Five Lessons from the North American "MLS" for India's Forthcoming Pro League

by Harmit Singh Kamboe

While we in India are into our 11th NFL season, so is another country like us, big and proud, on the other side of the world. Much like India, for this country too football is not the main sport and hence there are clear lessons that we can draw from their experience.
In the US Major League Soccer (MLS) is also into its 11th season. In this article we take a look at the key aspects of how the MLS runs itself and how it has been able to grow itself in the hyper-competitive US market.
Formed in 1996, with a goal to keep the 1994 World Cup momentum going, the MLS has been a major success and is spreading into Canada this year with Toronto FC set to join the league. Apart from the recent signing of English star David Beckham for mega bucks, its success can be gauged from the following startling facts:

1. Nearly 30 million fans have attended regular season games in the MLS's 11-year history.

2. The MLS has secured long-term national television agreements with ABC, ESPN, HDNet and Fox Soccer Channel. The MLS is expected to announce soon a long-term agreement with Univision to broadcast matches on the nation's top Spanish-language network. Plus all MLS teams have regional television agreements.

3. In 1999, the League began moving aggressively to create custom-made football stadiums for its teams that generate the atmosphere and intimacy the game needs and deserves. These facilities usually hold between 20,000 and 30,000 people and share design concepts with some of the finest football venues in Europe. Two new stadiums will open up in 2007 and the ground has been broken on two more stadiums.

4. Adidas and the MLS announced a 10-year, $150 million partnership in 2004 during which Adidas will be the official uniform supplier of all MLS teams as well as supply the official match ball of the League in 2006.

5. In 2006, an MLS All-Star team defeated Chelsea FC 1-0 in a friendly.

All of this has been achieved by a league in which 12 teams play 32 regular season games. The top eight teams then move on to a knockout format to determine the eventual champions.

These highlights are clear indicators of success, no matter which way you measure it. And success comes from proper planning and sound business strategy and not from spending wasteful buckets of money. Which is why with the talk of a Pro League upon India, we need to get our act together sooner rather later.
The success of the MLS was not an overnight task. The formation of the MLS was announced in 1993 and the games were kicked off only in 1996. And even before the league knew how many and which teams would play in the league, the MLS negotiated a 3 year broadcast deal with top TV stations in the US. And that is lesson number 1 for the Pro League.

Lesson 1: Revenue comes from the sale of TV rights

In India, we already know this as the AIFF is earning its money from the Zee Sports TV and marketing deal. What seems to have been forgotten is that the money (a large part of it) should find its way back to the clubs as they are the reason why Zee Sports is forking out good money, year after year.
While TV rights are the primary source of revenue, they are a contributor to major secondary source of revenue too. Would Adidas have signed the 10 year $ 150 million deal with the MLS if the games were not telecast live on TV, unlikely. Would East Bengal be getting a reported sum of Rs. 5 million from a lottery company for the 2006/07 season if the games were not telecast live on Zee Sports, very unlikely.
Indian football lacks not just mature and professionally run associations but also lacks the kind of written down, clear cut rules that the BCCI (Board of Cricket Control in India) has for the size, location, etc of sponsor logos on player apparel. It is mind boggling that the NFL in India does not have an official collective apparel sponsor, though some clubs have had a kit sponsor over the years. Key things related to sports like mineral water, sports apparel, nutritional food items, basic medications for muscle sprain etc and product categories related to youth that are the main viewers, like scooters, motorcycles, etc should all be targeted by the NFL for revenue and sponsorship purposes.

Lesson 2: Think local, one team = one city

In the summer of 1994 the MLS announced that a total of 22 teams had submitted a formal bid for a soccer team to be part of the MLS. Only seven teams were granted approval to be a part of the inaugural MLS season in 1996.
While it is clear that each of the bids was subjected to a meaningful due diligence test, it is also worth noting that all the 22 teams proposed were on a city basis. And India suffers tremendously on this count.
We have failed to realize that football must compete with other means of entertainment for the citizens. A survey in the US put the number of fans at a basketball game at less than 30% of the attendees. The same was true of spectators at an Ice Hockey game too. The other 70% of the spectators were there to just have a good time, in other words they were there for the entertainment.
And what better way to compete with other means of entertainment than to be a fixture in the social and entertainment scene of a city. Once a family has visited a museum, been to the zoo, seen the latest movie; they are unlikely to go there again as it is unlikely that there will be anything new or different. But once a family has been to a football game, the thrill of another game against another team, different weather conditions, players dropping out due to injuries, etc.; means the game and the result have a high likelihood of being different. That is why sports is heavily watched across the world. The drama, the human element, the unpredictability are things that cannot be replicated by many other forms of entertainment.
The franchise approach of giving exclusivity to a team owner for each city in the league is key given the expense of maintaining and building a team, its stadium etc. In return the prospective owner of the team gets a captive market that he/she must satisfy in order to make a good business proposition of his/her team.
But with the Indian football reality certain cities and states are likely to have more than one club in the new Pro League.

