But what about revenue?
Well… not so much. According to Tim Leiweke, chief executive of AEG, only a couple of squads will make a profit in 2010. MLS is on solid financial ground, but recruiting big-name players – who come with enormous pricetags – isn’t the route to making money. Sports Business Daily offers three ways teams can improve their cash flow.
The first is relatively obvious: ticket sales. Although the league averages around 16,000 tickets per match, it could be doing better, especially as more teams get their own soccer-specific stadiums. MLS is the first league to offer ticket sales training, so we may see the results soon.
And the other two?The league needs to work to improve its television ratings. While an increasing number of people are watching the English Premier League, MLS is mired in a slump. SBJ reports, “According to The Nielsen Co., through Oct. 3, MLS was averaging a 0.2 cable rating on ESPN2, which is flat when compared to the same period in 2009, and 253,000 viewers, which is down 16 percent from 2009.” That’s not good news, obviously, especially in a World Cup year.
The final revenue stream will come from jersey sponsors and other sponsorship options. For example, Beckham’s arrival in Los Angeles immediately encouraged Herbalife to dish out $4 million per year to put their name on the Galaxy’s uniforms.
MLS can survive, but it needs to maximize its revenue opportunities.