Inside sports business
So, you want to own an indoor soccer team?
It might sound easy, with $5,000 buying entry into professional leagues these days and player salaries reaching just $300 per game on the high end. But fair warning: making a buck at indoor soccer is tricky business.
Until a lawsuit last month accused Seattle Impact owner Dion Earl of sexual assault, many weren’t aware our region even had professional indoor soccer again.
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Sure, some remember the popularity of the Tacoma Stars — they set the Major Indoor Soccer League game attendance record of 21,728 back in 1987 — but that team and the original MISL folded in 1992, and defunct indoor teams and leagues have continued to litter the sports landscape.
An 82-page marketing plan, prepared in October 2013 by the Professional Sports Operatives consulting firm, provides a fascinating look into the game’s business. The plan, authored by the company’s Seattle-based president and CEO, Cory Howerton, made a case for reviving the Stars in November 2014 and joining a more-recent incarnation of the MISL.
But while touting our region as a potential indoor soccer hotbed, the plan indicated a thin line between success and failure. Howerton claimed one major mistake indoor soccer teams make is announcing the team is in the market less than a year before its launch.
A yearlong marketing campaign, he wrote, would “drive awareness of the club, and sell tickets.”
His plan budgeted for the new Stars to spend just less than $2.8 million the first two years, starting in November 2013. The initial 12 months would be used for marketing and selling tickets.
His projection: A specialized staff would secure an advance season-ticket base of 3,000 and $750,000 in cash sponsorships. That would help generate a Year 1 profit of $526,000, positioning the Stars for their inaugural season starting November 2014.
From there, they’d sell more tickets and sponsorships. The goal was an MISL-best 6,700 fans per game and a Year 2 profit of $548,000.
So, a combined profit of nearly $1.1 million after expenditures of about $2.8 million the first 24 months.
Some financial targets seemed optimistic but the plan’s analysis of the seven-team MISL, using figures from 2012-13, showed the most successful franchises posting comparable numbers.
A Baltimore franchise averaged 5,544 fans while deriving nearly $583,000 from ticket sales, $751,000 from cash sponsorships and $101,000 from soccer camps hosted by players.
That was similar to the Tacoma team’s first-year projection of $822,000 from ticket sales, $750,000 from sponsorships and $152,000 from camps. The big difference was ticket money, where the plan hoped the Stars could become the MISL flagship.
Overall, the report showed MISL teams drawing between 2,473 and 6,444 fans per game. The lowest payroll team averaged $933.33 per player in yearly salary, while the highest averaged $3,609.52. Close your eyes and you might envision the Tacoma plan working.
But it never got a chance.
The MISL last May became part of the new Major Arena Soccer League, a 23-team circuit now the nation’s biggest. A Stars ownership group tried to join, using a revised version of the PSO report. But the MASL gave Earl local franchise rights instead.
Earl wanted the “Tacoma Stars” name but the rebuffed group threatened legal action. So, Earl went with “Seattle Impact’’ playing out of the ShoWare Center in Kent.
The Stars became a semipro team in a newly-formed Western Indoor Soccer League.
The name fight meant Earl didn’t launch the Impact until summertime — committing the early mistake the PSO report warned about.
A June document Earl created for investors anticipated a first-year net profit of $550,000. Earl hoped for $670,000 from ticket sales, $450,000 from sponsorships, $30,000 from merchandise and $16,000 from soccer camps.
He planned to spend $470,000 — including $135,000 for sales commissions, $70,000 for staff wages, $53,000 for player salaries and $54,000 for airfare to games.
Total player salary for the 20-man squad would be capped at $2,650 per game. They’d bunk together in twos in $60 hotel rooms on trips and receive $25 in daily meal money. The combined salary for a head coach and assistant was $16,000.
But Earl’s projections assumed he’d draw 6,000 fans per game. Instead, he’s averaged just 696. There’s also little indication Earl had many sponsors, even before the sexual assault allegations against him.
Earl caught a break when the MASL charged him only a $6,000 yearly membership fee. The league had asked other teams for $25,000 — with a $5,000 deposit. Still, it takes much more money to run a franchise. Given missed targets and the scandal surrounding him, Earl, not surprisingly, now hopes to sell.
And whoever eventually winds up running the Impact should take heed: making money in indoor soccer is rarely an easy endeavor.
Geoff Baker is a sports enterprise and investigative reporter who writes a column on sports business. Baker: firstname.lastname@example.org or 206-464-8286.