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MLS will hurt growth of US soccer by rejecting $4 billion TV offer

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.

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37 Comments

37 Comments

  1. MAHLUF

    July 26, 2017 at 2:22 pm

    Absolutely hilarious that the author SLAMS on of the most respected sports business reporters out there and in the same graph compares investing in an MLS expansion team with investing in a Premier League club.

  2. Elliott

    July 26, 2017 at 11:28 am

    If Silva is serious, Silva will come back when the window for TV rights negotiations opens back up in a few years. If Silva does not come back, then we can be 100% this was just a PR stunt.

  3. Alo Futbol

    July 26, 2017 at 11:08 am

    What’s Oliver Tse’s opinion on this?

    • rkujay

      July 26, 2017 at 2:24 pm

      I don’t think there is enough room on the page for the four part mini series he’d write. Plus, after reading the comments, I don’t see any possible way for him to work female broadcasters and their respective ‘assets’ into the discussion

      • francis

        July 26, 2017 at 4:53 pm

        He was last seen in L.A. outside Aly Wagner’s house

  4. Aj

    July 26, 2017 at 2:22 am

    My take on this is as follows..
    1. MLS grows to 30 teams
    2. All leagues under MLS become USL 2nd division
    3. Once all MLS and USL teams are established start a relegation and promotion system of 2 teams.
    4. Let investment come into MLS, but level the caps on spending on teams.
    5. Use tv rights and marketing to expand the brand.
    6. Create a cable channel specific to MLS league games plus the current app.
    7. Change the MLS calendar to coincide with the FIFA calendar.
    8. Open academies with MLS teams first and then USL teams.
    9. Have a budget for teams who get relegated to not lose so much money and teams who get promoted get a certain amount for reaching 1st division.
    10. Make this league competitive by bringing big names to the US and grow this league to its pontential for it to compete in the world stage.
    I don’t agree a lot with what is going on with MLS soccer and silva’s offer, but investing in the league and taking up spending caps on teams should be thought about to grow the league.
    My two cents, peace.

  5. Can-Tuna

    July 25, 2017 at 7:28 pm

    According to this site, everything that MLS does is stupid. Here are some of the usual suggestions,
    You need Promotion and Relegation
    You need to follow the European model
    You need to follow the FIFA calendar
    You need to stop playoffs
    You need to have a rich club like Manchester United that wins like 80% of the titles
    You need to have only 4 clubs that win titles, like MU, City Chelsea and Arsenal
    You need to have the title decided months in advance of the end of the season
    You need to have a whole bunch of bad teams that the rich teams beat every year
    You need to learn to park the bus if you are a lower table team. That is always exciting

    Yes, all those things are a recipe for success in the United States, guaranteed…

    • ribman

      July 25, 2017 at 9:44 pm

      These are fair questions, what bothers me most about the endless Pro/relegation debate is it’s always framed as 2 absolute no brainer solutions American Model or European Model. When in reality both arguments have pros and serious real cons. There are a lot of potential problems with Pro/Relegation model -some listed above. There are strengths as well instead of just insulting the other side can we actually have some respectful responses to some of these concerns on both sides.

      For instance, In this age of have /have nots the argument that Pro/Rel leagues the teams have something to play for at end of season is less convincing. The teams in the middle have nothing to play for and it often shows and there are so many poor teams (see EPL 2017) that the relegation battle is not exciting as it;s just a bunch of bad teams seeing who lucks out. Europe is headed toward a super “league” where they just add another layer to the relegation model, the uber top 2-3 move into another money pot.
      The American model also is flawed and the playoff system as an example hasn’t shown to have a satisfying format, they can’t even schedule a decent date for the match. Is MLS really better served to have LA and NY become super teams and everyone else just happy to be in the league. I like that RSL, Portland, Atlanta and SKC can be top teams despite being in less glamourous markets. Maybe a hybrid would be the answer?

