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Soccer-specific stadia might not be panacea MLS believes they are.By Robert Wagman
WASHINGTON, D.C. (Wednesday, October 24, 2000 ) -- Ever since the Major League Soccer played its All-Star game in Columbus, Ohioís relatively new soccer-specific stadium, there has been a flurry of news stories about the need for, and the beneficial effect to MLS, of building more new, smaller, stadiums such as the one in Columbus.
MLS commissioner Don Garber started much of this talk by focusing on the subject of stadiums in his "State of the League" speech during All-Star week. Since then, and especially in his season-end roundup and media appearances at MLS Cup 2000, he has relentlessly repeated this theme. While this might be overstating Garber's position, he basically looks to new stadiums as a kind of salvation for the league.
Garber, at heart, is still a National Football League kind of guy. The NFL, and its owners, live and die by stadiums, and by season ticket sales. Given the way the NFL splits its revenues, the owners make large sums of money off private boxes, seat licenses, and ancillary game day revenues such as concessions and parking. So itís not surprising that NFL owners will do almost anything for bigger and more elaborate stadiums, ones with more private boxes and amenities, and there is little wonder the moment they get a new one built, they start scheming to get a bigger and better one.
MLS's drive for soccer-specific stadiums seems based part on perceptions and part on hard financial realities. The All-Star match, and later the United States-Costa Rica World Cup qualifier, were both played before a packed house of 22,000-plus fans in Columbus. Player after player was quoted as saying how much more pleasing it is to play in front of full stands, than in front of tens of thousands of empty seats. This is certainly understandable.
The All-Star match prompted a number of MLS officials, including Garber, to say they would be a lot happier turning away fans, than half filling giant venues. That seems a somewhat dubious proposition. Would they really be happier selling out a 20,000-seat stadium, than selling 30,000 in a 60,000-seat stadium. It's easy to say yes when crowds of 8,000-10,000 are the norm, but when these new stadiums start selling out, it will be interesting to see if these statements change.
This brings us to the financial reasons for MLS owners to want their own stadiums. While the league's finances continue to be a more closely guarded than the CIA's list of covert agents, understanding the way MLS splits its revenues and apportions its expenses is critical to comprehending the new stadium push.
General league overhead and player's salaries are shared expenses among all the owners. So-called "game-day" expenses are split, half becoming a general league expense -- split among all the owners -- and half the responsibility of each team's specific owner-investor. Revenues, likewise, are also split.
General league revenue from sponsors and the national TV deal -- if there is really any revenue yet from that source -- go to the league to offset general expenses and player salaries. Half of game-day revenues also go to the league, with the other half remaining with the individual owner-operator, a split that also applies to local sponsors and local broadcast deals. This revenue stream is meant to offset the individual team's overhead -- coaches, front-office staff, training facilities, marketing, etc.
So, it is easy to see the role a stadium can play in a teamís finances. For instance, it has been generally supposed that the Hunt family, owner of the Kansas City Wizards, have not really cared if anyone shows up at games because one of their other corporations owns Arrowhead Stadium, which otherwise would be sitting empty all summer. This way the Hunts get their fellow owners to pick up the tab for half of the rent their stadium corporation charges the Wizards 16-plus times a summer while the Hunts can also keep the parking and concession revenues.
This caused the Hunts to fight so hard last year to keep the 32-game schedule to prevent the loss the recently-adopted 28-match season would cause if Arrowhead lost two home matches. That would mean considerably less money being moved from one Hunt pocket to another, in ways probably only properly appreciated by their accountants and tax lawyers.
Now, this dynamic seems to have changed. Reportedly, the Hunts started to realize that crowds of 5,000 at Arrowhead don't really buy many hot dogs or park many cars. This year, the family that operates the Kansas City and Columbus franchises did not block cutting reducing the schedule.
The league's stadium problem is exemplified by D.C. United which plays at RFK Stadium, essentially a city-owned facility. It is probably the best facility for soccer in America, notwithstanding that the fact that the place is crumbling around its well-maintained pitch.
United is among the most successful and stable franchises in the fledgling league, but as United president and general manager Kevin Payne is fond of reminding one and all, the D.C. Stadium and Armory Board makes more money on game day than United does, even when United draws crowds of 25,000 or more. Under United's deal for RFK, it pays a substantial rent for the stadium and the Stadium Board keeps all the revenue from parking and concessions. If United had its own stadium, and could keep all this revenue while not having to pay rent, it would likely push the team into the black even while paying off the stadium construction cost.
Then there is the issue of public perception, which has become increasingly important to MLS. Stories are already starting to appear in major media outlets questioning the league's long-term viability. What better way to show an owner's faith in the league and in soccer in general than by seeing him write a $25- or $30-million check for a new soccer-specific stadium.
"Stadiums show a commitment on the part of an owner to his fans, show the sport's commitment to a community and when the community steps up to build a stadium, it shows the faith the community has in the team and in the sport," commissioner Garber said.. And he has repeated this statement often.
So there are clearly aesthetic, public relations and financial reasons the MLS owners toward building stadiums. But at this somewhat precarious point in the league's history, would it be better if the millions were spent putting a better product on the field, and better marketing the leagueís games?
It is obvious there is a need to build stadiums in markets where soccer could thrive and where there literally is no place to play -- expansion candidates Philadelphia, St. Louis, Portland, Ore., and Seattle serving as examples. In markets where there are stadiums, however, would it be wiser to devote more money to marketing the sport at the grassroots level, not just in trying to sell season tickets to businesses, and to acquiring more quality players for every team.
MLS has shown a willingness this year to spend money, but one must wonder how wisely. We are told that Luis Hernandez, for instance, represents about a $5-million investment -- salary and transfer fee. Yes, the league will get some of that back by loaning him out in the MLS off-season, and probably from an eventual transfer fee when he moves on. But the hope that he would lure large crowd Mexican fans into stadiums around the league, thus justifying his cost, has largely been in vain. Fans seem to be ignoring him equally in Los Angeles and on the road.
Wouldn't MLS have been better off, upon deciding it had an extra $5 million to spend, to have sent $400,000 to every team to beef up their marketing efforts? In some markets, without mentioning names, a $400,000 marketing budget would be about $400,000 more than is being spent now.
The same would appear to be true of this impending stadium building binge that seems just over the horizon. MLSís repeated statements to the effect of "If only we had more stadiums like Columbus, we would be fine," seems misplaced. In its second season in its new facility, the Crew doesnít seem to be selling out too often, a situation that might improve if the team had a couple of Stern John-type player or and still had Brad Friedel in goal. If that were the case, the Crew would probably be doing a lot better at the gate, even at lousy old Ohio State Stadium.
Senior correspondent Robert Wagman's "It Seems To Me . . . " appears regularly on SoccerTimes. He can be
e-mailed at firstname.lastname@example.org..