Collaborated in a group to develop a comprehensive plan for potential MLS Expansion to three cities. Besides designing and putting together the entire proposal document my proudest work is using my skills on Adobe Photoshop to create each of the three potential teams unique logos.
3. 3
EXECUTIVE SUMMARY
For this project, as the MLS plans to expand to more cities and grow the fandom of
their league nationwide we believe that we have chosen three cities that meet the standards
of what the President of the MLS is looking for to be successful as outlined in the Case Study.
We’ve taken into account corporate demand, an environmental analysis about the cities as it
pertains to suitability, as well as the feasibility of being successful, financial backing,
sponsorship opportunities and more. The three cities we chose were Cincinnati, San Diego,
and St. Louis. Throughout the process we took the liberty of coming up with team names for
each prospective city and designing a logo on Photoshop for all three. All five of us believed
we chose the right cities in hopes of the MLS continuing to expand within the United States
and reach new market segments that they never have before while building on existing ones.
We kept the MLS President’s following mission in mind throughout the process:
“A committed local ownership group with a passion for soccer and
sufficient resources, a desirable geographic market with a history
for supporting soccer/other sporting events, and a comprehensive
stadium plan”
4. 4
CURRENT MLS MARKET SITUATION
Current Situation
The MLS is currently looking to expand by adding more franchises across the United States.
Currently, the MLS is at 24 teams with the goal of expanding to as many as 28 by 2022. The
MLS is entering its 21st
season of professional play and in recent years, attendance, television
viewership, and merchandise sales have all significantly increased along with media deals
worth hundreds of millions of dollars with networks such as ESPN, FOX, Univision, and the
audiences. Since its inception, individuals have questioned if the MLS could survive in the
United States since it is not considered one of the four major sports especially after early
struggles with the league and years of empty stadiums.
5. 5
THE FUTURE OF MLS IN THE UNITED
STATES
Average Per Game Attendance of the Five Major Sport Leagues in North America per Statista
The Future
As the MLS seeks to expand in the United States there is a lot promise based on statistics in
recent years that MLS is ready to explode. According to a recent study by Statista the MLS has
grown to having the third highest attendance among five major sport leagues in North
America. Furthermore, the MLS also has also seen an increase in favorability. 7% of individuals
in the United States named soccer as their favorite sport according to a Forbes survey. That
number represents a three-percentage point gain from just four years ago, soccer being the
only sport to post such a large increase part of it has been the emergence of fandom of the
U.S. National team on the world stage.
6. 6
A TALE OF THREE CITIES: CINCINNATI,
OHIO
Why Cincinnati?
Cincinnati should be considered as one of the 3 final expansion franchises for the MLS
for many reasons. Firstly, it should be in consideration because of the passionate soccer fan
base that already exists in the city. The population of Cincinnati is 2,159,329 and the city
already has a USL soccer team; FC Cincinnati who had an average attendance
of 25,717 for the 2018 season. FC Cincinnati currently play their soccer at the
Nippert stadium which is one of the oldest sporting facilities in America,
dating back to 1901. The 33,250 seater stadium has been sold out many
times by the loyal FC Cincinnati fan base. When you compare those numbers to MLS teams,
only Atlanta United, Seattle Sounders, and Toronto FC have higher attendance. Although that
is impressive, FC Cincinnati has bigger plans. The USL team are planning to build a
privately/publicly funded new soccer-specific stadium (SSS). They have completed
negotiations with the City of Cincinnati and various municipal agencies to build a state-of-
7. 7
the-art, $200 million soccer-specific stadium in the West End neighborhood of Cincinnati. The
name of the team will be Cincinnati United FC.
Corporate Depth Analysis
Total Corporate Inventory: 2,230
Sports Teams: Cincinnati Reds, Cincinnati Bengals, Cincinnati FC, and University of Cincinnati
Athletics
Corporations per professional team: 743
Fortune 500 Companies: The city of Cincinnati has the appealing luxury of being home to 7
fortune 500 companies that includes Kroger (#17), Proctor and Gamble (#42), Macy’s (#120),
Fifth-Third Bank (#366), American Financial (#413), Western and Southern (#476), and Cintas
(#500).
