Soccer By Ives is doing a poll about the next city should get the next new MLS team. http://www.soccerbyives.net/ Aaron
I like that idea. Instant rivalry with the Galaxy. We would just have to ditch the USA title. ChivAZ FC sounds okay to me.
Who is going to pay the $20k+ Air Conditioning bill for each home game at UofP, in addition to their $30k+ stadium rental fee? I would love to have pro soccer here, but UofP won't work for MLS unfortunately...
At 50K per game, with expectations of 8000 people, the break-even is only 6.25 per person. Pricing structure is a wonderful thing when created correctly.
Well, I would play for free. But if I were the team owner, I would expect operating costs to be about 1.790 million per annum. 1.04MM paid in salary, rent fee and A/C =$50k for 15 games. If I could sell 8 thousand tickets per regular season game (approximately 15 home games), at three different price points than 2.079 million could be generated to cover these costs. Three different price points at the North section and south section @ $25, with approximately 32% and 6%, respectively. The majority of the tickets (45%) on the east @ $15. And the west would be reserved for friends, family, media and VIP @ $30 but realistically (freebies), half would sell, so $15 for 17%. The 1.04 number was generated by paying 20 players $1000 per week for 52 weeks. This does not take into consideration team goal bonuses, and other various factors that could increase operating costs, such as marketing and so forth. However, the revenues don't include other sales such as beer, parking, and merchandise. Based on the earlier numbers, a profit margin of 15%, is generated. This type of profit margin is reasonable by all accounts. Thanks for alerting me to the other operational costs. Your thoughts have been considered, please feel free to post more as I am new to the business.
Many professional sports franchises do not make money. As long as they are not hemorraging money, they are jewels of the rich and famous.
I'm the least prepared to banter finances with you, but a few data points for you to consider: You start with a debt of $35 to $40MM to get to play with MLS - franchise fee. I checked a couple team salaries. Don't know if they are high or low for the league or even accurate. I found San Jose at about $2.1MM and Chicago at about $4.4MM, (18 -20 on senior roster plus up to four on developmental roster) Last, I'm not sure about the directional seating price variances, but we will be playing inside so sun light shouldn't impact quality of sections. There should be plenty of cervesas sold for the positive side of the ledger.
Is that franchise 30-40MM fee a one-time cost or annual? Seems a bit outrageous to be an annual cost; so that could be spread out over 100 years? Good barrier to entry? Why? None needed! Well those teams have been established, and seek to play their players well. A better figure for comparison would be the first year team salaries. Chicago is the third largest city and San Jose is the 10th according to my figures. Phoenix is 5th and with that salaries could actually run about 3MM per year. So check the figures for the Sounders and Philadelphia. No team can be sustainable if they can’t compete in their own stadium, e.g. AZ Cardinals. A team will earn respect if they can manage to play is their specific stadium. The costs to construct and manage are not cheap, but done right can seem low. Many government municipalities help with funding, so effectively winning taxpayers support. Reach 11 is a taxpayer project! As I am currently living in Seoul SK, with a country mass about the size if not smaller than Arizona and a city of 10MM people, is a country made up of 15 leagues. The first game of the season, two weeks ago Saturday night, had 15 thousand + fans. The directional seating is common in football here as in other countries. Supporters of FC Seoul sit in the seats to the North, East and West. The west side is made of friends, family, VIPs, media and others. The East side (cheap seats), consist mainly of FC Seoul Supporters, but many are just football spectators or a small portion of the away team supporters. South side seats are the away team supporters, with the flag wavers and drum beaters, as is on the North. The proportion of the lower section seating filled was about 40% in the south. The North section for the home team lower section capacity was 90%, with partial capacity filled in the upper section. The long east side, lower level was about 80% with partial capacity in the upper section. The west side seating was about 20%. Total Stadium capacity is 68 thousand. The ticket revenue brought in for the first game is about $220 thousand. Other revenues of importance include all the other promotional events going on around the stadium. Four days later, Gamba Osaka from Japan played FC Seoul on a Tuesday night kickoff at 8PM with a similar crowd in the AFC Champions League. In addition, the stadium as a spare manicured grass ground, that they rent. The cost converted with the current exchange rate is about $140 per hour. This is a marvelous place for me, as just an amateur player who is lucky enough to play on a team that occasionally rents the field. I usually play at World Cup Park which is large park across the street from the Stadium, and frequently pass the spare field, to know that it is being used by other teams. Also used by younger players, so just running the numbers for a Saturday is $1260 in revenue minus 300 for employee wages. The stadium also has sort of a strip mall built in inside of it; which has a type of Wal-mart, a food court, a movie theater, a wedding hall and a museum. As I stated above, the directional prices have to do with supporters. Sunlight isn’t the issue; the use of the Cardinals stadium is the issue. Besides, that project was extreme waste of money for bragging rights. A more sufficient approach could be possible to building a stadium with much lower operating costs than the 50K per game A/C and rent fee. I wonder what the NPV for the Cardinals Stadium Project was without the sale to the University Of Phoenix. Let us not talk about UoPhoenix Stadium, it is out of the realm, a more suitable alternative would be the ASU Sun Devil Stadium or Soccer Fields they have there, or even Grand Canyon State University or even Reach 11 Sports Complex. Damn, they could put up bleachers at McDowell Mountain Park or Chaparral Park and tickets could go really very cheap!
