The jerseys worn by Sporting Kansas City players will soon tout two new names.
The uniforms will get a new logo during next year’s season now that Major League Soccer has allowed teams to sell sponsored sleeve patches. And Ivy Investments will lose its prime branding on Sporting jerseys after it lets its longtime sponsorship agreement expire at the end of the 2020 season.
Sporting players have worn the Ivy logo since January 2013, the season in which the team won the MLS Cup championship. Originally branded as Ivy Funds, the logo was changed to Ivy Investments in 2016 after the mutual fund company rebranded. Ivy Investment Management Company is an affiliate of Overland Park-based Waddell & Reed Financial.
The financial services firm announced plans in 2014 to extend its agreement through 2022. But company leaders say they are now realigning their marketing efforts.
“We remain committed to partnering with Sporting to ensure a smooth transition to a new jersey sponsor for the team in 2021,” Waddell & Reed’s chief operating officer Brent Bloss said in a statement. “Even when our name is no longer on the jersey, we will continue to be one of Sporting Kansas City’s biggest fans.”
With that company stepping aside, Sporting expects a big haul as it negotiates a new sponsorship deal on its most expensive piece of real estate. Unlike the team’s stadium, Children’s Mercy Park, the jersey is visible on television during every home and away game.
MLS will soon renegotiate its television rights deals, which currently bring in about $90 million per year. That’s expected to increase league and club revenues as domestic interest in soccer continues to grow in the United States.
It’s unclear whether Ivy will keep its naming rights on the Ivy Investments Executive Level Suites at the park. Both organizations say they’re in talks about future partnership deals.
But Waddell & Reed leaders said the current partnership has proved valuable, providing “value and visibility” for the company. The firm has been in the news lately as it prepares to leave Overland Park for downtown Kansas City, one of the last taxpayer-subsidized relocations in the so-called economic border war between Kansas and Missouri.
“Our jersey sponsorship has been one of the longest in Major League Soccer to date, which speaks to the quality and caliber of our partnership,” Bloss said in the statement.
Sporting’s business boom
As Sporting works to sell two spots on its jerseys, the club believes it has a good story to tell — but not just about soccer.
Even after a lackluster season — Sporting sat out the playoffs for the first time in eight years — team revenues continued to grow.
“It was higher,” said Sporting KC President and CEO Jake Reid. “We’ve had our best year every year for the last, oh gosh, probably seven or eight years running now.”
Reid would not share specific revenue figures, but said that strong performance in youth soccer, non-soccer events and retail sales have helped grow revenues. Even ticket sales remained fairly strong through a tough season: Sporting reported an average home game attendance of 18,601 this year and Reid said about 89% of ticket holders renewed for 2020, both figures down slightly from the previous year.
Sporting continues to benefit from soccer’s explosive growth in the United States: In the last decade, MLS has grown from 14 clubs to 24 with new teams coming on board soon in Miami, Nashville, Austin, St. Louis and Sacramento.
New teams now pay as much as $200 million in expansion fees — 20 times more than the $10 million Toronto FC paid to join the league in 2007. And stadium attendance more than doubled between 2008 and 2018, when more than 8.5 million fans attended live games.
With a growing television audience, Reid said the value of the jersey sponsorship will likely increase. He wouldn’t disclose specifics of the current deal but said jersey sponsorships generally deliver MLS teams $4 million to $10 million in annual revenues.
“As you see the media deals get better and you see the distribution get wider in terms of consumption, the metrics just go up,” he said. “You can drive more value for visibility. And obviously for us the jersey is the best driver of that.”
The jersey deal is Sporting’s most lucrative sponsorship, outpacing even stadium naming rights.
“It’s the most unique sponsorship in sports,” he said. “You’re literally next to each other as a brand.”
How Sporting will change in 2020
Sporting is making some big adjustments ahead of next season.
The club froze most ticket prices and reduced the cost of season tickets. It also plans to revamp food and beverage options and upgrade stadium technology.
Coach Peter Vermes will return for 2020. Mike Illig, a Sporting KC principal owner, recently told The Star the club is prepared to spend more on players next season to improve team performance. And a new collective bargaining agreement with MLS players could drive costs up even more.
Forbes calculated the club’s 2018 value at $270 million — the ninth highest valuation in the league and higher than teams in larger markets like New York, Houston and D.C.
But Reid said Sporting doesn’t generate a big profit: “Every year we’re kind of right around break even,” he said.
Sporting nearly finished last in the Western Conference this year. But its ticket sales showed an enviable resiliency. The Kansas City Royals saw annual attendance drop by more than 1 million people between its World Series-winning 2015 season and this year’s 103-loss season.
Reid doesn’t believe fans will be endlessly forgiving if Sporting is unable to bounce back. But so far, they haven’t jumped ship.
“We’ve had such a commitment to performance and investment in the team,” Reid said, “and we’re not going to get dropped by fans for a couple of bad years.”
As the team moves forward, it risks being outpaced by high-spending teams in bigger markets. But Reid said the club has long punched above its weight. And sports fans in Kansas City are used to battling against the deeper pockets of coastal teams, he said.
Put it this way: Sporting will never be the Dallas Cowboys of MLS. Rather than a “super brand” like that, Reid envisions the team finding a niche more like the NFL’s Green Bay Packers.
“The Packers are probably where we would aspire to be,” he said. “If we could be the Green Bay of our league, where you’ve got an incredibly small market and you’re successful on and off the field, I mean that’s a great case study to look at.”