Lesson 3: The MLS Game Experience

This lesson is a given in a society like the United States, but in a country like India where consumers and citizens have been given a raw deal since Independence, it needs to be stressed.
Consumers i.e. spectators or fans will only go back again and again to watch football games if they have a good time.

Key ingredients of a "Good Time":
1. Easy access to and back from the stadium (Transport)
2. Clean and plentiful Washrooms
3. Clean Drinking Water
4. Floodlights
5. Fair pricing
6. Orderly crowd management
7. Pre- and post-match Entertainment at the stadium

In order to provide this, the NFL must look overseas in terms of facilities management. Just like the shopping mall boom in India has drawn on established best practices from overseas, so should hopeful owners of football teams.
The economics of today's stadiums are such that one needs to plan for a multi-purpose stadium from the beginning. A stadium needs to be able to hold different sporting contests, concerts, conventions, make money from stadium tours, etc. without impacting the playing conditions or spectator facilities.
Once such a facility is built, in true American-style the team owners, the owners of the stadium will look for sponsors and use stadium names rights as advertising vehicles and secure tremendous revenue deals. Beckham's new team, the Los Angeles Galaxy for example shares the stadium with Chivas USA and they play at the Home Depot Center, FC Dallas play at the Pizza Hut Park, and the Chicago team plays at the Toyota Park.

Lesson 4: Set Team Roster Standards that Help League Expansion

Today the Indian fan finds it hard to draw hope and solace when it comes to knowing that talented youth of today is being groomed for tomorrow. This is not just a shortfall of the NFL, its been India's drawback in pretty much every aspect of life. We never plan pro-actively, succession planning is frowned upon despite us as people and nation knowing fully well that we are fully aware of our mortality.
Each MLS team is mandated to have a senior roster (team) and a developmental (youth) roster. Collectively the full roster cannot exceed 18 seniors and 10 juniors. Each team cannot have more than 4 foreign seniors and each youth team member must be less than 24 years of age. Three of these youth players can be from overseas.
A comprehensive set of regulations exist that collectively allow the weaker teams to have first choice amongst the players that come out of Colleges to start playing professionally. This forces the contests to be more even and also helps the financially weaker clubs. This system of draft, where players are picked by teams, is a tremendously popular spectacle in itself and is telecast on television not just in the case of soccer, but also other team sports in the US.

Forcing the teams to invest in youth does two things:
1. It helps the system discover/invest in new talent.
2. It helps expand the pool of players so that every few year when the MLS wishes to add a new team, there is sufficient number of players to choose from.

League expansion is key so that new cities and customers are brought into the marketing mix. In order to keep the fans fixated, the fans must have a geographical team to support. An expanded league also means that fans always have the option of live soccer as an entertainment, as entertainment needs to be local, close to where the customer is.

Lesson 5: Let professionals Run the League and Investors own the League

Indian football is probably the most unique in the world where the football administration runs the league. In almost all countries that are serious about football, the league is run by a separate team of professionals. The MLS is no different.
Major League Soccer is structured as a single, limited liability company (single-entity). In the single-entity business structure, club operators own a financial stake in the league, not just their individual team.

Don Garber was named Commissioner of Major League Soccer in 1999, the highest decision maker at MLS. He spent 16 years at various positions in the NFL (In the US, the NFL (National Football League) is the league that runs the professional American Football league).
One of his first decisions on becoming Commissioner was to adopt almost identical rules of the competition that prevail in Europe as that still is the benchmark of successful club football in the world.
In 2001, Garber created the SUM (Soccer United Marketing). SUM spearheads all marketing and sponsorship efforts for the league. Budweiser, Pepsi, Honda, Radio Shack, Nike and Adidas are some of the top brand names that are associated with the MLS in long term deals.
Don Garber is supported by other employees that have similarly diverse backgrounds are all professionals in their own regard.

The MLS is unique in that the players have contracts and they negotiate the salaries with the league rather than the club. While this has helped the clubs keep their costs low, it will be interesting to see how far this arrangement can be maintained, once the league and teams become more competitive. In India, this aspect may be hard to implement as Indian clubs are used to autonomy and are not being created for the first time.
Some Indian clubs think of themselves bigger than the league or even Indian football as a whole. That thinking will have to change in the interest of club football in India.

Summary

The MLS is not the end all and be all of professional football. It was chosen as a subject of analysis for this article because of the similarities between India and the US when it comes to popularising professional football. The 5 lessons chosen here in this article are universal lessons, the ones that make obvious sense for India to implement.
Those that dismiss the MLS success by saying that they have money and India does not are missing the point. Yes, the US has money which is why the MLS which has lost $ 350 million since inception is still around.

However, it is worth remembering that poverty does not come from money. Poverty comes from a lack of will, foresight and innovation. And the drought in Indian football is not related to dearth of funds, but a general lack of willingness to change and learn from others, on all levels.

Benjamin Franklin defined insanity as doing the same thing over and over again and expecting different results. And if that is the path of Indian football taken by our leaders in this filed then there is not much that will change.