LA Sol Folds: Good for the Future of WPS?

LA Sol and Marta

It’s not surprising that many commentators have seen the demise of the LA Sol, regarded as the flagship team of WPS in its inaugural season last year, as a very bad thing.  The LA Sol had the highest average attendance in the league, the highest sponsorship income, and thanks especially to Marta, the highest profile.

But they also spent by far the most money on their stadium, payroll and promotion, culminating — despite the decent crowds relative to the rest of the league — in a loss of over $2 million dollars.

In some senses, their departure should neither be a surprise nor a great cause for concern for WPS going forward.

Alarm bells did not ring loudly about LA (despite the fact they said they wanted out mid-summer last year) because they were owned by AEG. Phil Anschutz’s company had bankrolled MLS in its early years, and many felt he would shepherd his WPS team through the growing pains as well, even if a new owner couldn’t be found.  But when this did prove to be the case, Uncle Phil did not swallow up the loss for another year.

And so Jeff Kassouf asks: “It is hard to imagine what prevented this sports and entertainment conglomerate from “being in a position to take on” the Sol for another short period of time, other than simply not caring.”

Yet though I understand the sentiment here, this isn’t exactly fair to AEG as a business operation– which, after all, they are. AEG decided to sell-off most of its MLS teams when the league had become a viable business investment for others to sell to; between 2006 and 2008, they sold the MetroStars (2006), DC United (2006), the Chicago Fire (2007) and half of the Houston Dynamo (2008). It’s clear AEG have been scaling back their ownership of sports franchises for some time (including outside of soccer) — and most of this after AEG had already committed to WPS (remember, the league was supposed to launch in 2008 originally, and thus commitments were first made by ownership groups in 2007).

In WPS’ case, there wasn’t going to be such an easy sell at this stage, though one could fairly ask if AEG or WPS really couldn’t have done more to find a viable new investor given how long they must both have known how this was going to play out in the offseason.

charity

Does this mean AEG should have sucked it up and continued to lose millions of dollars in 2010?  It’s easy for us to tell a billionaire like Phil Anschutz that he should, but there’s really nothing to say besides it’s his business, and he quite easily could have pulled the plug much earlier: most probably, judging from the timing that he cut back on other team investments, he may actually have wanted to but instead sucked up some losses out of a sense that he owed WPS at least a season due to his original commitment to the league.

What is perhaps more significant than all this is whether or not this is a blow to WPS as a business.  The league added two teams this offseason, so despite the demise of the Sol, the league will be larger this year. Sponsorship revenue is reportedly going to increase over 50% this year. Many of LA’s players will find new homes, including Marta, and it’s a sign of health that other teams seem to be able to take this on (though it is terrible for the LA players who will not find new roster spots).

One could argue that the Sol’s failure may even help the league, as it continues to build a smarter business model than that of the WUSA some years ago — the overspending and overambition that doomed the first women’s professional soccer league was mirrored by Los Angeles’ approach to WPS. But this time, the Sol appear to be an exception. Sure, other teams are losing money, but none at the scale of the Sol, sensibly operating within tighter constraints that better reflect the position of women’s soccer as a spectator sport at this point. If the Sol’s demise ensures other teams continue to tighten their belts, that’s a good thing for WPS.

Quite frankly, WPS is small-time in its appeal at this stage of its development, and it needs to be approached as such by investors. Sky Blue FC showed in 2009 — despite some internal problems of their own — that you can spend little and be successful. The Atlanta Beat opening a new 8,000 capacity stadium built for women’s soccer is the way forward, not trying to be big time with a 6,382 average attendance in the 27,000 capacity Home Depot Center, as the Sol had. An LA team will return to WPS eventually, but it’ll be in a smaller stadium with smaller ambitions, and that’s better for WPS in the long-term.

At the end of the day, if women’s professional soccer is to survive in the long-run, it has to be because it’s sustainable, not thanks to charity from Uncle Phil. And the league, outside of LA’s bloated budget that’s now been blown away, is expanding and not contracting as a whole: the green shoots are still growing for women’s soccer here, folks.


24 thoughts on “LA Sol Folds: Good for the Future of WPS?

  1. KT

    Just as Miami and Tampa Bay being contracted was, in the long run, a good thing for MLS, I see your point about WPS learning from this and potentially coming out ahead in the long run.

    That said, it’s trendy to simply bash AEG as being the Evil Empire (especially if you’re in San Jose), so there you are.

  2. MrTuktoyaktuk

    One f’k season. I do not buy for one second that this was a simple, market driven business decision. Many MLS clubs have not shown an operating profit EVER. AEG, because of its stature and legacy of supporting the game in the US, wasn’t just one of the gang. It was a central player that gave credibility and stability to the new league. So AEG pulling out is more than just losing a franchise. They have made it more materially more difficult for the WPS to succeed.

