Guest Post: Miami’s MLS Bid in Jeopardy?

Today’s post is courtesy of Jackie Adkins, a senior at the KenanFlagler Business School at UNC Chapel Hill.

Way back in November, I made a blog post about Miami’s vie for an MLS team and basically, why it was important that they submit a legitimate bid and ultimately get a team with the backing of FC Barcelona, Spain’s soccer equivalent of the New York Yankees. Well, recent reports indicate that the folks at Barcelona are reconsidering their $20 million expenditure to obtain 50% ownership in the future Miami team. Barcelona CEO John Oliver stated the complicated economic situation in the US and their desire to avoid financial risk as the main reason for re-evaluating their commitment. To put this in perspective, their top 3 players, Messi, Eto’o, and Henry, make a combined 23.4 million euro per year. Now I don’t have my exchange rate machine with me, but I know that makes buying an entire team for $20 million look like pocket change.

If Barcelona does end up part owner of the club, it will be very interesting to see exactly how closely they associate Barcelona with the team and how they do it. Jerseys that looked similar to Barcelona’s famous red and blue stripes are the most obvious option to do this. Another consideration is naming the stadium something similar to Camp Nou, the famous Barcelona stadium which seats over 100,000. What would REALLY be cool, and probably would be a long shot, would be to see some FC Barcelona players make guest appearances at games, whether it be as an honorary team member who just sits on the bench, doing an event with fans, etc. The point: the possibilities are endless. Conversely, Barcelona may try to distance the Barcelona name from the MLS team, at least until it proves to be a success, in hopes of not eroding its own brand image.

The willingness of a European super club to commit to help grow soccer in America by owning a portion of a team is a huge step in adding credibility to the MLS, and is an opportunity the MLS should take steps to ensure they capitalize on. Barcelona may be using some “Jedi mind tricks” to get the MLS to lower the $40 million price tag of a new franchise, softening the financial risk they will be taking on. If that’s the case, the MLS should be willing to do so, maybe in exchange for some extra exhibition matches when Barcelona tours the US, which they are already scheduled to do over the next five years. Another option is the MLS could allow Barcelona to postpone its bid for a couple of years to a time where the financial uncertainty isn’t quite as high. This seems a likely scenario, as the MLS has been a league which has taken small, deliberate steps so far to grow.

So, my message to the MLS: Please, please, please don’t let this deal get away!

Thanks to Russell for letting me hijack his blog today! You can visit my blog, Jack and the Biz Talk, at www.jackieadkins.blogspot.com, where you can find even more sports business posts like this one!

3 thoughts on “Guest Post: Miami’s MLS Bid in Jeopardy?

  • February 26, 2009 at 3:06 pm
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    Good post. I would be curious to know how successful Chivas USA have been with regard to the criteria that Jackie stated above

  • February 26, 2009 at 11:06 pm
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    That’s a great question and I’ll be honest and say that I’m not entirely sure what the Chivas USA team’s relationship is with the Guadalajara team they’re named after in terms of shared ownership. However, I do know that they are proud of their connection to the Mexican team and the relationship has been tremendously successful, primarily due to the large hispanic population in L.A. (even with another team sharing the stadium!)

    If anyone else out there knows more specifics on the relationship between Chivas USA and the Chivas de Guadalajara I’d certainly be interested to hear it!

  • March 4, 2009 at 3:36 pm
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    I interned with Chivas USA during last summer and may help a little bit in clearing some of those questions, so here’s my two bits:

    There is in fact a strong connection between both teams as ownership is pretty much the same as Guadalajara’s.
    As for revenue generation, Chivas USA has complete proprietary rights to the Chivas (USA and Guadalajara) brand in the US and Canada and manages it in accordance with its own interests. This is by far their highest revenue stream.

    On the competition side, this connection has made Chivas USA an inevitable team to consider when the Superliga was developed by the MLS. That brought them not only revenue from entering the competition but also brand awareness and good market positioning.

    Also, the relationship does, in some way, translate into a significant stadium attendance in gamedays. Nonetheless, Chivas USA is only a few thousand spectators above league average. This is mostly due to the fact that not every hispanic or mexican living in the US is a Chivas Guadalajara fan. On the contrary, many support their rival teams and would never set foot in a Chivas USA game due to that clear connection (unless their team was playing too). Also, the Home Depot Center in not in the best location for this demographic and transportation costs are one of the top complaints/remarks made by the fans.

    On the team side, it has been beneficial for Chivas USA to be able to use Guadalajara’s training camps in Mexico for off- and pre-season training and to play against teams of better caliber (or more experienced) than the MLS’s. Also, the best practices’ interchange has also helped Chivas to be able to perform better and more consistently in recent years.

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