- Choosing the right expansion cities vital to MLS's future success
- Los Angeles FC pursue an 'authentic' brand as plan to create LA Galaxy rivalry
- Soccer-specific stadium plan drives Nashville's surprise selection
Major League Soccer is expanding in a major way. After growing at a steady pace since 2004, four new franchises will join the league in the coming years.
Los Angeles Football Club, or LA FC, enter in March to become MLS's 23rd team while Nashville was announced as an expansion city last December. By spring 2018, two new cities – most likely Cincinnati and Miami – will also be named as the homes of expansion franchises. Two more are expected to be revealed by the end of 2018, taking MLS to 28 teams by the mid-2020s.
Don Garber, the MLS commissioner, has long said that expansion will stop at 28 but with entrance fees reaching $150m (€124m) – up from $10m a decade ago – one cannot completely rule out further entrants down the line. That 12 cities have competed for the last four expansion places would have been unthinkable even five years ago.
Expansion helps solidify MLS's footprint across the United States, with three teams also in Canada, and gives the league a firmer foothold with which to challenge the traditional 'big four' in the North America.
By most metrics – TV viewership, club value, sponsorship and advertising deals – MLS has a long way to go to dislodge the 'big four' leagues but the long-term prospects appear promising given the decision to target millennials: a cosmopolitan, social-media savvy group more keen on soccer and less on baseball.
Expansion decisions will go a long way to improving MLS's standing, and location is key.
Multi-cultural Nashville gives MLS a firm place in the South East alongside Atlanta and Orlando. LA FC will hopefully form a rivalry with LA Galaxy as compelling as that between New York City FC and the New York Red Bulls.
Despite the struggles of David Beckham's ownership group to get their franchise off the ground, glamorous Miami offers a large Latino community with links to various Caribbean and Latin American countries.
The team ought to be in MLS already, having been announced as far back as February 2014. It is hoped the Beckham effect will make up for the embarrassing delays over his team's entry.
The league's new entrants will aim to follow in the footsteps of Atlanta United – which made a huge splash in its first MLS season last year – to take the league forward.
1) Los Angeles FC
Two MLS teams in LA is nothing new: for nine years from 2005 to 2014 LA Galaxy had a local rival in Chivas USA. But it is already clear that LA FC can not only avoid the pitfalls of its defunct predecessor but may even come to overshadow LA Galaxy, the most famous and successful club in MLS history.
Chivas USA – a sister club to Mexican side CD Guadalajara – was the product of a vanished train of thought in MLS development – an experiment to cater entirely to the LA-area Latino community.
Despite a brief run of play-off success its early years, Chivas struggled on and off the field and was no match for the Galaxy, with whom they shared the then-Home Depot Center.
Just three days after Chivas USA were dissolved in 2014, MLS announced a new expansion team in LA. Having had over three years to prepare for their entry this season, LA FC looks the part.
The LA FC ownership group is different from any other in MLS. Alongside heavyweights such as Mandalay Entertainment chief executive Peter Guber, co-owner of the LA Dodgers and the NBA’s Golden State Warriors, and Henry Nguyen, a Vietnamese-American venture capitalist, are the likes of NBA legend Magic Johnson, comedian Will Ferrell, former women’s soccer player Mia Hamm and self-help author Tony Robbins.
Tom Penn, the LA FC president, tells SportBusiness International: "We wanted a group that authentically represented Los Angeles – the city, the ideal, the idea. And we assembled a group that has so much world-class experience in their respective areas. It was assemblage of talent – it wasn't about capital, it was about intellectual capital, reputational capital and experiential capital, not just financial capital.
"The advantage for me is that I have the best contact list in global sports, I have this ability to call on any expert at any time in the various areas of interest and that has been huge advantage as we've created everything from nothing.
"When we work on entertainment we have the executives of Dick Clark Productions, we've got experts from the LA Dodgers and the Golden State Warriors, two of the premier sports franchises in America, we have Chad Hurley who founded YouTube, we have Brandon Beck and Marc Merrill who are world leaders in eSports… we have Tony Robbins who is a coach to the greatest leaders in the world. I could just keep going down the list."
