Essay Sample on MLS Commissioner Don Garber: Stadiums a Major Priority

Introduction

Major League Soccer (MLS) is the highest professional soccer league in the United States and Canada. The league was instituted in 1996, 2 years after the US hosted the FIFA World Cup. The league is made up of 24 teams of which 21 are in the US while 3 are in Canada (Homeyer, 2019). MLS's growth has been evident from the widespread construction of soccer-specific stadiums. Don Garber who has served as MLS commissioner since 1999 has always emphasized the stadium issue as a massive priority (Damron, 2018). Fast forward to 2007, Garber noted in the State of the League address that getting all MLS teams to have their own soccer-only stadium was a key factor (Damron, 2018). Efforts by MLS have moved several clubs from multipurpose venues to soccer-specific stadiums. The teams have in the past played matches at NFL and Major League Baseball venues. As of 2018, the league had constructed 12 stadiums specifically designed for soccer (Love et al., 2013). The construction of a soccer-specific stadium is an expensive affair costing millions of dollars with hopes of attracting and cultivating a soccer culture in the US. This paper seeks to expound on MLS soccer-specific stadiums.

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Characteristics of MLS Soccer-Specific Stadiums

A soccer-specific stadium (SSS) is an athletic stadium purposely constructed for soccer and whose principal role is to host soccer games. The stadium is different from a multipurpose venue which is used for a variety of sports. The stadium has dimensions, amenities, and scale suitable for soccer. It also has a scoreboard, video screen, luxury suites and some have canopies. The seating capacity is generally small and only provides a warm setting of between 18000 and 30000 (Homeyer, 2019). The Columbus Crew Stadium which was the first soccer-specific stadium had a capacity of 20145.

The soccer-specific stadium is owned and operated by an MLS franchise. MLS controls most aspects of the stadiums. The franchises are permitted to create standing room only areas, press boxes and spaces for supporters only.

Canopy is another feature commonly associated with soccer-specific stadiums. The role of the canopy is to shelter fans from external weather. The canopy also plays a crucial role in trapping noise from the stadium and redirecting it back in tote field. Trapping the noise works up the atmosphere and intensifies the fan experience. The canopy also offers the designers a chance to position the lights closer to the field. The canopy gives the stadium a sharp look in person and on television.

Soccer-specific stadiums heighten the fan's experience hence offering the team much control over secondary income streams than those presented by NFL and MLB stadium rental agreement. It thus follows that tying these features together and marketing the stadium will benefit the team in a big way.

Funding

The 18000-seat Kansas City's Sporting Park built between 2010 and 2011 cost $200 million (Greenberg and Wilson, 2016). The stadium can be described as state of the art featuring Wi-Fi, attractive architecture with a spanning blue roof covering all seats. This shows that a lot of funding is required.

The late Lama Hunt played a critical role in the growth of American football and was the first to invest in MLS soccer-specific stadium. He funded the Columbus Crew Stadium for $28.5 million dollars with his own wealth after the Franklin County voters turned down the plan to use taxpayer's money (Noll & Zimbalist, 2011). The funding for the soccer-specific stadiums has been controversial. Public financing of a new stadium can be traced to this era after several teams threatened to relocate if new stadiums were not built. Local governments scrambled to secure public funding so as to uphold their city's MLS status. Another aspect in the funding of soccer-specific stadiums is the subsidy on sports facility on grounds it will improve the local economy. The municipality by subsidizing the construction of SSS hope to create construction jobs and attract people to the events who intend to generate new spending for locals.

Currently, soccer-specific stadiums are financed by the public as well as private entities. Greenberg and Wilson, (2016) reported that public investment accounted for 33 percent of the funding of the stadiums. Funding for the stadium not only goes into construction but also procuring of land and improving infrastructure near the stadium. The recent public funding of a soccer stadium was by DC City Council which offered a subsidy of $183 million to cover construction costs for $400 million Audi Field (Greenberg and Wilson, 2016).

Attendance

Soccer-specific stadiums in the MLS are characterized by presence fewer seats than big multipurpose stadiums. Gomez-Gonzalez et al. (2016) argued that the use of soccer-specific stadium has a substantial positive impact on attendance records in MLS. The author reasons that "architectural features of the stadiums such as the number of seats available in the standings, seem to have an important influence on the atmosphere of sports events" (Gomez-Gonzalez et al., 2016). The argument is supported by Love et al. (2013) who argued that the construction of new soccer-specific stadiums is a novelty effect that led to an amplified attendance. The study defined novelty effect as the adjustment in the audience after a club moved into a new stadium. The study compared attendance in soccer-specific stadiums and multipurpose venues over four seasons. Love et al. (2013) found that by the fourth season attendance rates were higher compared to final seasons at the multipurpose venues (MPV). For example, FC Dallas attendance at MPV averaged 9087 while the fourth season in SSS has an attendance of 12440 (Love et al., 2013). They further noted that the novelty effect for MLS newly constructed stadiums persisted for a period of 3 years. The research concluded that MLS strategy of prioritizing soccer-specific stadiums had been an achievement with respect to attendance. It thus follows that the new stadiums have improved fan bases for clubs in leagues and the overall attendance rates.

