A business model for American (specifically MLS) soccer news

Posted on 07 December 2009 by ASN Staff

The immediate catalyst for this editorial was a post last month by A More Splendid Life, but really this topic has captivated us for some time.

As anybody in or near the media industry knows, there simply does not appear to be any way of making money as a provider of original (print) content. The Web has changed that. Advertising models have changed that and now the recession has hammered the final nail into its coffin. One’s best bet is to turn to recommending products or doing other things that “have little or nothing to do with the sort of long-form journalism and first person reporting we’ve come to take for granted from print media,” as AMSL puts it.

However, this conclusion assumes two things, both false:
1. That people are not willing to pay for content and
2. That there is no way to charge them in a way that is fair and effective and does not encourage piracy.

The first item should be a no-brainer, as human beings continue to pay money for books, newspapers and magazines. True, the latter two may not last much longer if current patterns hold. But that does not change the fact that paying for print content is deeply entrenched in the consumer psyche. The idea of receiving print content completely scott free is, by contrast, brand spanking new, having only emerged over the last 10-15 years.

The second assumption is admittedly more difficult, but it is only a matter of time before it, too, is disproved. Just last week there were reports that an “itunes model” for print publications is in the works. In fact, an announcement on its release may be imminent.

It’s about time. So how exactly would a soccer news business model work?

The idea is to have dedicated coverage for each Major League Soccer team. This is an area that has historically been underserved (at best) or completely ignored (at worst) by local newspapers. And yet the demand for news is certainly there. Just take the Philadelphia Union, the newest MLS team to begin play next season. The team has already sold 6,000 season tickets (as of six months ago!) yet does not have a single dedicated beat reporter from a major newspaper or wire service. That’s at least 6,000 individuals who are left wanting for news about their team.

Of course, if it’s going to attract paid subscriptions, such a news service has to be of the highest quality. The reports themselves have to be well written and will need to adhere to a simple, consistent style. More importantly, they will have to offer compelling content–exclusive stories, ideally–on a daily basis.

To accomplish this, a full-time beat reporter will be paid to follow the team, to attend its practices and road trips, to hound its players and coaches for interviews, to develop sources in the front office. This reporter will not only need to be experienced, but will also need to be equipped (and skilled in) the latest multimedia tools: a laptop to file stories, a Blackberry or iphone from which to send Tweets or shoot photographs; a mini camcorder to film videos. Estimated annual cost, including salary: $100,000 per team.

At least one full time editor will be needed as well. This editor’s duties will include assigning and editing stories (duh) and posting them to the Web site and filling in with reporting and writing duties where appropriate. He or she will also be expected to lend direction and management to the cause and should of course be able to edit videos as well as Webmaster the site where necessary. Estimated annual cost, including salary: $100,000 (total).

With 16 MLS teams, the cost would quickly skyrocket well into seven figures. Nobody, least of all nowadays, is going to want to put up this sum of money for a news media venture. Better to start with one team and have the editor double as a publisher, with a portion of the second $100,000 dedicated to marketing.

That’s still $200,000 for year one. What types of revenues might be expected? How much can/should such a site charge anyway?

A monthly fee somewhere in the $5-10 range should be realistic keeping in mind the cost of an individual magazine purchased from the newsstand. At the low portion of the range, an average of 3,334 subscriptions would need to be paid each month to break even at the end of the first year. That’s significantly less than the amount of people who put down season ticket deposits for the Philadelphia Union.

Obviously the math can and will change depending on the types of subscription packages that are sold. Readers could be encouraged to sign up for the whole year for a cost of 10 or 11 months, say. Various partners could get involved selling subscriptions in various capacities, in exchange for a portion of revenues.

The site would probably need to be ad-free if people are going to pay for it. But readers could be offered coupons for certain products (a pint of beer at the local tavern for the team’s next away game? Discounts on team merchandise from an online outlet?) that would result in more revenue for the site.

Does this sound like fantasy? Or might it be a realistic news model for the future? More importantly, would you, the fan, pay for such a service? Why or why not? Post your thoughts on the matter below. If you happen to have $200,000 burning a hole in your pocket, send it our way. Or tell us why you would not throw money at this cause.

10 Comments For This Post

  1. timmyu Says:

    I have trouble with the idea of paying for that content because I have only experienced it in the free version. I think ESPN is an interesting study with its INsider program that requires subscription in the 4 or 5 dollar a month range. It also appears to be an extension of their monthly magazine. They seem to do a great job of providing insider access, features, and content limited to the website and makes dual use of their writing, publishing, technology resources. Could something like this be pulled off for american soccer? doubt it. Seattle has taken to hiring their own beat reporter and using their in house promotions, marketing, etc. to make him worth while. That is probably a more feasible plan from a cost stand point and might make the sources, interviews, writeups etc less difficult to obtain. Right now, the market is contracting on print journalism, but the thirst for compelling content is not waning. Im sure there is a business model out there that will fill the desires and needs of the public.

