have also assigned each team a % PAID, either 95% or 90% or 85%, based on %CAP and demand for tickets (higher demand teams probably give away less and vice versa) plus factoring in any history of "papering" (Montreal).​
    also the HSV Portland study established that teams kick in 33.3% to MLS.​
    now obviously these numbers are not meant to be exact and taken literally. teams also have concession, merchandise, and premium tickets to add to game day revenue plus sponsorship and other incomes for their total revenue. however, given that the only assumptions here are made in relative terms to other teams (avg ticket price and % paid) we can at least get a decent sense of how teams stack up in revenue in relation to each other.​
    and again i realize that any one average ticket price or any one assumption about % paid might be in debate as to whether it is exactly like that in real life but i think i've done a pretty good job of getting those two factors correct in relational terms of one team to another.​
    so we can see that in relation to other teams Colorado would seem to fall into a ticket revenue category below the league median and in a tightly packed group with 7 other teams in the $5M-$6M range. add in the fact they also have no shirt sponsor and likely below median "other" revenue Colorado with a loss of $1.3M would seem to be one of only very few teams that are loosing money based on some basic assumptions.​
    the other interesting thing is to see the disparity in what teams are contributing to the league. i don't see how Seattle contributing 7x or more what Chivas contributes, while being constrained tot he same salary cap, is a sustainable situation. but it does appear that overall the team's contributions to the MLS pool are closer than ever to actually covering the overall salary cap expenditure. there are still the usual suspects that are contributing well below what the median team (Philly) is contributing. but 9 out of 19 teams nearly covering the $2.88M salary cap is a pretty good sign especially since they outweigh the 8 teams who are taking at or more than $1M in "charity" from the other teams in the league to "cover the cap".​
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  20. Howard the Drake

    Howard the Drake Member

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    It's also possible that the paid attendance was a larger percentage of the announced/tickets distributed number.

    ie.,

    2011: 14,838 announced, 13,000 paid
    2012: 15,175 announced, 14,000 paid

    (not suggesting that the Rapids were comping over 10% of the crowd in 2011....just throwing out numbers.)
  21. RapidStorm

    RapidStorm Member+

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    Based on anecdotal evidence (read: guesstimation of filled seats from Rapids fans on Bigsoccer), I'd suggest it was the opposite and that more comp tickets were given out this year. Or it could just be we had a lot more no-shows. Either way, your guess is as good as mine re: comps.
  22. Allez RSL

    Allez RSL Member+

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    Interesting table. You might want to be a little more open to adjusting the paid attendance and average ticket price figures, but this seems like a good start.

    One quibble about the quoted paragraph, though. Didn't the Portland study seem to indicate that the cap is covered by a capital call, and not by sharing ticket revenue? I realize it's all fungible once it's at the league office, but this distinction is important if we're going to assume some sort of animosity felt by the big-revenue teams towards the small-revenue teams. If the shared funds are disbursed to cover salaries for all teams, you might have a point. If instead the shared funds are viewed as profit in the cooperative, combined enterprise of MLS of which all team owners are investors, I don't see Seattle's I/O being that upset about it.
  23. Totoro

    Totoro Member+

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    One of the KSE companies probably made pretty good bank of the USWNT friendly, but it probably wasn't the Rapids. (I'm guessing the stadium must fall under a different company?) The tickets all had a hefty "DSGP convenience fee" -- it was $10.75 on each on my seats.
  24. Totoro

    Totoro Member+

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    I'm guessing the average ticket prices are too high for more than one team. We have good evidence its too high for the Rapids (based on their disclosure of their season ticket holder list), and while I know we all like to think of the Rapids as being a thuggish, boring, stagnant failure as a business, soccer team, and entertainment option , I think in reality they aren't that atypical of the league.
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  25. OleGunnar20

    OleGunnar20 Member+

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    well in the 2007 study the average ticket price was 22.50 .... so raising the average to 25.00 for 5 years later is pretty conservative.

    as for Colorado their average ticket price in the 2007 study was 18.00, below the league average so perhaps i should have put them at 22.50 instead of 25.00. however, doing so would only re-emphasize the conclusions. Colorado losing money is among a very few number of clubs that would do so.

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