Quakes moving: Is it AEG's fault?

Re: MLS is a Real Estate Business

Cadav:

You know how irritated I get when it comes to the FC Conspiracy 13 over at SJE boards, and I also think that what many ppl fail to take into account is that AEG has always said that it is not the best owner for this market/team. It's like the person who falls in love w/ someone else, who has always stated that, no... they're not available emotionally, and yet said person can't believe it when they get jilted.

Anywho, AEG had a conflict of interest in the SJ market: they're an entertainment company w/ eyes on controlling entertainment venues. Their style of venue is actually cornered by Clear Channel in the SJ market. In order to compete economically w/ ClearChannel, they would need complete control over the venue, something that neither the City of SJ nor SJ State could rightfully write off.

And after so many years of losses, AEG felt that they could/should demand a cut of a future projects in their industry in the Bay Area; after all, they kept the franchise afloat for 3 years. Essentially, AEG wanted to pull a Spartan Shops on whomever would take over the team: a % of revenue from the venue.

Well, as we all know, there's no way that an MLS franchise w/o t.v. $, w/ neglible merchandise $... can compete when a % of its income goes to a 3rd party. And that's where truly the deal fell through. It wasn't the economics of the stadium. According to all parties, that was taken care of, to the point where they weren't worried about a public vote (for whatever reason).

Now that AEG is out of the way, what do we have? A market that is controlled by Clear Channel... BUT, the A's owner has a vested interest in downtown SJ real estate and making his investments there worth more $, and bring them additional sources of revenue. For him, the competition from Clear Channel isn't so much of a factor b/c he would have "subsidiary income" from other investments that would benefit from development downtown.

In short, AEG really was the wrong, wrong owner for this franchise. Their departure opens up the market for a legit owner to come in. It's really no coincidence that as soon as AEG was going to bail, all this heavy hitter stuff came to light. Groups are already jockeying for position.

This is a good sign, as it shows that it is manageable.

 

Re: MLS is a Real Estate Business

How much of the gate goes to the other teams that played? What does it matter if you drew 30,000 instead of 15,000 if 50% goes to the other teams in the double header?

 

Just because they had an offer doesn't mean they needed to accept it. Lamar Hunt has turned down two offers for KC so far so its not like AEG needs to just up and sell the team just because someone is offering them money. Did the group offering the money have the financial backing to incur the loses that would ensue for the next few years? Did they have the financial clout to be able to get a stadium deal done in the city? Did they have the business acumen to make the sport work in the city? If not then you have AEG turning the team over to possibly another Horowitz; and I doubt that they want to do that anytime soon.

 

Re: MLS is a Real Estate Business

Oh my god, what a bunch of bullsh!t. When your event piggybacks the main event, the main event is not a "promotion." Just STFU already... Christ.

 

It is NOT AEG's fault!

How is it their fault that NO ONE wanted to buy the Quakes? 10 years was enough time to find a buyer, and no one was interested. When it was too late then there was interest. AEG ALWAYS has stated that they had no interest in owning the team, it has always been temporarily.

The league as well as SJ fans should feel grateful that Uncle Phil took them in, being the orphan child that they were and still are....

Stop blaming AEG.

Thanx........
2005 MLS CUP CHAMPIONS
LOS ANGELES GALAXY

 

Re: MLS is a Real Estate Business

You'll have to iscuse Cadaver. I believe he's starting to confound regular MLS double-headers and promotional games that teams w/ SSS are putting on.

Whereas back in the day at the Rose Bowl, there used to be double-headers, now at HDC we have big ticket friendlies that are sold in combo w/ MLS games. Chicago will do that this summer w/ Chelsea (rumored to be the opponent for the all-star game).

I know it sounds like I'm making "iscuses", but I know that I was thinking along the same lines...

 

Noah, Honore,

Yes outliers (like Chivas' game at the LA Mausoleum) do throw off the attendence averages. Fair comment.