    Maybe we’ll find out some day what the real reason was for AEG pulling the plug. I bet that AEG wanted to do something or other, the league (or the other owners) wouldn’t let them, so AEG picked up their marbles and left.

  3. Inca

    Pretty surprised you couldn’t find room to mention the Sol fans at all, Tom. I don’t disagree that the Sol overspent, and I’m no fan of AEG, but while this might be good for the sustainability of WPS, it really sucks for the fans here, myself included.

  4. Tom Dunmore Post author

    KT…I think the second comment here proves the relevance of your second point.

    Fortunately, MrT, the fact WPS is continuing and indeed expanding without AEG shows they are not dependent on Uncle Phil. Yes, many other MLS teams did not make a profit — and you may have noticed, in between getting in and out of WPS, AEG has got rid of their controlling interest in all of those that were losing money.

    It’s pretty clear that a few years ago, AEG decided they no longer wanted to keep losing a lot of money in a lot of different teams, and the Sol lasted longer than they might have considering that. They could have pulled out when the league was delayed a year from ’08 to ’09.

    I think we could question how hard AEG tried to find new owners for the Sol, but I don’t know enough about the ins and outs of that.

    I’ve love to hear your conspiracy theories though, MrT — my PhD is on the Trilateral Commission, maybe they were involved too?

  5. Tom Dunmore Post author

    Inca — it sucks more for the players at this late stage of the offseason, who I did mention. But yeah, it sucks for the fans too, and you’re right, that should have been weighed in this piece as a consideration for the good of WPS and for AEG’s decision to pull-out. But in the long-run, I do think LA will get a team that will last for years, and not this shooting star. It is a shame for fans, to be sure, though.

    But the main point here was to play the devil’s advocate; every other piece I’ve seen on the Sol has made that more obvious point about how much this sucks for those involved with the club.

  6. DK

    Whether or not AEG is making a profit, it is most frustrating because AEG clearly dictated significant aspects of the league’s operations, and then have abandoned ship far too early, and completely out of line with their bullying control tactics.

    They got Marta by insisting she go there (and signing her to an insane contract), even though the Sol did not have the first pick in the International Draft. They hosted the inaugural game at their fancy venue (the development of its “soccer-only” stadiums — the exorbitant rents they charge — are significant reasons so many of their previous MLS holdings lost money), and failed to properly market tickets to their Championship Game, despite knowing for more than a month they’d be hosting it (that the Live Nation entertainment stranglehold on the Los Angeles market couldn’t be used to leverage more interest. is a colossal failure on their part).

    To leave this soon is just another trademark of the company that repeatedly demands acquiescence from its partners, and treats soccer fans (and now women, obviously) as an inferior subset of their entertainment customers.

  7. Kolaroo

    I don’t think it’s a good thing that LA is folding – I disagree. Where I agree with you is I think the league can survive this.

    AEG’s selling off of its MLS teams is not a good example. It doesn’t mean that they’re scaling back on their sports investments; it’s simply not a good thing for one owner to own 2 or 3 teams in the same league. For the sake of competition. For the appearance of competition. That they were willing to take over as owners for 3 or 4 teams shows how deeply committed they were to MLS in the lean years.

    As for the Sol being “bloated” – Except for Marta’s salary (which was partly offset by Amway’s sponsorship), I need to see more evidence of the Sol running a bloated operation. They were under a salary cap. They operated with zero dollars in their marketing budget. The big difference that we know about is Marta — and she brought a benefit to the league as a whole. I think I just read that the average attendance was 3500 greater when the Sol was the visiting team.

    What it boils down to is the Sol didn’t have owners who were as deeply committed to the big picture as the other teams. That isn’t a knock on AEG (at least not necessarily). They always said their involvement was short-term.

  8. Tom Dunmore Post author

    DK — I’m no fan of AEG, and they certainly have inflicted some serious scars on the landscape of modern day professional soccer that they helped build. But there’s the rub: without them, there might not be MLS or WPS today. Would we have something better instead? Perhaps, but you’d need to explain how. Would WPS be around today without AEG’s initial involvement and investment? Maybe, but it’s pretty clear they were important to involve. Didn’t every other team profit from the marketing buzz and higher attendance of Marta’s involvement in the league’s launch? (as Kolaroo points out) Would other ownership groups have bought in without AEG in the initial stages?

    As ever with AEG and American soccer, I’m not convinced it’s black and white. WPS knew for quite a while AEG were not in this for the long-run; and they must have known, as we all do, that Uncle Phil is a businessman first and foremost. The fact the league can survive without them at this early stage is to me a sign of its strength.

    Kolaroo — it’s pretty easy to conclude that the Sol ran a bloated operation, I think. Despite having the highest attendance and the best sponsorship deals, they still lost much more money than anyone else. We (I think) know Marta cost around $500k, and yet the Sol lost considerably over $2m. Clearly (as DK points out), renting out HDC was very expensive, as would be operation costs at such a bigger venue with such (relatively) small crowds. I’m also told they spent far more on marketing than anyone else. The end result was an average attendance higher than the league average, but obviously much less cost effective than any other team, and not high enough to justify their spending. It was a poor business model that WPS is best off without in the long run (which is the point I was trying to make here).

