Major League Soccer's Seattle Sounders FC ownership puts its money where its mouth is

From their inception and through their pre-operating period, opening season and well into their sophomore season in Major League Soccer, the Seattle Sounders FC have defined themselves as something special in North American professional sport.

Exhibit 1 is how they created an ownership group which blended the new (Hollywood producer Joe Roth, comedian and television star Drew Carey and former software mogul and financial titan Paul Allen) with the old (Adrian Hanauer, owner and operator of the incumbent USL Sounders). It gave the franchise seamless continuity with the city's USL soccer tradition and history while at the same time injecting it with economic, political and creative clout that is second to none in Major League Soccer.

Exhibit 2 is how they listened and responded to their constituents on the issue of the name and identity of the franchise. They abandoned their choice for a new name -- either Seattle FC, Seattle Alliance or Seattle Republic -- and embraced the clear favourite of Seattle soccer fans: the traditional Sounders FC designation.

Exhibit 3 is the democratic spin they've put on soccer operations management; a vehicle in which Sounders FC season ticket holders will have a voice in extending the initial contract of general manager Hanauer...or in voting for change.

Exhibit 4 is the authenticity of their fan experience; where Sounders shirts and scarves combine with band-led fan marches (Sound Wave) and other touches on match nights at Qwest Field to make it the closest thing to European soccer in North America.

Exhibit 5 is the most impressive marketing launch in North American expansion franchise history.

Exhibit 6 is an infrastructure provided by Allen's Vulcan Sports & Entertainment, the company which owns and operates the Seattle Seahawks of the NFL and markets and manages the Sounders FC.

Exhibit 7 is a dynamic community partnership between the Sounders FC and Washington State Youth Soccer.

The first-year results included a playoff berth as an expansion franchise and records in MLS attendance (north of 30,000 per game), sponsorship (including a five-year, $20 million shirt deal with Microsoft's Xbox 360), merchandising and regional television success. The second-year has picked up where the first ended, with crowds now eclipsing the 36,000-mark in an expanded seating manifest at Qwest Field.

Yet the ownership and management of the Seattle soccer club pushed the envelope to another level this week after the Sounders suffered an embarrassing 4-0 loss at home at the hands of the Los Angeles Galaxy. By Sunday morning, they had announced a one-game refund for all season ticket holders. It will come in the form of a credit against next year's season ticket charges.

It all came after one of the partners in the club looked around at his colleagues in the owners' suite and said if he was a fan, he'd want his money back.

Within 24 hours, Sounders FC season ticket holders had received word they would get the single-game credit as an acknowledgment of the sub-par team performance against the Galaxy and in appreciation of the support they had given the club since the announcement four years ago that MLS was coming to Seattle.

It was another example of the Sounders FC walking the walk and talking the talk. It was also quite simply a case of the team's ownership putting its money where its mouth is. Whether or not other ownership groups have the integrity to make similar moves in the months and years to come, the Sounders FC have made a resounding statement about the importance of season ticket holders to the most successful sport franchises.

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A tale of two sport business storylines

Note: Penny Stocks is a regular feature of The Sport Market on TEAM 1040 and teamradio.ca Saturdays from 9 a.m. to 12 noon PT. It airs at 10:40 a.m. PT and identifies some of the smaller sport business stories which are worth watching in various sectors of The Sport Market. This week, the imminent appointment of Andrea Shaw to an independent executive contract as the new marketing and sponsorship boss of the Vancouver Whitecaps FC represents the intersection of two Penny Stock storylines we've projected since last fall: the need for the Whitecaps to ramp up their management team in preparation for their debut in Major League Soccer in 2011 and the imminent return of significant sport business talent to the marketplace as VANOC begins to disband post-Vancouver 2010.

The leap from United Soccer Leagues to Major League Soccer is a relatively small one in terms of on-field product. It's a massive leap, however, in all other aspects of the game of soccer, from brand management to television to marketing and game presentation.

That's why the status quo was never an option for the Vancouver Whitecaps FC when Greg Kerfoot and his expanded ownership group won the bid a year ago to bring Major League Soccer to the west coast of Canada in 2011.

Kerfoot and company always had only two choices as they considered the resources they needed to compete in Major League Soccer among the likes of Toronto FC (a division of Maple Leaf Sports & Entertainment, which owns and operates the Toronto Maple Leafs of the NHL, Toronto Raptors of the NBA, Toronto Marlies of the AHL and the Air Canada Centre), the Los Angeles Galaxy (part of the global Anschutz Entertainment Group juggernaut) and the new kids on the block from Puget Sound, the Seattle Sounders FC (owned by Joe Roth, Drew Carey, Adrian Hanauer and Paul Allen but operated by Allen's Vulcan Sports & Entertainment, who also manage and market his NFL Seahawks).

The first choice was to form some sort of strategic partnership with Canucks Sports & Entertainment to gain access to the kind of customer sales and service, sponsorship and broadcast infrastructure that Toronto FC , the Galaxy and the Sounders have at their disposal.

The second choice was to expand their own in-house capacity in those areas, in part by expanding their people power and in part by bringing in those with big league experience to manage their in ticketing, branding, sponsorship and broadcast operations.

With the hiring of Paul Barber as their new Chief Executive Officer, the Whitecaps made it clear they would be taking the second approach. Barber took the reins March 1st and he will be tasked with building the organization in the year leading up to the debut of MLS here in Vancouver in March of 2011.

More evidence of what that second approach will entail will be announced soon by the Vancouver MLS franchise; the appointment of VANOC sponsorship director Andrea Shaw as the Whitecaps' new executive striker in marketing and revenue generation.

