Tuesday, March 13, 2007

The Operational Deficit That Ate New York

Last spring, I found myself in New York City shortly after Red Bull's much-hyped takeover of the erstwhile (New York/New Jersey) MetroStars. New York, of course, is secretly one of the greatest soccer markets in the entire world—a city where you see Man United replica shirts sharing subway car space with strips from Dynamo Moscow, Inter Milan and the Colombian national team, a place where one passonate fan faction or another is rarely more than a street corner away. From the storied Cosmos to the 84-year-old Cosmopolitan Soccer League to the massive crowds that throng international matches at Giants Stadium, the Big Apple is rich with football lore.

So it was distressing, to say the least, to see a grand total of one (1) dude wearing the colors of the supposed hometown franchise, Red Bull New York. (Or New York Red Bulls?) After over a decade, three or four name changes, numerous attempts to wheel out foreign stars and more managerial regimes than the average banana republic, Major League Soccer's visible fanbase in the Capital of the World consisted of one fat guy in Little Italy.

Now, courtesy the excellent Ives Galarcep of the North Jersey Herald, comes news that RBNY frittered away $14 million last year alone, and appears to be sailing into the '07 campaign without a commercial rudder.

$14 million. That probably equals the seasonal budget of the entire United Soccer Leagues First Division, and could definitely fund the combined salaries of the Portland Timbers 20 times over or more. It may look like crumbs from some angles—if you're, say, Posh Beckham's personal wardrobe acquisitions director—but $14 million gone is a pretty damning indictment of a league that will never be able to claim a real mainstream breakthrough until it establishes a serious New York beach head.

Now let's take a theoretical (and idealistic) trip in the Time-Reverser to 1996, the first year of Major League Soccer. Let's imagine that instead of the closed, centrally controlled American-style set-up the league insisted on (otherwise it would never survive, remember?), it had adopted a more fluid franchising system. One based on promotion and relegation between several competitive tiers—one designed to encourage a little speculative investment, even direct competition for particular markets. By this time, we may well have seen a half-dozen New York-based clubs come and go. We almost certainly would have seen attempts to harness the raw vitality of the Outer Boroughs. The cursed ghost ship of the MetroStars/Red Bulls might have died an unlamented death, replaced by International NYC or Brooklyn Spartak or Empire FC of Queens—or all of the above. MLS might have succeeded in creating its own version of baseball's Gotham glory days, when three teams duelled for local affections.

Formula for disaster? Maybe. But can anyone convince me that the league would have done worse than it has?


wise said...

agh, i was going to blog this story, but you beat me to it. something about snoozing and losing.... (Ives has a follow-up on his blog as well that clarifies some of the points in the column)

anyway, it seems to me we have that sort of scenario you outline (club model, albeit no pro-rel) in the USL, and without a hedge against risk (single-entity), investors have stayed away in droves. Promotion and relegation is a hard sell to business folks, partly because its something that's better for the sport than it is for the balance sheet.

The way I understand it, during the recession years from 2000-03 or so, Anshutz, Lamar Hunt, and Kraft ended up owning all 10 teams. They had met at Phil Anshutz's ranch to basically decide whether or not to can the entire league at that point, but they voted to push on, and bolstered with their collective billions, MLS is now on solid footing with a bright future.

so basically, i don't think the league would have survived (or done any better than the USL has) without collective risk-sharing. I don't like it any more than most fans, but now that they're getting more and more owners into the league, i'm holding out hope they'll ditch the training wheels and let this kid ride on its own.

It's also probably worth mentioning that the true day of reckoning for Red Bull will come when they open their stadium in 2009, which will be smaller and closer to public trans.

sorry for the length! perhaps i should have just blogged this after all.

Zach Dundas said...

Excellent stuff! And no doubt you're right; usually I take a hardheaded approach to critics of the MLS model for all the reasons you've outlined. It's just that New York is such a glaring failure that it sparks fantasies of what an alternative approach might have stirred up.

My understanding is that Red Bull has exclusive franchise rights to NYC through 2011, at which point a second club could join the league. Crosstown rivalry could be just what that market needs.

I'm no businessman, but it would seem to me that promotion/relegation gives you a built in "expansion" system—the Premier League, for example, gets a new market in Reading this year, while its existing markets in Sunderland, Birmingham, etc are still just as hungry for the product.