  9. Kolaroo

    The Sol’s losses weren’t much out of line with what was expected in Year One. In a widely reported inteview last year, Tim Leiweke (the AEG president or GM) said (as closely as I recall) “Did we expect to be $2 million in the red? Yes. Will we continue to do that? No.”

    Martin Rogers – in his article on Yahoo today says this of the first year losses –
    “… WPS officials set realistic targets for the league’s inception and have avoided the kind of fiscal meltdown that befell WUSA. But even by going small, building gradually and trimming costs, there have been financial losses – with several franchises leaking between $1 million and $2 million in 2009.”

    The biggest difference between the Sol and the other teams is the long-term commitment of the ownership and that isn’t something I necessarily fault AEG for (I reserve judgment on that) – we knew all along that this wasn’t a long-term strategic goal of theirs. That and the stadium situation as you mention – with HDC quite possibly being too expensive a venue (although I’ve heard occasional rumors that the Sol got a good deal on it since AEG owns it)

    Either way, there’s hope that the remaining teams can make it where the Sol couldn’t. (Which is some comfort, but not a lot, to Sol fans like me)

  10. Tom

    I agree entirely with everything you’ve written there. The problem is that AEG going in willing to lose that much money can be seen as both a good and a bad thing; it helped the league in some ways with its profile in year one (due to the additional expenditure and visibility of the “flagship” franchise, Marta, etc), but as Leiweke’s statement makes clear, it wasn’t a sustainable business plan for AEG or anyone else. So, as you conclude in cold comfort for Sol fans, players and staff, it perversely vindicates the commitment to more limited budgets by most other teams. In that sense, it’s good WPS has got past this, tough as it is.

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  15. Jennifer Doyle

    Readers of my own blog know I’ve always hated AEG’s role in the LA Sol, and had serious doubts about their investment in the women’s game.

    Carson is a nice stadium in terms of its size and aesthetics, but its shitty stadium in terms of its accessibility and was never appropriate for the Sol.

    As a long-range plan, housing the Sol at Carson – and charging as much as $100 for a good seat for a Sunday afternoon match – wasn’t the behavior of an outfit interested in growing the audience for the sport. Carson had to have been hugely expensive as a venue as well. (Why not work with one of the area campuses – UCLA? – which is already a pilgrimage site for fans of women’s soccer? And accessible by mass transit?)

    And when they slapped the word “AMWAY” on the shirt, that was it for me. Their marketing was half-hearted at best – no real consideration for the team’s “brand” – which goes right to the crappy name. “Sol” = mediocre beer. “LA Sol” = linguistic awkwardness (sol is masculine, “el sol” – I see “la sol” and imagine “la soledad” – not a good linguistic association for a team sport!). I never once saw the Sol marketing folks at an LA Municipal women’s game.

    The Sol enjoyed the support they did because we have no other option – we went to games in spite of AEG’s efforts, not because of them.

    I happened to sit next to a high level sport marketing executive at the hair dressers the other week. She ranted about AEG’s business strategy: turn a quick profit. They have no business playing a role in a developing league. They are ruthless number crunchers. I’m tired of people saying that is OK: it isn’t, if you throw ethics and commitment to the sport out the window.

    And, I still say a corporation run by an aggressive and politically active homophobe has no “business” getting involved in women’s sports, never mind a league using Marta as its poster child. Good riddance.

    Query: The LA Sol had, via AEG, an institutional link to a men’s team. Historically, that’s usually worked against women’s clubs and not for them. Are other WPS owned or co-owned by companies that own the men’s clubs in their towns, sharing staff and facilities?

    JD

  16. Jennifer Doyle

    A good question is: Why couldn’t they find another buyer? Move to a different location? The rumors about AEG’s desire to sell their half have been around for ages. It was no secret. Did they try to stay at Carson? Was there a problem with Rudi Bianchi, the other partner??

    JD

  17. Bobby

    Jeff Cooper owns St. Louis Athletica and AC St. Louis, but it appears it intends to run them as true sister clubs and not “big club, little club”.

  18. Alyse

    LA Sol is the only team that had a direct interest btw MLS/WPS teams.

    While the Freedom & DC United worked together (and even shared staff at one point), their ownership has always been separate (btw they no longer share staff).

    As of now, Chicago is the only team that even shares a stadium with an MLS team, but that’s as close as the relationship has been… the happenchance that Red Stars & Fire play in the same place.

    Jeff Cooper owns Saint Louis Athletica, and obviously was pushing for an MLS team there, but that is the only chance I see anywhere in the future of a combined ownership (as of now).