SACRAMENTO MARKET ANALYSIS November 2015 ABOUT CSL • Conventions, Sports & Leisure International (CSL) is an advisory and planning firm that specializes in the market and financial evaluation of sports and other public assembly facilities • Established in 1988 to provide focused consulting services to the sports, entertainment and leisure industries and has been involved in over 1,000 engagements. • Major emphasis on feasibility assessments surrounding the development of stadiums, arenas, ballparks, convention centers and other public assembly facilities. • Client base includes professional sports teams, sporting clubs, and colleges throughout the U.S, Europe and Central & South America. • Currently working with D.C. United and Los Angeles Football Club 2 KEY FINDINGS • MLS cities vary widely in terms of market size and characteristics – Successful MLS cities come in all shapes and sizes – Bigger does not mean better • Sacramento market is comparable to several successful MLS cities – Portland, Salt Lake City, Kansas City, Orlando • Sacramento’s case as a viable MLS market is strengthened by several factors – Sacramento Republic FC success – Limited competition from other pro sports – Historically strong fan intensity and loyalty – New urban core stadium – Favorable demographics and regional economic trends • Sacramento Republic FC should place particular emphasis on shoring up areas where traditional metrics are less compelling – Premium ticket market – Corporate partnership base 3 CONTENTS 1. MLS Overview and Comparable Markets 2. Sacramento Market Analysis 3. Conclusions and Next Steps 4 MLS OVERVIEW • 20 teams currently playing in league • Four new expansion teams expected to launch by 2020 – Atlanta (2017) – Los Angeles (2018) – Minnesota (2017/2018) – Miami (TBD) • League currently assessing viability of further expansion beyond 24 teams • Potential markets under consideration include (but are not limited to): – Sacramento – San Diego – St. Louis – San Antonio – Charlotte 5 CURRENT MLS MARKETS MLS cities vary widely in terms of market size and characteristics. 6 CURRENT MLS MARKETS MLS cities vary widely in terms of market size and characteristics. MLS Low MLS High MLS Median Population 1,143,671 19,985,109 3,606,687 Median Age 37.1 40.8 36.9 Median Household Income $49,033 $94,828 $61,044 Median Household EBI $38,104 $71,855 $47,776 % High Income Households 6.7% 25.6% 11.4% Annual Sports Admission Spending per $113 $226 $159 Household Corporate Inventory* 910 14,178 3,449 Total Households (Millions) 0.4 7.3 1.4 * Includes corporations with over $5 million in annual sales and over 25 employees. Sources: Claritas, US Census Bureau, Dun & Bradstreet. 7 COMPARABLE MLS MARKETS Among current MLS markets in the US, Sacramento would most resemble Portland, Salt Lake City, Kansas City, and Orlando. Population 2,227,651 2,321,299 1,143,671 2,063,363 2,203,521 # Big 5* Pro Franchises 2 (w/MLS) 2 2 3 2 Population per Franchise 1,113,826 1,160,650 571,836 687,788 1,101,761 Median Household EBI $48,808 $44,874 $47,068 $46,998 40,336 Corporate Inventory 968 1,579 910 1,498 1,244 Corporate Inventory per 484 790 455 499 622 Franchise Households per Franchise 405,811 453,300 191,778 270,806 425,438 * Includes NFL, MLB, NBA, NHL, and MLS teams. Sources: Claritas, US Census Bureau, Dun & Bradstreet. 8 PROFILE: PORTLAND TIMBERS Providence Park Location Portland, Oregon Stadium Name Providence Park Capacity 21,144 Stadium Owner City of Portland Stadium Operator Peregrine Sports, LLC (Team) TEAM NOTES: • Team joined MLS in 2009 as 18th club in MLS • One of two major Big 5 sports teams in the city (NBA - Trail Blazers) • City was previously home to NASL and USL soccer clubs • Sold out every MLS game to date • Season ticket base of 15,300 with 10,000 on waitlist • Supporter Group: Timbers Army • Regional rivalry with Seattle Sounders FC – dates back to NASL 9 PROFILE: REAL SALT LAKE Rio Tinto Stadium Location Sandy, Utah Stadium Name Rio Tinto Stadium Capacity 20,213 Stadium Owner Real Salt Lake Stadium Operator Real Salt Lake TEAM NOTES: • Team joined MLS in 2005 • One of two major Big 5 sports teams in the city (NBA - Jazz) • Won 2009 MLS Cup and 2013 MLS Cup Runner Up • 10,000+ season ticketholders • Eight official supporter groups 10 PROFILE: SPORTING KC Sporting Park Location Kansas City, Kansas Stadium Name Sporting Park Capacity 18,467 Stadium Owner Kansas Unified Development Stadium Operator Sporting KC TEAM NOTES: • One of ten charter teams that joined MLS in 1996 • Previously known as the Kansas City Wizards (Rebranded in 2010) • Won 2000 and 2013 MLS Cups • 14,000+ season ticketholders with 3,000 person waitlist • 50 consecutive sellouts (through March 2015) • Main supporter group: The Cauldron 11 PROFILE: ORLANDO CITY SC Orlando SC Stadium Location Orlando, Florida Orlando SC Stadium Stadium Name (Opening 2016) Capacity 25,500 Stadium Owner Orlando City SC Stadium Operator Orlando City SC TEAM NOTES: • Team joined MLS in 2015 as 21st club in MLS • One of two major Big 5 sports teams in the city (NBA - Magic) • City was previously home to USL