Archive for April, 2013

Greed Is Good: Why MLS Must Feed The Monster

How much is your team worth?

"How much are you gonna spend on a ticket son?" "Not enough"

“How much are you gonna spend on a ticket son?” “Not enough” (Photo courtesy: MLSReserves.com)

Alex Olshansky with Part I of II on assessing franchise value in MLS

(Twitter) (Blog)

Real Salt Lake owner Dell Loy Hansen recently stated in a Salt Lake Tribune profile of him: “One thing that’s black and white: I will never make money running this.”

Mr. Hansen is right.

And he is also very wrong.

He is right in the sense that vast majority of MLS teams run on a net operating loss. Based on that comment, RSL is likely among that group. But here’s where Mr. Hansen is wrong: hardly anyone in world soccer makes their money on operations. It is not a cash-flowing business. It is an asset-appreciation business.

Below is the most recent financial table of EPL clubs compiled by The Guardian. QPR and Swansea were excluded as some information was missing for them. Also, The Guardian’s formula was slightly altered to make the numbers more uniform.

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As is the case in MLS, most teams are not making money on an operating basis.

Champions Manchester City lost nearly 100 million pounds (~$150 million), on revenues of 230 million.

And yet, according to Forbes, they are currently worth approximately $690 million.

If MLS aspires to be one of the top leagues in the world, as Don Garber has stated, then the league has a long way to go to resemble the EPL, the current gold standard of global soccer. Manchester United—by itself—is worth approximately three times the entirety of MLS.

So how does MLS stack up? With information so opaque, estimating a team’s finances and overall value is—at best— educated guesswork. To date, the most comprehensive attempt to value each MLS team was done by Forbes back in 2008.

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For whatever reason, Forbes has not put out anything since.

The league has changed dramatically since then. For example, this piece of info from the 2008 article on “struggling teams.”

..believe SportingKC has done just that.

..believe SportingKC has done just that.

“The Kansas City Wizards are playing in a minor league baseball stadium and had just $5 million in revenue.”

One factor that makes valuing MLS teams so challenging is inextricable business relationship between the teams and MLS/SUM.

Among the peculiarities of this relationship is that the league—not the team—owns each player’s contract.

Additionally, SUM negotiates the sale of World Cup broadcasting rights in the United States, organizes international friendlies, etc. and profits from these ventures may or may not be distributed to owners of MLS teams. Therefore, to simplify matters, this valuation only takes into account revenue earned by each team. It also allocates any revenue from league-wide sponsorship deals (Adidas) equally amongst everyone.

Match day revenues were calculated based on average ticket prices from tiqiq.com and a blend of average attendance from 2012 and the first games of 2013. This value was “grossed-up” to account for non-ticket match day revenue. This calculation is based on guidance from a 2009 document (login required) prepared when the Portland Timbers were pushing for public funding for a stadium. The gross-up factor is lower for teams without their own soccer-specific stadia.

Television, with the exception of the LA Galaxy Time Warner deal, was allocated evenly across each team.

Team-specific sponsorship was generally limited to jersey and or stadium deals. Local and smaller deals could not be tabulated as those specifics are not publicly available.

For example, from the profile of RSL owner Dell Loy Hansen, he mentions that he expects RSL to generate approximately $10 million in sponsorship revenue.

But a contradiction?

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On Brentford: The Cruelty Of The Beautiful Game

Agony.....for now.

Agony…..for now.

Zack Goldman on a treacherous Saturday for his Brentford.

Football is known around the globe as “The Beautiful Game,” but its capacity for pulchritude is undoubtedly matched by a penchant for cruelty.

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http://www.youtube.com/watch?v=LF8dLCdgdRg

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I live in England and work for a club in the lowest rung of the Football League.

My truest of soccer loves, however, resides miles away in a quiet corner of West London. Brentford Football Club, the Bees, are my poison of choice, a cornerstone of the local community that prides itself on being a family club—one that punches above its weight, but doesn’t weigh a lot to begin with, which has given rise to its self-spun moniker “the Barcelona of the lower leagues.”