Having this many fortune 500 companies presents the opportunity for sponsorships, naming
rights, and other sources of revenue down the line. Currently, we plan to reach an agreement
with Macy’s for naming rights to the new stadium as well as reaching a partnership
agreement with the University of Cincinnati. Cincinnati is a unique market that we believe has
the ability to be successful long-term with the help of these corporations in its backyard.
8. 8
FACILITY FINANCING AND TENANTS
Macy’s West End Stadium Cost: $200 Million
The stadium is going to be 30% publicly funded ($60 million). The money for the project will
be come from the following sources:
$6.38 million from the city’s reserves funds, money made on the Blue Ash Airport
$1.5 million, annually for 30 years, from the city’s hotel tax collection
$2.5 million from the city’s 2019 capital budget
$8 million from the Downtown and Over-the-Rhine tax increment finance district. The
fund, commonly called a TIF, takes taxes property owners pay in the neighborhoods
and reinvests them into new development.
The remaining $140 million will be privately funded by the following sources:
Macy’s will put forward $100 million over 10 years for the naming rights, the
stadium will be called Macy’s West End Stadium.
$5 million will be given towards the stadium from the University of Cincinnati (in
return the university will be able to use the facility 10 times a year if dates do
not clash with FC Cincinnati game day)
The remaining $35 million will be generated by the owner
9. 9
Non Primary Tenants: This is a soccer specific stadium however we would aim to host at
least 6 Music concerts per calendar year at the stadium. We would aim to also host at least 1
male and 1 female national team fixture per calendar year and 2 professional exhibition
games from elite clubs around the world per calendar year. As well as the use by the
University of Cincinnati.
10. 10
A TALE OF THREE CITIES: SAN DIEGO, CA
Why San Diego?
The 2nd
city we chose to bring an MLS team too is San Diego and it is our top choice.
Currently San Diego who currently hosts no professional soccer team. San Diego is home to
the San Diego Padres who play in the Major League Baseball League. It is a surprise that San
Diego does not have a professional soccer team in either the MLS or USL considering the rate
at which soccer has already grown to in the state of California. Currently California is home to
three Major League Soccer teams; LA Galaxy, Los Angeles FC and San Jose Earthquakes, whilst
California is also home to five United Soccer League franchises which includes Fresno FC, LA
Galaxy 11, Orange County SC and Sacramento Republic FC. Due to the popular demand for
soccer in California and with their only being one professional team in San Diego and it not
being a soccer team, this leaves a huge place in the market for a heavily supported Major
League Soccer team. However there is a professional indoor soccer team who play in the
MASL (Major Arena Soccer League) the San Diego Shockers who finished first place in the
Pacific Division conference last season. With a population of 3,299,521 and also with 33% of
11. 11
San Diego’s population being Hispanic, we feel this would be a perfect target market for an
MLS team. Research shows the over 97 million people watched at least 6 minutes of a soccer
match last year and over 32 million of these viewers were Hispanic. From this research it
shows that Hispanics accounted for an astonishing 68% of soccer’s viewership throughout the
year compared to about 12% of viewership to all other sports. The San Diego Padres average
attendance is 26,837 which ranks 18th
in the nation for Major League baseball team’s average
attendance, with the Padres being heavily supported, we feel an MLS team would also be
heavily supported if it were to come to San Diego, especially with the population size
compared to other proposed cities and also with the Hispanic percentage of the population.
There are good quality university soccer teams in San Diego such as NCAA Division 1
programs San Diego State University and the University of San Diego. San Diego State plays
in the PAC-12 which is arguably the best conference for men’s soccer in the nation which is
also heavily supported with good attendance for collegiate level. Also, there is the University
of San Diego who play in the NCAA Division 1West Coast Conference. Then there is the
University of California San Diego who play in the NCAA Division 2. The University of
California are a very successful Division 2 soccer team who rank 23rd
in the nation for division 2
attendances for the fall of 2017. San Diego is currently host to one semi-professional PDL
team the San Diego Zest SC and also has two semi-professional NPSL (National Premier
Soccer League) teams ASC San Diego and the San Diego Flash. This adds to the benefit of San
Diego having an MLS team as it gives these players a goal to strive for of playing professional
soccer in their homegrown state. Furthermore, San Diego is an attractive destination for an
MLS expansion team is due to its tourism and exclusiveness. The name of the San Diego
12. 12
Soccer team will be the San Diego Jacks in a sponsorship and ownership with the popular San
Diego fast food chain Jack in the Box.