According to Bloomberg, the Banc of California agreed to pay $100m over 15 years for the naming rights to the LA FC stadium at Exposition Park, which is also the home of the Los Angeles Memorial Coliseum and many other attractions.
With plans to construct their own training facility, and season tickets and premium packages virtually sold out, it is so far so good.
"LA is a massive market, over 13 million people. The GDP of this city would be the 16th largest country in the world. This place is plenty big for as many teams as there are," Penn adds. "The challenge is you have to be first class in everything you do to be relevant – this is why we invested so much in our stadium, which is the best of its kind in the world of its size and it's really captured the attention of the market place.
"We did not try to appeal to any certain demographic or ethnicity or any other sector of LA – we just wanted to be authentically LA in everything we did."
What have LA FC learned from the Chivas USA experience? "We learned a ton of what not to do," says Penn. "There really isn't a comparison other than this team was in this market. Such a completely different approach, starting with the stadium – we have our own venue in the heart of the city and they were second tenants in a different building."
On the commercial side, Penn reveals, LA FC have a multi-year marketing deal with Heineken USA (a league-level MLS sponsor), as well as a partnership with Toyota.
Pattie Falch, Heineken USA director of events and partnerships, tells us: "From the very beginning when we partnered with MLS we were looking for a team in the LA market and obviously the Galaxy was not available for us in our sponsorship category [the Galaxy has a deal with Corona]. When it was clear that MLS was expanding in the LA market we made it clear from the outset that we wanted to be a part of it.
"One of the benefits of being there from day one is that we have been able to build the relationship from the ground up, which is something we've not been able to do with any other team in the league."
Activation includes a Heineken bar in the Banc of California Stadium that has been designed following discussions with LA FC supporter groups.
Heineken, a long-standing Uefa Champions League sponsor, is a major player in the global soccer market and its involvement with LA FC is an extension of that.
Rob Ryder, a Heineken USA brand manager, explains: "When we looked at our target consumers they hugely over-indexed on soccer interests and when we asked what they associate with Heineken one thing that pops up more than with other brands is that they associate it with soccer."
As for cracking the crowded Los Angeles sports market, the key for LA FC, according to Alexi Lalas –former LA Galaxy general manager, USA defender, and now Fox Sports pundit – is for the club to differentiate themselves from the Galaxy, which he believes it will do with "alternative, urban" branding.
Lalas tells SportBusiness International: “The Galaxy quickly dispatched their rivals Chivas USA, on and off the field. So much so that they went out of business. But Los Angeles is notorious for liking a shiny new toy so this stadium and this team is, I think, going to turn a lot of heads and be that shiny new toy.
"If they can establish a brand that’s cool and alternative, and I think they have already done a good job of that so far with their colour scheme and marketing concept, they can have some real success off the field.
"On the field they have to compete and I think they will challenge the Galaxy to compete, which they need, and they will both benefit from a true rivalry rather than the false rivalry that existed with Chivas USA."
Lalas adds: “I think LA FC's more urban and hip type of appeal – and being almost the antithesis of the LA Galaxy and its bright, starlike motif – can be used to their advantage. There is an undercurrent of being like the Oakland Raiders and being truer to the city of Los Angeles.
"A lot of these things I think will serve them well in targeting either a segment of the soccer market that is looking for an alternative or a segment that has never embraced the Galaxy for whatever reason."
2) Nashville SC
Music City has become a serious sports town in the past few decades.
The Tennessee Titans, who moved to Nashville from Houston in 1997, reached the NFL play-offs for the first time in nine years this season. Last summer the NHL Nashville Predators reached the Stanley Cup finals. And last December the city was awarded a coveted MLS expansion slot.
Nashville came from out of nowhere to gain an MLS place – the city won a place in the second-tier United Soccer League just over a year ago – but its expansion application was head and shoulders above the other applicants.
