When the Seattle Sounders announced their separation from the Seattle Seahawks as working business partners, it came and went with a flash and bang. This divorce of sorts, will have large reaching impacts on how the team will drive business matters for years to come. While the standard outward appearance of the team in its players and coaches will stay the same, those who pull the strings behind the scenes and orchestrate that which we have come to breath and live on a daily basis will shift dramatically.
This is the first of a three part series looking at how the business aspects of the team will and will not change, as well as the potential revenue streams and other benefits garnered through this departure.
The immediate effects of departing from under the wings of the Seahawks will not be felt until next year. Seattle extended it’s sponsorship relationship with X-box through the 2014 season (1 year). The season ticket renewal process will not go into swing until the late stages of summer and early fall, giving the organization a nearly 5 month lead in organizational structuring, hiring, training, and preparing for the next cycle of season ticket sales. This cycle will be more difficult as many sales representaves will be soley Seattle Sounders ticket reps, and not sharing a dual role. Meaning if you area a current season ticket holder for both the Seattle Seahawks and Seattle Sounders, previously you could have had the same sales person whom you dealt with regarding both of these. No more.
This will mean an expanding labor force for Seattle as they will need to hire those to replace some who did not make the jump to the team, as well as the potential small expansion in growing its sales force.
In December of 2013, Sounders announced they were partnering with Q13 and JOE TV to be local carriers of their games on television. While details of the deal were not released, based on other teams recent television deals, the partnership with Q13 will be between $7-10 million annually. With this new deal in place,the team will be able to ramp up into next year with a soft landing after having signed a multi-year contract.
Clint Dempsey and the World Cup
Upon the arrival of the Captain of the US Men’s National Team captain, there was foresight well beyond the immediate impact Clint Dempsey would have on not only the local Seattle soccer scene, or even that of Major League Soccer itself. Over 14 million people watched the 2010 World Cup game between the USA and Ghana. If you hear the term ,” of the Seattle Sounders” when he is announced, mentioned, or talked about, the publicity is weight in gold. The price tag for Dempsey was steep, forcing the team to part ways with nearly $14 million in transfer fees and salary.
Over 14 million Americans watched the 2010 World Cup game between the USA and Ghana.
Value-added. This could be another description of the former EPL striker. In spending $14 million, Seattle essentially raised the value of their franchise alone by nearly $10 million dollars. Accounting for merchandise sales, marketing value, tickets sold, eyes on the team both on and off the field, as well as national air time, the prominence he will/could play in the World Cup in 2014, and his star status world-round, have/will allow the team to expand in new and emerging markets.
The new marketing department will be drooling at the possibility of Clint Dempsey, coming off of a strong performance in the World Cup, with the Sounders making a strong playoff push and potential supporters shield run. This influx of money will be a stabilizing factor in any cost overruns, as an organization head quarters takes shape in the heart of Pioneer Square.
The Rest Of the World Cup Team
Clint Dempsey isn’t the only player on the team with the likelihood of making it to Brazil. Both Brad Evans and DeAndre Yedlin, have been featured within the national team’s possible plans for the mid-summer trip. If both or either play, the dollar signs for the Seattle Sounders begin to multiply exponentially. There is a possibility both Evans and Yedlin could start alongside Dempsey. While unlikely, the mere prospect of three of the starting 11 for the USA coming from Seattle increases that multiplier.
Based on previous merchandise sales, ad revenue, and marketing dollars, Seattle increases its revenue stream by nearly $250,000 per game. If a player scores a goal that number jumps to $325,000. The further the national team makes it the higher those numbers go. If the United States were to make it to the final four of the World Cup and Clint Dempsey were to score a goal, Seattle has the potential to maximize their revenue stream by a cool $1,000,000, at no expense to the team other than having their players play for the USA.
This additional revenue stream, along with the addition of Clint Dempsey, and the new television deal, were major factors in the providing the team the ability to flex its’ muscle and venture out on its’ own.
Possibilities abound when you are adding cash to a growing organization which has a stable foundation and can put new monies towards investing in its long-term vision of residences and a campus for its academy players as well as a growing presence on the national and world stage.
Seattle Sounders Long Term Effects
A startup is never easy. Regardless of what profession it is, there are pitfalls, and dangers around every corners. However, over time and through experience those pitfalls and dangers get further apart. Every organization goes through its version of growing pains and the Seattle Sounders are no exception. As they move out of the shadow of big brother, and make their own imprint on the office space of downtown Seattle, it will take years to understand the financial, social, and overall success of the split with the Seattle Seahawks, yet there is never a perfect time to end a relationship.
While the team is financially strong and has the potential to get even stronger over the next several months, it will need that cash influx to sustain its evolving institution.