CSM Sport & Entertainment is looking to invest in Major League Soccer (MLS) franchises through its newly-launched CSM Soccer subsidiary. Kevin Roberts spoke to the brains behind the operation.
Soccer in the United States has long been touted as one of the major commercial growth areas in world sport, and last month the spotlight was firmly placed on it following news that CSM Sport & Entertainment, a division of Chime Communications, had launched a new subsidiary to accelerate its opportunities in the market.
CSM Soccer is being led by president and chief operating officer Gary Hopkins, the former CEO of API (Alan Pascoe International) agency API Sponsorship USA, which brought a sea-change in the value of USSF (US Soccer Federation) commercial rights and was a co-founding investor in both MLS and Washington team DC United.
CSM deputy chairman Edward Leask who, like Hopkins, has been an intrinsic part of the commercial development of the sport in north America, says CSM Soccer is entering the market with an appetite for investment in both existing and potentially new MLS teams.
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“We are looking at acquisitions and we’ve identified where we want to be involved,” says Leask, who co-founded API and led the team that became a founder of MLS. “The United States is the biggest sports market in the world and soccer is its fastest growing sport. We want to play a significant part in that growth.”
CSM encompasses a range of well-known sports sector brands ranging from the Fast Track agency to talent managers Essentially, signage specialist Icon and hospitality company iLUKA. Icon and CSM sales agency Sportseen are already operating in New York while the company also owns the JMI motor sports agency and sponsorship company SJX, both of which were founded in the United States.
“We have access to the skill-sets of a wide range of specialist operations and felt that CSM Soccer was the right brand vehicle to launch our service for the United States soccer market. We will continue to operate JMI and SJX separately,” says Leask.
The focus on soccer in the United States from CSM and other international sports sector brands is testament to just how far the game has come, says Hopkins, and its appeal to demographics highly valued by brands.
“Millennials see soccer as the sport they want to experience and, since the move to more soccer-specific stadiums, the experience is closer to the one experienced in Europe,” he told SportBusiness International. “You only have to go to games in Portland and Seattle – where they average crowds of 40,000 – to realise that the passion and the experience is very much the same as across the Atlantic.
“You also have to understand that soccer fans in the United States are different from those elsewhere because they’ll usually support more than one team – one in MLS, one in the English Premier League, a Mexican team and perhaps another in Europe.”
Mastering the business of United States soccer is about understanding the nature of the fans, says Hopkins, who adds that there has been a significant switch from youngsters playing the game to wanting to attend professional games in person.
Millennials see soccer as the sport they want to experience…[and] the experience is closer to the one experienced in Europe
“They see it as a cool, hip and trendy sport,” he says. “It is a young audience that shares its love of the game through social media. That’s something which is very attractive to brands, and is reflected in the size of some recent deals that have been done.”
Deals Hopkins refers to include Audi’s sponsorship of MLS and presenting sponsorship of the MLS Cup from 2015 to 2018; Heineken’s $10 million-a-year deal with the MLS from 2015 to 2019; and adidas’ long-term MLS supplier deal said to be worth $25 million a year.
These deals, says Hopkins, are contributing to the surging value of MLS franchises that now average close to $100 million. That may not come close to the value of a franchise in the National Football League or National Basketball Association, but the upswing represents the value perceived by investors, making soccer teams a good value proposition.
While Leask says CSM Soccer will only invest in franchises in “the top league” – MLS as opposed to the NASL (North American Soccer League) or USL (United Soccer League) – Hopkins adds that the growth in public appetite for soccer is creating business opportunities at all levels of the sport.
“Not every town or city can sustain an MLS team, but there is a huge interest in the second and third level…the fact is the rising tide of soccer in the United States floats all boats,” Hopkins says, illustrating the case of Sacramento Republic in the second-tier USL, which has averaged gates of more than 10,000 over the past two seasons, a figure that doubles when playing games at larger home venues.
Hopkins also sees opportunities in the newly-formed National Women’s Soccer League (NWSL), the latest attempt to establish professional women’s soccer in a country whose national team is a world-beater. Girls account for 38 per cent of the 14 million United States youngsters playing soccer.
“You can’t be in the United States soccer market and not be involved in the women’s game. Everybody is looking to support it and help it grow,” says Hopkins, who adds that he has already met with NWSL commissioner Jeff Plush.