It has been well over a year since the Houston Dynamo reached an agreement with Greenstar Recycling to terminate the latter’s role as shirt sponsor for the Dynamo. The termination followed Waste Management’s acquisition of Greenstar and desire to reduce the financial obligation to the Dynamo.
At the time of the termination, the Dynamo indicated that they were seeking a new sponsor and that discussions were “ongoing” with a few global companies. The Dynamo are well into their second consecutive season with a large blank spot on the front of their shirts and, in what can only be characterized as the slowest discussions of all-time, the line continues to be that discussions are ongoing with a few global companies.
The arrangement with Greenstar would have expired at the end of 2013 with options extending through 2015. At the time of termination, a buy out was arranged. It is entirely possible, even likely, that the buyout included a lump sum payment to the Dynamo along with a commitment to refund some of that money to Greenstar in the event that a new sponsor is found during the period covered by the buyout.
If that is indeed the case, then the buyout value would establish the minimum acceptable price point for a new sponsorship. That could explain the amount of time it is taking to get a new sponsor in place. However, then it suggests that the value of a Dynamo sponsorship may have declined since the Greenstar deal was announced in December of 2010.
There are a large number of fans who do not particularly care about the lack of a sponsor on the front of the shirt because they prefer not to look like a walking billboard. That is an understandable viewpoint, but it ignores the negative perception that follows a soccer team without a sponsor.
Even the most casual of soccer fans knows that it is commonplace for soccer teams to have a sponsor on the front of their shirt. For most, a sponsor is an expected part of the shirt. The absence of a sponsor on the front of the shirt gives the perception that there is so little commercial interest in the team that nobody deems there to be value in sponsorship. This is generally not a message that a soccer club ought to be sending to its fanbase.
This becomes fodder in particular for fans of European leagues who know that a team without a shirt sponsor, even at the lowest of league levels, is almost unheard of. Again, the lack of shirt sponsors becomes a point of amusement or even derision.
With the announcements earlier this year of shirt sponsors for the Colorado Rapids and DC United, the Dynamo are now one of only three MLS teams that do not currently have a sponsorship, the other two being the San Jose Earthquakes and Chivas USA. This is not great company to be in.
San Jose claims to be close to a sponsorship deal. Chivas USA had a deal with Corona which expired at the end of last season. Given the current state of ownership transition and the resulting uncertainty around brand identity for Chivas USA for next season, it is doubtful that the club is even seeking sponsorship deals at this stage.
When the Houston Dash announced a sponsorship deal with BBVA Compass, many fans reacted in predictable fashion. A question I heard uttered quite often was: if the Dash can get a sponsor, why can’t the Dynamo? What’s the deal?
Naturally the two teams cannot be compared. The market for the Dynamo is considerably larger and, therefore, the expected value for a Dynamo sponsorship is much higher than what would be expected for the Dash. Again, though, this does not matter as fans see the situation and draw their own conclusions. For the casual fan, that reaction may well be: if sponsors do not care about the Dynamo then why should I? Does this impact attendance? I would hope not, but it cannot be discounted altogether.
I would expect that the lack of a shirt sponsor also negatively impacts shirt sales. I can attest to the fact that I have not bought a new shirt for myself or my kids since the Greenstar name was dropped and have no intention of doing so. It is not the lack of a sponsor, per se, but rather the large empty spot on the front of the shirt which I find boring. At a minimum, the Dynamo should have put the team name on the front of the shirt or perhaps even temporarily plugged Dynamo Charities in the spot where a sponsor would normally appear.
I cannot verify that shirt sales are down as I have not seen any data available to the public. However, based on a look around at matches I do not see anywhere near the number of new shirts as I have shirts with sponsors or names on the front in the past.
Some fans question the loss of sponsorship revenue. As noted above, I suspect that is not an issue given what Greenstar/Waste Management would have had to agree to in order to get out of the sponsorship deal. The financial value of shirt sponsorship in MLS is significantly less than in European leagues, however relative to MLS payrolls it is still an important source of revenue.
Does it make the difference between being able to afford a Clint Dempsey or Michael Bradley type of designated player? Probably not, but the Greenstar sponsorship was said to be worth $12.7 million over 5 years which is not insignificant for a team with a payroll of some $3 million per year.
What do you think? Is the lack of a shirt sponsor a big deal in your eyes? Let us know in the comment section below.
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Tags: Houston Dynamo