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Why MLS was so focused on New York as the 20th market

May 21, 2013, 2:30 PM EDT

NYC pic

From a fan standpoint, as the great unwashed considered Major League Soccer and franchise No. 20, the league always looked more interesting with an expanded geographical footprint.

It made perfect sense from the outside; Major League Soccer stretching into the American southeast, specifically, had a certain sex appeal. Plus, more TV markets couldn’t hurt, right?

But for Major League Soccer’s deciders, this was a strategic choice all about dollars and good financial sense – something near and dear to those who keep answering cash calls for an 18-year-old operation that continues to dwell collectively in red ink.

What that ultimately means is TV contracts. That and greater media awareness, too, which helps drive sponsorships and, ultimately, further enhanced TV contracts.

Do not underestimate this as you consider that NYCFC, as of today, is now officially laying tracks in preparation for pulling into MLS station in 2015: All of Major League Soccer’s current TV deals end at the conclusion of the 2014 season. That means with NBC Sports, ESP and Spanish-language Univision.

(MORE: Manchester City, Yankees will own and operate Major League Soccer’s 20th franchise) 

All the deals will be negotiated beginning … well, right about now. They will all be in place by this time next year, or not much later than that. And now, thanks to today’s massive announcement, they will all that much more lucrative.

Speaking of lucrative:

A Major League Soccer expansion fee beyond the Big Apple runs about $40 million right now. Almost two years ago, MLS commissioner Don Garber set the NYC expansion price at $100 million. You don’t need much of a calculator to see about $60 million reasons why current owners would prefer this ordering of expansion, right?

That’s more cash in the here and now. Plus, by adding in one other ownership group before NYC’s $100 million gets tossed into the pool, the current owners’ split would be further divided (and by a new ownership group that didn’t share in the cash calls over the last few years.)

Further, the Yankees and Sheikh Mansour, Manchester City’s owner and a man of seriously ridiculous money, represent the kind of deep pockets MLS has long sought.

(MORE: Notes on today’s big announcement)

No offense at all to Orlando or Miami or any other Richie Rich-types out there who have enough money to buy into the MLS game — but perhaps not the level of money MLS is looking for at this point.

This has been a problem before in MLS – possibly even more than even close MLS observers are aware. MLS owners don’t want to deal with that mess any more.

(MORE: Implications of the ‘sister-club’ relationship between City and NYCFC)

  1. mlsconvert88888 - May 21, 2013 at 2:47 PM

    I posted something similar to this on one of the other articles about the new NYCFC, but here is another good post to bring it up;
    I’m no business guru but haven’t the pacific northwest teams shown the blueprint for a successful expansion team? I mean what’s more valuable to the league; a) having a mindbogglingly rich ownership group for a club in a huge media market, but with zero established fan base in an area that’s already struggling to support a different club, or b) having a decently rich ownership group in a smaller yet un-plundered media market, but with a club that already has an engaged fan base?

    One option seems to have a large instantaneous influx of cash, but then leaves the potential for a fanless team that will be a drag on the league, whereas the other option still has some cash influx due to expansion and then would provide steady income into the future thanks to fans who give a shit. It just seems like MLS isn’t seeing the forest for the trees on this one.

    • drewvt6 - May 21, 2013 at 2:55 PM

      With zero grassroots interest, I expect we’ll have another beautiful stadium like RedBull Arena 50% empty week in and week out. Even the good Sheikh and the Steinbrenners have a limit on how long they’ll dump money into a black hole.

      Garber’s going to go down in flames on this one.

      • CaliforniaRedskins - May 21, 2013 at 3:37 PM

        This perspective seems to forget that what this team has is a solid infrastructure and a boat load of cash. One of the strong points that Seattle has going for it (as well as the history) is that it shares resources with the Seahawks. Although there would be a good draw if this wasn’t the case, I don’t think that the numbers would be the same if the Sounders were going at it alone. I think that people are also underestimating the effect of having a lot of money. If the team can consistently win, which it probably can after a few years, and the rules of MLS start favoring big money teams, which they probably will in a few years, there’s no reason why New York can’t succeed. Personally, I’d rather see big money injected into the league than have another minor league type town (NC, San Antonio) added to the league. Does MLS really need another small town, little engine that could team. I’d rather MLS not simply compete with AAA baseball for the local sports dollar and to do that it must attract investors like the Man City owners. I don’t think that anyone thinks the Galaxy is bad for the league. More of the same is in order.

    • jskinner23 - May 21, 2013 at 4:10 PM

      What you are talking about is team success from a local standpoint. MLS has plenty of local success stories with the Pacific NW teams being some of the best stories. What the Pacific NW teams don’t do as much is move the needle on what MLS needs the most – bigger TV contracts. The MLS isn’t going to become a top-flight league in the world without bigger TV contracts fueling a higher salary cap which attracts higher level talent. As recent expansion in college athletics has shown, TV contracts have more to do with potential viewers than actual viewership. That’s why Rutgers was an attractive university to add to a conference lineup because of the potential to attract eyes in NYC although most argue Syracuse and UConn are more popular with New Yorkers. To get the higher TV contracts, it makes sense that MLS wants an expanded presence in one of the largest cities in the world (with a population multiple times greater than Portland, Seattle, and Vancouver combined).

