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mightymoose

CPL economics

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As a European with an interest in North American soccer and ties to Canada, I find the idea of a Canadian Premier League very interesting. I do however have a somewhat hard time in understanding the economics behind it all, since professional soccer is still very new to many areas of Canada, which of course is a humongous country.

Who finances it all? I understand some Canadian Football League owners are behind the soccer clubs, too, but we're still talking about an incredibly unpredictable league with even more unpredictable income. Distances are huge between cities, with e.g. Winnipeg having their closest away games played more than 1300 km from Winnipeg in Alberta, while Halifax need to travel almost 2000 km just to get to Toronto. Not to mention transcontinental travel.

How do teams travel? I understand air travel is quite expensive in Canada, while riding coaches for huge distances becomes very inconvenient, to say the least. With no guarantees of people finding their way to the stands, it seems like a really risky business model.

I don't want to sound like a massive party pooper (although I know I sound like one), it just sounds very risky to me. I hope I am wrong to think, that multiple professional soccer clubs in e.g. the GTA will have a hard time surviving and finding supporters. If one is a casual soccer fan, surely TFC is the most viable option, which represents the whole area. For instance the York 9 sounds like a neighborhood team to me. Surely it will get a small following, but one that is able to generate enough income for a fully professional nationwide North American sports league operation? I don't know.

Being the fan of a 3rd tier Finnish club, I know it can be a struggle. Even as amateur/semipro clubs with a league divided into 3 geographical groups in a much smaller country.

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Travel is one of the major reasons the other attempts at leagues have failed. Professional players aren't going to take week long coach buses to one end of the country. I think all these logistics have been planned in. They have to have been, whether it is Soccer Canada, the CPL, or the teams themselves, or all three. I imagine the money from sponsors are going to play a large part in it as well. 

 

It remains to be seen but it is a very big obstacle. Places like Victoria, Hamilton, and Halifax have waited a long time for this kind of professional team. They will make it work.

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I'm sure you are right, and of course there are many more wealthy people in Canada than in Scandinavia, who can invest private money.

I'm thinking that the ultimate goal has to be self-sufficiency. Not a Russian or Asian model, where rich people pump their private money into the clubs, in order for them to function. When the owner loses interest or runs out of cash, the club folds. This is why I have a hard time seeing how a team from some obscure "suburb" could make it in the long run in an expensive set up.

The places you mention I completely understand. The soccer teams become the main pro teams in those cities, which adds a lot to the potential.

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...or completely understand is maybe an exaggeration, given the nationwide set up. But I do believe they can make it work and it will be interesting to follow the development of soccer in those areas.

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I can only speak for Victoria as I grew up here, but soccer is the biggest sport here. Most kids play soccer over hockey or baseball here. Mostly due to the weather so we play from September to April then have summer camps and basically play all year. Just my age group and club that I played for/coach right now we produced Adam Straith and Simon Thomas who are both bubble national team players but still good and likely to play in CPL. Josh Simpson (former national team player and owner of Pacific FC) is also from here.

We have a WHL (junior hockey) team since a few years ago and it has been a semi success, but that's junior hockey. A top flight pro team is gonna get a lot more attention, especially if it's a soccer team. We're kind of a hotbed for success with Jamie Benn and Steve Nash being from here. So finally having a team for kids to look up to and cheer on and a proper academy it is very promising. Back in my day the Whitecaps were in the USL and not a big deal whatsoever. I wouldn't be able to even name a player on the team back then. MLS was seen as a joke and the only soccer I had to watch started at 7 am and was very limited. 

 

This team will bring so much to this city and I am so excited to be apart of it. I coach some pretty talented kids that finally have a path to look up to that I didn't have as a player unless identified by the national team like Adam Straith.

 

 

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That's very interesting. Would you say your average soccer fan in Victoria (with suburbs) feels more strongly for Victoria than Vancouver? Could there even develop something of a rivalry between the Pacific and the Whitecaps, if the teams met in the Canadian Championship?

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9 minutes ago, mightymoose said:

That's very interesting. Would you say your average soccer fan in Victoria (with suburbs) feels more strongly for Victoria than Vancouver? Could there even develop something of a rivalry between the Pacific and the Whitecaps, if the teams met in the Canadian Championship?

I'm a former season ticket holder for the Whitecaps and still will cheer for the Whitecaps in the MLS. I am undecided which team I would cheer for if they meet in the Canadian Championship. Hard to tell when one of the team hasn't even signed a player. 

 

As for the kids I coach, most of them are Whitecaps fans with a few exceptions (couple of TFC fans as their parents are from Toronto, one Sounders fan (I make him run extra laps if he wears Sounders gear) because he was born in Seattle, and a NYRB fan because his dad played with Jesse Marsch at Princeton). I think if Pacific FC play their cards right and give free gear and team deals to matches they might win some over. As for hardcore fans, most of them will support both teams like me. We've invested too much to the Whitecaps to give up just like that. 

 

It'll be interesting to see what the general public does though. I'm still not sold on the location of the stadium, especially trying to get home (drunk) after a game. 

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It's still possible the Whitecaps might create some kind of deal with a CPL team to loan out young Canadians for playing time at a possible higher level than USL. Not sure if the league will allow it, but Victoria and Calgary were both considered.

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5 hours ago, mightymoose said:

...How do teams travel? I understand air travel is quite expensive in Canada, while riding coaches for huge distances becomes very inconvenient, to say the least. With no guarantees of people finding their way to the stands, it seems like a really risky business model...