Led by billionaire local businessman John Ingram, and accompanied by the Wilf family – owners of the NFL's Minnesota Vikings – the ownership group ticked all the boxes. Just as significantly, the local council voted to support a $275m soccer-specific stadium at the city's fairgrounds site.
There is an element of risk in choosing Nashville, a city with no history of support for a professional soccer team. But healthy crowds last summer for an International Champions Cup match between Manchester City and Tottenham Hotspur, as well as a Gold Cup match between USA and Panama at Nissan Stadium, the home of the Titans, show promise.
Nissan, one of the biggest employers in Tennessee, recently signed a deal with Nashville SC as primary jersey sponsors in the USL and the manufacturer believes that soccer, as a rising sport in the US, ties in well with its brand.
Robert Cross, director of marketing media and activation at Nissan, says: "Soccer is definitely up and coming as a sport in the US and there is a real appeal to be part of something like that – outside the big four sports. There is also a desire as a mid-table auto manufacturer in terms of our market share to find the growing, less established opportunities and grow our brand alongside them.
"It is also more accessible from a cost point of view to invest there and with large, long-term programmes it's about investing and building relationships over time."
To improve its branding, Nissan is in discussions to display some of its models on match days at First Tennessee Park, Nashville SC's USL stadium – which is primarily the home of minor league baseball team the Nashville Sounds.
Nissan is not yet confirmed to be a MLS partner of Nashville SC, Cross told SportBusiness International. "There is definite potential with the MLS piece and we will evaluate that as we move forwards," he adds. "We have not had conversations about [MLS]. It's a very nascent partnership. There is exciting potential down the path but we have to see how this grows over the next two years. We are looking to see how we can develop that relationship in the USL and that has been the focus."
According to a study conducted by the University of Tennessee, Knoxville, the economic benefits of having an MLS team in Nashville are significant. The study estimates that construction of the stadium alone will generate $139.2m in income, $18.3m in state and local tax revenues and 3,572 temporary full-time jobs to the city. Long term, the study estimates an additional 1,886 permanent full-time jobs and $15.1m in tax revenues once the team plays in MLS.
Ralph Schulz, Nashville Area Chamber of Commerce chief executive, said: "There is a lot of migration to Nashville from many places in the country and even around the globe, and with soccer being a popular sport on an international level, having a MLS team in Nashville really fits into the desires of the people living here and moving here.
"Nashville is an entertainment centre – music is what we are known for – and MLS complements the entertainment industry here. The MLS team creates job, revenue and economic activity but it also makes Nashville a popular place to live.
"Moreover, MLS appeals to a really diverse group and it creates an awareness of the diverse cultures in Nashville that a lot of people are not aware of."
As Lalas adds: “Nashville has been around for a long time but the modern-day Nashville is much more than Music City. Prospective MLS owners recognize that the league wants to be in places that are progressive, diverse and attract business and industry – a lot of that appeals to the generation that likes soccer.”
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Who’s next?
Following the announcement of Nashville’s MLS entry, one of Sacramento, Detroit and Cincinnati will be named as an expansion team early this year, Cincinnati is clear favourites.
Backed by the wealthy Lindner family, FC Cincinnati has regularly attracted crowds over 20,000 since their entry into the USL in 2016.
While there is some concern over a stadium location and funding for the arena, FC Cincinnati already have a reported $50m deal with Ohio-based Mercy Health to become team jersey sponsors if MLS entry is granted.
The likely relocation of Ohio neighbours the Columbus Crew to Austin, Texas, also plays to their advantage.
Miami bound
It has been four years since David Beckham launched his plan for a MLS team in Miami but it now appears entry into the league is around the corner. With an ownership group including entertainment guru Simon Fuller, Sprint CEO Marcelo Claure and, recently, Miami executives Jorge and Jose Mas and Japanese billionaire Masayoshi Son, 'Miami Beckham United’ have the financial backing to make a splash.
The negative press that has come from the delays over entrance to MLS and a stadium site in the far from salubrious neighbourhood of Overtown has raised concerns over the club's potential. But neither these delays nor the failure of the Miami Fusion, an early MLS team, has put off league executives.
