- Club have hired consultancy firm Premier Partnerships to secure commercial deals
- Interbrand, which redesigned Juventus’ logo, brought in to undertake brand refresh
- New $250m soccer-specific stadium will be multi-purpose and have naming rights
The lead time is unusually short. FC Cincinnati – currently playing in the United Soccer League – was announced as an expansion franchise in May. Nashville, who were awarded a place in December, will not join the league until the 2020 season at the earliest.
While MLS commissioner Don Garber says the club is “MLS ready”, this disguises the enormous job Berding has to guide the club to its inaugural MLS campaign, which effectively begins with the expansion draft in December. At the same time the team is completing its final USL season, which could stretch until November if the team make a deep play-off run.
Immediately, this means: hiring new front-office and sports staff; scouting for new players and potentially overhauling the squad; making further upgrades to temporary venue Nippert Stadium; a brand refresh; renegotiating all commercial deals; and seeking potential new broadcast deals. In the medium term, it means building a new $250m soccer-specific stadium in Cincinnati’s West End area – due to be completed in 2021 – as well as a state-of-the-art training facility.
“What we were doing previously is nothing compared to what we are going through right now,” Berding tells SportBusiness. “As you go from the second division [USL was upgraded in January 2017] to the first there are things we need to be better at and there are things that we’ve identified with MLS that are a step up. We are working very hard to do that.”
“We can’t lose a single day,” Berding said recently. “There are no victory laps.”
As part of MLS’s single-entity model, team names, colours and logos need league approval. Virtually every existing club that has joined MLS has had brand redesigns to varying degrees.
FC Cincinnati has hired global brand agency Interbrand, which has an office in the city, to help tweak its brand ahead of the MLS season. Interbrand is best-known for the redesigned logo of Italian soccer giants Juventus.
“It will be an evolutionary change from USL to MLS,” Berding says. “If you look at what Juventus was prior and post, they are still black and white and still Juventus but the brand has a different, cleaner look. We are going through the same process as the same agency that [worked with] Juventus.
“The colours, blue and orange, will stay the same, we will still be FC Cincinnati.We are not talking about a revolutionary change – the brand is working, it has a lot of value in this market and we have spent two and a half years building it up to give it cultural ubiquity in the market.”
Another change will the business name – from Futbol Club Cincinnati to Fußball Club Cincinnati, although the club will generally still be referred to as FC Cincinnati. This is mainly for legal reasons: the club are required to create a new company to join MLS and the name cannot be exactly the same.
“It is an acknowledgement of Cincinnati’s strong German heritage,” says Berding. “We do have fans in Germany – Munich is a sister city of Cincinnati and we have developed some relationships through our sister city and we will look for opportunities to continue to grow it.”
A new home
FC Cincinnati has rented the 40,000-seat Nippert Stadium, home of University of Cincinnati football, since 2016. Its three-year lease runs from 2016 to 2018. “The rental deal does change in MLS, we’re negotiating that right now,” Berding said. MLS will require upgrades, including a new visitors’ changing room, which will be built under the North End stand. There will also be broadcast technology and fan-experience improvements.
FC Cincinnati has options to extend the Nippert lease by four additional three-year terms, but if all goes to plan only the first extension will be required. Though the club initially hoped to remain in situ, MLS insisted on a club-owned downtown stadium – a standard requirement for expansion teams.
After a lengthy process, a deal was secured in April to build a soccer-specific stadium in the city’s West End neighbourhood. The stadium is due to be completed in 2021.
Reports that FC Cincinnati’s new stadium will have a 21,000 capacity are wrong, Berding says. “We haven’t finalized what the number of seats is – I expect we’ll be far above 21,000.” He has already visited several MLS stadiums to investigate best practice and will have visited the remainder in the coming weeks. “We’ll borrow some of the best ideas we see from some of the different venues but also look to make it distinctly Cincinnati,” he says.
The club recently announced its principal development partners for the stadium, including architects, construction firm, management company and finance partner. Plans to maximise revenue from the new stadium – while embryonic – include a significant amount of premium seating, securing naming rights (with the help of consultancy firm Premier Partnerships) and making the venue multi-purpose. “… concerts versus college soccer games, high school soccer games, movie nights… all of that is something that we are studying,” says Berding.
The $250m stadium will be paid for by owner equity and bank financing, says Berding, while the local council has agreed to provide $34.8m in infrastructure costs for the new stadium.
Tickets will rise
The club will increase ticket prices next season, to levels comparable with average MLS pricing around the country.
In the USL, season tickets in the FC Cincinnati supporters’ group section, The Bailey, are sold for $170. MLS season tickets in supporters’ sections usually range from $272-$468.
Berding says: “As we move from division two to division one and Cincinnati is hosting some of the best players in the world, there certainly is an expectation that ticket prices will increase. There is a desire and acknowledgement on our part that the entry price point needs to remain accessible – and it will.
“We’re very mindful that a key value of FC Cincinnati is that it is a family-friendly club and we’ll never lose sight of that. Part of a way to show that is to have price points that families of all means can afford.”
He added that there will be a further price rise for tickets when the new stadium opens.
Sponsorship and broadcast rights up for renewal
Almost all the club’s sponsorship deals are up for renegotiation ahead of the move to MLS. Berding says existing partners have shown “enormous interest” in renewing.
“All our commercial deals have language in them regarding the MLS move-up. We were very cognizant that MLS was our ambition, and we needed to protect our business interests to that end,” Berding says. “All the deals involve renegotiations. In most cases you are adding a zero [to the deals].”
As part of the move from the USL to MLS, FC Cincinnati will switch from Nike to Adidas uniforms and merchandise. The deal is expected to kick in once the USL season ends but the club will continue to sell its Nike stock for the remainder of the current campaign.
Its local broadcast rights are currently held by Sinclair Broadcast Group’s Star 64 and CW television channels. Berding says these deals – rolling annual agreements with Sinclair – will be discussed in an onboarding session with MLS in the coming months and it is “to be determined” if the club moves to different networks.
“We’ve just started these conversations,” he says. “We value being over the air with television – we will look to continue that – and we will look to give everything [for example, digital rights] ample consideration.”
MLS format creates new business model
In MLS, the club will see its business model transformed.
In the USL, owners control their franchise independently, and retain all revenue earned locally (from sponsorship, ticket sales, merchandise, broadcast, parking, concessions et cetera). They pay an annual participation fee toward the league’s operating costs.
Under MLS’s single-entity model, outright owners become investor-operators who have a stake in the league. Revenues from sponsorship, merchandise, local broadcast, parking, and concessions are still retained, but revenues from online merchandise and 30 per cent of ticket sales are shared with the league.
Factoring in a planned new $30m training facility, it will cost between $400m and $500m for FC Cincinnati to join MLS, with the largest individual costs being the stadium and the $150m expansion fee required to enter the league.
The value of the club is certain to rise enormously. Earlier this year, the sale of a minority stake in Orlando City – which paid $70m to join MLS in 2013 – valued the club at $500m.