Major League

Feature photo by Kevin Leclaire – UltiPhotos.com

From High Release co-founder Jonathan Neeley: As both a life-long sports fan and a dedicated ultimate player, professional ultimate is still a crazy notion to me. I look at the American sports machine— billions of dollars in gear sales, the mesmerizing effect of March Madness, the obsession with fantasy scores— and see ultimate as a dwarf.

But there are plenty of people who think ultimate is gaining stature. And when it comes to Major League Ultimate, these people are willing to put legitimate investments behind that belief.

Mark Evangelisto is the executive vice president of the MLU’s DC Current; he was the general manager of the MLU’s Philadelphia Spinners in 2013, and the head referee for the American Ultimate Disc League’s Rhode Island Rampage in 2012. If anyone believes professional ultimate is a good idea, it’s Mark. I caught up with him— and I should note now that I play for the Current— in hopes of giving readers a clearer idea of how the MLU plans to sustain itself, where its relationship with other big institutions stands, and the league’s vision for the future.

What makes you think Major League Ultimate will be profitable? Ultimate may be bigger than it used to be, but is it really anywhere near creating a profitable professional sports brand? From what I can tell, Major League Soccer barely scrapes by, and their attendance is typically in the tens of 1000s. Am I looking at this wrong?

To properly answer this, I believe, requires looking at the questions from a couple of different angles. Looking at the sport of ultimate itself, from a pure participation standpoint, it is currently played by close to five million people in the United States annually. That’s larger than the combined participation in ice hockey (2.1 million), lacrosse (1.5 million) and rugby (850,000). From a growth perspective, ultimate is in a prolonged growth phase of about 5 percent annually and is in a position to surpass football– which has experienced a sharp decline in participation– in annual participation as early as 2014*. Soccer, while an order of magnitude greater in participation than ultimate, has experienced relatively flat growth.

There’s a lot to be positive about on the MLU side. While the average, league-wide, per game attendance of 700 may seem modest, it is the conditions on which those numbers were achieved that is encouraging. The first season of MLU was largely assembled from the ground up in four months. Having experienced it first hand as general manager of the Philadelphia Spinners, I can attest to the monumental task that is and say that to repeat that process eight times is astounding. That late start resulted in every team playing in venues that were in less than ideal locations. This had a direct impact on attendance numbers, so to reach the numbers that we did is a very positive sign. Looking solely at attendance numbers, however, only provides a partial picture of the league’s total performance. Every fan that attends an MLU game spends money on concessions, drinks and merchandise in addition to the cost of their ticket. Our annual plan distills game revenues into three primary numbers: attendance, average ticket cost and per-person average ancillary revenue (concessions, drinks and merchandise). For our first season, our attendance numbers fell a bit short of plan, while average ticket cost and ancillary revenue projections were on target. In addition to game revenues, other major components of the league’s bottom line come from online merchandise sales, sponsors and broadcast.

With a full year to prepare for our second season, teams should be able to secure more centrally located venues and an associated jump in attendance as a result. To further enhance the event experience for our fans, we’ll be looking to line up concession and alcohol availability in more of our cities. Our league-wide attendance goals for 2014 are 950 per game, which is very achievable.

There are other aspects of our achievements in 2013 that are worth noting: we had a total of 23 live streamed games with over 2.5 million views on YouTube and seven appearances on the weekly ESPN Top 10 Plays generated a lot of exposure. From a social media perspective, MLU generated over 88,000 Facebook likes and 14,300 Twitter followers, both of which are very strong numbers for attracting potential sponsors. One of the biggest surprises last season was in how well the broadcast of Philadelphia Spinners games on Comcast were received. Over the seven games that were broadcast, we reached a peak Nielsen rating of 0.5 and pulled at least a 0.1 rating in six of the seven games. This result compared extremely favorably to other second-tier sports like soccer, rugby and lacrosse, which average between a 0.1 and 0.2 rating (for reference, the Nielsen rating is essentially a percentage of households viewing a broadcast. In the Philadelphia tri-state area, where the games were being broadcast, games were available to 3.5 million households). In short, these are some very positive performances and the MLU is poised for solid growth in 2014.

Attendance comparisons against MLS are largely relevant but I think some of the observations are a little off. MLS, in its 20th season, has been showing signs of profitability for several seasons now. While their attendance does average about 18,000 per game (a big part of that is from Seattle, which averages over 44,000 per game), those attendance numbers are needed to make the league sustainable because the economies of scale in MLS are orders of magnitude higher than MLU at this point. The average salary of an MLS player, for example, is $160,000. MLS travel expenses are also much higher because they have cross-divisional play during the regular season.

Can you outline the business model? What’s the basic path that the league will need to take to become a sustainable venture?

