Networking with the LA Galaxy

galaxy

Insight.

It’s what MBA students the world over seek, whether it be in sports (our industry of choice), manufacturing, financial services, or anything else. Everyone seeking a leg up in their industry of choice is looking for a bit of crucial information that can make them indispensable.

This past weekend, several aspiring sports professionals had the opportunity to hear Chris Klein, team president of Major League Soccer’s LA Galaxy, discuss his team, his league, his team’s place in the LA Sports Market and how he came to occupy his role as the leader of a four-time MLS Cup-winning franchise.

The Q&A session was all part of a networking event hosted by the LA Galaxy at Stubhub! Center in Carson, Calif., on Saturday, Mar. 8. Roughly 50 young professionals came to hear Klein speak, to ask him questions and to make professional contacts that will hopefully lead to employment someday.

Klein told the small crowd how he came to be the President of the Galaxy. He played for years in Major League Soccer for three different clubs: the (then) Kansas City Wizards, Real Salt Lake and, of course, the LA Galaxy.

Klein said he knew that after his tenure as a player ended, he would have to find something else to do. He said he knew he loved soccer, knew he didn’t want to do something away from the sport and knew he didn’t want to become a coach, so he became an executive. He volunteered to represent the players in collective bargaining negotiations, and those negotiations eventually led to the connections that allowed him to end up in a front office.

In the end, it’s just like they say: Your connections matter.

Klein also briefly commented on the differences between MLS and the larger European soccer leagues and said he believes MLS is in a much stronger long-term growth position than many of its foreign counterparts. When asked why, Klein said he believes very strongly, first, in the strength of the MLS ownership group and, second, in the ability of the league to control player costs.

Player costs are a tricky thing in sports. By far the largest expense in the industry, failure to maintain appropriate salary expenses on a league-wide basis can be more than just costly in the short term — it can sink your league. For example, the last iteration of an American soccer leage, the NASL, eventually went under because league owners couldn’t control themselves. Pelé was the poster child — the Brazilian star’s salary was in the millions of dollars. Getting that kind of money in any American pro sports league would have been good in 1975, let alone a soccer league in America.

With such prohibitive player costs, the league didn’t last long. Founded in 1968, it was gone by 1985.

Compare that to the MLS today. The league is 19 years old and growing. The highest paid player in Major League Soccer in 2013 was Clint Dempsey, who earned roughly $4.9 million dollars, roughly the equivalent of a modern, average NBA salary. The average salary in MLS, by comparison, is less than a 10th of Dempsey’s income: $141,000.

Surely salary depression doesn’t apply to the elite teams in the league, right? Wrong. The total payroll of the two teams that played for the league’s championship in 2013, Real Salt Lake and Sporting Kansas City, was less than $7 million combined, and the average salary between the two clubs was $108,205.

That’s controlling player costs, and according to Klein, it’s how the MLS has been able to grow so rapidly over the last five years.

Finally, and perhaps most interestingly, Klein discussed how the Galaxy manage to stay relevant in such a large sports market with so many competitors. What it boils down to is Major League Soccer’s digital, social and broadcast media offerings. The Galaxy are trying to connect on an intimate level with soccer fans within their footprint. They are not trying to be the Dodgers or Lakers. They know who they are and what they’re up against, and they try to live within their means.

Other topics Klein discussed were the Galaxy’s key target demographic (2nd generation, 18-to-34-year-old Latinos), the growth of the Academy development system in MLS (Klein said he loves it), the recent proliferation of EPL broadcasts in American markets (Klein said he doesn’t like them), the impact David Beckham had on the LA Galaxy season ticketholder base (season ticket sales declined by 66 percent with Becks in LA), and what kinds of employees Klein likes to see in the Galaxy organization (hard-working team players with a good attitude).

Following the Q&A, several hiring managers from LA market sports, media and event companies, including Time Warner Cable, the LA Kings, the Ontario Reign, AEG, Major League Soccer’s Sales Academy and the Galaxy, took resumes and swapped business cards with the attendees. And of course, the Galaxy hosted Real Salt Lake in both clubs’ MLS season opener after the networking event.

All in all, the Galaxy provided a fun event that gave those who attended a solid piece of insight into the inner workings of the club and an opportunity to make some new connections. It was a night well spent.