soccer club • Sold out all 62,358 seats in home opener in Citrus Bowl • 18,000 season tickets sold out for 2016 • Supporter Groups: The Ruckus and Iron Lion Firm 12 COMMON THEMES IN COMPARABLE MARKETS • Strong base of season ticket holders • Passionate supporter group • New or renovated soccer-specific stadium • Limited competition from other major pro sports • Strong social network engagement 13 SACRAMENTO MARKET SNAPSHOT In terms of commonly used market analysis metrics, Sacramento is at or near MLS medians in most categories. Sacramento MLS Rank Population (Millions) 2.2 14 Median Age 36 9 Median Household EBI $48,808 8 % High Income 10% 13 Households Annual Sports Admission Spending $67 4 per Household Corporate Inventory 968 18 Note: The Core Based Statistical Areas (CBSA) methodology commonly used in these types of analyses defines the Sacramento market area as encompassing eight counties: Sacramento, Yolo, Sutter, Yuba, Placer, Nevada, El Dorado, Douglas (NV). Sources: Claritas, US Census Bureau, Dun & Bradstreet. 14 SACRAMENTO MARKET STRENGTHS However, several key advantages serve to strengthen Sacramento’s case as a viable MLS market. • Strong Sacramento Republic FC market performance • Only one major league sports team • Fan intensity and sports spending • New downtown stadium proposal • Young and diverse population • Emerging downtown and overall economy 15 ADVANTAGE #1: SRFC MARKET DOMINANCE Since its inception, Sacramento Republic FC has led every major USL sales category in record-breaking fashion. Category 2014 SRFC Rank USL Record? 2015 SRFC Rank USL Record? Overall Attendance FIRST Yes FIRST Yes Season Ticket Sales FIRST Yes FIRST Yes Corporate Partnership Revenues FIRST Yes FIRST Yes Merchandise Revenues FIRST Yes FIRST Yes Food & Beverage Revenues FIRST Yes FIRST Yes Team Revenues FIRST Yes FIRST Yes Source: Sacramento Republic FC. 16 ADVANTAGE #1: SRFC MARKET DOMINANCE Since its inception, Sacramento Republic FC has led every major USL sales category in record-breaking fashion. 2014 USL Season Ticket Leaders Sacramento 5,738 Republic FC has sold out all but one USL match in team 1,953 history 1,465 950 888 92% renewal rate Sacramento Oklahoma City Charleston Pittsburgh Rochester from 2014 to 2015 2015 USL Season Ticket Leaders 9,572 2,808 2,476 2,207 2,135 Sacramento Louisville Los Angeles Oklahoma City St. Louis 17 Source: USL ADVANTAGE #1: SRFC MARKET DOMINANCE Since its inception, Sacramento Republic FC has led every major USL sales category in record-breaking fashion. 2014 USL Corporate Partnership Revenues $1,124,450 $623,801 $572,825 $480,606 $418,300 Sacramento Team 2 Team 3 Team 4 Team 5 2015 USL Corporate Partnership Revenues $1,610,300 $1,262,240 $964,272 $594,100 $528,500 Sacramento Team 2 Team 3 Team 4 Team 5 18 Source: USL ADVANTAGE #1: SRFC MARKET DOMINANCE Teams making the jump to MLS typically see significant (150-200%) growth in attendance. Average Match Attendance Comparison: USL to MLS Last USL Season Attendance First MLS Season Attendance 23,500 20,406 18,827 11,507 10,727 11,337 5,149 Portland Vancouver Montreal Sacramento (Projected) Note: Data excludes Seattle and Orlando, whose MLS year 1 totals were significantly higher due to playing in large venues (CenturyLink Field, Citrus Bowl.) Sources: USL, MLS. ADVANTAGE #2: LIMITED COMPETITION Sacramento is the largest metropolitan area in the United States with only one major professional sports team. • Sacramento would join Portland, Columbus, Salt Lake City and Orlando as the MLS cities with the fewest number of competing pro sports teams and venues • NBA and MLS regular season have minimal overlap – NBA: October to April – MLS: March to October • Limited venue competition for other stadium events – Golden 1 Center – Raley Field • Adjusted “per franchise” ranking improve Sacramento’s standing among other MLS teams – #5 largest TV market per franchise 20 ADVANTAGE #3: FAN LOYALTY & SPORTS SPENDING Sacramento has historically demonstrated tremendously strong support for local teams in terms of fan loyalty and spending. • Historically strong fan support for local teams – Kings: #1 in NBA in sellouts 1985-2008 with two of longest sellout streaks in NBA history – River Cats: #1 in total attendance among all MiLB teams ten times between 2000-2010 – Sacramento Republic FC: >25% of total USL fan attendance • Fan and corporate spending on sports outperforms market predictions – Kings naming rights deal one of largest in NBA – River Cats naming rights deal is 2nd highest in minor league baseball – Average resident spends approximately $182 per household - would be fourth highest among U.S.-based MLS markets • Robust Local Soccer Community – 6th Highest TV Ratings in U.S. for 2014 World Cup – Top 5 TV viewership market during 2015 Women’s World Cup – Second highest total of adult and youth league soccer participants in the US 21 ADVANTAGE #4: STATE OF THE ART STADIUM Picture of stadium (that can be released publicly at this point) 22 ADVANTAGE #5: YOUNG AND DIVERSE POPULATION Sacramento is a young and diverse market with increasing appeal among millennials.