Ownership Key to San Antonio FC’s Pitch for Major League Soccer

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Image made during a USL soccer match between the Swope Park Rangers and San Antonio FC, Saturday, April 9, 2016, in San Antonio. The final score was 1-1. (William Abate/USL)

William Abate / USL

Toyota Field is the home of San Antonio FC, a USL soccer club beginning its second season next month.

Its stadium may be outside the urban core and its first-year attendance numbers underwhelming, but San Antonio FC‘s bid to secure a Major League Soccer expansion franchise comes wrapped in winning colors: the silver and black of the San Antonio Spurs.

San Antonio FC played its first season last year in a league associated with MLS called the United Soccer League, or USL. The team’s owners, Spurs Sports & Entertainment, want to move up and bring top-level North American soccer to San Antonio by getting one of four expansion franchises MLS is awarding.

When considering where to place its expansion franchises, MLS emphasizes stadium plans and the securing of potential stadium sites, current game attendance, interest from fans and corporate sponsors, the stability and financial backing of the ownership group, and size of the local media market.

MLS currently has 22 teams, including three in Canada. San Antonio is one of 12 cities vying for expansion franchises. The first two expansion sites will be selected by the end of the year with teams beginning play in 2020.

Through the Spurs’ five NBA titles, Spurs Sports & Entertainment has made a national name for itself that will carry considerable weight with current MLS owners. Forbes magazine has called the Spurs the best-run pro sports franchise in North America, and the team ownership consistently ranks near the top in ESPN’s fan-driven survey of all pro sports franchises.

Scott Ball / Rivard Report

Toyota Field.

“We have a lot of respect for the Spurs organization, and I think it really speaks a lot to the state of the sport in this country that they got involved with the USL,” said MLS President and Deputy Commissioner Mark Abbott in a conference call with reporters earlier this month. Abbott said the Spurs organization’s interest in MLS expansion “certainly caught their interest.”

MLS has a single-entity ownership model, which means the teams are owned collectively by the league’s investors, although investors control their respective team operations. SS&E also owns the WNBA’s Stars, the NBA developmental league Austin Spurs and the Rampage of the American Hockey League. SS&E’s ownership group is led by CEO Julianna Holt and husband Peter Holt and include investors such as Valero Energy, AT&T, iHeartMedia, and Aramark Sports & Entertainment Group.

“My perception is that MLS likes owners who have multiple sport properties,” said Jason Davis, host of SiriusXM’s daily United States of Soccer program. “I think they like the caché that comes with being attached to an NFL owner or an NBA owner, so that’s obviously working in the Spurs’ advantage.

“If your reputation is as strong as theirs, you’re doing something right.”

The ownership group has burnished its soccer credentials by bringing in former USL President Tim Holt as SAFC’s managing director last year and more recently by forming an affiliate partnership with MLS club New York City FC, whose majority owner is the same group that controls Manchester City FC of the English Premier League.

While the contents of the bids have not been made public by any of the 12 markets applying, stadium plans loom large in the race for expansion franchises. For a smaller stadium, SAFC’s Toyota Field boasts good facilities and was built to be expanded to 18,000 seats.

In the weeks leading up to the club’s inaugural season last year, SS&E came to an agreement with the City and Bexar County in which the local government put $18 million in public funds toward the purchase of Toyota Field with the intention of leasing the site to the soccer franchise. SS&E contributed $3 million.

Since the 8,000-seat stadium’s purchase, San Antonio FC has not only played a full USL season at Toyota Field, but also established a top-level development academy at the adjacent S.T.A.R. Soccer Complex.

However, MLS has shown a preference for stadiums located inside the urban core of its club’s cities. Toyota Field sits on the Northeast side away from many of the things Millennial soccer fans crave most, such as bars, restaurants, and public transportation.

The Houston Dynamo of the MLS play downtown at BBVA Compass Stadium, and the Seattle Sounders, who led the league in attendance last year, share a downtown stadium with the NFL’s Seattle Seahawks. Several of the cities bidding for expansion, including Indianapolis and Sacramento, have plans for downtown stadiums.

To bring MLS to San Antonio, SAFC will have to convince MLS officials that the location is able to attract close to 20,000 supporters to each home match. In an effort to spin the stadium’s location as a positive, SAFC has pitched Toyota Field’s close proximity to I-35 as a lure to Austin area fans.

San Antonio FC’s 2016 attendance was among the best in the country for lower-division soccer, but a far cry from what MLS clubs are expected to draw each week. SAFC ranked 4th in the USL with an average attendance of 6,170, totaling 92,546 over its 15 home league matches. The USL average is 3,439; the MLS regular season game average in 2016 was 21,962.  

The USL team in Cincinnati, which is also bidding on an MLS expansion franchise, led the league in attendance, drawing an average of 17,296 to each home match, and announced earlier this month that it had surpassed 10,000 season ticket holders.

With its second season beginning in late March, SAFC is hoping to greatly improve its attendance numbers over last season. The USL franchise was formed late in the offseason of 2016, leaving just a few months between the announcement of the new club and the start of the season, giving the club’s sales and marketing teams limited time to promote ticket sales. The situation is different this year, Tim Holt said.

“We renewed about 85% of season ticket members, which is a number that we’re pretty proud of, so that’s where it starts,” he said. “From that point, we’re starting to build that base.”

Holt said the team now has more than 3,000 season ticket holders for the upcoming season, almost double the number last season.

“It’s third in the league,” he said. “Sacramento and Cincinnati are sort of head and shoulders above the group. We feel pretty good about where we are on those things, but not satisfied.”

