MLS Teams have three primary sources of revenue: gate receipts, sponsorships and television. Over the last few years, MLS has found ways to increase revenue from all three sources.
Stadia
In order to improve gate receipts, MLS teams have spent the last decade finding stadiums which they can control.
MLS is expected to have 18 teams in the 2011 season. Only three of those teams will play in stadiums (soccer specific or not) that do not provide the owner with primary control of the stadia and significant revenue streams.
The New England Revolution play at Gillette Stadium and the Seattle Sounders at Qwest Field. These are NFL stadiums controlled by families/groups who own both the NFL and the MLS team. The MLS teams will always be secondary tenants but the revenue streams should be sufficient.
| Team | Capacity | Year Completed | Cost | Stadium Name |
|---|---|---|---|---|
| Vancouver Whitecaps | 20,000 | Under Renovation | $365 million | BC Place |
| Portland Timbers | Under Renovation | PGE Park | ||
| K.C. Wizards | 18,500 | 2011 | $130 million | TBD |
| Philadelphia | 18,500 | 2010 | $115 million | TBD |
| Red Bulls Arena | 25,000 | 2009 | $220 million | Red Bull Arena |
| Real Salt Lake | 20,212 | 2008 | $115 million | Rio Tinto |
| Toronto FC | 20,522 | 2007 | $62.5 million | BMO Field |
| Colorado Rapids | 18,000 | 2007 | $130 million | Dick’s Sporting |
| Chicago Fire | 19,100 | 2006 | $98 million | Toyota Park |
| FC Dallas | 21,193 | 2005 | $80 million | Pizza Hut Park |
| Galaxy/Chivas | 27,000 | 2003 | $150 million | The Home Depot Center |
| Columbus | 22,555 | 1999 | $29 million | Crew Stadium |
| San Jose: Economy has caused stadium plans to be scaled back but work is proceeding. | ||||
| D.C. United: Expect them to get a stadium. Either in DC or the burbs. | ||||
| Houston: Expect to build a stadium that the Dynamo would share with Texas Southern. | ||||
Attendance
New stadiums have helped boost attendance. MLS averaged 16,310 in attendance in 2008. The Galaxy led the way with an average home attendance of 26,050. Kansas City and Dallas scraped the bottom at 10,673 and 13,097 respectively.
If 12,000 people paid the MLS average ticket price of $22.47 (in 2007), a team would net $264,000 per game in ticket revenue. That’s about $4 million over the course of a season just for ticket sales.
Sidenote: Of the four major sports, baseball has the lowest average ticket price at $26.64. The next-closest competitor, the NBA, is at $49.47.
In 2007, MLB had record average attendance per game of 32,785.
The newest MLS franchises are thriving attendance-wise. Toronto FC was second in attendance last year. In 2007 it had the league high average for concession sales of over $11 per person.
Seattle Sounders, playing in their first MLS season this year, have a season-ticket base of 22,000 in a stadium that was predicted to hold 27,700 fans. If the Sounders achieve the average MLS ticket price for just their season ticket holders, it will amount to $494,000 a game in revenue.
If the Sounders average 25,000 in attendance, concession sales should easily take them over $750,000 per game in revenue. That certainly seems doable given the Sounders recent annoucement that demand has caused them to expand Qwest Field’s MLS capacity to 32,000 after only playing there a few games.
Remember: $750,000 a game in revenue is nearly twice as much as we’ve learned that 5 NBA teams make per game at the arena.
Sponsorships
Portland’s bid projects total sponsorship revenue of between $4.5 million and $5 million per year in its first few years of operation. Where will this sponsorship revenue come from?
For one, MLS teams which have moved into new stadia have been reasonably successful in partially funding construction through naming rights deals.
| Arena | Deal Value |
|---|---|
| Home Depot Center: | $70 million over 10 years |
| Pizza Hut Park: | $25 million over 20 years. |
| Toyota Park: | $10 million over 10 |
| Dick’s Sporting Goods Park: | $40 million over 20 years |
| BMO Field: | Up to $2.7 million per year for ten. |
| Rio Tinto Stadium: | $1.5-2 million per year |
While not exactly the $20 million a year for 20 years that the Mets received from Citigroup for their new ballpark, it is not too far below fourteen MLB teams who average $2.58 million per year for the naming rights to their parks. For example, PETCO Park in San Diego provides the Padres $2.7 million a year for naming rights.
Uniform and shirt sponsorships are another lucrative source of revenue for MLS teams. The league has a $15 million annual deal with Adidas.
The Galaxy have a league best $4 million-a-year jersey rights agreement with Herbalife. That’s peanuts compared to Manchester United’s four-year £56.5m deal or Liverpool’s £10m-a-season deal with Carlsberg, but it is more than Premiership teams West Ham ($3.7 million for 18 months) and Portsmouth (two year $2.37 million) receive for their shirts.
| Team | Sponsor | Value |
|---|---|---|
| Chicago Fire | Best Buy | $7.5M over 3 years |
| Chivas USA | Comex | $2M per year |
| Columbus Crew | Glidden | $1M per year |
| D.C. United | Volkswagen | $14M over 5 years |
| Houston Dynamo | Amigo Energy | $1.9M per year |
| Los Angeles Galaxy | Herbalife | $4M-$5M per year |
| New York Red Bulls | Red Bull | Part of $100M deal for club and stadium |
| Real Salt Lake | XanGo | $500K-$1M per year |
| San Jose Earthquakes | Amway Global | $2-$3M per year |
| Seattle Sounders FC | Xbox 360 Live | $20M over 5 years |
| Toronto FC | BMO | $1M-$1.5M per year |
MLS’ shirt deals total something north of $20 million annually. Eighteen Bundesliga clubs earn about $200 million annually.
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