Garber admits MLS Season Pass deal with Apple could pose risk

MLS Commissioner Don Garber has admitted that MLS’ revenue share agreement with Apple for MLS Season Pass contains risk.

In a recent keynote address at the Columbia Sports Management Conference, Garber explained Major League Soccer’s exclusive global streaming deal with Apple in more detail.

“It’s a partnership, and that’s the most different aspect of it,” Garber said. “After we hit the minimum guarantee from Apple, we make 50 cents of every dollar. That’s the risk in this deal. I’m highly, highly confident we’ll get into that revenue share.”

Apple nor MLS has publicly shared what that minimum guarantee is. If the league surpasses that minimum (presumably based on MLS Season Pass subscriber numbers), the revenue share could be rocket fuel for Major League Soccer. Vice-versa, if MLS can’t smash the minimum guarantee out of the park, it faces an uphill task of competing against the world’s top leagues.

Is MLS Season Pass a game of risk? Risks and rewards of the Apple, MLS deal

Privately, according to World Soccer Talk sources, Major League Soccer executives have been mentioning how they want to market the league similar to the Premier League. With the production capabilities MLS has as well as its talent, don’t be surprised if you see MLS trying harder on MLS Season Pass to make the league look, sound, and feel bigger than it is now.

In reality, the gap between MLS and the Premier League has never been larger.

In the United Kingdom, the English Premier League just wrapped up an $8.4 billion domestic media rights deal for four seasons. That’s on top of the Premier League’s foreign rights deal which garners $7.2 billion over three seasons. Altogether, the Premier League’s global media rights deals generate $4.5 billion per season. Compare that to Major League Soccer’s exclusive deal with Apple, which is $250 million a year for all global rights, both domestic and foreign.

Since MLS is locked into its exclusive global deal with Apple for an entire decade, the league needs to surpass the minimum guarantee. Otherwise, $250 million per season without hitting the minimum guarantee is simply not enough especially when MLS has the world’s greatest soccer player, Lionel Messi.

From a platform perspective with MLS Season Pass, Apple has a direct-to-consumer streaming package that can deliver all MLS games to most countries in the world. If consumers want to watch MLS, it’s there. Whether they’ll subscribe in the numbers that Apple and MLS want to hit the minimum guarantee, is another matter entirely.

MLS focused on subscribers, not viewing numbers

Determining how many people are watching MLS Season Pass is a closely kept secret that only MLS and Apple know.

As a result, according to Sports Business Journal, many brands who are potentially interested in advertising with MLS are taking a cautious approach due to the uncertainty of how many people are watching games on MLS Season Pass. Jessi Sanchez, senior vice president of consulting and valuation at Playfly Premier Partnerships, who has worked on deals in the past related to the league, told Sports Business Journal, “This has been a wait-and-see type of year. Brands are asking me, ‘What is the viewership? What is my brand impact?'”

In his State of the League address last week, Garber explained MLS’ policy when it comes to sharing viewership numbers. “What we’re focused on is the number of [MLS Season Pass] subscriptions we’re selling.”

Without potential advertisers knowing how many people are watching broadcasts of MLS Season Pass games, it’s again imperative for MLS to hit Apple’s minimum guarantee of subscribers to grow its revenue. Expansion fees are an enormous generator of revenue for the league, but if MLS wants to consider itself in the same sentence as the Premier League, it has to significantly improve its revenue from media rights.

This is, at the same time, where Garber admits he used to hate soccer. In the wide-ranging keynote speech at Columbia University, Garber explained how he was appointed MLS Commissioner while working at the NFL.

“I was at an [NFL] owner’s meeting in Atlanta [in 1998/99], and Robert [Kraft] came over to me, and he said, ‘What do you know about soccer?’

“I said ‘Absolutely nothing. I hate soccer.’

“He said ‘You’d be a great commissioner,’ and the rest is history.”

Photos: Imago.