13. 13
Corporate Depth Analysis
Total Corporate Inventory: 2,940
Sports Teams: San Diego Padres, San Diego Chargers (at the time of this case), San Diego
State Aztecs, University of San Diego Toreros
Corporations per professional team: 1,470
Fortune 500 Companies: The city of San Diego home to two fortune 500 companies. The
first company is a multinational semiconductor and telecommunications equipment company
that designs and markets wireless telecommunications called Qualcomm (#119). The second
Fortune 500 company headquartered in San Diego. The second fortune 500 company that is
headquartered in San Diego is Sempra Energy, an energy company ranked 280th
on the list.
Other notable companies: The most notable company in San Diego is the wildly popular fast
food chain Jack in the Box reaching 21 states in the United States with 2,200 locations
generating a revenue near 2.2 billion dollars. The notable reason to highlight Jack In the Box
is we plan to mimic the New York Red Bulls model of Red Bull partly owning the New York
Red Bulls. Hence, the San Diego Jacks. Furthermore, other notable companies include Pet Co,
Nokia, Reef Sandals, and WD-40.
14. 14
FACILITY FINANCING AND TENANTS
Jack in the Box Stadium Cost: $170 Million
San Diego’s new stadium is going to cost $170 million which will be split 60/40
between public and private financing as outlined:
$140 million will be put forward privately through the ownership group which includes
the CEO of Jack in the Box.
The remaining $30 million will be generated through sales tax 8%, Sin tax 5%, tourism
and food & beverage tax 17%, and the remaining 20% will be from General obligations
bonds. Along with the stadium the new franchise plans to build a new hotel and
multiple restaurants and bars.
Non Primary Tenants: Our aim would be to hold at least 12 music concerts per calendar year
due to us being in a warm location all year round we feel this would be possible at our
stadium, especially with it being a large tourist location also and a place which is regularly
visited. We would also aim to host at least 5 professional soccer exhibition games per
calendar year, a lot of teams travel to California from European countries for their pre-season
15. 15
tours because of the hot climate, so this would enable our stadium to host some of these
games hopefully. We would also aim to host at least 1 male and 1 female nation team game
per calendar year.
San Diego Jacks Comprehensive Budget
16. 16
The Budget: In order to come up with a budget for the San Diego Jacks, the Seattle Sounders
FC were used as a reference point. Soccer is very popular in the San Diego area, and Seattle
started out the same way and when they turned their club team into a professional team, they
have been a major success. Above is the San Diego Jack project budget for the upcoming
year.
17. 17
A TALE OF THREE CITIES: ST.LOUIS, MO
Why St.Louis?
The last city we chose was St. Louis. We chose this city because there is currently no
MLS team based in St Louis, however it is a city who thrives off producing great soccer talent
such as current U.S National player Josh Sargeant. There are already several successful
professional teams in St. Louis such as the MLB team the St Louis Cardinals, NHL team St.
Louis Blues, USL team St Louis FC (2nd
tier of American soccer) and also MASL team the St.
Louis Ambush (indoor professional soccer). Previously there was an NFL team the St. Louis
Rams who then returned to Los Angeles in 2016. We feel this leaves space in the market for
another top level, 1st
professional tier sports team in St. Louis which would be an MLS team.
Soccer is heavily supported and participated in and around the city of St. Louis. Saint Louis
University had an average attendance in 2017 of 1,032 which ranked at 32nd
in the nation
which is better than many teams at the collegiate level with a much higher ranking than St.
18. 18
Louis University. Which is more impressive is Saint Louis University’s highest attendance from
this past season of fall 2018 which is 4903 against SIUE (which is higher than the professional
USL teams average attendance) shows just how heavily the area is supported by soccer fans.
There is also Southern Illinois University of Edwardsville (SIUE) 21 miles away from St. Louis.