Of course, once you go down that road, you begin looking at other out-liers. I suppose you could argue that SJ crowds that came out to games against LAG were there only to hate on LAG and Landon and not because they supported Quakes. (If they really supported Quakes, why weren't they there for the Colorado games?) So if you throw out those full houses against LAG as non-representative out-liers, then the "real supporter" average for SJE falls pretty flat.

But fireworks? Is there some reason Quakes were not allowed to have fireworks if that brings in a crowd?

And we will never know exactly what Chivas' "take" was at the Mausoleum, but I would not be surprised to find that their net revenue there was higher than the net revenue at many of their games at HDC.


1. I very much agree that the reason the team moved had more to do with the fact that AEG could not put together an HDC-like deal than with fan support. While fan support was not spectacular, it was in the mid-range of MLS franchises. Nothing to be ashamed of.

2. As to whose fault it was that an HDC-like deal could not be cut with SJSU, none of us will ever know for sure. In any deal, it "takes two to tango." Apparently AEG believed it needed venue control to make the whole SJ operation workable, and SJSU/Spartan Shops did not see AEG as offering enough to make it worthwhile to cede control. Whether one side wanted too much or the other offered too little is probably a matter of perspective. One would need to be privy to some pretty detailed information and market studies to make that judgment.

So, no, I never have subscribed to the "its all the fans' fault" school of over-simplification. But neither do I subscribe to the theory that AEG was out to do SJ in from day one. It simply was the case that AEG could not achieve a situation where their particular business model could be implemented at a price they were willing to pay. That doesn't make them evil.

One last comment on the "Clear Channel has the Bay Area concert circuit tied up" theory as to why AEG pulled out. I don't buy it. The way the big name concert groups get booked is by the tour, not by the event. In other words, the promoter offers Band X an "8 concert package in the following cities." AEG could have gotten big names to play in an AEG-controlled venue in the Bay Area becuse they could also offer LA (Carson), Chicago (Bridgeview) and eventually New York (Harrison) as well. That makes for a pretty attractive tour package, and I don't think AEG would have any qualms about going head-to-head with Clear Channel in tour bookings. But all of that obviously depends on venue control, and that's what never could be secured.

 

Because traditionally those were the best games that MLS had to offer... both in quality and passion. Not to mention that they were the only games that were actually advertised well (outside of the Chivas game late in the season).

Not disagreeing with your post, just offering a potential answer to the question

The question really is that if we had 25,000 a game average, would we still have a team? Unless that actracted a new owner, I'm guessing not.

 

Considering that they drew similar crowds for games against Chivas USA, FC Dallas, and Real Salt Lake, it's hard to call the Galaxy games outliers.

Yes. Fireworks have not been allowed at Spartan Stadium since Opening Day 2001 when the wind blew the ashes directly over the crowd and set people's clothes on fire.

The standalone attendance figures that I calculated did not exclude fireworks games. The Quakes were 4th for standalone games with fireworks games included.

If you're using attendance as a proxy for revenue, the doubleheader figures have more merit than if you're using it as a measure of interest in the MLS team.

That's the only reason I bring up the "4th in standalone attendance" figure. Actually, I don't really bring it up, but I defend it when it comes up. It's simply evidence against the idea that the Quakes' attendance was particulary horrible and that they had to be moved for that reason.

If the Quakes drew an extra 3,000 people per game at a $20 average ticket price, they would have had an average of over 16,000, which pretty much everyone agrees is quite respectable by current MLS standards. But the added ticket revenue would be just about $1 million (a little less). Would AEG have kept the team in place for an extra $1 million per year? I'd say no. And in reality, it wouldn't even be that much, because $20 is an overestimate of the average ticket price for the last 3,000 tickets sold.

 

Posts like this erode [some] Quakes fans credibility:

Really? Is the BCS-worthy SJSU football program suddenly unable to play at Spartan? Exactly how is the "pageantry" of NCAA football lessened by any of the so-called renovations?

And this is why mouthbreathers like this aren't involved in real estate. Here's hoping that this guy isn't poisoning the gene pool.