Long lovable doormats and one of the last remaining properly fan-owned clubs in the professional football pyramid, Brentford has undergone a bit of a cultural shift in the past two years. Its shareholding masses (of which I was a member) agreed to relinquish control to a committed benefactor whose sights are set on transforming the Bees into a more prominent piece of the London football jigsaw. Plans for a new stadium were drawn up, the wage bill was increased, and, most importantly, a new manager was hired: One Uwe Rösler, a bald, brawny, disciplined, and yet remarkably silly—by any standards, but especially by those for a former East German international—tactician who has created a squad with mettle, guile, and something rarely seen at Griffin Park: lots of talent.

The Bees have morphed from a club settling for mid-table mediocrity in League One, the third division of English football, into one doggedly pushing for promotion and scaring teams not only in our division, but much higher up the ladder—like Chelsea, whom we were minutes away from beating in this year’s FA Cup.

Today, though, was much more important than Chelsea. Today, we could win automatic promotion to The Championship. The stage was set in Disney sports movie-like terms. Brentford versus Doncaster. Win and we go up. Lose or draw and we have to enter the playoffs, while Doncaster replace us as the team automatically promoted. All to play for—simple as that.

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Riverhounds: Pittsburgh Perseverance Personified

The Riverhounds ... cornered for a stadium no longer...

The Riverhounds … cornered for a stadium no longer…

Steve Fenn on the triumphant tale of the Riverhounds

A year ago, if trying to strike up conversation with a Pittsburgher about MLS, the US national team, or the local USL Pro club, you’d likely receive blank stares until the polite midwesterner figured out how to gently convey that they hadn’t the foggiest idea what you were talking about.

Last week some of those same people were disappointed that they were unable to attend the soldout opening of their USL Riverhounds’ new downtown home, Highmark Stadium.

Since their founding in 1999, the Riverhounds have been a foster child of US domestic soccer.

The club bounced amongst three high school stadiums, a minor league baseball stadium, and one hiatus year, 2007, in which they reorganized the club, with a stadium under their own exclusive lock-and-key being a major focus.

Enter Highmark Stadium they now have a permanent location just across the Monongahela river from downtown Pittsburgh, in full view of two high-traffic bridges, and a plethora of office windows. Here’s a panoramic comparison between the scene of Saturday’s opener in Highmark and a July 2012 Riverhounds game at Chartiers Valley High School.

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If these fields were MLS players, Pittsburgh just got Osvaldo Alonso in return for James Marcelin

The ‘Hounds have allowed their crowds to take full advantage of the view, placing no seating on the river side of the stadium. A byproduct of this being the occassional clearances that become fish food in the Monongahela River. Three balls reached the river alone on Saturday.

In 1999, the same year the Riverhounds were formed, the Columbus Crew, just 188 miles away, moved into the first soccer specific stadium in the United States. 7 years later, the only other soccer specific stadia in MLS were in Carson, CA, Frisco, TX, and Bridgeview, IL.

Lower-tier USL clubs actually followed the Crew’s lead more emphatically than MLS in those days. Between 1999 and 2006, six soccer specific stadiums were built in SC, NC, IN, TX, GA, and NY that today serve as the home fields for NASL, USL Pro, PDL, and NWSL sides.

Since 2007 this trend has reversed, with 9 MLS sides building their own homes, and a complete lack of new construction in the lower tiers.

But with MLS approaching their limit for soccer stadiums, the lower tiers are picking up the slack.

The NASL’s San Antonio Scorpions also moved into a new home, Toyota Field, on Saturday. Both lower-tier stadium debuts were sold out, and both clubs have expressed a willingness to expand seating beyond their modest initial seating capacities (roughly 8,000 in San Antonio, and 3,600 in Pittsburgh).

Kutney (front and center) bringing the 'Hounds to the forefront.

Kutney (front and center) bringing the ‘Hounds to the forefront. (courtesy Whirl Magazine)

At the center of everything Riverhounds is Jason Kutney, who serves as the club’s CEO, director of youth development, and right outside back.

After joining the Riverhounds in 2006, new ownership reorganized the club during a 2007 hiatus year and installed Kutney as player/CEO during that period.With all of the issues needing his attention from a front office perspective, Kutney hasn’t been able to practice as much as he would like with the team in 2013, but now that the stadium and all of its issues are taking shape he hopes to push for a starting position, and at the very least force his teammates to push even harder for their own playing time.

