After Carlos Cordeiro’s election win this past weekend as US Soccer Federation (USSF) President, the general sense is that Cordeiro’s management style will be different than his predecessor Sunil Gulati and that he will attempt to find a more consensus-based approach to issues. But in terms of general policies and positions, he doesn’t differ from Gulati very much except in one notable place — the role of Soccer United Marketing (SUM) as the media partner of US Soccer.
SUM, which is owned by MLS and was created specifically to allow the league to enter the sports marketing and media business at a time of critical need financially, has now become an estimated $2 billion-valued company that bundles money from partners to fuel MLS’ finances. SUM handles the Mexican Federation’s marketing and media rights in the United States and has since 2003, had a virtually uncontested, no-bid contract type relationship with the USSF.
For years, it has been argued by this website and other critics of US Soccer that SUM drains resources from the USSF and puts them in the hands of MLS owners. The joint television deal SUM negotiated for English-language rights to both the USSF properties and MLS over the period from 2015 to 2022 with FOX and ESPN has a $500 million value.
Despite having access to the USSF annual budgets (these are public documents), the money received by the Federation for the TV rights package from SUM isn’t apparent because it is rolled into a larger line item related to sponsorships. But educated analysis by many has led to the conclusion that the Federation is being severely shortchanged its fair share of television dollars.
For example, in calendar year 2017, an estimated 65% of English-language viewers for programs covered by the SUM media deal were watching US Men’s (USMNT) or Women’s National (USWNT) team matches covered by the package. But the general consensus is that the USSF only receives somewhere between 20% and 33% of the revenue from this deal on a yearly basis. While Gulati has argued in the past that having a steady, reliable check coming into the USSF every year allows the Federation to plan effectively and not worry about the volatility of the market, it’s pretty clear the rights for the men’s and women’s national team are worth far more than they are currently yielding. In fact, the SUM arrangement might be considered a clever way of USSF providing a subsidy to Major League Soccer that is not being provided to second division men’s league USL or any amateur or adult league in the country.
While Cordeiro appeared at first to be a lock-step establishment candidate, by mid-December my reporting indicated he was discussing his discomfort about SUM’s relationship with the USSF about the conflicts of interest among members of the USSF Board of Directors. That same week, MLS and Gulati threw Kathy Carter into the race presumably as a response to Cordeiro’s new found skepticism about SUM.
Weeks later, in his candidate interview with the Athlete Council who eventually cast its votes in a bloc for Cordeiro after a long deliberation, Cordeiro said “The unique ownership of SUM creates conflicts that need to be addressed. To avoid any and all conflicts going forward, USSF will need to ensure that any individuals with potential conflicts of interest are recused from any future negotiations with SUM. That is why I have proposed a new Board-level commercial committee to be chaired by one of our independent board directors to oversee the entire process.”
Cordeiro’s comments set alarm bells off with MLS, leading Garber to reveal more about SUM than he has ever publicly done in a very candid interview. He said:
“By creating a vibrant commercial market for soccer, SUM has helped the most significant professional soccer organizations in the United States increase their revenues, which they have then been able to use to help further their respective missions.
“Importantly, since 2004, SUM has paid U.S. Soccer more than $190 million to help the federation fund its operations and programs. When you total the amount of our guaranteed payments through the term of our agreement in 2022, it’s more than $300 million.”
It was probably unwise for Garber to give numbers since to this point it’s been a game of speculation. When you consider that over the next five seasons that the SUM English- and Spanish-language TV rights deals that include the MLS and USSF properties will yield about $90 million a season, but only a little over $20 million a year will be directed to the federation’s coffers (approximately $110 million in total), it indeed shows that the USSF men’s and women’s programs are being shortchanged.
Former USWNT Goalkeeper Hope Solo, a World Cup winner, filed a formal complaint with the US Olympic Committee in which she takes aim at SUM, alleging the other aspects of the game in the United States have been neglected financially due to the relationship between the USSF and MLS/SUM.
Cordeiro’s willingness to take on the SUM deal, which if renegotiated or torn up could yield a boon in finances for not only the national team programs but also player development and adult soccer, might be the defining issue of his presidency. If he follows through on his promises to make SUM more accountable and removing the conflicts of interest that have plagued soccer in the US, he will make the USSF more financially solvent and powerful than it currently is.
Objective fans of US Soccer, irrespective of their views about the election and the candidates, should urge Cordeiro to follow through on his promises to scrutinize SUM and its relationship with the USSF. Maintaining the independence of the federation from a pro league and its marketing company is essential for the betterment of the sport in this country.