Soccer team thinks globally

When the owners of the new Philadelphia team ante up the $30 million entry fee to join Major League Soccer, they'll also get a valuable asset that doesn't show up on a balance sheet:

A gateway to the world.

Today the 12-year-old league is striving to push across borders and seas, partnering its teams with storied European clubs, bringing foreign sides to play here, and buying up marketing rights to top Mexican teams - all as a means to capture new revenue and advertising.

"Investors are able to tap into what has been an explosive market, not just in the rest of the world but here in the U.S.," MLS commissioner Don Garber said in an interview last week. "That's a big part of what we're selling."

And that's a big change from the way most Americans, used to domestic leagues and to competitions in which international means Canada is taking part, think about sports.

The three-day-old Philadelphia expansion club is sure to pursue an alliance with a big-name foreign team, probably in South America or Europe. And the new team plans to bring in world-class clubs for exhibition games to generate money and excitement.

"You have a team from England and you get people from all over the East Coast coming here," said Joseph Fuhr, an economics professor at Widener University in Chester, where the new team will play.

There's another way the owners will gain from MLS's determination to go international: When someone becomes an owner-investor in MLS, he or she also becomes part-owner of an entity called SUM, Soccer United Marketing. SUM has snapped up properties that on the surface, to Americans, might not seem worthwhile - but that soccer followers know possess both value and potential.

For instance, SUM owns the right to stage games played in the United States by the Mexican national soccer team - which, supported by the growing Latin fan base, is arguably the most popular side in this country.

It's unclear how much income the Philadelphia owners will get from SUM, created in 2002 as the league's marketing arm. MLS is privately held and releases little financial data. One of the few things MLS will say is that SUM is profitable.

"Soccer is the global sport, and that international connection is very important and very much a part of our business strategy," said Nick Sakiewicz, chief executive officer and co-owner of the Philadelphia team. "We were all over European TV yesterday. What value is that to the greater Philadelphia area? It's hard to measure, but I suspect it has value."

MLS's strategy has certain risks and one big advantage:

When league officials try to export American soccer, they may get an argument about the quality of play, but they don't have to explain the game. The rest of the world knows and loves soccer.

That's one reason that before MLS granted a team to Philadelphia, it put a club in Seattle - "a true gateway to Asia," Garber said. That team-to-be's Web site offers translations in Mandarin, Cantonese, Japanese and Korean.

The Philadelphia team is to begin play in 2010 at a $500 million stadium complex to be built on the Chester waterfront. In the first 24 hours after Thursday's expansion announcement, the team took 1,000 season-ticket orders.

As MLS ponders its next expansion, two cities north of the border, Vancouver and Montreal, will get consideration, Garber said last week. But the big draw and the big money lie to the south.

If it seems to you that the Mexican national team is constantly playing matches in this country, you're not mistaken. Last month, the club opened its fifth consecutive U.S. tour, as usual drawing huge crowds. In Houston, more than 70,000 fans, most of them clad in the red, green and white of "El Tri," packed Reliant Stadium to see Mexico battle the U.S. team to a 2-2 tie.

The national teams for Mexico and the United States - whose rights also are owned by SUM - continue to develop a fierce rivalry, making the right to sponsor their games a greater asset.

"The strategy by SUM is to purchase the most valuable soccer properties in the U.S.," said Jeff L'Hote, who runs LFC International, a soccer consultancy in New York. "SUM has been a very smart and successful model."

SUM caters to what it sees as a key Mexican fan base. It bought the right to sponsor one of Mexico's most popular teams, Club Deportivo Guadalajara, known as Chivas. And it sponsors Interliga, in which Mexican teams challenge one another to qualify for South America's premier competition, the Copa Libertadores. The Interliga games are played in cities with big Latin populations such as Los Angeles, Dallas and Houston.

"This Mexican soccer fan, who was an afterthought for everyone, is now somebody that's high on our radar screen," Garber told the Los Angeles Times.

Last year, SUM created SuperLiga, an eight-team competition among clubs from MLS and the Mexican First Division. The games are played in the United States and televised live here and in Mexico, attracting advertisers that include Adidas, AT&T, Budweiser, Burger King and Lowe's.

Those games "are really attractive to media partners and sponsors," L'Hote said. "If they were only selling MLS, it would be a much more difficult sell."

SUM led the creation of the Pan-Pacific Championship, a tournament that made its debut last month in Hawaii, featuring clubs from the United States, Japan and Australia.

The results were mixed. In last week's championship game in Honolulu, Gamba Osaka of Japan blew out the Houston Dynamo, 6-1, in front of 23,087 - the most ever to see a soccer game in Hawaii, but half the capacity of 50,000-seat Aloha Stadium.

Still, the tournament provided advertising opportunities for firms such as Honda, Chase and Pepsi. Which is not to say MLS is a gold mine - a new alliance with the top German league has produced few direct results - or is even profitable. Business Week estimated that between 1996 and 2004, MLS lost more than $350 million.

Garber has said the league should be in the black by 2010. One way MLS is trying to get there is partnerships between its teams and top foreign clubs.

Last year, the Colorado Rapids aligned with Arsenal, the storied Premier League team in England. Real Salt Lake is linked to Real Madrid in Spain, and Red Bull New York is aligned with FC Red Bull Salzburg, which was SV Austria Salzburg before the energy-drink company bought and renamed it.

"It's a global business, and we needed a better base of knowledge," Jeff Plush, the Rapids' managing partner, said from England, where his team was training with Arsenal.

The teams' agreement involves an exchange of ideas on everything from players to advertising. "Clearly we will have a return" financially, Plush said.

Team-to-team agreements offer both sides the ability to, as the business types say, extend their brands. But L'Hote said those alliances had not reached their full potential.

The difficulty is that only a handful of foreign clubs can reliably fill big U.S. stadiums. Arsenal and Real Madrid will sell out. The same with England's Chelsea, aligned with the L.A. Galaxy.

Then there are clubs like Everton, a solid if unspectacular Premier League performer that drew only 10,259 to 22,555-seat Crew Stadium in Ohio for a match against MLS's Columbus Crew.

Still, L'Hote said he expected these alliances to grow as team owners sought ever-newer ways to increase receipts.

"All of these leagues are now looking at global markets," he said, "looking at selling their rights outside their home countries."