Despite Kutney’s absence from the squad for now, the Riverhounds have significantly upgraded their roster over the offseason, bringing in many players in their mid-twenties who were on MLS benches last year, like Jhonny Arteaga, Jose Angulo, and Mike Seamon.

On Saturday against their intra-Pennsylvania rivals, the Harrisburg City Islanders, the Riverhounds did score the first goal in their new stadium in the 68th minute, with a well-worked throw-in creating space for Matt Dallman to cross a ball which found Jose Angulo in front of goal, who headed it home emphatically.

But while the Riverhounds controlled the run of play for most of the evening, their two defensive lapses in the second half were punished as Harrisburg’s Sainey Touray got behind the backline to score in the 78th and in the 90th Lucky Mkosana scored followed a bad Riverhounds clearance.

Driving the atmosphere on Saturday were the Riverhounds supporters group, The Steel Army. Given a home behind the South goal in Highmark, their chants, drums, and cowbell could be heard around the stadium consistently. Not surprising that when Kutney laid out tentative expansion plans to The Shin Guardian (decision to be finalized after the season), his first priority was a larger, permanent stand for the Steel Army with a capacity of at least 1500.

Many of the 3900-plus on hand obviously hadn’t been to a professional soccer match before, since the ‘Hounds average 2012 attendance in Chartiers Valley was less than 1000. Most outside of the Steel Army didn’t seem to know when to get excited, as evidenced by commonly-heard wonderment over the distance goal kicks would travel.

This is a passionate sports city, though, and 93% of those surveyed at the game planned to attend at least 3 matches this year. It should be interesting to see how the crowds’ involvement and understanding of the game changes over the course of this first season in Highmark.

The day after the game, Kutney spoke with The Shin Guardian and said that “as a player it was difficult to watch and not be able to help,” but as CEO he was “just overjoyed,” and it was “hard to walk away from that game and care about the result on the field.” Kutney did say that he had identified opportunities for improvement in concessions, cleanliness, and other minor stadium issues, but considering that the stadium didn’t even get a dry run before its debut, the overall experience was very encouraging.

Indeed, it is rare that you’ll see a crowd so happy after a loss in the 90th minute, but that was absolutely the tone as the Highmark Stadium lights dimmed in preparation for post-match fireworks.

This was an important night not just for Pittsburgh, but for all of US Soccer. Soccer specific stadiums give the beautiful game a validity and presence that gets the attention of those who, like many Pittsurghers, traditionally forget about the sport, and a permanence for locals who love it, like the Steel Army and the droves of multicultural supporters in San Antonio.

Local success is a part of national success because everything in US Soccer is connected on some level. Kutney confirmed that Pittsburgh are currently negotiating an MLS/USL affiliation with one of their closest top tier clubs: Columbus, Toronto, New York, or Chicago.

A few years ago, it could be argued that Pittsburgh was one of the weaker links of professional soccer in the US, but Highmark Stadium and its debut on Saturday night show that is emphatically not the case today

Op-Ed: Thunder Come Sunshine & Soccer

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Joshua Wells, writing from Oklahoma City in the wake of events in Texas & Massachusetts

On April 19, 1995, at 9:02 AM, I was in bed. It was a rare sleep in day for me.

Normally I was out of bed by 6:00 or 6:30 in the morning, but I had tennis match that day, so I didn’t have to get ready for school or go through my normal routine. I was snuggled on the top bunk of one of three bunk beds in the bedroom I shared with my five brothers when I heard a boom and the house shook.

I guess most people might wake in a panic when they hear a boom and their house shakes, but those people aren’t from any of the great plains states in our magnificent country. It was April, the time of year when all of the nation’s weather meets in the middle of the country and creates some of the most beautiful, powerful, devastating, and magnificent weather events known to man. Where I come from, people head to the porch to watch the power of nature, rather than head to the cellar to take cover. My first thought was, “Oh no. That’s thunder. It’s going to rain and my tennis match is going to get cancelled.”

To the utter devastation of my home city, it wasn’t thunder. Instead it was the handiwork of Timothy McVeigh and Terry Nichols. They had created a blast that shook my home, eleven miles away from the detonation.

