Soccer World’s Most Popular Sport 265 million players worldwide 1.7 million teams Professional level leagues in over 170 countries
WORLD CUP Every four years World’s Greatest Sporting Event Nation vs. Nation Sold out venues Lucrative International TV rights Elicits national pride like no other event
1994 World Cup in US Average attendance - 69,000 Total attendance - 3.6 million. Record for the highest attendance in World Cup history. Highest-attended single sport sporting event in United States history.
Current Status of US Soccer US has 24 million soccer participants (2 nd in world to China) Professional League – Major League Soccer Tours of International clubs and national teams
MAJOR LEAGUE SOCCER –Average attendance 15,000 fans per game –Team Salary cap of $2 million (with exemptions) –Expansion Franchises sell for $30 Million –14 Franchises –TV agreements pay $20 million annually
International Club US Tour Attendance Figures FC Barcelona Tour 2006 80,734 Manchester United Tour 2003 67,884 Manchester United Tour 2004 62,684 AC Milan Tour 2004 56,817 Real Madrid Tour 2006 56,170 Juventus Tour 2003 54,441 FC Barcelona Tour 2003 48,150 Real Madrid Tour 2005 40,716 Celtic Tour 2004 40,091 A crowd of 92,216 that watched Barcelona in Los Angeles Coliseum set an all-time high for a soccer match in the United States.
Attendance for National Team Exhibitions in US Argentina vs. US78,682 June 2008East Rutherford, NJ Argentina vs. Brazil68,498 June 2008San Diego, CA Brazil vs. Mexico 67,584 Sept 2007 Foxboro, MA China vs. Mexico 56,416 April 2008 Seattle, WA Brazil vs. Venezuela 54,045 June 2008 Foxboro, MA Mexico vs. Ecuador47,416 March 2007Oakland, CA Brazil vs. Canada 47,000 June 2008 Seattle, WA Mexico vs. Paraguay46,510 March 2006Chicago, IL
Emotional Bonds of Fans The United States has millions of soccer fans that have either emigrated or are descendants of other countries These fans have allegiances to foreign clubs and national teams and have supported exhibitions played on US soil involving these teams.
Major US Ethnic Groups Irish 35 million Mexican 28 million Italian 17 million Polish 10 million Puerto Rican 4 million Chinese 3.5 million Greek 1.3 million Cuban 1.2 million (Based on 2000 US Census figures)
Concept A professional soccer league based in the US with franchises issued to each nationality that is designed to capitalize on the emotional ties based on pride of fans’ nationality and ethnicity
Franchises Franchises will be awarded on the basis of nationality rather than cities Club Italia, Club Ireland, Team Brazil, etc…) Develop fan allegiance to club based on ethnic pride
Marketing Each Game to be marketed as an Event Ethnic groups of participating clubs will be targeted for ticket purchases
Stadiums Games will be played in major league, world class facilities near high concentration of ethnic population –New York –Chicago –Boston –Dallas –Houston –Los Angeles –San Francisco –Miami
Players Roster to be comprised of players with nationality or ties to club ethnicity (Italian-American, Irish born, etc…); Players will have their “soccer citizenship” established through place of birth, ancestors or having played in nation According to FIFA 2006 survey, the number of professional players worldwide is 113,000
Player Compensation Average player salary estimated to be $185,000, approximately 50% increase over average MLS salary of $125,000. Initial Salary Cap to be $10 million compared to MLS cap of $2 million. Salary cap to be adjusted annually based on league revenues
Season 20 game season from March to August Each Franchise will have right to promote and host Ten games; Games will be scheduled in proximity where significant ethnic base lives (i.e. Mexican team will play in California or Texas, Cuban team in Florida, Irish in New York and Boston, etc...)
Exhibitions Clubs can play additional exhibitions, tournaments or "friendlies" anywhere in the world to create additional brand exposure for sponsors and revenue generating opportunities for franchise.
Ticket Revenue Ticket revenue to all league games is to be shared equally on a 50/50 basis between participating teams.
Sponsorships Franchises will be able to sell all sponsorship categories including rights to jersey and field signage; Sponsorships will be marketed to companies that seek to reach a targeted ethnic groups – ethnic food products, airlines, etc… Franchises will offer unique and very targeted branding opportunities not available elsewhere
Title /Jersey Sponsorships Presenting and title sponsorships of teams to be available Microsoft and Herbalife are currently paying $5 million annually to MLS Clubs for Jersey sponsorships (Source- Sports Business Daily)
Corporate Ownership Possibility of corporate ownership opportunities of franchise exist providing an excellent promotional vehicle as well as an appreciating asset (i.e. Red Bull) Opportunity for a unique brand connection with a very targeted demographic Red Bull paid a reported $25M for the team, $45M for 50% stake in stadium and $30M over the next ten years for naming rights
Franchise Expenses Club annual operating budget projected to range from $5 million to $13 million depending upon player salaries signed by club
Television & Licensing League will control all domestic and international television and licensing rights for he benefit of all clubs TV and Licensing revenues generated by the league will equally divided to all clubs Includes licensing revenues generated merchandise and video games
TELEVISION OVERVIEW Three potential broadcast arrangements available Rights Fee –Network pays League Revenue Sharing –Network & League partner on TV Time Buy –League buys time from Network and produces
Broadcast Agreements Rights fee more likely after league develops ratings track record. Revenue Sharing or Time Buy arrangements are most likely type of agreements to be secured at launch League can bundle sponsorship rights with TV commercials and exposure to enhance value of sponsorships and maximize ROI Availability to purchase favorable time slots is available on virtually all networks.
INTERNATIONAL TV Export games to grow international brand awareness of league
FRANCHISE EQUITY Franchises valuations are based on two primary factors –Revenues –Comparables to similar transactions in marketplace
Franchise Valuations MLS Franchises sell for $30 million Manchester United is valued at $1.8 billion
World’s Most Valuable Clubs FORBE’S VALUATION April 2008 All figures in US millions dollars RankTeamCountryValueRevenue Operating Income 1 Manchester UnitedEngland 1,800 394 111 2 Real MadridSpain 1,285 474 112 3 ArsenalEngland 1,200 329 77 4 LiverpoolEngland 1,050 269 60 5 Bayern MunichGermany 917 302 72 6 AC MilanItaly 798 307 54 7 BarcelonaSpain 784 392 92 8 ChelseaEngland 764 382 -5 9 JuventusItaly 510 196 35 10 Schalke 04Germany 470 154 36
SHORT TERM VISION (3 to 5 years) Surpass MLS as premier soccer league in US Secure National and International TV deals Consistently draw over 50,000 fans per game
Long Term Vision (6 to 10 years) Develop and sign the World’s Best players Export league worldwide to create a global fan base Increase franchise equity and revenues on par with the World’s top clubs Ascend to top soccer league in world by all metrics – player talent, merchandise sales, revenues, franchise equity, popularity
MANAGEMENT TEAM George Daniel –15 years in professional sports –Deputy Commissioner, COO & General Counsel for National Lacrosse League Robert Lanza –Former NBAPA Chief Counsel
Franchise Ownership - Opportunity to create a Global Brand with Unique marketing opportunities in the World’s Most Popular Sport $10 Million (US) Franchise Fee
ACTION PLAN / TIMELINE Secure at least 6 franchises by January 2009 Commence league operations by February 2009 Secure TV contracts by September 2009 Inaugural Season launches March 2010
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