If the club is able to sell larger numbers of  group tickets, especially to those hundreds of soccer families who are already at the S.T.A.R. Soccer Complex on Saturdays for youth matches, SAFC’s 2017 attendance average could rise significantly. This year soccer organizations from youth to adult leagues will have the opportunity to purchase blocks of tickets and receive special perks like having SAFC team members visit.

As the club continues to build its fan base, the power of its ties to the Spurs also have helped secure corporate sponsor support.

Toyota has been the stadium sponsor dating back to the days of the previous tenant, the now-defunct San Antonio Scorpions of the North American Soccer League. When SAFC took control of the stadium in late 2015, it announced that Toyota would continue to be the sponsor of the stadium and the adjacent soccer complex, although details of the arrangement were not released.

“The [corporate] interest has been very strong for us,” Holt said. “What we did strategically the first year knowing we had a short ramp-up time was focus on getting between six and eight blue-chip partners – founding partners for the first season. A lot of those had pre-existing relationships with the Spurs, so it allowed us to move very quickly with those and give us enough of a base of support to get going for the first year.”

Those partners included Valero Corner Store, H-E-B, and SWBC. Now Holt is looking to build upon that foundation in the team’s second season.

“It’ll be a group of mostly locally based partners that we’ll have that will have some combinations of field signs or in-game activations or joint promotional presence,” he said. “I would expect that you’ll see anywhere between another six to eight new corporate partners help us this year.

“Our approach will continue to be quality over quantity. It’s not our game plan to have 50 corporate partners and signs everywhere because I think you’d get clutter and lose a lot of value.”

One new marketing initiative the team is launching is the SAFC bar network, in which participating bars and restaurants display team branding in exchange for a package of benefits, Holt said.

With training camp well underway and the season opener a month out, SAFC Head Coach Darren Powell is focused on the 2017 USL season being a success. But he knows the ultimate goal for the club is moving up to MLS.

“We can’t make decisions for the MLS,” Powell said. “But it’s what this organization is about, so we want to hold high standards. If we get that opportunity to step into the MLS, [we want to be] ready, as ready as any team has ever been to make that transition from the USL to the MLS. That’s our goal.

“So we hold these guys, the team and the staff, to high standards in preparation for that. It’s an exciting prospect. I think with the organization, the Spurs Sports & Entertainment behind it, you couldn’t have a better group trying to push for the MLS. And in my opinion, they deserve it.”

5 thoughts on “Ownership Key to San Antonio FC’s Pitch for Major League Soccer

  1. Good article. One minor correction: USL was a third-division league during SAFC’s first season. The league was elevated to provisional second-division status by US Soccer last month.

  2. The fact that Austin seems to have left the radar in terms of MLS expansion (with their minor league team going on hiatus and the city being dropped from the list of those being considered for expansion) may help San Antonio. The application should emphasize not only that the present stadium is on IH 35 on the side of town toward Austin but provide statistics on population growth northward from San Antonio and southward from Austin that is bringing the two cities together into what is quickly becoming one megalopolis. A stadium just off-center of a megalopolis of 4 million people might offset the downtown mindset of the MLS. SS&E might also seek an Austin sponsor or two to boost this idea.

    • As an Austin resident, San Antonio FC season ticket holder, and someone who supports the MLS in San Antonio movement, I completely agree about SS&E needing to do more to reach out to Austin. I have this fear that MLS would prefer Austin over San Antonio and may sit on San Antonio’s bid for a few years to see if Austin can get its act together. (I’m incredibly skeptical that Austin is anywhere near to getting its soccer act together. That’s why I support MLS in San Antonio.) Anything San Antonio can do to make it seem like their team would be Austin’s too will greatly enhance the bid.

  3. “SAFC ranked 4th in the USL with an average attendance of 6,170”.
    Seattle Sounders averaged 3,386 and Orlando 4,743 in their last seasons in USL, both under the capacity of their stadiums at the time, so maybe 6,000+ is not discouraging. However, their stadiums were not as conveniently located as their current ones so maybe the location of Toyota Field should count against them. San Diego, Phoenix, Sacramento and Cincinatti all plan, or have stadiums accessible by walking or public transit, from downtown areas as have expansion teams number 19 through 23.

  4. This article completely ignores how difficult it is to sell domestic soccer in Texas. This is a football state and always will be. The only reason the Spurs have become so relevant is because they have won convincingly for decades and grew up in an era of less distraction and entertainment noise. Soccer will be different because nobody knows and cares about MLS here and the Spurs have zero knowledge of what it takes to build and run a soccer team. Prior success in one sport does not translate to success in another. To add to this reality, the two Texas MLS teams-FC Dallas and Houston Dynamo, are basically irrelevant and ignored in their markets. San Antonio has demonstrated no evidence that anything will be different here. Youth and Adult Anglo outreach is destined to fail because of the demonstrated fundamental lack of emotional connection these audiences have to professional soccer in the U.S. Additionally, most Spurs fans could care less that there is a Soccer team in town and the ones that do still think it is the Scorpions. SS&E needs to figure out how to build on the unique strengths of San Antonio, primarily by reaching out to the soccer-mad portion of the majority Hispanic demographic population base here. MLS has struggled mightily to build connections to this audience and SAFC doesn’t seem to have it either. I will believe that SS&E has a chance to be one of the next four expansion franchises when they demonstrate that they understand this and make demonstrable progress towards this goal. This will be one key way to differentiate itself against bigger markets in more attractive geographic locations. This is the path forward….not doubling down on textbook soccer marketing strategies that have not worked elsewhere in the past.

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