    • tim

      July 25, 2017 at 11:08 pm

      Stop with logic! This is whats making me hate EPL and LA Liga. Who in their right mind wants to watch a league dominated by 5 teams? No American soccer team has deep enough roots to sustain never having a chance to win if we went to this model. What the euro loving hipsters forget is that these teams in places like England have been in their communities for well over 100 years. Loving your local club has been passed down though families and people will always go. All these eurosnobs see here is Man U, Arsenal, Chelsea, Liverpool and think this is the end all be all of soccer and we should do the same. If any team here got relegated no one would go and no one would care. Its amazing to me that people really think this sport is bigger than it is here when its not even close, There is not one person i know that doesn’t watch MLS, USL, NASL(literally no one watches) because there is no PR. It all has to do with quality and PR will not make bad players better. Get a life with the PR, its old and boring.

      • NaBUru38

        July 26, 2017 at 11:27 am

        “Who in their right mind wants to watch a league dominated by 5 teams?”

        The most popular soccer leagues in the world are like that.

    • CTBlues

      July 26, 2017 at 11:05 am

      I would love to see pro/rel but I don’t want all those things you listed. I think MLS should be two 16 team leagues east and west with no cross over play. The top four of each league play in a playoff.
      If you end up with pro/rel I think the German model should be used with a playoff between the teams coming up with the teams going down.
      As for the calendar I think they should use something closer to what Liga MX does. Start the first half of the season in August and end in mid November. The second half start in the end of February and end in mid to late May.

  6. CraftyBernardo

    July 25, 2017 at 2:28 pm

    “Steve Kaplan and Jason Levien’s buyout of Swansea City last year for $143 million is just one of many examples.”

    it’s an example of why you’re an idjit… .the reason investors will pay the same for a FREAKING EPL team that they would for Real Salt Lake ($140 million) is BECAUSE OF THE POSSIBILITY OF RELEGATION! If you could buy Swansea in the EPL without the chance for relegation, it would be worth $2 billion, like the LA Clippers.

    • Total Relegation

      July 25, 2017 at 7:21 pm

      Crafty, you are gifted in spouting reckless facts and assumptions. Pro|Rel is coming.

  7. CraftyBernardo

    July 25, 2017 at 2:23 pm

    This is not a good deal. Yes, it’s $4 billion, however if MLS takes it, it’s giving up:

    Probably $2 – $3 billion in expansion fees – the league clearly intends to grow into a typical American sports league, with 32 teams. That leaves 10 expansion teams. Currently it’s $150M to get a team, but 1) at the rate that’s increasing 2) based on the trajectory of the league and sports team values in general, and 3) the laws of supply and demand (if you want a franchise, you can wait now, but when it comes down to the last couple, there will be MANY bidders for the last franchise), it wouldn’t be surprising of the franchise fees on the last few are $500M – $1B (don’t laugh…. ). If you institute pro-rel, NOBODY’s going to pay a fraction of that.

    MLS probably ALREADY intends to get somewhere on the order of $4B for 10 years of TV rights going out to 2032. It sounds like a lot of money, but when you consider that the league will be in many more markets in 2023 than when it negotiated it’s last deal in 2014, and the growth prospects, plus the increasing value of the overseas TV rights… .I think $4B for those rights negotiated a few years from now sounds like a likely number.

    Partnerships: Trading ESPN, Fox and Univision to some capital vulture who’s got a vendetta against the league is prooooooobably not a great idea. That would be selling your soul for cash.

    MLS is doing the right thing.

    Oh, and never… EVER… criticize Don Garber on a decision like this until 10 years later. He’s proven the morons wrong time and again. I’ll bet we look back on this in 2024, when he’s got $8 billion on MLS’s pocket from franchise fees and TV rights instead of this measly $4 billion and nobody remembers personally saying “We should sell MLS rights to some snake for $4 billion!”

    • Tunafisher

      July 25, 2017 at 8:47 pm

      Did Grant Wahl summon all the Garber ball l1ckers or who makes the notification to you nut jobs?
      Proven wrong on what? They play in empty stadiums with some exceptions, play is crap, garbage players like Altidore are league all stars, you’re happy with that? Good TV deals and the Kraft family and others making a nice profit is benefiting you as a fan how?