Exactly how was this done? What billionaire businessman gets rich eroding the value of his firm's assets? If in fact the "value was dirven down," as you claim, there likely would be more bidders for the franchise, as it becomes more affordable for a potential buyer. You sir, are the definition of a conspiracy theorist.

[To JD and all the other stupid Quakes fans that don't understand]
For the MILLIONTH FVKCING TIME: Landonpvssy's rights were held by Bayern, NOT MLS. Bayer Leverkusen had the right to do whatever they wanted to do with his rights. AEG had no control over the fact that Landonpvssy was a coward and acted like a pvssy the second Bayern recalled him from what was tantamount to a loan. No one at AEG could have forecast that he would pvss out of his contract and embarras American soccer in the process. Got it, you stupid fvkc-o?

So, did AEG want the team in the first place, or did they do you ingrates a favor by keeping your team in place longer than they wanted to do so? Was it their choice to put the team in SJ in the first place? If you don't understand these realities, then you are simply a moron. Period.

 

You don't even know what team Landon played for, but don't let that stop you from berating people on the Internet.

 

My apologies, Noah. But do you deny that Bayer Leverkusen owned his rights, and not MLS, as [some] stupid Quakes fans purport as part of their conspiracy theories against AEG?

For that matter, you still haven't bothered to answer any of my previous questions, but I suppose it's your right to avoid doing so...

 

I don't care to rehash the Landon argument. You seem to despise him more than I do. I find it a bit funny that you think nobody at AEG could have imagined that he would want to quickly return.

I consider my first sentence in post 142 to be a sufficient response to your questions. I don't appreciate your general tone and don't feel the need to respond to each point in your rants.

 

Abso-fooking-lutely.

At that level, things start to kick in, big time:

1. sponsorships. It becomes that much more attractive to a sponsor to have their product displayed for so many more ppl. That's free $$. Plus, more games would be shown on t.v., as SJE would be something that the league would want to showcase, which would make sponsorships even more attractive. (Suddenly, Wells Fargo is now advertising to more than just 25K but to the entire nation.)

2. AEG's lease w/ Spartan Shops actually had % of concessions kick-in at a significant level at around 16K fans. Under 16K it was negligible. At 25K, the ancillary income becomes much more lucrative.

3. I could go on and on..., but honestly, if the Quakes were averaging season-long what they averaged in the fall... they would still be here, as it the extra income makes it that much closer to pulling together a fiscally sound business plan.

 

No, I don't despise him, I merely think that anyone making the kind of money he made to play a game could figure out a way to fit in. I merely think he behaved poorly, and very much like a coward.

But to your point that no one could have predicted his return, that may be debatable. It's the conspiracy theorists that somehow try to make it appear that AEG conjured up means to "steal Donovan" from the Quakes that I can't tolerate.

 

If that's the case and since it was proven with good marketing we could indeed bringing between 16 and 25k, then this is squarly AEG's fault; if AEG would have spent some more marketing dollars we'd still be here.

 

But everything that "JD" posted seems to be cobbled together from other posts by a few Quakes fans. The summation of reading the same, tired crap over and over again from [some] Quakes fans is reflected in that post.

I truly feel bad for the truly HARD CORE Quakes fans. I understand that many of you SHOULD feel raw about what happened, as would I if it happened to my team. But there has been loads of revisionist history written by [some] Quakes fans, both before and since the move to Houston; A lot of it [the Landonpvssy issue, SJSU, etc, etc...] was nicely summated by "JD."

 

The people that came to see the Landon/Galaxy games - but for a couple hundred of you - were Quakes fans.

The fact that they intended in great numbers speaks to the rivalry and the amount of promotion. But it also says very favorable things about our market. Where else would people give a crap of that size? The "We Hate Landon" games were one of the biggest highlights of this entire MLS season. Fans here enjoyed playing the part. That's a big plus for MLS and a big plus in our column.

Now, a significant number of local fans who care little about the Quakes DID attend the Chivas USA games at Spartan. But still it speaks to the value of this market: San Jose is a place where Chivas USA can ply their joke and pull a crowd.

