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MLS – SuperLiga, In SUM We Trust

Posted on by Peter C
lowland gorilla phc MLS   SuperLiga, In SUM We Trust

Original Photo courtesy of www.copyright-free-photos.org.uk

Well, the start of the 2009 SuperLiga has jumpstarted the familiar conversations about it’s quality, purpose, players’ shares if an MLS club wins, among others. One major issue has been partially addressed, i.e.; schedule congestion with short rosters by way of the new qualification criteria that prevents the overload in the past by having teams participating in both SuperLiga and the CONCACAF Champions League(formerly Cup).

It also jumpstarted my mind on some MLS issues that’ve been dancing around my head, specifically, the finances of Major League Soccer.

For me, this interest was ignited by living in a former MLS candidate city, Phoenix. That idea has faded to near black, but during the process, you cannot separate finances from any MLS club. After all, they are for profit businesses. My interest piqued when I came across these Jun 2007 quotes of Adrian Hanauer(page 2, para 3 and 5) of the Seattle Sounders, made during the expansion dash of 2007.


excerpt


…Hanauer(Seattle Sounders owner) says his team loses between $300,000 and $400,000 per year, and that he operates the Sounders as a labor of love….
Hanauer says the supporter groups like the ECS(Emerald City Supporters) have “zero” effect on an ownership group’s calculus when evaluating potential markets. “[An MLS team] is a $30 million to $80 million investment, so it’s not something I or any potential ownership group is going to be influenced to do or not do based on a micro-set of the overall market,” he says. “Although we respect the ECS and try to accommodate them as best we can, we don’t run our business based on what it’s thinking or doing or asking for.”

I read this and it rocked my soccer world. After all, I was swept up in the enthusiam for a team, joined the local supporters group, and the prospect of a first division team was intoxicating. It made no sense to me that Phoenix wasn’t a top candidate. 5th largest city, 14th largest media market, large Hipanic population, yet no MLS, USL, or PDL teams. A no brainer, right? Yeah right. The no brainer was between my ears. And Hanauer’s words put it all into perspective.

This was followed up a year later by the ‘Forbes Report’, in which it announced that 3 clubs were in the black and 2 more were close to turning a profit in 2007. I had read about the massive financial shortfalls of the league in the early years. What am I saying…’the early years’?? The league is ONLY 14 years old, a mere babe in the soccer world. But I digress. Most of the teams are losing money, including most of the original founding franchises. So how was the league surviving? Which brings me back to the SuperLiga.

Soccer United Marketing(SUM) is the 800 lb gorilla in the room. It is the entity that keeps the league afloat. And one of the vehicles it uses is SuperLiga. As long as SuperLiga turns a profit, it will exist in its current state or some other form.

You can see in this interview with the Don by Jack Bell where SUM’s interest lies. From this piece I get that Garber sees the CONCACAF Champions League as competition for SuperLiga. By stating that “Our teams have to decide what’s more important to them”, Garber sends the message that the CCL is a nuisance, rather than the gateway to earning international respect that it is. Of course, the fact the the CCL is controlled by CONCACAF and not SUM would seem to taint Garber’s nonchalance about the matter.

This post is an introduction to a series that will examine how it is that around 9 teams will lose money this year, and how it is that they survive to play another day. Topics in this area that get my curiousity churning include …

  • Is $800,000 really the amount distributed by SUM to MLS clubs?
  • Does an owner’s team have to make money in order to turn a profit?
  • If the broadcast rights are fixed amounts, and the league expanding, will SUM distribute smaller slices to the clubs?
  • If owning the stadium makes a team profitable, how does that explain FC Dallas as one of the teams in the black and Columbus not on the list? Is it all about alternate events in the stadium to put a team over the top?

    Where do all those revenues generated by SUM go? TV rights, appearances by the Mexican National Team, CD Guadalajara and Barcelona, the Pan-Pacific tourney and more. There are many tributaries feeding the SUM stream. Is MLS still doing so poorly that all those revenues don’t permit a decent increase in the salary cap?

    Obviously, it’s my opinion that any discussion MLS and its future must include SUM. But there is so much unknown about the closely held finances that I found it difficult to find a jumping off point for this discussion. So I’ll just post this and let the conversation grow organically(hopefully) with input from you, fans of soccer in the US and supporters of a successful and improving MLS.


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