World Cup 2014 kicked off on Thursday. In the run-up to the big event, much of the focus has been on the fact that host nation Brazil has seemed largely unprepared. The country has struggled with infrastructure issues, protests, and claims that it had to “scramble” to get ready. But at heart, the big event is an international one, with teams from 32 nations competing. And it will show just how much soccer interest has grown in the U.S.
In late May, Fortune spoke with Sunil Gulati, president of the U.S. Soccer Federation and an economics lecturer at Columbia University, about the challenges in Brazil, the U.S. team, and soccer’s popularity in the U.S. What follows is an edited transcript.
Fortune: So, everyone is talking about the World Cup and specifically whether Brazil is unprepared, let’s get right into that.
Sunil Gulati: I think people recognize that the infrastructure in Brazil is not what it might be, and doesn’t match what it was in some previous World Cups like Japan, Germany or the U.S. In some sense, no country is ready to host the world cup or an Olympics until five minutes before kickoff. But clearly Brazil has had some additional challenges beyond that, in terms of stadiums.
Infrastructure is the one thing you can’t really help ahead of time. As I think the IOC [International Olympic Committee] is finding out about Rio right now.
Obviously, countries that have been developed for many years have a huge advantage in hosting major sports events. And the huge concern these days is security, and now there are certain safety issues everyone worries about.
But I think the atmosphere in the country is what people are really looking forward to. The demand for tickets in the local area and internationally has been extraordinary. We’ll have more U.S. stands there than we’ve ever had for a World Cup. And my hunch is that the TV ratings will be the best they’ve ever been for the World Cup.
Is it sort of a sad statement that the U.S. team will have five German players (they are dual citizens) that, as the media is claiming, chose to play for the U.S. because they would get more playing time on our less competitive squad?
We don’t think it’s sad at all. We think it’s a great thing, because they’re great players. The world is more interconnected every day, so players are going to have these types of choices and decisions in the future. Further, we have players who spent many of their key developmental years in the U.S. and will play for other countries in the World Cup. The same is true for one of Italy's top forwards [who won't play in the World Cup as he has been injured and just recently returned] and for Serbia's star central defender.
Let’s shift to Major League Soccer. It seems as though, just anecdotally, interest in the U.S. in international soccer is rapidly spiking, but not so for interest in our own league, the MLS.
I don’t think that’s completely fair to say. In terms of television ratings, it’s true that MLS has not jumped up the way it might. But they announced a new TV deal just this week [ESPN, Fox Sports, and Univision each signed contracts through 2022 that reportedly will pay MLS a combined $90 million] that certainly signals a “futures deal” as [ESPN president] John Skipper called it. So the MLS on TV might not be where it should be, but clearly ESPN and Fox Sports believe that it’s a growth sport.
Internationally, you’re right, there has been more exposure, primarily because of the Internet. But the MLS is averaging 18,000 people at a game. We have 19 teams with three new ones already announced for the next three years. So I would argue the growth has been extraordinary.
Is part of the challenge for MLS a lack of big merchandising? Look how people all over the world, who aren’t even baseball fans, wear Yankees caps. But you really never see people in soccer jerseys unless they’re huge soccer fans.
Well, yes and no. You certainly see more soccer jerseys than you would have seen years ago, but yes, of course if you compare it to other sports, it’s not even close. But anecdotally, just using my own classes at Columbia as a tiny sample size, I see far more soccer jerseys than there were 20 years ago. Coming back to your previous point, yes, many of them are Arsenal or AC Roma or Juventus, not many are LA Galaxy or Red Bulls. But a few are.
What's your take on NYCFC—the second MLS team coming to New York, set to begin its first season in 2015? Does New York really need another MLS team?
Having NYCFC is going to create a great rivalry with the Red Bulls, so I think it's a very positive development for MLS.
So, does the sport, in the U.S., need to make some big, aggressive changes to court new fans, or is it more like, "We’re doing everything right, we just need to keep doing what we’re doing and it’ll keep growing?”
I think there is some of both. I would never say we’re doing everything right. We’re always looking for ways to get more people involved in the game and get more interest in the game. But part of it is just time. We’re not even 20 years in for Major League Soccer. If you’d said to me in 1996, when we started, ‘This is what it will look like in 17 or 18 years, would that be pretty good?’ I’d take that in a heartbeat.
We have 13 soccer-specific stadiums, 19 teams, the U.S. national team, a $90 million-plus TV contract—which doesn’t compare to baseball or football, I get that, but we don’t need to displace any of the mainstream sports that have been around for 100 years. There’s plenty of room in the landscape for all of us.
Is it a rising tide, where the continued popularity of international soccer will buoy interest in MLS?
If you look at soccer overall, you’ve got 200 countries out of 210 that play it very seriously. Millions of kids play, it’s big in every school in the country, and it has well-known international events because of the World Cup and the Olympics. So the World Cup is going to help a lot.
In the U.S., one big win has been in Seattle. We’ve got 40,000 people attending games regularly there.
What is it about the team or the fans there? Why has that been such a success?
Oh, I wish I had all the answers on how Seattle has done so well, and we could bottle it and transfer it to other markets. But they’ve averaged 35,000 people at each game, and the atmosphere in the stadium is phenomenal. [The Seattle Sounders play in the same stadium as football’s Seahawks, they merely close the upper deck; it also helps that the team has Clint Dempsey, arguably the sport’s biggest star today.]
And I think they had everything right coming out of the blocks. They’ve got good ownership, strong local fans, and they do well on the field. [The Sounders have been MLS champions three out of their six seasons.] But obviously winning championships cannot be the only way to do well. Because you can’t win the championship every year.
Right now, the MLS has very few global, mega-marketable stars. The salaries are lower, and the endorsement deals are much lower. Can that change, and will it change soon?
The answer is yes. You find it with some of the players, but it’s not LeBron level yet for anyone. That mirrors the interest in the game more generally: It's increasing, and at a pretty hefty rate, but certainly soccer’s biggest players are not mirroring the top players in other sports yet.
As the sport grows more generally, salaries will grow, because revenues are growing. And with all of that and higher media interest, the players will become more well-known and command bigger endorsements. Landon [Donovan, of the LA Galaxy] and Clint Dempsey are the biggest two right now.
Within five years, we’re going to be far ahead of where we are today, but it’s not about catching someone else or matching us up against any other sport.