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-   -   The Great Canadian Sports Attendance, Marketing and TV Ratings Thread (https://skyscraperpage.com/forum/showthread.php?t=228928)

thurmas Nov 6, 2019 5:47 PM

I hope Whitecaps can get a outdoor stadium and team up with the Lions and get out of BC Place. The BC govt can then make billions from the sale of BC place and the land it sits on.

esquire Nov 6, 2019 5:53 PM

Quote:

Originally Posted by thurmas (Post 8740790)
I hope Whitecaps can get a outdoor stadium and team up with the Lions and get out of BC Place. The BC govt can then make billions from the sale of BC place and the land it sits on.

Boo to that. The province spent half a billion renovating BC Place not even a decade ago... you want them to dump a first class facility like that for an outdoor field which will inevitably be something like BMO?

thurmas Nov 6, 2019 7:46 PM

I do the facility is far too big for both the Lions and Whitecaps needs, downtown Vancouver transit is so bad many fans complain of how hard it is to get into the downtown these days and the reno was not necessary The real estate value of the land it sits on is so prime it would pay for the reno and demolition costs several times over.

EpicPonyTime Nov 6, 2019 7:58 PM

Quote:

Originally Posted by JHikka (Post 8740616)
So the teams are operating on a loss due to investments in sport infrastructure and personnel but the owners are effectively breaking even thanks to marketng and corporate deals which are not included in team revenue reporting.

What's the break even number for attendance in MLS? Has that ever been firmly established?

Berklon Nov 7, 2019 12:24 AM

Quote:

Originally Posted by thurmas (Post 8740790)
I hope Whitecaps can get a outdoor stadium and team up with the Lions and get out of BC Place. The BC govt can then make billions from the sale of BC place and the land it sits on.

When BC place was renovated, everyone was impressed and thought it was a great venue for sporting events. 8 years later and now it's not good enough? What's changed?

thurmas Nov 7, 2019 12:28 AM

Quote:

Originally Posted by Berklon (Post 8741302)
When BC place was renovated, everyone was impressed and thought it was a great venue for sporting events. 8 years later and now it's not good enough? What's changed?

Its in great shape and very nice still but at 54,000 seats that's more than double what the Whitecaps and Lions average in attendance right now. The upper deck is always closed off and never used the atmosphere is like a giant tomb. The Lions and Whitecaps really only need a 25,000 seat facility. To me the renovation was pointless waste of $600 million when a fraction of that could have built a very nice stadium for cfl, mls and the national rugby team.

wave46 Nov 7, 2019 12:29 AM

Quote:

Originally Posted by Berklon (Post 8741302)
When BC place was renovated, everyone was impressed and thought it was a great venue for sporting events. 8 years later and now it's not good enough? What's changed?

They got bored with their shiny new thing and want another shiny thing?

This time they'll use the argument that the new shiny thing is "right-sized".

It's the same reason they build new stadiums in Atlanta every 15 years - this one will finally be the right-size/right-place/whatever criteria justifies the 'investment' of public dollars.

thurmas Nov 7, 2019 12:35 AM

I am very doubtful a new stadium will be built in Vancouver unless the Whitecaps owners really are serious about building a new stadium which from their frugality owning the team is very doubtful.

thurmas Nov 7, 2019 12:45 AM

interesting stats on how similar MLS team revenue is to CFL teams as CFL teams are between 18 and 42 million as are most mls clubs

https://dailyhive.com/vancouver/forb...se-values-2019

https://d3ham790trbkqy.cloudfront.ne...ual-Report.pdf

https://d3ham790trbkqy.cloudfront.ne...port-FINAL.pdf

blueandgoldguy Nov 7, 2019 6:25 AM

Quote:

Originally Posted by JHikka (Post 8740616)
One thing that you failed to copy/paste over was MLS' investments in SUM:

There’s more in play than the future of MLS, though. That’s because, in addition to their franchise operating rights, the league’s investors also own stakes in Soccer United Marketing (SUM), the black-box subsidiary that has a hand in managing the commercial rights for almost every major soccer property in North America. In addition to negotiating sponsorship and television deals for MLS, SUM handles commercial rights for the U.S. Soccer Federation, Concacaf and the Mexican national team’s U.S. tours, among other properties.