Our city was devastated by the death of 168 people. A daycare center was located in the Murrah building, and the lives of 19 children were snuffed out in an instant. The wounded totaled nearly 700. Nothing like it had been seen on U.S. soil since Pearl Harbor.

There was fear, devastation, and pain. Parents of friends were dead. Psyches were wounded. An entire city was shut down. Yet these are not the things that are most poignant to me about the Oklahoma City bombing so many years later.

What I really remember are the teenagers who ran to the site of the blast and pulled people from the rubble within seconds of the blast going off. I remember the donations of food, water, and money for victims and first responders…more than could ever be used. I remember my father, the pastor of a local church, spending days in a building near the blast site telling family members that their loved ones’ bodies had been identified and comforting them until they couldn’t cry anymore. I remembered widows in our home because they lived out of state and didn’t have a place to stay while they made arrangements for the bodies of their husbands, not to mention plans for their unexpectedly new lives. I remember a nation embracing a small dot in the middle of nowhere that many of them had never spared a thought for prior to April 19, 1995. In short, I remember the love, resilience, and power that was generated in response to the hatred and anger of terrorism.

Today, mass terrorism is not a new experience for this nation like it was in 1995. The events of September 11, and now, the Boston Marathon Bombing, have added to the tally of dead, broken, and scarred.

One thing I do know…the healthy response to terrorism is not hatred, fear, and trembling, but love, empathy, generosity, compassion, and strength. That response was reaffirmed this week.

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Op-Ed: Elevation

“The only thing that floats a heavy heart after an unspeakable act are the stories of heroism & unity. Keep rising to the moment Boston.”

For a concentrated few, the unfathomable acts that consumed a city Monday will leave a permanent residue.

Loved ones lost; limbs lost.

Life diverted to an uphill path not previously conceivable.

But choosing, choosing, to take a step back and inventory not only the horror, but the reactive heroism, you have to see the folly that a cowardly act like this is.

Boston Marathon Day, Patriot’s Day, in Boston is a day of reveling in community.

Community of the family, community of a city. On the surface, it appears a good target logistically and emotionally to strike. Hit a people when their guard is down, when their loved ones are near and in tow. When they’re outside any protective or containment structure and in a moment of what should be jubilation.

It seems a logical plausible selection. But it’s also an act of someone who really doesn’t understand community and the power of bringing people together.

Sport, local sport, is one of the oldest fabrics of a community.

It’s the centerpoint of commonality. A means of everyone within some geographic interdependent bond identifying with one another.

In times past, it was a singular guaranteed gathering once a week or month or over some time period. Heck, go to Ireland today and see the droves of citizens that come out for an all-day, no alcohol consumption allowed, stiff-bleachered accommodation “Counties” competition on a given Sunday.

In the present day, it, at minimum, envelops the white space with someone near you who would otherwise remain foreign. “Cold out there today, huh?” “Yeah.” “How ’bout them Giants, them Red Sox last night?” “Tough one.”

And the Marathon–in Boston, through history–is a fabric beyond burlap–the common mythology of the event being the swift soldier Pheidippides sent from the battlefield of Marathon to deliver and proclaim “Niki!” (“Victory!”) in the capital of Athens before collapsing to his death. Victory by the (hometown) Greeks over the Persions. The event itself–the “marathon”–commemorating the sequence of events.

The effort of one becoming the sacrifice of one for the elevation of the community. It’s the final event every four years at the Olympics for a reason.

Monday some actor, working alone or on behalf of some warped cause, sought to prick at the tranquility and communality of people gathered to celebrate and compete, thinking insecurity and fear would pierce and tear that fabric.

Someone forsaken by the community or perhaps driven to conspire with zealots. Think about that, someone whose philosophy of community  was “inspired” through the hatred of the very definition of it.

And the people, with a magnitude as great as the mythology and momentousness of the event itself, elevated itself through the sacrifice of a few.

Op-Ed: In The Arena of American Soccer

Arena coaching the Nats in 2002.

Arena coaching the Nats in 2002.

Lost in the email, Darius Tahir on “American” soccer.