  8. CTBlues

    July 25, 2017 at 12:34 pm

    Screw MLS, Silva should just use that money to help develop teams in NPSL, NISA, and NASL and eventually have pro/rel among those leagues.

    I don’t watch MLS I’m a season ticket holder of my local NPSL team.

    • tim

      July 25, 2017 at 5:20 pm

      Ya screw logic and smart business!! PRO REL fo life!!!!!!!

  9. NaBUru38

    July 25, 2017 at 10:30 am

    US$ 400 million per year for MLS tv rights is not a serious offer.

  10. Gabe

    July 25, 2017 at 6:23 am

    Pro/rel in one of the reasons I watch football around the world, however I suspect if other countries were trying to grow a sport with a new league they would steer clear of this. Fortunately for us It’s essentially grandfathered in around the world. I agree that this would not increase interest in the league and would risk hurting franchises that are working hard to grow their fanbases. Don’t trust Silva, MLS smart to keep their distance, also agree that these articles are no more than clickbait (similar to Ollie’s Ali crush)given that it’s been stated MLS are not allowed to negotiate media rights at this time

    • JR

      July 26, 2017 at 1:50 pm

      All news articles are clickbait by nature. Get used it to, it’s how the world works.

  11. Joey

    July 25, 2017 at 6:10 am

    I’d rather see it grow organically and let the lower tier teams build which a lot are doing in usl. This was a PR move for NASL which is on its last leg. We still don’t know where the money comes from and you also just don’t engage in breaching of contract and piss off your biggest customers in fox and espn right now. It’s interesting but only a PR move and it worked. It got all the pro/rel bots awake like that total relegation wack job and this site writing its usual narritives against MLS and while sometimes valid, this is not one of them. I suppose the fact that these things are happening is a good sign.

  12. Bruce Wayne

    July 25, 2017 at 2:14 am

    Joke of a league. This is why American franchise model sucks.

  13. R.O

    July 25, 2017 at 12:52 am

    Christopher, link to an article from 2011 from theguardian – “EPL looking to get rid of Promotion/Relegation” The Guardian wasn’t the only media agency to report on this in 2011. One of the reason this was being discussed was exactly what John Ourand wrote (owner pay/invest in a team that would face the possibility of relegation, as any relegated club stands to lose millions in revenue.) It wasn’t only the US/American owners of EPL teams but also investors/owners from the middle east.

    I’m not against Pro/Rel, just fyi that even in EPL back in 2011 getting rid of Pro/Rel was being discussed.
    https://www.theguardian.com/football/2011/oct/17/premier-league-owners-relegation

  14. A

    July 24, 2017 at 10:52 pm

    WST publishes a lot of good stuff but this is utter garbage. First, it’s clear this was a grandstand offer designed to get people talking about Silva and his media group (well done). I have a hard time believing that a league who struggles to get ratings when their best teams are playing are all of a sudden going to get people to watch crap teams like Colorado and D.C. United duke it out to see who’s worse in the middle of CFB and NFL seasons. Instead of spending $4 billion on solving a problem we don’t have, let’s invest in NASL teams and get them out of playing in baseball or college stadiums. What about increasing MLS’ salary cap? Academies? Coaching? All of these can help improve quality faster then farcical excuse of pro rel.

  15. Ed of CT.

    July 24, 2017 at 10:20 pm

    Common sense is something the Mls has Never had in abundance ever at ussf and mls…They folded two clubs in Florida, T. b. With Valderama And Miami just to shaft the union yrs ago…….. Expansion is a cash cow for Mls. That is why man city and Roma were given mls clubs in NYC and Orlando period. There is
    no.other reason at all but use of expansion as bribery revenue.. One hundred fifty million is a princely sum for pro soccer in the USA………..Mls would rather fold clubs like Chivas rather than demote them. . Perrenial mediocre clubs like Kraft , Revolution ,Chicago and mls would NEVER allow them to be sent down and replaced by say NY .Cosmos who won nasl two of last three yrs……….. No wonder Euro and Latin America regards mls and a second rate joke behind championship div in UK for instance. Only way you would see promotion and regulation if Fifa imposed it. Then Fifa would likely fine the USSF ,fed.. And mls for offering bribe money to T.B. and Ottawa and npsl clubs to jump to usl pro and Pdl fourth div. Usl….from Nasl and npsl… Silva should spend that money on Nasl and npsl proposed promotion and relegation and a new third div. In between those two leagues..

