Selling Soccer

The Columbus Crew and MLS have a three-year plan to sell more season tickets and land jersey and stadium naming rights. With two goals to go, the clock is ticking.

By Kitty McConnell
From the April 2013 issue of Columbus CEO

From its perch in the Crew Stadium plaza, Columbus Crew founder Lamar Hunt’s bronze likeness overlooks an administrative office buzzing with pre-season preparation. Beyond that lies a soccer field white with snow on a windy February afternoon.

While he may be unrecognized outside of professional sports, Hunt is the Steve Jobs of American soccer, and Columbus is where he staked America’s claim in the international soccer market. As one of three founding members of Major League Soccer in 1993, Hunt founded the Columbus Crew in 1996 and bankrolled the $29.49 million Crew Stadium, the first soccer-specific stadium in the country, after taxpayers voted down a 1998 referendum for a private-public funding agreement which would have situated the facility in Dublin with the help of about $10 million in public funds.

Before a sell-out crowd of 24,741, the Crew won its inaugural match against the New England Revolution on May 15, 1999. The team brought home the MLS Cup in 2008, three MLS Supporters Shield season championships and the 2002 U.S. Open Cup. By 2011, however, the Crew found itself without a jersey sponsor (its contract with Glidden Paint ended) or a stadium naming rights partner, not to mention ticket sales that were lower than the league average. While the top 10 MLS franchises reported five-year attendance averages between 15,619 and 33,688, the Crew was hovering at 14,343 between 2006 and 2010, a decline from the team’s early years.

When MLS Commissioner Don Garber announced in a Sports Business Journal interview in October 2012 that the Dallas-based Hunt Sports Group had “made a commitment to get out” of Columbus and was seeking a local buyer, it seemed to confirm that the hometown team was in financial trouble. In addition to the Crew, Hunt Sports Group also owns FC Dallas; in 2006, the Hunts sold the third soccer team in their roster, the Kansas City Wizards, to Kansas-based On Goal sports group. While MLS officially denies any hard-and-fast rule requiring divestment among owners of multiple teams, the league encourages owners to develop strong bonds with their hometowns. “It’s always beneficial to have local investment,” says Dan Courtemanche, MLS executive vice president of communications.

The Hunt name runs deep not only in soccer. Lamar Hunt, who died in 2006, was a sports heavyweight who devoted significant interest—and money—to soccer, tennis and pro football. A member of the Pro Football, National Soccer and International Tennis halls of fame, he also was one of the founders of the American Football League; the AFC Championship trophy is named after him.

National sponsors and die-hard Crew fans—those season ticket holders who fill the chanting, sign-waving Nordecke (North Deck) stands—would likely remain loyal regardless of an ownership shakeup. But uncertainty might make it harder for the team to attract the new sponsors and season ticket buyers needed to meet management’s goal for a self-sustainable, profitable team in its 18th season and beyond.

The Hunt family quickly refuted Garber, declaring that, though they had been seeking local minority investors since 2010 in keeping with the league’s emphasis on local ownership, the commissioner had “overstated” that objective. (Ron Pizutti is the team’s primary local minority investor). “The City of Columbus, the Crew and Crew stadium are extremely important to our family, and that hasn’t changed,” said Clark Hunt, chairman of the Hunt Sports Group, in a public statement. “Adding local investors, reaching our goal of 10,000 ticket holders, securing a naming rights partner for Crew Stadium and boosting support from the business community are all critical factors in the long-term success of the Crew in Columbus.” Hunt Sports Group declined to comment for this story.

 

Ownership Questions

While the time is right for the Hunt Sports Group to seek local investment partners, Crew general manager Mark McCullers, who’s been with the team for 15 years, doesn’t expect to be working under new owners anytime soon. With a three-year timetable to meet the three-armed ticket sales, jersey and stadium sponsorship goals devised in cooperation with the league, McCullers signed a four-year contract extension in 2011.

“I see the Hunts in Columbus certainly for the foreseeable future,” says McCullers. “Lamar Hunt was very passionate about Columbus. He was very hands-on in the development of Crew Stadium. This club means something to the Hunts; I probably see that more than anybody else. But it is a business, and the value is increasing in Major League Soccer for the clubs and franchises.”

In a pre-season interview with The Columbus Dispatch, Hunt emphasized the importance of meeting ticket and sponsorship benchmarks, saying that the strongest MLS teams have done so. “I think it would mean for the first time in the history of the organization we would be a financially stable enterprise that’s at least in a break-even situation in the league.”