In the Klinsmann-pile-on that was so last week, Bruce Arena made sure to get some punches in, saying in an interview with ESPN the Magazine: “Players on the national team should be — and this is my own feeling — they should be Americans. If they’re all born in other countries, I don’t think we can say we are making progress.”

As we so often do, the narrative immediately leapt to the simplest, most controversy-filled interpretation possible: Arena’s saying foreign-born Americans aren’t REAL AMERICANS, and this allows everyone to write or say their piece about ‘What is America?,’ ‘What does it mean to be American?’ and those other great topics we hated to write essays about while in school and love to talk about once out of it.

There’s another interpretation of Arena’s comments. Let’s use our ability to read and process context. Arena’s interview centers around his career and MLS. Now, Bruce Arena can presumably remember more than ten years of his life at a time — I don’t believe he’s Guy Pearce in Memento — and therefore probably has some recollection that Earnie Stewart played for him. It’s possible Arena is just wilfully cynical and willing to switch his views for convenience’s sake; it’s also possible he has a different point.

To wit: insofar as players born in other countries are taking the place of U.S.-born players, it (probably) means that MLS has not developed them. And while the occasional foreign-born American player is fine, over the long term it’s best (from a practical perspective) that MLS develop those players.

Has MLS succeeded? That’s another question, isn’t it? As Arena notes, if large proportions of the U.S. team is born elsewhere, it’s not a sign of progress. While Arena laughs at the idea of producing a Messi at this particular stage (“Unfortunately people think we’re supposed to have a Lionel Messi and win World Cups overnight.”), there’s a lot of room between the current state of the MLS-produced player and Messi, which could help improve the quality of play in the league and the national team.

Kagawa...

Kagawa…

For example, there’s room to produce a Shinji Kagawa. Japan has been in the domestic soccer league business about as long as we have, and — among others — have produced Kagawa. MLS hasn’t yet developed the next Donovan, let alone a better version.

For all the celebration of MLS-developed players taking up all 14 spots at Azteca, the fact remains that only two goals have been scored in the hexagonal so far, on three shots. Surely a part of the reason is Klinsmann’s tactics — his narrowing of the game, his refusal to put speed on the wings, his leaving Altidore on an island — and surely another part of the reason is the blizzard in Denver, but it’s not exactly a revelation that the U.S. lacks creative, technical players. The fault for that surely has to trace back to MLS’ past policies (with the more recent, homegrown/reserve/USL partnership policies being TBD.).

There’s your problem. The rest is noise.

Will Chivas USA & The Montreal Impact Continue to Be MLS Darlings? Extrapolating the MLS Season

"Minda telling me when you guys are going to cool off?"

“Minda telling me when you guys are going to cool off?”

Steve Fenn sets the MLS table.

The first month of 2013 MLS has just finished, but many are already trumpeting clubs’ achievements or bemoaning the lack thereof. Chivas USA and Montreal Impact gear is flying off the shelves apparently (that’s not true, but you get the drift.)

Yet, here is an important fact as sure as the stacks of yellow cards sitting in Oswaldo Minda’s locker stall.

Everyone in MLS has either 29 or 30 matches left in their season in which form will surely shift.

Is there a way to extrapolate from the four or five game observations seen to date?

Regression:

First, let’s illustrate which clubs offensive & defensive achievements have to this point been so far outside the norm as to be unsustainable. The graph on the left is each club’s goals and shots on goal per game for each season from 2006 through 2013, sized based on number of games played. The graph on the right is the same format, but with the sum of goals allowed and shots faced by each club’s keepers. (Note: Goalkeeping stats don’t quite tie out to total defensive stats, but the assumption is they are close and as a note, were the only historical resource available. The defensive graph’s axes are reversed so that in both graphs clubs would be striving for the top right.)

1st graphs

Click [here] to see an interactive version where you can filter down by club or year.

The best fit lines illuminate the overall average strike rate for the league since 2006. Almost every one of the 2006-2012 club-seasons amass in the middle of the graph and around that line, displaying the general range one can expect almost every club to land in by the end of a season.

Thirteen clubs offensively and twelve defensively fall outside of that mass thus far in 2013, and a regression to the mean should be the expectation.

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