If You Build It, Will Soccer Fans Come?

Abstract

Major League Soccer (MLS) is growing quickly by improving its existing franchises, and also by expanding to new markets, adding new franchises. MLS has the potential to see significant gains from this expansion into new markets; however, as with every business decision, there are risks. There is always the potential that a new franchise may fail if placed in the wrong city. This is a concern with expansion in any professional sports league, but particularly so in one as young as Major League Soccer. Given the sizable risk, it is surprising that relatively little research exists on the evaluation of potential markets for new sports franchises. This study fills this void by analyzing how a variety of factors that characterize a geographic market – i.e., population, community attachment, the presence of other professional sports franchises, household entertainment spending, and education level (at a metropolitan statistical area level) – affect MLS attendance. Results indicate a positive relationship between population, entertainment spending, and education level with the success of MLS franchises while a negative relationship exists between the presence of other professional sports franchises and community attachment with franchise success. Subsequently, the observed relationships are used to predict which geographic markets would be most suitable for future Major League Soccer expansion in America, with Atlanta, San Francisco, Miami, and Phoenix appearing most attractive.