Forbes has estimated that SUM generates annual revenues of some $350 million, and it’s profitable, too; last year the property distributed $125 million to league owners. In 2017, SUM was valued at $2 billion after MLS bought out the stake owned by Providence Equity Partners (SUM is now wholly owned by the league’s investors). Although SUM dividends aren’t included in the teams’ operating revenues, they go a long way toward explaining why MLS franchises cost so much; in fact, the league’s least-valuable teams derive nearly half their total value from their stake in SUM.

So it makes some sense that MLS owners would invest big in a money-losing enterprise, given that they’re also securing a long-term interest in the continued success of soccer in the North America. That may start looking like a very smart bet in 2026, when the World Cup returns to the United States for the first time since the 1994 edition that fueled the launch of MLS. And although most teams may struggle to break even, there is a glimmer of hope offered by the league’s elite franchises, which are already showing that an uber-successful MLS team can be a license to print money.


https://www.forbes.com/sites/chrissm.../#7310a10251b5

Emphasis added mine.

So the teams are operating on a loss due to investments in sport infrastructure and personnel but the owners are effectively breaking even thanks to marketng and corporate deals which are not included in team revenue reporting.

There was $125 million distributed to owners, so no, many owners are not breaking even. Toronto still lost piles of money and so did a few others.

If ratings don't show a significant increase by 2022, then it is unlikely the league will see a huge tv deal...say $20 million per team. Somewhere around a 150% increase might be more realistic...around $8 - $10 million per team.

blueandgoldguy Nov 7, 2019 6:27 AM

Quote:

Originally Posted by EpicPonyTime (Post 8740976)
What's the break even number for attendance in MLS? Has that ever been firmly established?

It's dependent on how much teams spend on player salaries - that is the biggest variable. Montreal and Vancouver had similar revenues but one team lost $12 million while another lost $5 million.

Of course amenities and control of revenue sources plays a role...and the Canadian dollar. As an example Washington's new stadium seats 18,000 and they averaged nearly that last year and had some of the highest revenues in the league thanks to control to all stadium revenue streams and a large number of luxery seating options. Montreal's stadium lacks high-end stadium seating and revenue streams while Vancouver does not receive any of the concessions. I'm not sure they even receive all suite revenue. No parking revenue around the stadium either.

osmo Nov 7, 2019 10:15 AM

Quote:

Originally Posted by JHikka (Post 8740616)
One thing that you failed to copy/paste over was MLS' investments in SUM:

There’s more in play than the future of MLS, though. That’s because, in addition to their franchise operating rights, the league’s investors also own stakes in Soccer United Marketing (SUM), the black-box subsidiary that has a hand in managing the commercial rights for almost every major soccer property in North America. In addition to negotiating sponsorship and television deals for MLS, SUM handles commercial rights for the U.S. Soccer Federation, Concacaf and the Mexican national team’s U.S. tours, among other properties.

Forbes has estimated that SUM generates annual revenues of some $350 million, and it’s profitable, too; last year the property distributed $125 million to league owners. In 2017, SUM was valued at $2 billion after MLS bought out the stake owned by Providence Equity Partners (SUM is now wholly owned by the league’s investors). Although SUM dividends aren’t included in the teams’ operating revenues, they go a long way toward explaining why MLS franchises cost so much; in fact, the league’s least-valuable teams derive nearly half their total value from their stake in SUM.

So it makes some sense that MLS owners would invest big in a money-losing enterprise, given that they’re also securing a long-term interest in the continued success of soccer in the North America. That may start looking like a very smart bet in 2026, when the World Cup returns to the United States for the first time since the 1994 edition that fueled the launch of MLS. And although most teams may struggle to break even, there is a glimmer of hope offered by the league’s elite franchises, which are already showing that an uber-successful MLS team can be a license to print money.


https://www.forbes.com/sites/chrissm.../#7310a10251b5

Emphasis added mine.

So the teams are operating on a loss due to investments in sport infrastructure and personnel but the owners are effectively breaking even thanks to marketng and corporate deals which are not included in team revenue reporting.