The MLU’s organizational structure closely resembles that of MLS. The league is set up as a single entity business model, with the league centrally controlling all of the teams. Investors in the MLU receive one of eight voting blocks on the board as well as management rights for an individual team. The goals of the MLU board are to ensure in the collective success of each of its teams and the league as a whole. This model allows for the survivability of the teams in the league and lets us focus on building brand awareness and development of a repeatable model league-wide.

We’re fortunate to have a solid foundation of fans due to the popularity of the sport and their recognition of the quality of the product that we are able to put out on the field. But the eventual success of the league will hinge on our ability to attract and cultivate new fans both from organic growth of people already familiar with the sport and by introducing it to the casual sports fan that is not already familiar with ultimate. Reaching out to that latter demographic will come through a dedication of local community outreach efforts to expose the sport at all age levels and promote the league and individual team brands to raise awareness locally and nationally.

Our path to sustainability is really a function of the accuracy of our year over year projections to reach profitability. Like all other professional sports that came before us, the road to success will be a long one. We have a fantastic product and a great team of talented and dedicated individuals working together to ensure that the MLU will be successful. Our goals are aggressive but definitely achievable. From an attendance perspective, our magic “break even” point is somewhere around 3,500 fans per game and is baked in to our five year plan. At those attendance levels, all sorts of other possibilities, like national broadcast deals, become much more realistic.

Could you comment on the MLU’s official relationship with USA Ultimate and the AUDL? From a fan’s perspective, it seems like a room of elephants all dancing around one another. Do people within the respective organizations work together? Is there animosity? How real is the sense of competition, or in other words, is it an issue if a huge promoter like ESPN really picks up Nationals and doesn’t have any room for MLU?

First, it’s worth noting that all three organizations have the same goals of expanding the popularity and reach of the sport of ultimate. Our respective business models— and in the case of USAU, organizational charters— differ, which doesn’t lead to much synergy between them. I’m not aware of any substantive discussions with USAU. The relationship between the professional leagues is cordial, but I’m not aware of any current ongoing discussions between the two organizations.

From an MLU perspective, there is no real sense of competition per se. We are focused on our approach and our vision. In terms of the broadcast question, there is no overlap currently between Nationals and the MLU season. The exposure that USAU has been able to get with ESPN3 benefits everyone involved with the sport. We’ve had success with MLU’s broadcast trials with Comcast and there are other major sports outlets, so there’s plenty of room at the table.

Where is the MLU in terms of speaking with organizations that could get more eyes onto the sport? What’s the business dynamic with those kinds of relationships?

In our first season, MLU had some key successes with our relationships with Comcast and exposure on ESPN segments like Sportscenter and SportsNation. The successes of the first season resulted in more interest in different outlets, such as coverage in major magazines like Time and The Economist. The Fox Sports 1 coverage of the MLU Championship was another example of the reach of MLU beginning to take hold. Finally, the fact that we’re now able to attract interest from other major sports-related companies like Puma is a testament to the increased awareness of the MLU brand and the sport as a whole. The league has been approached by other media organizations with some exciting proposals that are being explored, but we aren’t ready to announce anything at the present time.

Can you talk about your vision for the MLU in 5 years? 10 years? 25?

In five years, I expect that Major League Ultimate will have expanded to 10 teams and will be averaging 4,000 fans per game league-wide. With the introduction of new teams, we should also see an increase to the number of games played and a longer regular season. I hope we’ll have broadcast deals of some sort in at least half of the local markets. At those levels, and the resultant growth in all the other aspects that generate revenue, the league should be showing initial signs of profitability. In 10 years, I think we’ll have gone through the introduction of a third conference, further expansion of the league schedule and the beginnings of cross-divisional play in the regular season. In this time frame, attendance should grow to about 8,000 per game, league-wide.

In 25 years, we’ll see Nick Purifico, as one of the hosts of Monday Night Ultimate, cover the induction of Sean Keegan into the ring of honor at the newly opened DC Current Stadium. Their sons will be part of the graduating class at the University of Delaware and go 1-2 in the 2039 MLU draft. On a more serious note, the possibilities looking 25 years out, as I see it, are very exciting. We’re talking about the effects of an entire generation’s growth of ultimate. I do not think that attendance on the order of 15,000 per game, with MLU challenging MLS in terms of popularity, is unrealistic. Just as important, I believe that by this point, we’ll be seeing players being able to choose ultimate as a profession in addition to entire staffs of the MLU teams.

This is an exciting time for our sport.

*This data is from the Sport & Fitness Industry Association (SFIA) 2012 Sports, Fitness and Leisure Activities Topline Participation Report.

Issue No. 3 | Business

January 6, 2014