 

Air travel with players on full-time contracts so it's definitely high risk, but also potentially high reward as well if you get in early which is why rich people that can afford a speculative investment that can be used as a tax write-off are willing to roll the dice on this sort of thing with a small portion of their net worth (the problem with earlier attempts was that some people were doing it with a large portion of their net worth, but that doesn't appear to be the case this time fortunately) on something they probably enjoy being involved with.

They need to get the salary cap right, so that many/most of the teams have a legitimate shot at breaking even. That part I am more skeptical about but time will tell. 6000 paid is what tends to be mentioned as a break even on crowds, while 4500 was what they were shooting for with the CSL the last time around in the late 80s. Things have started somewhere between moderately and very well in five of the seven markets to announce so far and Ottawa should make that six, but they'll need to get a minimum of eight to be financially stable and sustainable for this league to fly long-term. Not mission impossible but no slam dunk either.

Edited by BringBackTheBlizzard

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12 minutes ago, BringBackTheBlizzard said:

Air travel with players on full-time contracts so it's definitely high risk, but also potentially high reward as well if you get in early which is why rich people that can afford a speculative investment that can be used as a tax write-off are willing to roll the dice on this sort of thing with a small portion of their net worth (the problem with earlier attempts was that some people were doing it with a large portion of their net worth, but that doesn't appear to be the case this time fortunately) on something they probably enjoy being involved with.

They need to get the salary cap right, so that many/most of the teams have a legitimate shot at breaking even. That part I am more skeptical about but time will tell. 6000 paid is what tends to be mentioned as a break even on crowds, while 4500 was what they were shooting for with the CSL the last time around in the late 80s. Things have started somewhere between moderately and very well in five of the seven markets to announce so far and Ottawa should make that six, but they'll need to get a minimum of eight to be financially stable and sustainable for this league to fly long-term. Not mission impossible but no slam dunk either.

Especially in the first season, there needs to be more hype and marketing.

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Understandable. It's better to spend money on something one enjoys, that benefits the community, than to let money go to "waste" in form of taxes. I guess it is hard to grasp this sometimes, since there are so very, very few people with money like that in Finland. Of course there are a few private guys that own football clubs, e.g. Seinäjoen Jalkapallokerho, but the running costs of a club in a relatively small European country must still be a lot less. Air travel is not a big issue, since one flies to maybe two destinations, but still many smaller clubs even in the top tier choose not to.

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2 minutes ago, mightymoose said:

Understandable. It's better to spend money on something one enjoys, that benefits the community, than to let money go to "waste" in form of taxes. I guess it is hard to grasp this sometimes, since there are so very, very few people with money like that in Finland. Of course there are a few private guys that own football clubs, e.g. Seinäjoen Jalkapallokerho, but the running costs of a club in a relatively small European country must still be a lot less. Air travel is not a big issue, since one flies to maybe two destinations, but still many smaller clubs even in the top tier choose not to.

Do ice hockey teams fly? Besides Jokerit who obviously plays in the KHL, last time I checked.

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13 minutes ago, Xavier said:

Do ice hockey teams fly? Besides Jokerit who obviously plays in the KHL, last time I checked.

Only when travelling to Oulu. The rest of the teams are at most a 5-hour bus ride apart, most teams only 2 hours, so it wouldn't make much sense.

In the top soccer tier only HJK would be flying to the northern destinations (Oulu and Rovaniemi) and the island of Åland on a regular basis. The rest travel by bus, train and ferry.

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...that should have been Kemi and Rovaniemi. Oulu are currently in the 2nd tier. But you get the point.

 

For instance IFK Mariehamn travel from Åland by ferry to Turku and from there by train to Rovaniemi, when they play up north. That is 1200 km, which is by far the furthest distance a team travels in Finland. Probably in any sport.

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3 minutes ago, mightymoose said:

...that should have been Kemi and Rovaniemi. Oulu are currently in the 2nd tier. But you get the point.

 

For instance IFK Mariehamn travel from Åland by ferry to Turku and from there by train to Rovaniemi, when they play up north. That is 1200 km, which is by far the furthest distance a team travels in Finland. Probably in any sport.

Victoria to Halifax is 6175 km, which is insanely far to travel twice a year. Will be interesting. But the CPL clubs should be richer than most SM Liiga teams.

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18 minutes ago, baulderdash77 said:

A transatlantic flight from Toronto to London England is 5,700 km and a flight from Halifax to Victoria is 6,100 km.  That puts the distance into perspective.  

I always enjoy talking to Brits about these distances and remind them that they complain about things like Champions League games being too far. London to Moscow is only 2,500 km and they whine about it like it's the far side of the world.

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12 hours ago, Tigers said:

Air transat is cover all the Wolfpack flights, so something like that isn't outside the realm of possibility.

Well the Wolfpack need it as much as Halifax and Pacific are going to need it.

 

 

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5 hours ago, ddoouugg said:

https://www.bbc.com/sport/football/44987242

 

Hamilton Academical: Club defend cannabis plant sponsorship decision

 

Pot company sponsorship with legalization coming at some point to Canada will the CPL be on board?

Doubt it.  The Feds have pretty strict advertising restrictions for medical marijuana companies and the indications are they will be similarly restrictive post October on e recreational pot is legalized.  Health Canada even recently issued a statement reiterating their position.  And with the strong emphasis on protecting children and youth (and denormalization, etc) they would sanction (even potentially pull the licence of) any company that tried to do an end-run on advertising restrictions by sponsoring a team that tons of kids would be cheering for.

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