MLS has quietly rebuffed a $4 billion offer from MP & Silva that would have quadrupled the broadcast rights fee the league currently receives from its deals with FOX Sports, Univision and ESPN, according to a story in Sports Business Journal. The deal came with one catch, which was too much for MLS to absorb — the institution of a promotion/relegation system within the top two divisions of American soccer. The proposed deal would cover the time period from 2023 to 2032.
MP & Silva presented its proposal to MLS on June 26, which was quickly rejected. However the article also stated several MLS owners have been recipients of correspondence from Riccardo Silva, the founding partner of MP & Silva, since the late June meeting.
MLS’ decision to reject the proposal from MP & Silva represents a calculated risk for the league. It appears that media rights fees from networks might have hit a point of diminishing returns as cable subscriptions continue to decline and the rights fees paid long-term by the likes of ESPN and FOX Sports for non-soccer properties necessitate tighter spending at the networks. It is not a massive leap of faith to assume MLS will never obtain a rights fee anywhere near that of the $4 billion over 10 years MP & Silva was proposing. Moreover, the TV ratings for MLS don’t justify the rights fees being paid by FOX Sports, Univision or ESPN. As a television property, MLS continues to struggle due to a number of factors. But for the terms of this discussion, the relevance or lack thereof of many regular season league games, is a big part of these struggles.
However, on the flip side, MLS is a league that has never been completely about sporting merit. Promotion and relegation would open the league’s weaker teams up to the possibility of losing millions in revenue and fan support. The league has for years maintained mechanisms to prop up weaker clubs in a traditional American sporting way, and contrary to the promotion and relegation model used around the rest of the world.
In conjunction with US Soccer, MLS currently is focused on spending whatever surplus monies it earns on developing youth academies and a pyramid similar to that of Major League Baseball, using its affiliate league USL as a stalking horse in this regard.
The United States Soccer Federation (USSF) has taken a largely hands off role in forcing leagues and clubs to work together, allowing MLS and USL to isolate leagues outside the pyramid they are trying to create. The USSF has also in the past appeared hostile to the facilitation of promotion and relegation and has published arbitrary standards about what constitutes clubs from the first division to the fourth division. This includes among other things market size, something which does drive TV and sponsorship deals.
I’m not sure why worldsoccer talk has decided on the MLS ratings are falling narrative and why they keep at it but it’s not entirely true and it makes the site look bad.
Here’s an example
MLS TV ratings comparisons put up this year at beginning of season when 2017 ratings were slightly down compared to 2016 in the weekly most watch games articles. Those comparisons were gone as soon as the 2017 ratings improved over 2016.
I don’t really care about the narrative as I never come to WST for analysis and only occasionally click on anything beyond TV schedules. I’d just like to know why?
Also I know its clickbait but
1. Pro/rel is never going to happen.
2. Who signs a TV deal like 6 years in advance? Nobody so
MLS cannot negotiate a new TV rights deal now. Their current contract has a period of renegotiation with their current partners (typical for sports TV deals) so legally they cannot consider this offer. That was the official MLS response. Silva knew this ahead of time, but made his offer anyway to generate media coverage, brilliant on his part. Now we have his surrogates,like this author, parroting the message without doing any research to look up the facts.
Pro/Rel would spread Soccer to cities that currently have no hope of a pro team in their lifetime. If the negotiations are currently just a publicity stunt, I am ok with that. Clearly, it was in the interest of the key players to make public the presentation of their offer at this time or they would have remained quiet.
I think that people that live in large cities with ready access to first tier sports are not aware that Pro/Rel is the only hope of bringing top tier talent close by via promotion
Who would pay US$ 400 million per year for MLS tv rights? That’s not a serious offer.
Promotion shouldn’t just be based on quality of the team in question. It should be based on marketability and attendance. This is a business and the risk of a “Chievo, Sassuolo, etc” being promoted into the premier league lowers their market value. A middle ground could be reached, but the beauty of best team no matter what city their from realistically weakens the league from a viewership and attendance standpoint. Having teams like Cincinnati proving their attendance figures before expansion is such a luxury that MLS has as opposed to other leagues like the NHL blindly expanding into Las Vegas.
If we look at it from a business point of view, how do we expect for our national team to get better?
Without knowing what TV channels the games would be on, and how easy it would be for Americans to access the games, this discussion is completely meaningless. Who cares if they have a massive media rights deal from ONE network if no one in America has ONE network?
The Dodgers got greedy and went for the money, now no one can see their games and according to trends their cable business model is on life support. If they go bankrupt the gravy train is dead and the Dodgers lost a generation of fans. Well played MLS.
I’m a pro/rep believer. One of the anti arguments is if, say, Portland gets relegated nobody would show up and they’d go bankrupt. As you know, Kartik, I’m a Newcastle fan. NUFC has been relegated twice in a decade and still got 48K+ for The Championship this past season. I’d argue that fans in places like Portland and Seattle would continue to show up in an “MLS-2” league for at least a season. It’s ludicrous that a club can basically sleepwalk through a couple of seasons like Chicago without any fear of losing first division media revenue while an ambitious owner in the NASL is stuck there.
Pro/Rel overall is a joke. in the premier league 6 teams have never been relegated and are 6 of the 8 in contention for a championship every season because since they don’t get relegated they can outspend their competition. In La Liga it’s a battle between real madrid and barcelona and that’s it. It’s also why Messi is over-rated and sucks in the WC. In Bundesliga, Bayern outspends everyone and wins the league every season. Only 3 other teams can even attempt to complete. On the flip side Bayern fails miserably in inter-league play and Germany couldn’t even make it out of the first round of the WC. This isn’t even factoring in the sheer size and travel amounts required by pro sports in the US vs UK. This isn’t an instance of us refusing to use metric because we want to be different, this is an instance where we are choosing to be different because we have to, and in the end we will end up better because of it but we’re still a baby for leagues ages compared to the rest of the world.