The league fought hard to raise pro soccer’s profile in the early years with its 10 charter teams, several of which (including the Tampa Bay Mutiny and the Miami Fusion) have gone out of business. In 2012, MLS was ranked seventh in global attendance, with a league average of 18,807 regular-season attendees per game. The league’s goal is to double that fan base by 2022.

Crew home attendance was up 18 percent in 2012, and the team ranked 14th in the league with an average of 14,382 fans per game, according to the Dispatch. McCullers told the newspaper that season ticket sales were up by 30 percent but declined to give an exact figure. The team has helped boost the profile of pro soccer in the Midwest by hosting a sold-out World Cup qualifying match, national tournaments and, most recently, the 2012 MLS Business Summit.

“Columbus is always on the short list to bring those important matches to market,” says Courtemanche. “Lamar Hunt and his family really set the tone for the future of professional soccer when they committed to privately finance Columbus Crew Stadium back in the late ’90s.”

Today, 15 of 19 MLS teams play in their own soccer-specific stadiums. Unlike Crew Stadium, the majority have been the result of private-public financing, and most have secured naming rights sponsors. In a 2012 Bloomberg Sports panel discussion, Garber said a total of $2 billion in public-private stadium investments had been made since Crew Stadium’s construction. The Crew is one of only four privately funded soccer-specific stadiums in the country.

Since the 1990s, soccer’s mainstream popularity has exploded in the Unites States, MLS has gained respect in the lucrative business of international soccer, and the city of Columbus has morphed from a cowtown into the 15th-largest city in the nation. Throughout those two decades, Crew management has been laying the foundation for economic success in a digitized global economy. Time will tell if they succeed. “Our rallying cry is that 2013 is going to be a breakout year for us,” says McCullers.

 

Team Goals

By the first home game against San Jose on March 16, the Crew will have achieved at least one of its targeted goals. In February 2011, the team signed a five-year jersey sponsorship agreement with Barbasol, the iconic men’s shaving cream brand made by Dublin-based Perio Inc. Neither the Crew nor Perio would disclose the terms of the deal, but in a 2012 Dispatch interview, McCullers said Perio is paying less than the league average of $2.4 million.

The contract includes the Barbasol logo across game, retail and practice jerseys, as well as field-level signs, TV, print and radio advertising. As a bonus, Barbasol released a limited-edition can featuring the Crew logo in the Ohio market.

“Our CEO connected with their company pretty early and that’s how the deal was worked out,” says Jill Crumbacher, vice president of marketing for Perio. The company, with its new “Shave Like a Man” ad campaign, has a retro appeal among Crew fans, as evidenced through enthusiastic social media posts soon after the deal was announced.

“The MLS jersey sponsorship is really such a unique opportunity in major league sports,” says Crumbacher. “When you can work those things out with a local partner, it makes it even better. Having that in-game presence takes it beyond local for us and makes it [an] even more fun partnership.”

Columbus may not be able to match big-market MLS teams such as Los Angeles and New York, but the Crew has a regional, national and international reach that is the envy of other small-market teams. The team signed a 32-game broadcast deal with Fox Sports and will be broadcast nationally on NBC for two games. The Crew has the fifth-largest TV market household reach in the country, says Michael Malo, the team’s senior vice president of sales and marketing. Games are broadcast in Spanish through Telemundo Columbus and reach more than 165 million households in 154 countries through a deal brokered by MLS partner firm MP & Silva.

Going into the 2013 season, the Crew has signed new concessions partnerships with Papa John’s and Columbus-based White Castle. Marysville-based ScottsMiracle-Gro has signed a one-year deal for naming rights to premium seating. The deal includes field-level LED signage and additional assets, including sponsorship of the Crew Soccer Foundation’s Innis Park field refurbishment. Coughlin Automotive has also signed a contract to be the team’s official automotive sponsor, which will include multiplatform advertising and an in-game car lease giveaway. The Crew declined to disclose the details of financial sponsorships.

The team saw a pullback from sponsors during the recession, but things have rebounded thanks in part to the new jersey deal, says McCullers. “Without the Barbasol sponsorship, we still had double-digit increases in corporate sponsorship,” he says. “There’s more interest, generally speaking, but we’ve also invested in assets to increase our commercial value.” Though McCullers wouldn’t talk numbers, the Dispatch reported in September that the Crew’s corporate sponsorship revenue (from seating rights, concessions, event partnerships and the like) had increased 60 percent between the 2011 and 2012 seasons. Still, it lagged other teams in the league.

