Creative Business Models That Can Work for Major League Women's Soccer in USA
Part Five in the Series: How Major League Women’s Soccer Can Work in the U.S.
If there's one thing we've learned from two failed attempts at major league soccer for women in this country, it's that some version of the typical major league franchise does not work in the current market. We've already suggested outside-the-box ideas for franchise location, venues and developing the fan base; now it's time to look at the way the business is organized. There are several models worth considering.
Company Owned Model
The Western New York Flash is a working example of the this model. The club is owned by Buffalo meat mogul Joe Sahlen, along with his primary business Sahlen's Meats, as well as his NASCAR racing team and his sports park.
The team is part of Sahlen's marketing strategy. It does not need to pay for itself directly in ticket sales, sponsorships or TV deals as long as the increased brand recognition is deemed a sufficient return on investment.
Not only does this model provide a high profile vehicle for promoting the brand, it also provides additional efficiencies and synergies, as much of the business operations of the team can be run through corporate offices without a full-front office staff as would otherwise be necessary. In smaller markets, the likelihood that a large company in the community might be interested in this approach is high.
Community Owned Model
The Green Bay Packers organization is a working example of this model. Again, Green Bay is a small city with a major league team. They've had more than their share of world championships, which is why they nicknamed their city "Titletown." Were it not for the citizens owning the team, the franchise would have been moved to a larger venue when the rest of the original NFL markets (Canton, Decatur, etc) were abandoned for bright lights and big cities. Businesses as well as individual citizens could buy in.
An initial investment of $5-10 million should be enough to fund the startup and first two years of operations, in addition to sponsorships, concessions and TV rights. Ten thousand shares at $500 each is five million dollars.
League Owned Model
This model has been tried before, but there are many different ways to structure it. When the league owns the teams, there are additional efficiencies and synergies that can reduce the overall cost of operating each club. Many front office functions, such as personnel management, could be combined in one office instead of eight, for example.
But who would own the league? The USSF (United States Soccer Federation) would benefit from having a major league in this country. It needs a place for its national team players and prospects to develop and maintain their talents. In the WPS model, national team members' salaries were figured into their total compensation package. It would be extremely efficient for the USSF to have a major stake in a new league. In addition, major investors with a passion for women's soccer that exceeds their need for short term black ink would be recruited.
Will there be a new major league for women withn the next two years?
Pooled Resources Model
Whether or not the league owns all the clubs, there are many things that could be coordinated jointly for cost savings. Travel is one. Schedules could be arranged so that teams in closest geographic proximity could travel together for back to back games with other teams in close proximity to each other.
For instance, let's assume there are clubs in Wichita, Topeka, Harrisburg and Allentown. Wichita and Topeka could travel on the same plane to play back to back games with Harrisburg and Allentown. Friday night would be Topeka at Harrisburg and Wichita at Allentown. Saturday night would be Wichita at Harrisburg and Topeka at Allentown. You could cover four games with one round trip. This strategy could be used regardless of the structure of the league, and it would be a big money saver.
Other Business Strategies
Within or across these models there are other creative approaches to ticket sales that might increase the speed of seat reservations and the likelihood of a sell-out. Our models for these strategies come from the discount airlines, the discount bus lines and the Internet startup.
The discount airline
Southwest Airlines does not assign seats; they believe filling seats on a first come basis allows planes to board faster. But they have given people a means of ensuring they can get to the front of the cue. In the last 24 hours before departure, passengers can log on and print a boarding pass. Instead of having a seat number, it has a line order number. The first one to log on inside of the 24 hour window gets the first place in line.
Why not do something similar with ticketing for women's soccer games? The difference would be that the first one to purchase a ticket gets first choice of a seat assignment, regardless of price. This would not be sustainable over several years, but in order to generate more interest and to drive earlier decisions to attend the games, having a flat admission fee and allowing fans to compete for the best seats would serve to fill up the venue and do so more quickly.
