Major League Soccer (MLS) is the premier soccer league of the United States and Canada. Since 1993 this organization has grown from obscurity and is now a household name in America. The league is currently composed of 20 teams divided into two conferences with four more teams scheduled to be added by 2020. With only a few more slots in the league, dozens of cities are putting bids on the table to gain entrance. However, despite the flood of interest, MLS has accepted the propositions of two clubs that will move into cities that are already occupied by other teams. Will this provide too much supply that will exceed demand and dilute profitability for both parties? The following story suggests that the league is not yet ready for two teams in one locale.
Chivas USA competed for market share with LA Galaxy in the Southern California area. Attendance at the Chivas games became so poor that the club gave tickets away in order to fill the stadium. It didn't work. Despite cheap ticket prices, average attendance remained at a dismal 7,000, about 35% of capacity. Average attendance at LA games was 21,258, 80% of capacity with full-price admission. The Galaxy had won the turf battle for fans. Tickets to watch Chivas play were essentially inferior goods that weren't valuable despite being free to the consumer. Is the soccer market in North America too saturated for current levels of demand? If this is the case, allowing two teams to share a city may be a step backward for the league in the current market.
Cities which house only one soccer team see game turnout hover around 95 percent. With these traits in mind, it seems the decision to grant LA FC and NYC FC entry into the MLS system is a mistake. These teams will fight for their respective markets. Once the better performing team emerges, fans will follow, leaving the other team to die. Given past experience, it seems that the wise solution is to separate teams geographically from one another, allowing them to have a monopoly on their individual markets. Demand for the sport is still in its youth in this country. Despite the promise of continued growth, by providing too much supply at this stage, MLS risks the failure of clubs residing in the same area as another.
Can a city sustain two MLS clubs?