Since 2009, the team has invested $15.91 million in stadium upgrades. The jewel of these expenditures has been the LED scoreboard installed last season. In an effort to make the stadium naming rights more appealing to potential buyers, the Crew plans to invest in a new 100-foot tall, $2 million LED sign north of the stadium along Interstate 71. Team execs believe the increased visibility along the well-traveled stretch of highway will be an added incentive to potential naming rights sponsors; the team aims to ink a contract worth $1.8 million annually for 10 years.

“We are in more meaningful discussion than we’ve had in probably five years. … We think 2013 is the year that we’re going to get that deal done,” says McCullers. The Crew is seeing more interest from potential investors thanks to vocal civic champions. Mayor Michael Coleman, Columbus 2020, Experience Columbus and the Greater Columbus Sports Commission have emphasized to potential investors why it’s “critically important” for the city—and the team—to secure a stadium naming partner, says McCullers.

 

International Fan Base

Central Ohio’s increasingly sophisticated culture is central to the front office’s effort to reintroduce the team’s marketing potential to locally based companies. According to the Columbus Council on World Affairs 2012 Global Report, 14.9 percent of Franklin County’s foreign-born population is from Mexico. A 2012 ESPN poll revealed that, second only to the NFL, pro soccer was the favored sport of Americans aged 12-24; among Hispanic-Americans it ranked as No. 1. On any given home game day, the Nordecke crowd illustrates just how well the Crew has reached out to Central Ohio’s various immigrant communities.

“The Americans and the Hispanics get together and they chant both in English and in Spanish. It’s a very cool thing because you see a great synergy because the American fans and the Hispanic fans and really they’re just bound together by the Crew team,” says Luis Orozco, the man who named the Columbus Crew in 1995.

Orozco moved to Ohio from South America to play soccer for the University of Akron before settling in Columbus with his wife and four children. As vice president and chief marketing officer for Minority Brands Television, Orozco has paved the way for the team’s Spanish-language broadcasts and minority outreach since the team’s early years through Telemundo Columbus and Azteca Columbus. Orozco was the sole entrant in a team contest to name the new club. He founded Radio Sol and began covering Crew matches in Spanish. He is still involved in Crew coverage through Minority Brands Television stations.

The Crew’s engagement of Central Ohio’s Hispanic and African communities, most of whom already watch international soccer, is unparalleled among local sports organizations, says Orozco. “That crowd, we don’t have to sell them soccer. They’re already huge soccer fans, so we have to sell them the Crew.”

In terms of international business interests, the Council on World Affairs reported that businesses from 37 different countries operated in the city as of 2011, and that among the city’s Fortune 1000 companies, there were 337 subsidiaries operating in 65 countries. Pair those numbers with Coleman’s 2013 State of the City address in which he outlined goals for increasing the city’s export capabilities, and it’s clear that Columbus’s business reach is increasingly international.

The Crew is an excellent tool for building global business connections says Linda Logan, executive director of the Greater Columbus Sports Commission (GCSC). “You can’t even put a value of the media coverage we get around the world on an annual basis—the direct spending that happens [at Crew Stadium] annually from events … that’s big, but I think [the team] also gives us some panache as an international city.”

 

Economic Impact

According to a study released in January 2012 by Conventions, Sports & Leisure International, a consulting firm that studies the economic impact of facilities like Crew Stadium, the team and stadium generated $384.2 million in direct spending from 1996 to 2011. Per capita visitor spending in the stadium on tickets, concessions, merchandise and parking totaled $36.88. Crew patrons reported spending $32.42 per capita outside of the stadium at Columbus hotels, bars, restaurants and shops. The GCSC points to the study as evidence of the positive financial impact the Crew and Crew Stadium have on the city.

Traditionally, sports marketing investments have been directed toward football, baseball and basketball. Locally, the minor league baseball stadium, pro hockey and Ohio State’s college basketball arenas all have naming rights partners. The Schottenstein family pledged $12.5 million for the naming rights to the Value City Arena at the Jerome Schottenstein Center, commonly referred to as “the Schott.” In 2006, Columbus-based Huntington Bancshares purchased the naming rights to the Columbus Clippers’ ballpark for 23 years at a cost of $12 million. Nationwide Insurance, the original majority owner of Nationwide Arena, sold the home of the Columbus Blue Jackets hockey team to the Franklin County Convention Facilities Authority in 2012, retaining naming rights until 2022 for $28 million.