  2. Nope Says:

    No way I'm payin' for this site.

  3. Matthew N Says:

    I would be willing to pay but the content would have to be good and it would have to be diverse. Basically, it would have to have both commentary and the facts (and preferably multiple points of view). I don't think other consumers would agree with me, but personally I would be willing to pay to view my favorite news sites were they to go pay-to-view. If that is the goal for ASN, I think it is headed in the right direction.

  4. amersocc Says:

    To clarify, we would not be charging subscriptions for this current site. It would be for one of the MLS team sites (links above right) but only with the setup discussed in the article (full time beat reporter, etc)

  5. leslieville Says:

    The real option is to have sponsorship for the site, it provides a great branding opportunity into a very targetted demographic.

    The ad revenue could also be attractive based on what network you could affiliate with, if you are able to attract more content from each team it would drive up the traffic and in return more impressions, more revenue.

  6. amersocc Says:

    We did explore sponsorship. Despite the obvious (or not?) benefits, nobody was willing to come on board. And this was back in '06 and '07.

    From my personal POV there is a different reason to eschew sponsorship: it makes your business model dependent on corporations' ad budgets. I would rather just go to “the people” directly. Sure they will also be affected by the broader economy, perhaps even more so than corporates. But they are, in the end, the consumers of this product, and if you can't satisfy your consumers you have no business being in business to begin with IMHO. I think that if you can produce a quality product many (though not all) of your consumers will stick with you in bad times. The same thing cannot really be said of sponsors and advertisers, who have priorities completely divorced from the quality of your content.

  7. Paul Miles Says:

    I think your numbers are way skewed. Even if you pay your writers $70k a year, your still estimating $30k for equipment (most of which writers already have, for example, I already have a laptop, Blackberry and a Flip Mino, all in cost ~$2000) and travel. And that's assuming you have your beat writers road dog with teams. Considering the same publication plans on having full time staffers with each team, having a visiting reporter file remotely would not be out of line. The only time the site would lose would be for international competitions, such as CCL or WCC. And I think an American website would have a difficult time getting credentialed for WCC, not to mention the travel alone being cost prohibitive.

    Personally, I think the best model is the SBNation model. A network of ad-supported sites. There is a central publisher/editor, and a network of bloggers who (at this point) work part time. Having a decentralized network I believe generates more traffic, especially if all content is free. Writers are paid a split of advertising generated by their site, which is an incentive to deliver quality content and drive readership to the sites.

    Then as the site develops, develop a video podcast that covers the league. Another way to monetize the network through ad time sales. I'd rather sit through a 15 or 30 second commercial during a video than pay for a website. And getting into ad networks like Yardbarker (powered by Adify) provides awesome CPM's for publishers. So developing a profitable website or network based on ad sales isn't entirely impossible.

  8. Paul Miles Says:

    I think your numbers are way skewed. Even if you pay your writers $70k a year, your still estimating $30k for equipment (most of which writers already have, for example, I already have a laptop, Blackberry and a Flip Mino, all in cost ~$2000) and travel. And that's assuming you have your beat writers road dog with teams. Considering the same publication plans on having full time staffers with each team, having a visiting reporter file remotely would not be out of line. The only time the site would lose would be for international competitions, such as CCL or WCC. And I think an American website would have a difficult time getting credentialed for WCC, not to mention the travel alone being cost prohibitive.

    Personally, I think the best model is the SBNation model. A network of ad-supported sites. There is a central publisher/editor, and a network of bloggers who (at this point) work part time. Having a decentralized network I believe generates more traffic, especially if all content is free. Writers are paid a split of advertising generated by their site, which is an incentive to deliver quality content and drive readership to the sites.

    Then as the site develops, develop a video podcast that covers the league. Another way to monetize the network through ad time sales. I'd rather sit through a 15 or 30 second commercial during a video than pay for a website. And getting into ad networks like Yardbarker (powered by Adify) provides awesome CPM's for publishers. So developing a profitable website or network based on ad sales isn't entirely impossible.

  9. Best CPA Networks Says:

    Most internet marketers who are having success these days are using Cost-Per-Action, or CPA ads. The reason for this marketers don’t need to complete high cost sales in order to get credited for a conversion.

  10. Ann Moscicki Says:

    Normally I don’t read article on blogs, but I wish to say that this write-up very compelled me to check out and do so! Your writing style has been surprised me. Thank you, very great article.

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