    • jm

      July 24, 2017 at 11:04 pm

      the cosmos could not make pay roll last season – champions with no revenue

      • Ed of CT.

        July 25, 2017 at 4:51 am

        New owner Of Cosmos now.. M. P Silva owned by Asia business Interests. They do have The money to pay for the contract offered.. …. Unless you have lots of money to pay off mls brass.,as La Cal. second club did with a meaningless extra club in L. A…. Or man. City with NYC, Fc and Roma with Orlando then there is NO interest by the mls no matter who owns Ny. Cosmos or Miami etc… .. Again ONLY in the USA do.you have a league structure designed to undermine Nasl in Okl. City Tampa Bay and Ottawa. And 4th Div. Npsl….. Not to.mention No WHERE else on Earth do you have two lgs. Each In Div. Two through four….. … No wonder Millions of Us Soccer fans would rather watch Euro- Spain ,UK and Mexican soccer on TV. . They will NOT support a JOKE.of a dysfunctional Ussf and splintered pro and lower Div. Football soccer in the USA. ….. No wonder TV. Ratings are Wnba of Nhl like for the mls on TV… No common sense or national effort to.promote the sport. As Mls undermining Nasl and Npsl goes to show.

    • Adam

      July 25, 2017 at 8:14 am

      Roma secretly owns Orlando City?! lol

  16. SilverRey

    July 24, 2017 at 7:56 pm

    Has anyone asked where the $4billion is going to come from? Silva certainly doesn’t have it.

    “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”:

    Stability.

    It wasn’t that long ago we only had 10 teams in the league.

    • Christopher Harris

      July 24, 2017 at 8:18 pm

      MP & Silva is valued at $1 billion after a Chinese investment recently bought a majority stake in the company. They’re not hurting for money.

      • Economics

        July 26, 2017 at 2:44 am

        How’s Chinese investment working out in the Chinese Super League? How many teams pay their bills?

      • Yespage

        July 26, 2017 at 1:32 pm

        Not hurting for money? They are offering MLS 4 times what they are allegedly worth. And the entire MLS pro/rel system would desperately need every dime do that small market teams could afford to promote.

    • Adam

      July 24, 2017 at 9:33 pm

      He DOESN’T have the money and knew MLS wasn’t even currently holding discussions on TV rights. This is nothing more than a clever PR move that also keeps fans talking about pro/rel. NASL is endlessly throwing hail mary passes in an attempt to keep their business model alive. I wish they’d just go away and let the decent clubs move to USL and MLS.

  17. Total Relegation

    July 24, 2017 at 7:23 pm

    MLS is stupid not to take the money. Over half the league is mediocre and has failed to gain any traction in their respective markets. Ratings are in the toilet and the only growth has come from expansion. NYCFC is a joke and will probably never have a stadium. MLS is still viewed as a retirement league both at home and abroad. International leagues continue to eat MLS’ lunch. 0 CCL Titles.

    Owners not willing to accept Pro/Rel is part of the global game can sell their shares back to other owners/league if they don’t want any part of Pro/Rel. I’m sure they will earn more than the original purchase and they will be done with soccer. If MLS’ teams can’t survive the drop then they shouldn’t exist and successful MLS teams shouldn’t be subsidizing losers.

    • Joey

      July 25, 2017 at 6:11 am

      Lol why don’t you go make another video and post to the internet that no on cares about hahahaha.

      • Total Relegation

        July 25, 2017 at 10:40 am

        I’m not sure I quite understand your reference or why you are laughing at your own joke.

    • Yespage

      July 26, 2017 at 1:30 pm

      What money? They say $4 billion, but do they have $4 billion? It sounds like a scam to me.

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