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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.

  • This entry was posted in Leagues: Major League Soccer, Uncategorized. Bookmark the permalink.

    14 Responses to MLS – SuperLiga, In SUM We Trust

    1. Great piece!

      I wrote a similar one a year ago about the strange relationship between the FMF and SUM which I believe is a conflict of interest.

      After writing the piece I was approached by a former MLS employee who has told me he strongly believes the league would have been out of business by now if not for SUM and the tightly held secretive finances. He admitted to me their are conflicts of interest when our domestic league promotes our rival national team, but said for the good of maintaining a first division in this country we must put up with it. He did however tell me Superliga was a sham and that most Mexican players and coaches hate both it and Interliga.

      Sadly he convinced me SUM was a necessary evil. He admitted conflicts and hated the fact that we promoted the Mexican National Team in a way that they were almost like our national team and in fact played more friendlies on US soil than the US did in 2007 and 2008. But he said until MLS stabilizes we need to just grin our teeth and accept it.

      Even though it is a necessary evil I will not stop calling them out as I did today with my thoughts on Superliga and selfishness of MLS/SUM to schedule this event during a big tournament for our national team.

    2. Joey Clams says:

      SUM is also the reason why neither Garber nor Gulati call the Mexican teams on their terrible behavior.

      The calculus is perilous, though; league games are increasingly marked by the zaniness of those who presume to monopolize the sport in this country and international club competitions are always marred by violence and overall poor sportsmanship.

      Soccer’s dirty little secrets aren’t so secret anymore. Don’t blame soccer moms and yuppies for that.

    3. Even more striking about Phoenix not having MLS or USL.
      The US Soccer Development Academy does not have one club in Arizona or New Mexico This is shocking considering the number of Mexican-American kids in AZ/NM.

    4. timmyg says:

      Not having a go at anyone, but this post confuses me.

      Are you saying that SUM controls MLS, and that Superliga is a cash cow that helps keeps the league afloat?

    5. mindthegap says:

      Krishnaiyer,
      Using your logic (Superliga = evil promotion of Mexico), are the Chicago Fire a conflict of interest? I’d bet most fans of Blanco aren’t cheering on the Yanks. Should we set up a rule in which Mexican players can’t play in the MLS? Ridiculous.

    6. Of course any Mexican player is welcome in MLS although in the past most like Luis Hernandez have bombed.

      But it’s an inherent conflict of interest when OUR DOMESTIC LEAGUE PROMOTES ANOTHER NATIONAL TEAM ON OUR SOIL. That situation doesn’t exist anywhere else in the world. SUM are the match promoters who allow Mexico to host more games of a friendly nature on US soil than the US team itself. That’s my issue.

    7. mindthegap says:

      True, and no other country in the world cares at all about friendlies. The long and short of it is this: the USMNT would do well to attract people with strong Mexican ties. And how are they going about it? By playing up a US/Mexico rivalry. That rivalry is a zero-sum game: Mexico wins by it, the US loses.

    8. vic says:

      Wow, SUM keeps MLS afloat. I guess thats pretty bad from the strictly MLS side of things. Makes you wonder though, why aren’t the “hurting teams” more involved with SUM- such as Crew hosting West Ham or Aston Villa in Cleveland, or scenarios like that? If true, perhaps SUM should have greater control of MLS. This issue of the necessity of control of MLS in international tournys is one of the reasons why “serious input” by MLS in such tournament would depend on how much control they have. In CCL, they have little. Perhaps Pan Pacific could be successful if you simply invite 4 teams from MLS, FMF, and Jleague, and get rid of Superliga. The more international flavor of this may appeal to FMF to send their best.

    9. Peter C says:

      timmyg:

      yes, that’s exactly what I am saying. When you purchase an MLS franchise, you also purchase a stake in SUM.

      Future posts will give a bit of background on SUM. If you can’t wait for that, then start by visiting http://www.sumworld.com and look at various ways it pulls in money.

    10. Lars says:

      The answer to your question:

      Does a team have to make money to turn a profit? is a categorical NO.

      The Teams are tax loop holes which allow wealthy owners to avoid paying ridiculous amounts of money to the IRS. If the team loses too much though, then it is not profitable.

      On top of that, it depends on how you account for your money you take in. A team may state it’s not profitable (good for tax purposes) but be pulling in a profit.

      There is a saying from a former Toronto Blue Jays President, he once boasted he could “take a 2 million dollar profit and turn it into a 5 million dollar loss” using proper accounting techniques.

    11. mindthegap says:

      SUM is basically the marketing branch of the MLS (its CEO is Garber) plus some other US marketing rights. If you don’t have a problem with the fact that the MLS has to make money, you don’t have a problem with SUM. Also, Garber, the creator of Superliga, could get rid of it tomorrow if he wanted.

    12. Les says:

      Superliga being played during the Confed Cup is unacceptable. How could Gulati allow this? This is flat out embarrassing. What other country would allow this?

    13. The Three Lions says:

      SUPERLIGA = JOKE THAT MAKES THE REST OF THE WORLD LAUGH AT THE USA.

      Now that Concacaf has a CL why must this tournament exist? I’m new to the USA just having come over three years back but this event never made any sense to me especially given it is the Mexican off season.

      The Champions League was good. Also helped me discover lower league football called USL which no offense to this site I prefer to MLS. More like home if you know what I mean. Actual tactics.

    14. Peter C says:

      Three Lions,

      SuperLiga is about money. As the post says, MLS is a young league with only 4-6 teams expected to be profitable in ’09. As long as SuperLIga generates revenues for SUM, it will continue. But I also would like, at the minimum, to see it scheduled when both leagues are in season.

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