Shaw comes to the table hot on the heels of working with VANOC Executive Vice-President Dave Cobb and CEO John Furlong to help VANOC exceed the domestic sponsorship targets set for Vancouver 2010 - more than $750 million in marketing contracts and revenues for the Olympic and Paralympic Winter Games.

Shaw will join the Whitecaps -- either as a full-time senior executive or on an independent executive consulting contract -- to complement the existing marketing and sales resources the team has used at the USL and now USSF-2 league levels.

In the works for months, her appointment will give the franchise the additional resources -- and corporate contacts -- they need to drive the much larger budgets of MLS. It will allow respected cause marketing specialist Andrea Wilkinson to focus on the Whitecaps Foundation, another important piece of the puzzle for the franchise, especially as it works hard to build a stronger connection with the local soccer and sports communities.

Barber and Shaw are only the beginning for the Whitecaps. The makeover will continue in the weeks and months to come.

Yet Shaw is also only the beginning for VANOC. Where her Vancouver 2010 land this year will have a big impact on professional sport here in Vancouver, the larger sport business landscape in Canada and potentially in other sectors in North America.

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NHL Attendance: A Solid Bull Market

For all of the criticism directed at the National Hockey League on several fronts, we need to give it credit where credit is due: its performance in arena attendance.

Sure it still has its desert dogs and other problem childs, but the fact is, next to the NFL, the NHL has more franchises playing to full or near capacity than any other major league in North American sport.

Only two of Major League Baseball's 30 clubs sold out their games in 2009 (the Boston Red Sox of the American League and the Philadelphia Phillies of the National League). That's seven per cent. Sellouts are the norm at only two of Major League Soccer's 16 franchises (Toronto FC and Seattle Sounders FC) or 12.5%. In the NBA, it's 15% (five of 30 teams).

The NFL had 28 of 32 clubs -- or 87.5% -- selling enough tickets to avoid television blackouts throughout 2009.

In the NHL, a third of its teams (10 of 30) are selling out every night. It's over half (17 of 30) when you include those virtually selling out (98% capacity or more).

There are five-year plus consecutive home game sellout streaks at five of six franchises in Canada and multiple-year streaks in northern U.S. markets such as Minneapolis, Chicago, Pittsburgh, Philadelphia and Washington. Throw in near capacity sales at Boston, downtown New York (where the Rangers ended a 187-game sellout streak in February), Ottawa, Buffalo, Detroit, St. Louis and San Jose (where the Sharks have been virtually sold out all year).

Almost two-thirds of the league plays before sellouts or crowds of more than 18,000 fans. Less than half of its direct competitors in NBA arenas can say the same.

The NHL has more teams among the top-20 North American active home game sellout streaks (seven) than any league except the NFL (11). The NBA and Major League Baseball have only one team each in that top-20 club (the Dallas Mavericks and the Red Sox).

http://www.teamradio.ca/news/story/?id=2917

The NHL also has seven of the top-20 all-time sellout record holders, more than the NBA (six), NFL (five) and MLB (two).

http://www.vancouversun.com/sports/Stoking+coals+hockey+hotbed/2760498/story.html

What's more, the NHL can boast those sellout streaks despite the most stringent sellout standards in the industry. Top-selling NFL teams benefit from the league's rather liberal definition of a sellout: it does not require that all luxury suites or club seats in its respective stadiums are sold out. Selling out the non-premium tickets does the trick and lifts the NFL television blackout.

Heading into the last week of the regular season, average attendance of 17,475 is good news for the NHL (and outshines the NBA by about 500 tickets per game or 600,000 fans per season league-wide). Imagine the brand equity the league would carry, on both sides of the border, if only it could find solutions for the weak links it has in some of the NHL's southern markets.

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Seattle Sounders FC picks up where it left off: Selling out Qwest Field

The Seattle Sounders FC has my vote as the fastest-rising sport property in the world. According to Champions of The Sport Market, they also gave Major League Soccer the biggest sport business gain of 2009 in the United States and Canada.

Bottom line: they are architects of the most impressive expansion franchise launch in North American professional sport history. Bar none.

Thursday night, the Sounders kicked off their sophomore season in Major League Soccer the way they left off their storybook expansion campaign last fall; by selling out the lower bowl and more at Qwest Field, the home they share with the Seattle Seahawks of the National Football League.

Seattle hung a 2-0 shutout win on the Philadelphia Union, the league's newest expansion entry. That's the box score; that's the sport story.

The sport business story is as if not more impressive. A sellout crowd of 35,500, including an eye-popping 32,000 season ticket holders. After leading the MLS in attendance in their 2009 debut, they are already sold out this year through July; despite expanding their seating configuration and capacity by more than 3,000 seats (now about 10 rows into the upper deck at Qwest).

Merchandise sales that make SoDo (Seattle's south downtown district in and around Qwest and Safeco) awash in lime green at least 20 times a year. Scarves that have become the new fashion statement in the Emerald City. A band march of thousands of fans to the stadium before every home game. Solid television and radio ratings.

It makes it hard to choose what is more impressive about the way the Sounders have made their early mark on MLS in particular and North American sport in general. Is it the terrific tangibles of ticket sales, sponsorship sales, merchandising and cash flow? Or is it the intangibles of how authentic a soccer experience the Sounders have created for Seattle or how they've worked hand-in-hand with the Washington State youth soccer community to do so?

It might be difficult for the Sounders to exceed expectations the way they did last year in making the playoffs as an expansion team. But either way, they will continue to lead the league in tangibles and intangibles; an impressive achievement in this era of professional sport.

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