      • mlsconvert88888 - May 21, 2013 at 5:12 PM

        Definitely some good points. But if I was someone who was considering setting up a contract with MLS to air soccer matches on my television station (and I’m saying this with pretty much zero knowledge of what actually goes into decisions like this) it seems like I would be much more eager to air a game in an environment like portland, where the stands are packed and the fans are going buck-nutty, than I would be to air a Chivas game. I guess what I’m saying is I think that if they’re trying to have success in the big TV contracts, they need it to be built upon the success from the local standpoint first.

        And speaking of having a second club in a huge media market and trying to get TV contracts; I believe Chivas USA, aka the second LA club, still doesn’t even have a contract to be locally televised, let alone nationally televised.

      • jskinner23 - May 22, 2013 at 1:46 PM

        @mlsconvert88888 – You have a good point – the Pacific NW might actually be helping with TV contract negotiations. The fact that Seattle-Portland was broadcast on the NBC mothership station last season means the people with money do at least value that game – although you only get three or four of these matchups per year.

        From a personal standpoint, I’m with you. I’d much rather watch a game on TV with a great atmosphere than see a half-empty Red Bull Arena or a fully empty Home Depot Center. There are several teams around the league that provide great gameday atmospheres that look good on TV (no empty seats): Portland, Seattle, KC, Philly, and RSL immediately come to mind.

        I think MLS was following your strategy a couple of years ago when it added Montreal – the most European city in North America who also had an NASL club with a following (although I have no idea what kind of following that was). Unfortunately, after some big crowds at the beginning, attendance waned when the Impact struggled through portions of last season. I’m not calling Montreal a failure by the MLS. What I am saying is that there isn’t a magic formula for starting an MLS team that will generate the kind of atmosphere you see in the Pacific NW right off the bat, especially one you are trying to sell to major sports networks.

        Now that the 2nd NYC team is in the fold, I think you’ll see MLS move back to a strategy closer to what you are suggesting. Unless, of course, they move Chivas USA to Miami or something and then try to target a second team in LA again – only this time with competent people running the club.

  2. creek0512 - May 21, 2013 at 2:51 PM

    MLS will never register nationally as long as it is in only 15 US cities, compared to 31 for NFL, 26 for MLB, 27 for NBA.

    • joeyt360 - May 22, 2013 at 7:37 PM

      But all those leagues registered nationally when they only had 15 markets.

      • joeyt360 - May 22, 2013 at 7:39 PM

        I should elaborate. . . not a one of them can really point to expansion as a significant reason why they are successful. In every case, those leagues TRIED ACTIVELY to keep their leagues in the teens as far as number of teams, it’s just that in every case this policy, once the leagues got successful, led to rival leagues.

      • takeyourspace - May 23, 2013 at 5:42 PM

        I don’t think the NFL was nearly as relevant when the league was only 16-years-old (or 20 or even 30 years old) and had not expanded to the league it is today. I would love for the MLS to be a top tier global league and someday (probably years from now) it might be. But for now I’m glad MLS is a stable league. I think for the most part solid and financially conservative decisions have kept it growing.

  3. chadmoon1 - May 21, 2013 at 3:14 PM

    MLS is in 18 cities now, but the point is well taken.

    • cgerstl - May 21, 2013 at 6:13 PM

      He meant 15 US cities. There are three MLS teams in Canada.

  4. chadmoon1 - May 21, 2013 at 3:15 PM

    This should not be about going for the most money now, it should be where can the league make the most money in the long run.

    • archlobster - May 21, 2013 at 5:07 PM

      I think I see your point.

      There is obviously not enough money in New York City proper.

  5. midtec2005 - May 21, 2013 at 4:31 PM

    MLS needs to make sure every team has a rival. Rivalry week was awesome… except for in Columbus. A team in Cleveland or Cincinnati would dramatically change the dynamic here.

    Hopefully the second NYC team creates a great atmosphere in rivalry games. They really need to get going on the southeast though… MLS is throwing away a huge geographical area.

  6. dws110 - May 21, 2013 at 5:01 PM

    Given the enormous splash NYRB made in the New York media market, it’s pretty much a given that lightning will strike twice, yes?

    Oh, wait…

  7. quizguy66 - May 21, 2013 at 11:45 PM

    I’m from New Jersey, I wish we had an MLS team to represent us. I’d check ‘em out in person even.

    -QG

  8. danielofthedale - May 22, 2013 at 1:21 AM

    How does Man City sending youth players to NYCFC on a seasons long loan help the league get out of the retirement league image? So it becomes a day care league where you send young players for a season? At least the retirement league will be around two plus seasons.

    Also I want to see the marketing research data that shows there is a legion of soccer fans in NYC that WILL NOT support MLS since there is not a team in NYC proper BUT WILL support MLS if there is a team in NYC proper. I don’t believe this is a the case I don’t think it will make a noticeable difference in the TV contract since TV Networks are not run by morons for the most part.

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