Income from Soccer-Specific Stadium

The income generated by the stadium come from entry charges. Registration of new members targeted by the stadium and are crucial in ticket sales and merchandise revenue. Additional stadium revenue comes from property tax payment from new hotels and apartments that were constructed near the stadium. Many soccer teams have created a unique atmosphere for concerts, extreme sports, ceremonies, and other events. Greenberg and Wilson, (2016) note that a soccer-specific stadium is owned by an MLS franchise which means it determines the prices for parking, ticket sales, and merchandise. This arrangement is essential in that it restricts the number of seats and increase prices.

While new subsidies have produced a path to the growth of much-needed infrastructure for the League, the investment does not automatically assure financial success for investors. This is evident from the 2006 public financing of the Toyota Park, which hosts Chicago Fire, for $98 million by taxpayers in Bridgeview Illinois (Homeyer, 2019). However, the stadium has not been able to make enough revenue to offset or service its debt. Homeyer, (2019) noted that this prompted the city to borrow an extra $27 million in 2012 to cover costs of the debt consequently leaving taxpayers $125 million less. Red Bulls arena which host the New York Red Bulls cost was inaugurated in 2010 and cost $200 million of which 20 percent was contributed by the city and county (Greenberg & Wilson, 2016). The stadium also faced conflict in repayment and faced various legal cases that saw the team requested to pay $3.6 million in property taxes and to pay $1.3 million in the rental agreement.

Future Plans

Homeyer (2019) reports that some clubs are going through the process of building new stadiums. He notes that at least 8 new stadiums are coming to the MLS. The Allianz Field which will play host to Minnesota United FC and has a capacity of 19400 is set to open in 2019. FC Cincinnati's West End Stadium with a capacity 26000 is scheduled to open in 2021. The team broke ground in December 2018. FC Cincinnati will, however, continue to play their home games at Nippert Stadium. Other soccer-specific stadiums coming sooner into the MLS list include Providence Park which will host Portland Timbers and Austin Stadium which will be the home ground for Austin FC. MLS, as well as cities, continue to invest a lot of money towards the construction of a soccer-specific stadium. Homeyer (2019) reported that Los Angeles F.C. that plans to join MLS announced plans to build a $250 million, privately financed 22000-seat stadium. Some of the teams that have announced their plans to construct soccer-specific stadiums include Columbus Crew SC, Nashville SC, New York City FC and Inter Miami CF.

Criticism

As early as 1990s construction of soccer-specific stadiums was heavily criticized as seen in the failure by Franklin County voters to help fund Columbian Crew Stadium. Noll and Zimbalist (2011) in their book "Sports, Jobs, and Taxes" objected the use of public funds on the private stadiums. The authors noted that new sports facilities had an extremely small impact on economic activities and employment. They based their argument on the fact that sports facilities attracted neither tourists nor new industries. Noll et al. (2011) faulted promotional studies in that they overstated the economic impact of the facility. The promotional studies also failed to acknowledge that sports income distribution was poor in that most revenues went to a small group of people-coaches, managers, few players and executives who earn extremely high wages. This is in comparison to stadium employees that earn very low wages.

The argument is supported by Kuper and Szymanski (2009), authors of "Soccernomics," who argue sports and stadiums more often have no positive economic impact on a city. The authors note that it may even lower sports-related revenue in a city. They question where the construction workers would come from and that it would create a shortage elsewhere. They further argue that new stadiums would impact negatively on spending. They demonstrate that a fan buying a hot dog, watching the game and then leaving hardly creates an economic bonanza. The public funding of the stadiums is objected because it requires raising of taxes or issuing bonds to pay for the stadium. This means that the city or county assumes a portion of the risk without any hope of a payout.

Recommendations

The soccer-specific stadiums are banking on the growing popularity of soccer in the US. Though they have proven to be vital in attracting an increasing fan base, they still are controversial in the way they funded. Pete Clarke who was an Orange County Commissioner is quoted to have proposed that giving public money to the construction of the stadium was not a proper strategy (Damron, 2018). He, however, advocated for the county to own a part of the team in exchange for the contribution. He based his argument on the fact that taxpayers also needed to benefit from the investment of the county. The MLS emphasis on the soccer-specific stadium is likely to face opposition or lack funding for constructing new ones. Therefore, it is important that they learn from past exceptions to soccer-specific stadiums. The general rule informing MLS emphasis is that football stadiums do not function well for soccer. This assertion fails in the case of Seattle Sounders FC and Atlanta United FC which have found success in NFL venues. Sounders have averaged an attendance rate of 40000 per game and were number 32 in 2015 World Soccer Attendance Rankings (Greenberg & Wilson, 2016).