MLS will hurt growth of US soccer by rejecting $4 billion TV offer and promotion/relegation

If ever there needed to be evidence that MLS is completely entrenched in its single entity model for soccer, Monday’s revelation that it rejected a $4 billion TV deal from MP & Silva was it.

Imagine for a minute how an injection of $4 billion in cash could transform the United States into a powerhouse of soccer. The money would give the league the opportunity to compete with teams from China and Europe in the global marketplace to sign players that are in demand at the height of their career. The money also could be used to get rid of the pay-to-play system to allow kids from all levels in the United States a chance to play competitive soccer. Plus, a portion of the funds should be invested to expand the network of scouts across the US to find the next MLS star.

Instead, MLS has stubbornly decided to stick to its principles in order to guarantee that they continue to line the pockets of the investors who — like New England Revolution owner Bob Kraft — began generating a profit within the first five years of his club’s existence, and has in the 16 years since not invested money into growing the New England Revolution by building its own soccer-specific stadium.

Protecting the ownership of MLS is more important to Commissioner Don Garber than growing the game in the United States. By rejecting Riccardo Silva’s gargantuan deal, it keeps the MLS investors happy and completely in control.

In a letter that Silva sent to Garber on July 13, Silva stated:

This is a message that I have repeated over recent weeks in conversation with a number of MLS owners … all of whom share a passion for the growth of soccer in the U.S. I believe that MLS would be the major beneficiaries of an open, meritocratic system because it would stimulate greater fan interest, excitement, quality and engagement in the domestic game. As a result, greater commercial revenues would flow not just to MLS and MLS club owners but also to all tiers of the U.S. soccer pyramid.

While Silva’s aims are self-serving, to generate revenue by reselling TV rights around the world as well as to give his Miami FC team an opportunity to advance to the top-flight league, there’s certainly much to hate about MLS’ rejection of changing the league to make it more successful. Even in the United States, MLS continues to struggle with poor TV ratings as it’s continually eclipsed by much greater viewing numbers for foreign leagues such as Liga MX and the Premier League.

By rejecting the MP & Silva TV deal out of hand, and thereby rejecting promotion/relegation, MLS is sending a message to soccer fans in the United States that generating revenue for its investors is far more important than growing the sport.

In the article by Sports Business Daily, reporter John Ourand included his own editorializing on the topic. Ourand wrote, “With the league seeking $150 million for each of the four expansion teams it’s currently evaluating, it’s unthinkable that any prospective MLS owner would pay that much for a team that would face the possibility of relegation, as any relegated club stands to lose millions in revenue.”

For a reporter so institutionalized in traditional American sports, it’s not surprising for Ourand to be close-minded. For example, several American owners have invested millions of their own money into clubs in Europe where the risk of relegation is a common threat. Steve Kaplan and Jason Levien’s buyout of Swansea City last year for $143 million is just one of many examples.

Implementing promotion/relegation into a top-flight league in the United States would make the competition more compelling and meaningful overnight instead of watching teams drag out a seven month regular season only to see 54% teams make the playoff anyway.

Instead, the opposite is more likely. By agreeing a lucrative TV deal with MP & Silva and adopting the changes necessary to make the league flourish, the quality of the entire league would improve. As a result, the revenue from sponsorships, advertising and commercial deals could jettison the team’s finances into the next tier. For owners, the risk and rewards of promotion and relegation would be immense, but the end result would be a significantly more entertaining product on the field for the fans.

Even with Taylor Twellman’s claim that MLS can’t engage in media rights discussions until at least 2021, MLS spokesperson Dan Courtemanche said that “As Commissioner Garber stated in his letter to Mr. Silva, we are not interested in engaging with Mr. Silva on his proposal.” It’s one thing for MLS to admit that it’s not ready at this time to discuss the opportunity, but it’s another matter to dismiss it entirely. After all, why did MLS agree to meet with TV rights mogul Silva in the first place if they didn’t want to discuss TV rights?

It’s the fans that end up getting the raw deal from MLS. While the experience of going to a MLS game in person is a pleasing one, that doesn’t do anything to improve the quality on television. For the league to grow to become more meaningful in the United States, it needs to crack the TV market. And by adopting the changes MP & Silva is outlining, that would be the ticket to success for fans. Instead, MLS is prioritizing the satisfaction of investors over soccer fans, and by doing so is strangling the growth of the game in this country.

Silva in his letter to Garber added, “If MLS, its owners and other key stakeholders are open to further discussion, MP & Silva would be pleased to begin a dialogue at a suitable time and, subject to our board approval, to submit a formal offer in the appropriate way.”

MLS, the ball is in your court.

37 Comments

  1. Total Relegation July 24, 2017
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    • Yespage July 26, 2017
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      • Economics July 26, 2017
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