The discount bus line: Megabus uses another variation on this theme. Those who book the earliest get the cheapest seats; those who book at the last minute pay the most. Let people who are willing to book several months in advance get tickets for a dollar for the first season. The prices would increase gradually as the season gets closer, meaning seat selection could be handled by adding a premium for certain sections, or just by using the first come system described above.
The Internet startup: The internet has brought us a new business model that allows people to use a service at no cost, yet still raise revenue from the users of the site.
Why not ask fans to reserve their seats online—while charging a small fee for processing—and leave seat selection to a first come basis. Plan to make all the revenue the first year, at least, from concessions. Sports franchises do this already, to a certain extent. The markup on food and souvenirs in stadiums and arenas is already pretty steep. Make it even steeper. People will not mind paying for food our souvenirs because they haven't had to pay to get into the game.
Again, this would not be sustainable for the long term, but it would help fill the seats in the first year or two while the fans get hooked on the team and the league.
The traditional airline pre-1990
There would still be an opportunity for people to reserve suites, boxes or a certain section of seats, perhaps half of the best seats in the house, by paying a high price for tickets. It would be like flying in the "old days." Most of the stadium would be like flying coach, which for a while was still a fairly good experience, and a small portion of the stadium would be like flying first class. But half of the "first class" section would be available for the early birds, as described above. In that case, it would be like getting a free upgrade to first class.
Any one of these models, or any combination of these models, could be effective in generating greater fan interest and selling a greater number of seats. Sell-outs would be much more likely using some version or versions of the above models.
Structuring Player Compensation
In order to ensure that the new United States women's major league is the world's premier league, it is essential that marquis players are paid more than they could earn elsewhere.
I suggest a three-tiered pay scale. The top tier would be for the top eight US internationals and the top foreign players, with a limit of four such allocations per club (three foreign players and one of the top eight USWNT players). The second tier would be all other US national team members. The third tier would be all other players. Each team would have two additional foreign slots (for a total maximum of five per club) that could be on the second (internationals) or third tier.
The top tier would have a salary range of $100-200,000, with one cap exception (no limit) per club. The second tier would have a range of $50-99,999. The third tier would range from $30-49,999. Players would also have an opportunity to earn bonuses based on an equal balance of individual stats and team achievement. Bonuses would be structured with an inverse proportion to salary, so a third tier player would be able to earn up to 50% of their salary in bonuses, a second tier player 20 percent and a first tier player 10 percent.
Members of the US Women's National Team already earn annual stipends of $60,000 or more. Some players also have endorsement contracts. If the league were partially owned by the USSF, as mentioned above, all US internationals would be under contract to play in the new league, and their national team salaries could count toward the total package. Even if the league is not owned by the USSF, we would suggest that a certain percentage of the women's national team salaries be counted as a portion of compensation for league play.
Some very creative recruiting of sponsorships will need to take place to help fill any revenue gaps that exist, in the first few years especially. In addition to season sponsors for individual clubs and the league, there could be sponsors for individual games, for rivalries, for awards, for playoff series and for championship games.Strong appeals should be made to women CEO's of major corporations to drive corporate sponsorships as well as high-end ticket sales.
Of course, there would still be attempts to maximize traditional sponsors in the sports marketing arena, but it is very possible that traditional women's brands would be very interested in getting into this space.
Much more than has been done by the two failed leagues should be done with brands associated with women such as Dove, Playtex, Victoria's Secret, various hygiene brands and products, fashion labels, and magazines, among many others. Being at least half-serious, I can imagine having the league championship trophy being the Playtex Cup. The Tide Award could be given to the keeper with the most clean sheets. The Cosmo trophy could go to the most creative player. You get the idea.
The bottom line
In order to have the look and feel of major league, anything that affects the fan experience should not be economized. Use the best paper for programs. Have major league quality amenities in the venues. But anything that does not affect the fan experience can be economized, such as pooling for travel.
And in all things, throw away the mold and develop a new structure and model that is as "major league" in creativity as it is in quality.
This concludes the series.
Missed Part One? Here’s the link.
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