Both the Crew and MLS insist companies that ignore pro soccer are missing out on the sport’s young, multicultural and—most importantly—brand-loyal demographic.  “We finally have the first generation of fans who grew up with Major League Soccer and don’t know a country without it. That’s why we’re seeing such significant growth opportunity with this 18- to 30-year-old demographic. They’re the first generation now that is old enough to buy tickets with us and get involved in the supporter culture,” says Malo.

The Crew is going to great lengths to connect with both supporters and potential fans. Frankie Hejduk, a beloved player who helped lead the team to its 2008 World Cup win, has rejoined the team as brand ambassador. The position was created especially for the charismatic soccer champ. Hejduk travels the state and runs around the city, “getting the brand name out there every way we can,” he says. Hejduk puts a likable public face on the team, speaking at schools, partying with fans in the stands and even networking with business owners and politicians (he calls Coleman “a good friend”).

“I’m gonna try to do it one person at a time, one handshake at a time, one beer at a time,” says Hejduk. The team’s level of outreach encourages the noteworthy—and lucrative—devotion of the Crew’s supporter culture.

A survey released in December by Turnkey Sports and Entertainment measured viewer associations between MLS and its advertisers. MLS fans recognized league sponsors more than their counterparts viewing the NFL, NBA, NHL and golf. Avid fans also demonstrated they were more likely to use and recommend brands that supported their the league, a phenomenon the Crew say reflected in the online buzz that erupted following the Barbasol partnership.

Last season, the Crew tripled the size of its digital marketing department to reach its audience through the team’s website, social networking sites and YouTube. “They haven’t sat still,” says Logan. “They’re wonderful community partners who also happen to be visionaries.”

 

The Crew of the Future

Should the Crew achieve all of its goals for 2013, it would be a financial boost to MLS as well. “We certainly believe the goals set forth by the Crew and their three-prong approach [is] realistic and achievable,” over the next three-years says Courtemanche.

A portion of all MLS teams’ revenue reverts to the league; if the league is profitable, a dividend is returned to team owners. Neither McCullers nor Courtemanche would disclose the percentage of the revenue shared between the league and the team, but in 2012, Garber told the Dispatch that shared league revenue streams include national broadcast and merchandising revenue, as well as 30 percent of ticket sales. While a percentage of the Crew’s jersey sponsorship revenue will revert to MLS, revenue secured through the sale of stadium naming rights for the privately owned stadium would stay with the club.

The Ohio Expo Commission will also earn additional revenue if ticket sales increase. The commission owns the land on which Crew Stadium and its parking lots are built. The team leases the land for annual payments that increase every year according to the consumer price index; the team’s 2014 rent is expected to be $65,840. As part of the Crew’s 25-year lease on the property, the state commission earns a 30 percent share of the parking revenue generated by non-fair Crew stadium events. The state’s share of stadium parking revenue generated between 1999 and 2012 was about $2.1 million, according to Doug Smalley, assistant general manager and finance director of the expo commission.

The GCSC and the Crew have begun lobbying to bring the 2019 MLS Superdraft and National Soccer Collegiate Coaches of America Convention to Columbus. Meeting ticket and sponsor benchmarks will go a long way to helping secure the event—not to mention the Crew’s future.

The team is prepared to do whatever it takes to get there, says Malo—even if that means reworking the Crew’s logo to reflect a community that has moved beyond the team’s original blue-collar image. “We’re kind of at a disadvantage because we were one of the first teams. We’re not new anymore … so we kind of have to go through this re-education process,” says Malo. The Crew logo, which depicts three men in hardhats, was designed to reflect Columbus’s working-class demographic. Today, it’s the only MLS team logo that depicts people—and the only one that hasn’t been modernized and rebranded.

But 17 years after the Columbus Crew was founded, the tradition and the weight of Lamar Hunt’s name remain. The Crew is embracing the challenges of its 18th year as opportunities for innovation. Says McCullers: “The growth and the potential [are] tremendous, and I think that’s what Lamar saw.”

Kitty McConnell is a reporter for Columbus C.E.O.