Bases in Illinois SIUE are another NCAA Division 1 soccer program who attract high
attendances.There are also many successful schools who participate in NCAA Division 2
soccer in the St. Louis area such as Lindenwood University and Maryville University. With all
these universities averaging great attendances this shows how well supported soccer is at the
collegiate level in the St. Louis area which gives us great confidence of an MLS team also
being very heavily supported.
There are also a number of semi-professional soccer teams who recite in St. Louis such
as the St. Louis Lions who play soccer in the PDL league, there was also St. Louis FC U23 who
played in the PDL before they decided to pull out of the league in 2017 as part of a reshape
to their academy structure and finally there is FC Maritsa who play soccer in the United
Premier Soccer League (UPSL). Youth soccer is huge in the city of St. Louis and its surrounding
areas such as O’Fallon, Cottleville, St. Charles, Kirkwood and Webster Groves to name just a
few. The youth soccer clubs based in the St. Louis area are as follows:
-AFA Fillies
-Ajax Soccer Club
-Alton Fighting Irish Soccer Club
-Alton United FC
-Ambassadors FC
-Amerstam FC
-FC Missouri
-FC Global United
-GPS St. Louis
-Highland Attackers and a list that accounts for 50 more teams in the area
-
19. 19
This shows there is a great demand for youth soccer in St. Louis and this is a city who
really are building for the future and the city is desperate for an MLS team to give these
young soccer players something to strive for and a goal to achieve of playing in the MLS for
their hometown club.
The professional teams in the St. Louis area are very heavily supported. The St. Louis
Cardinals (MLB team) host an average attendance for 2017 of 42,019. St. Louis is also host to
NHL team St. Louis Blues who had an average attendance for 2017 of 18,358. The current only
professional soccer team in St. Louis is the USL (2nd
tier) team St Louis FC who have an average
of 4,271 for the season of 2017 which is the 16th
highest in the nation for USL soccer, finally
indoor professional soccer team St. Louis Ambush who are part of the MASL had an average
attendance of 2574.
With current professional teams being so heavily supported and their being so many
youth soccer clubs in the area, we feel if there was to be an
MLS team brought to St. Louis there would be huge benefits.
It would bring a new level of soccer to St. Louis that the city
has never seen before and there is no doubt it would be very
heavily supported on the basis of how heavily supported the
university’s, youth soccer clubs, USL teams, MASL teams and
also other professional teams such as the Cardinals and the Blues are. However, fans
desperately miss the Rams since there departure which why we are naming this MLS team the
St. Louis Rams Football Club.
20. 20
Corporate Depth Analysis
Total Corporate Inventory: 2,830
Sports Teams: St.Louis Blues, St. Louis Cardinals, and St.Louis Rams (at the time of the case
study)
Corporations per professional team: 943
Fortune 500 Companies: The city of St.Louis is home to 10 fortune 500 companies by far the
most among the proposed expansion cities. The companies include Express Scripts (#25),
Centene (#61), Emerson Electric (#178), Monsanto (#199), Reinsurance Group of America
(#234), Edward Jones Financial (#376), Graybar Electric (#426), Ameren (#453), Peabody
Energey (#491)
Edward Jones Financial: Edward Jones is probably the most well-known company out of the
city of San Diego serving as a financial services firm for investments. It has more than 14,000
locations, 7 million clients, and $1 trillion in assets under management worldwide. For this
reason, Edward Jones has been chosen as the primary sponsor of the St.Louis Rams Football
Club.
21. 21
FACILITY FINANCING AND TENANTS
Edward Jones Stadium Cost: $110 Million
St.Louis’s New Stadium is going to cost $110 Million and is broken down through a
63/27 split as follows:
$70 million off this will be privately funded with the help of naming rights from Edward
Jones
$40 million will be publicly financed. This will be from dedicated sales taxes on
concessions and other merchandise sold to patrons, a property tax break from a city
agency owning the stadium site and leasing it to the group, state tax credits and a
break on the city’s 5 percent ticket tax.
Non Primary Tenants: Due to there already being Busch stadium which hosts to many music
concerts per year and also professional soccer fixtures in the past such as Barcelona vs Man
United in an exhibition, we feel that due to the size of what our stadium will be it will be hard
for us to attract these games due to Busch stadium being a lot bigger. However, with our
stadium being soccer specific we would aim to host at least 3 music concerts a year which sell
out the capacity. We would also aim to host at least 2 professional exhibition soccer games
from elite level soccer clubs around the world, we would also like to host an NCAA
tournament game at our stadium.