Thank you as people are missing the forest for the trees with MLS. If you're are a betting person there is more upside to betting on MLS success in 50 years versus the NFL and CFL (if one wants to compare large stadium outdoor sports head to head). Class action lawsuits surrounding CTE could bury both leagues. NFL has hundreds of millions in cash stashed away as a war reserve to fight this future battle, the CFL not so much. CTE soccer wise is oddly only an issue with the woman's game as for some medical reason woman get concussions at much higher rates versus men in soccer.

Also, with MLS salaries the league is set up to central control salary spending so that it isn't the crux that kills teams. If your team makes the choice to load up in high ticket exception players then go for it, but outside of that each time has a balanced salary level that the league covers centrally among all teams. TFC for example has made the choice to blow up salary and has been very candid about it. Fluctuations in attendance could be attributed more to missing the mark on pricing increases more than anything. I think nationwide the economics are not as sound as many think and many families and individuals have been scaling back entertain spending. Every other league has seen weaker attendance here in Canada just like MLS. This problem isn't solely to MLS.

Where teams vary is local revenue potential which is why Columbus for example has been missing a move to Austin as they perceive the ability to make money in that City as limited.

MLS can be viewed as a long term play or a ponzi scheme depending how you look at it. Until rich men are swayed to not want to pay the entry and expansion fee the league will continue to grow. IMO MLS is going to thrive in non conventional markets that are not viewed typically as cash cows, examples of Atlanta a future Austin, Minneapolis and a potential future Boise as these are youthful growth metropolitan areas that don't have the same demographic makeups as traditional metropolitan areas.

Lastly, many teams are dumping money on capital costs such as building elite acadamcy facilities and other legacy facilities to go towards that above mentioned future growth strategy. I view MLS the same as MLB as both have suspect ratings and demographic mapping but if you feel back the layers the business interests of both league are sound with highly lucrative investment and assets. MLB BAM Media makes a boatload of money, and local teams make a tonne of cash of local TV, nationally it's a dumpster fire, but many teams are doing well. MLS will evolve to be the same IMO.

Soccer is still a growth sport domestically here in North America; Baseball, Football, and hockey all have seen declines or stagnant growth in the youth level. Does that equate to ticket buyers and such, it isn't an exact science but if you're looking to dump millions into a sport would you pick baseball, football or soccer if you had the level of resources to make that choice ?

osmo Nov 7, 2019 10:24 AM

Quote:

Originally Posted by blueandgoldguy (Post 8741617)
It's dependent on how much teams spend on player salaries - that is the biggest variable. Montreal and Vancouver had similar revenues but one team lost $12 million while another lost $5 million.

Of course amenities and control of revenue sources plays a role...and the Canadian dollar. As an example Washington's new stadium seats 18,000 and they averaged nearly that last year and had some of the highest revenues in the league thanks to control to all stadium revenue streams and a large number of luxery seating options. Montreal's stadium lacks high-end stadium seating and revenue streams while Vancouver does not receive any of the concessions. I'm not sure they even receive all suite revenue. No parking revenue around the stadium either.


Canadian dollar doesn't mean anything for operations, people need to kill this myth. This isn't the 90s with low ForEx IQ operations being run by many Canadian teams.
These days any Canadian sports operation has sophisticated ForEX that is hedging nonstop to remain equal or ahead of currency fluctuations. There is also the fact that shared revenues are all also paid out in $USD to Canadian sports teams which gives them a slight competitive advantage as this revenue provides an extended top end that funds and pays discounted operation costs that are $CAD. Your staff, cleaners, marketers, etc all are getting paid in $CAD which isn't the case with USA teams.

Where the $CAD impacts Canadian sports is with entry into these leagues where franchise and expansion fees are $USD so the rock bottom deal of $40 million with a near par dollar is much more palatable to Montreal back then versus the $200 million $USD needed now. This is the biggest reason that further Canadian expansion died (thus creating a window of opportunity for the Canadian Soccer League to startup).

Denscity Nov 7, 2019 5:27 PM

Quote:

Originally Posted by thurmas (Post 8740958)
I do the facility is far too big for both the Lions and Whitecaps needs, downtown Vancouver transit is so bad many fans complain of how hard it is to get into the downtown these days and the reno was not necessary The real estate value of the land it sits on is so prime it would pay for the reno and demolition costs several times over.

The stadium has its own skytrain station it's the car drivers that complain about getting into downtown.