Finally, I hear a lot of dittoheads talk about our crowds against Colorado, etc. I've been to MLS games all over the country. Hell I've seen the Crew at Home Depot Center at least three times - while die-hard Galaxy "fans" chose to eat their tickets (corporate seat blocks?) Chivas have a lot of invisible afficionados and Revolution fans are far more sensitive to weather than Patriots fans. Colorado is a morgue. New York is a joke. Dallas and Columbus have put lie to the SSS theory. By comparison with the rest of the league, our crowds are healthy and lively. Weeknight regular season games typically suck for everybody.

I find it really hard to talk about attendances in MLS because there are so many factors, (how do the Wizards corporate sales and p.r. teams and advertising budget compare to the Galaxy's?) so much BS in the numbers that it's really difficult to make comparisons, aside from what we see on TV and what we experience live.

All things considered San Jose has a a proven ability to draw, a fan base we can be very proud of and positive attendance and ticket sales trends. Too bad none of that is really a factor.

The real deal is AEG inherited a market they had no interest in. They mismanaged it accordingly. They didn't see a near-term payoff worth expending effort in San Jose and that trumped their concern for soccer and soccer fans. They know they have credit to burn with US Soccer, MLS and US fans everywhere but here, and they're burning it.

 

Re: MLS is a Real Estate Business

Rolling your eyes repeatedly can make you dizzy. When you average 13K for MLS GAMES ONLY, it speaks for a fan base. No gimmicks, just good soccer...which Houston now gets to enjoy.

 

No.

You don't get from 13K --> 20K solely on marketing.

You get there through controlling the dates of the venue. For teams w/ a small stadium and the ability to host a 7/4 game that will sell-out, you automatically force fans that want to go to a soccer game some time in that time frame... to buy a ticket in advance. Which forces ppl that are dead-set on going to a game b4 or after 7/4... to buy their tickets in advance.

Which forces partial season ticket holders to consider upping from a 5 pack to a 10 pack, which includes 7/4. And on and on.

Then you throw in a quality international friendly, charge a premium price that includes a 2nd game (a choice of 3). Bam. You've just started the above cycle all over again.

Of course, advertising does work, but it doesn't have that big of a pay-out. Tie ins to youth soccer do work, but for SJ, that's only the fall, partially b/c of the constant turn-over of staff, constant turmoil in the front office, etc.

Another way that you get higher #s is by having the right facility. Spartan was just a tad too big and it was about 4 decades too old. It comes off as minor league and it's a dump. Quaint, but a dump. And the field's too small.

Just on the stadium alone, and not the control of dates, I'm confident that SJ would get another 2K/game. Throw in the added season ticket sales (steady income immune to the caprices of the weather, albeit not too much of a problem in SJ and coastal California), control of dates, etc. and you've got yourself a healthy, healthy franchise.

 

Mere stability/continuity of management: add another 4-5K.

But this guess assumes the kind of on-field product we've had for the last four years -and we were rather lucky in that regard. It's no surprise to me that Colorado and Columbus aren't big draws, even if they have players that interest MLS cultists like me.

 

I somehow have trouble blaming the city or the league, when it comes out several days AFTER the team moved that their is a potential owner in Lew Wolf and $90 million on the table for a new stadium. They say it cost them extra money, but they will be spending far more money getting a new team off the ground in Houston, then they would have keeping the team in San Jose with an already solid fanbase.

 

I don't buy Spartan as an excuse as to why people didn't come to games... it's not that bad a place to see one.

You do have a point on international friendlies not coming to Spartan (probably due to field size), but the games we have had have been poorly attended (in my experience). I don't think we're talking about many (if any) additional fans in San Jose based on that (unless we could get one of the big 3 or 4 teams which is unlikely).

Ability to control dates hasn't been too much of an issue; as many people have already mentioned we already had the most Saturday night games of any team (I've never actually compared myself). And they're almost always at 7:00. As long as we we're playing on a Saturday night we tend to draw fairly well.

On a side note it's really hard to type in the past tense