22. 22
INDIVIDUAL TICKET DEMAND: CINCINATTI FC
PER GAME SEASON TICKETS
Club Seats $58 $1,500
Field Seats $52 $1,000
Premium Midfield $43 $800
Center Midfield $37 $650
Outer Midfield $37 $650
Sideline A/Upper Center Mid $34 $630
Sideline B/Upper Mid $31 $615
Corner Flag A/Upper Outer Mid $29 $520
Corner Endline B/Upper Sideline
B
$25 $490
Endline A $29 $520
Upper Corners & Endlines $22 $370
23. 23
INDIVIDUAL TICKET DEMAND: SAN DIEGO JACKS FC
PER GAME SEASON
TICKETS
$57 $1,300
$60 $1,500
$57 $1,300
$47 $930
$44 $890
$39 $730
$37 $700
$34 $650
$31 $580
$29 $550
$26 $495
$26 $495
$23 $450
$19 $350
25. 25
SEASON TICKET HOLDER INCENTIVES
Cincinnati FC:
Complimentary Parking
Playoff Priority
Member scarf
Online presale opportunities
Complimentary Wi-Fi
20% discount at Concessions & Fan Shop
San Diego Jacks:
Your name listed on seats purchased
Inaugural gift
Complimentary Wi-Fi
Pregame/postgame happy hours
Presale on playoff & individual games
Discounted upgrades
St. Louis Rams:
Exclusive team merchandise discounts
Complimentary Wi-Fi
Exclusive pricing on concessions
Ticket exchange dates
Access to exclusive member events
Playoff priority
26. 26
THE VALUE OF POTENTIAL NAMING-RIGHTS
DEAL
The market approach is a valuation method used to determine the appraisal value of a
business, intangible asset, business ownership interest, or security by considering the market
prices of comparable assets or businesses that have been sold recently or those that are still
available. Price-related indicators like sales, book values, and price to earnings are usually
utilized.
Major League Soccer is fairly new to the U.S. and steadily increasing each year. Many
expansion teams have been added over the years, and the amount of companies wanting to
sponsor these teams is increasing as well. MLS has over 20 national sponsors you’ll see
advertised in stadiums and on TV during game broadcasts. Additionally, Investor-Operators
are encouraged to cultivate local sponsorships for their clubs, including the big logos on the
front of MLS jerseys and stadium naming rights. With this information, finding comparable
27. 27
sponsorship deals was easier for the three proposed cities: St. Louis, San Diego, and
Cincinnati.
For the three major naming rights deals; Macy’s was chosen for Cincinnati, Edward Jones was chosen
for St. Louis, and Jack in the Box was chosen for San Diego. Based on previous naming rights deals,
for example the Colorado Rapids’ deal with Dick’s Sporting good, the Rapids would receive around 2
million dollars yearly. Potential naming rights revenue could include:
All the companies chosen for naming rights contracts, are all prominent companies in the
perspective city. Jack in the Box is an American fast-food restaurant chain founded and headquartered
in San Diego, California. Edward Jones is a financial services firm headquartered in Des Peres,
Missouri. Macy's is an American department store chain headquartered in Cincinnati. With each of
these major companies being founded or headquartered in one of the chosen cities, giving them naming
rights would have a tremendous impact for both the expansion teams and the company.
29. 29
FACILITY SPECIFICATIONS AND
OPERATING ESTIMATES
FacilitySize Considerations
For this section we compared three similar MLS teams when it comes to city size,
partnership opportunities through corporate demand, funding, demographics, and more.
Based on our findings and comparing numbers we found Kansas City is comparable to
Cincinnati, Denver comparable to St. Louis, and Seattle Comparable to San Diego. The
average future attendance we calculated is as follows:
Based on our data the following conclusion can be made about what our facility size should
be.
Cincinnati: 19,000 (venue capacity) / 18,829 (avg. attendance)
San Diego: 30,000 (venue capacity) / 26,524 (avg. attendance)
St. Louis: 18,500 (venue capacity) / 18,534 (avg. attendance)