Maldive Nov 7, 2019 5:51 PM

Anyone notice Toronto FC pulled off a worst to first in one season ((without Joey)?

JHikka Nov 7, 2019 7:02 PM

Quote:

Originally Posted by esquire (Post 8740622)
^ Very interesting re: SUM. I always kind of wondered how MLS franchises were valued at such high numbers when most teams have revenues roughly on the same scale as CFL teams according to the Forbes chart. But that makes it clear that the teams themselves are only a part of the overall business picture.

Indeed. SUM is why expansion prices are so high and why teams losing millions a year is fine in the short-to-medium term. As long as marketing and corporate revenues continue increasing yoy the teams can continue operating at a loss.

Quote:

Originally Posted by thurmas (Post 8741333)
interesting stats on how similar MLS team revenue is to CFL teams as CFL teams are between 18 and 42 million as are most mls clubs

MLS revenues are posted in USD, so add another 25% onto any revenue you typically see posted. The $18M in revenue for Montreal/Vancouver turns into roughly $23-24M in CAD. Toronto's $43M becomes $56.5M.

Teams will be receiving an additional $1-3M sponsorship revenue in 2020 with sleeve sponsors.

Quote:

Originally Posted by EpicPonyTime (Post 8740976)
What's the break even number for attendance in MLS? Has that ever been firmly established?

I don't think it exists, mostly because their revenues from corporate and sponsorships are increasing at such a rate that attendances can be flexible, and the new media deal in 2022 will change revenue breakdowns in the medium-term. Teams are building 20K-30K stadiums, so somewhere in that ballpark would make some sense, but I don't think it's a hard requirement.

Quote:

Originally Posted by blueandgoldguy (Post 8741616)
If ratings don't show a significant increase by 2022, then it is unlikely the league will see a huge tv deal...say $20 million per team. Somewhere around a 150% increase might be more realistic...around $8 - $10 million per team.

MLS teams don't live or die on TV ratings (if they did their franchise values certainly wouldn't increase 30% yoy). If we're basing a new TV deal for MLS similar to what MLB received or what the NHL will get then they'll be getting a larger increase than what you're expecting.

Quote:

Originally Posted by osmo (Post 8741659)
Lastly, many teams are dumping money on capital costs such as building elite acadamcy facilities and other legacy facilities to go towards that above mentioned future growth strategy.

This is a point i've tried to highlight a number of times on this forum. MLS is still in the infrastructure development phase and have yet to see the returns on their youth development setups (Whitecaps saw some with Davies, as an example).

ScreamingViking Nov 7, 2019 7:48 PM

Quote:

Originally Posted by osmo (Post 8741659)
If you're are a betting person there is more upside to betting on MLS success in 50 years versus the NFL and CFL (if one wants to compare large stadium outdoor sports head to head). Class action lawsuits surrounding CTE could bury both leagues.

I agree with you for that very reason.

Been thinking though... while soccer will certainly grow, and appetites for field sport are likely to remain if the CFL ever dies, would rugby end up partly filling the void in Canada?

esquire Nov 7, 2019 7:51 PM

I'm not saying it's impossible, but rugby would have a hell of a mountain to climb. Soccer has long been a very widely played game at the amateur level so there is a lot of familiarity with the sport. Football is already fairly popular in Canada, and I'm sure it's wild popularity south of the border probably exposes a lot of Canadians to it with the relentless media coverage it gets.

There is nothing like those things for rugby...it's a bit of a niche sport here in terms of amateur play and at the pro level.

ScreamingViking Nov 7, 2019 7:55 PM

Quote:

Originally Posted by esquire (Post 8742204)
There is nothing like those things for rugby...it's a bit of a niche sport here in terms of amateur play and at the pro level.

Quite right.

But it's a closer substitute (and ancestor) for gridiron football which makes me wonder if CFL die-hards would embrace it.

esquire Nov 7, 2019 8:00 PM

Quote:

Originally Posted by ScreamingViking (Post 8742208)
Quite right.

But it's a closer substitute (and ancestor) for gridiron football which makes me wonder if CFL die-hards would embrace it.

As with any emerging sport, I think its best hopes are with younger generations, the kids who are in their K-12 years who are playing the game now or might be in a few years time. They are the ones who could be buying season tickets in 20 years time.


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