Thanks for all the info. I had no idea of the global seating traditions. I've not grown up around soccer. I'm pretty sure that the mls franchise pricetag is a one time fee. I assumed that it is all due up front, but not sure about that. I do believe that the local municipalities will be glad to help in some fashion. We have a couple groups working to get a team here, but they need to find the big moneyman. As far as stadiums go, we do not now have a proper platform, no soccer specific stadium that mls requires. I've seen matches at all the venues you mentioned, and none fit the bill to be successful. UOP and Sun Devil Stadium are much too large. GCU is much to small, local high schools have better fields.
You have made some good points so I would like to touch on them: Proves traditions are catching on in the US. Seating Traditions in MLS, try; http://en.wikipedia.org/wiki/U-Sector http://www.section8chicago.com/jm3/ Grown up around soccer: That’s a major problem-but with the rise in youth soccer, things are changing. I began playing soccer at age 4 in South Africa. After immigrating to the US, my father put me in a club in Kansas City, which I left after one season because of reasons of the quality of soccer. I began playing in the SUASL in Jan 2006. After about 20 years of not being associated to any teams. I played backyard sports, such as baseball, football, basketball, (skateboarding), tennis, etc. At ASU, they only have a women’s soccer team, so no luck there. But here in Korea, fields all over the city have youth to adults playing every weekend. One of my professors associated soccer popularity to countries that are poor. It makes sense, because the cost to play is very cheap, almost nothing. But if you look at gridiron, baseball, basketball they all have relatively higher costs to play. Basketball for instance, could possibly be the cheapest, but someone has to at least dole out the money for a rim and board. With soccer all you need is a rectangular area and two goals in a generic sense; at practice in my youth we used gallon size trash cans in park as the goals where if you hit the can you score. MLS FEE: The barrier to entry of the MLS fee is reducing competition. Competition is what makes the game popular, I am pretty sure things can be negotiated about the fee. Seeing as how the MLS clubs are not making any money; except Galaxy via Beckham which he’ll be gone soon enough. I also read that many of the premiership clubs that have been around for years aren’t doing well making money. The MLS reason may be that they have a pie in the sky dream to pay players comparable salaries to those in the NFL, NBA, MLB (with low attendance rates salaries will drop), and NHL (did you forget about those strikes years ago)? NFL is a tough sport and for many not a long-term career. NBA players with their large pituitary glands results in a lower life span, therefore require additional compensation. I like numbers, so I constructed a table to resemble the average soccer player earning. It doesn’t post correctly so I’ll explain: Salary Increase changes over a twenty year period; max compensation paid in the 12th year, in the amount of 250 thousand, starting base salary is 40 thousand. Total 20 year career salary earnings of 2.423 million. Average team cost range for 20 players is 800,000 to 5 million. 800,000 being all base salary players and 5 million being all max salary players. My estimates using my number percentages and my expectations of footballer earnings. These guys aren't super-rock stars in a band of four, they are just atheletes that play on a team of eleven. MUNICIPALITIES: I also found a study that was done by two Economics professors at the University of North Texas, as a cost benefit analysis for the City of McKinney or the Stadium for FC Dallas showing the city would have to carry debt for 20 years in the construction of a new stadium. Separately, the major benefits of a stadium are growth in various areas. Not only by providing jobs through retail outlets, restaurants, and so forth. The city receives tax revenues from the businesses who provide employment and consumers who frequent their establishments and of course, employees. Stadiums: What is a proper platform? Given the associated costs and the way the MLS is run, I think I can create a better functioning system. I think the major problem with the League is their approach to expansion and the division within the organization. Last Personal Idea: Soccer Universities, not universities that have a soccer program. This requires young players, recent high school grads and college grads, preferably high school. They join a team after graduation and provide service to the teams owners for one, two, or three years, like the army for example; getting paid a small stipend and SPB (Soccer Play Bill) for when they decide to go to an actual university. So, for say 3 years, they live in a dorm based facility, where they eat, sleep, and play soccer. This is essential to having a good soccer team, in any case. What is the point of finding players at traditional universities with soccer programs where they eat and sleep books, and play soccer? The foundation for success in soccer has not yet been written and the MLS organizing committee is not capable. The founder is just a law suit, and the various owners are just wealthy. Where is the passion?