Major League Soccer finds itself in perhaps its most challenging situation since the league retracted two teams in 2002. How MLS addresses the growing concern over its next media rights deal will go a long way to determining its future success. After all, MLS Commissioner Don Garber knows the importance of landing a lucrative media deal.
In 2020, Garber told CNBC, “The need for revenue [from future media rights deals] will be able to satisfy all the things that all of our critics and all of our supporters want. More investment in players, more investment in infrastructure, more investment in marketing and content, and fan development.”
Without a major deal, MLS will unlikely hit its aggressive goals. In 2015, Garber wanted MLS to be one of the top leagues in the world by 2022. Missing that mark is one thing. But to even get close to being one of the world’s best leagues in the future, signing a new, major media deal in 2022 is imperative. And the way things are heading right now, MLS is falling short of its goal.
Upside down with a long way to go
When asked about the media rights in 2020, Garber said:
“We are entirely upside down [based on our media contracts] compared to all the other leagues.
“Media as it relates to our revenues is frankly the smallest piece of the puzzle and I believe going forward that will change.”
How upside down is MLS? In its joint deal with US Soccer that ends this year, MLS’ revenue is $60 million per year. Looking ahead, the league is seeking $300 million per year in its new deal from 2023 onwards. However, given the lack of interest from legacy sports broadcasters such as FOX Sports and tepid interest from ESPN, the $300 million/year goal appears wholly unrealistic.
Compare MLS’ deal to the Premier League (NBCUniversal is paying $450 million/year) and LaLiga (ESPN is paying $150 million/year). NFL gets $10 billion annually. NBA comes in at $2.6 billion per year.
Losing FOX would be a blow to MLS
If FOX Sports decides not to bid for MLS rights, the league will miss out on a major national television deal for English-language viewers. Yes, ESPN is interested in MLS rights but ESPN+ is the main driver of that.
This season, FOX Sports showcases 34 matches, highlighted by 27 on FS1 and seven on FOX, with twice as many primetime windows as the network’s 2021 slate of games.
Losing FOX Sports would be a major blow for Major League Soccer. Not because of its MLS TV ratings for Sunday night games on FS1. But more so because FOX often broadcasts MLS games on the over-the-air FOX network. In previous years, MLS viewing numbers on FOX have helped boost Major League Soccer TV ratings. Without those over-the-air numbers, MLS would be in an even more of a dire situation when TV ratings are averaged out over a season.
For instance, FOX’s 2021 Thanksgiving Day game drew 1,894 million viewers across FOX and FOX Deportes. It was the second most-viewed MLS match ever when excluding MLS Cups and all-star games.
At the same time that FOX Sports have reportedly shown little interest in renewing MLS rights, the speculation is that FOX Sports could be for sale.
How did the league get into this situation?
US Soccer’s decision to cut media ties with MLS‘ marketing arm Soccer United Marketing has put MLS in a difficult position. The top-flight league is the last to complete a deal in a series of major soccer rights acquisitions.. That began last year when ESPN paid $1.4 billion for LaLiga rights. Thereafter, NBCUniversal paid $2.6 billion for the Premier League. And WarnerMedia secured the US national team rights for $200 million.
The writing was on the wall from broadcasters last fall when they told MLS they wanted to wait until the major deals were completed before determining their level of interest in MLS.
Now that ESPN has arguably overspent on LaLiga, while NBC Universal paid more than expected for the Premier League, those two major broadcasters are unlikely to be willing to spend big money for a league that delivers small viewing numbers.
Timing is everything when it comes to media rights. LaLiga and Premier League timed it perfectly. MLS couldn’t have timed it any worse.
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