Stars fail to put MLS in big league

Two years after David Beckham joined the league, Major League Soccer is facing many headwinds in addition to the declining economy as it attempts to establish itself as a major player on the U.S. sports landscape.

While Beckham's signing in 2007 helped boost the league's public awareness and put more fans in the seats, television ratings for the young league remain stagnant and some analysts said the MLS will never be more than a minor player behind NFL, MLB and NBA.

"They didn't do all that well this year when people were expecting, with Beckham, that they'd get a little bit more momentum," said Andrew Zimbalist, professor of economics at Smith College in Northampton, Massachusetts.

Driven by the housing bust and subsequent stock market slide, declining spending by consumers and companies alike has meant different levels of pain across all U.S. sports. However, former England captain Beckham, 32, was meant to elevate soccer to a higher status when the MLS signed him to a five-year deal valued at up to $250 million.

MLS officials at the time envisioned more TV viewers, as well as higher attendance and franchise values. Their optimism was based on landing a player many called the biggest star to play the game in the United States since Brazil's Pele signed in 1975 to play in the MLS's predecessor league.

Early returns for the MLS have been mixed as stagnant TV ratings and a lack of profits contrast with higher attendance and franchise values. TV ratings ticked up to 0.3 from 0.2 in Beckham's first year before slipping back to 0.2 in the just completed season, all on Walt Disney Co's ABC, and ESPN networks, according to the Nielsen Co. Those are a far cry from the 0.9 rating garnered in the league's first season in 1996. A ratings point represents the percentage of U.S. TV households viewing a game.

"It would have been tough in good times for the MLS to become the fifth league here," said Michael Cramer, professor of sports management at New York University.

"I have real doubts Major League Soccer as we know it will make it in the next 20 to 25 years," added Cramer, the former president of Southwest Sports Group, which owns the Texas Rangers baseball and Dallas Stars hockey teams.

Many attribute the failure of the North American Soccer League, which dissolved in 1984, on its inability to capture public interest beyond Pele and a handful of other stars.

In addition, Forbes magazine estimated in September that only three of the 13 MLS teams it studied had positive operating income. MLS officials do not discuss league finances, other than to state league revenue rose in 2008.

"They're the runt of the litter, so they're still working their way to legitimacy in some respects," said a sports banker who asked not to be identified because he deals with the MLS. "They're getting there. They're used to running a business that doesn't generate a lot of cash profits."

Nevertheless, MLS officials cite the positive impact of Beckham, who will join Italy's AC Milan club on loan in January until his return in March for the 2009 season with the Los Angeles Galaxy.

"There's been a lot of positive impact from David Beckham coming," MLS President Mark Abbott said. "We've seen it in attendance. We've seen it on road attendance for Galaxy games. We've seen it in terms of commercial revenues."

The MLS had 14 teams in 2008, which combined for record attendance of 3.46 million. It is scheduled to add its 15th team in Seattle next year, its 16th in Philadelphia in 2010 and two more teams in 2011. MLS officials believe attendance will continue to rise. About 15 million Americans play football, making it the third largest U.S. team sport that people play behind basketball and baseball, said the Sporting Goods Manufacturers Association.

Delaying plans

Eight MLS teams play in football-only facilities with more in the works, although Abbott stated the weak economy could delay those plans.

Meanwhile, franchise values continue to rise with Seattle and Philadelphia paying entry fees of $30 million apiece and the two teams to follow scheduled to pay $40 million each.

Beckham was signed under the Designated Player Rule, which allows teams to exceed league salary limits to sign globally known superstars in a bid to raise fan excitement.

Seattle did just that with its signing in October of Freddie Ljungberg, captain of the Sweden team and a former Calvin Klein underwear model.

Enough people believe in the MLS that seven bidders hope to be one of the 2011 expansion teams, including groups with the owner of the National Football League's Atlanta team, a partnership that includes the Barcelona football club and the owner of the National Hockey League team in Montreal.