Having added four franchises since 2020 and with new clubs soon to take root in St. Louis and (presumably) Las Vegas, Major League Soccer is in the midst of a hyper-accelerated expansion phase that reflects Don Garber’s outsized ambitions. Bound up with the longtime MLS commissioner’s drive to establish a continental footprint is a parallel quest for a comprehensive new media-rights deal, a knotty threading of national and regional broadcast privileges that could go a long way toward reversing the league’s money-losing streak.
Trouble is, MLS may have a somewhat exaggerated view of its value as a media property, especially where linear-TV impressions are concerned. In exchange for a bundled package of TV and streaming rights, MLS is looking for a new pact that will pay out some $300 million per season, and while that’s small potatoes compared with the billions raked in by the nation’s top sports leagues, some network execs believe the league’s asking price is still too high.
Under the terms of MLS’ current deal with ESPN, Fox and Univision, the league takes in $90 million in rights fees per season. When the league secured that package in 2014, it represented a steep increase over the $18 million per year it had collected via its previous package, which featured the same cable and Spanish-language partners, but included a different broadcast outlet in NBC.
The current contract expires at the end of this season.
Much of the calculus that informs rights negotiations is easy enough to follow, even if the shift of younger viewers to streaming platforms has somewhat devalued the TV ratings currency. The audience for nationally televised MLS matches on ESPN and Fox in 2021 was less than half the size of the turnout for Univision’s Liga MX matches (845,000 viewers), and fell shy of NBC Sports’ Premier League coverage as well. And while the new MLS season has only just begun, the early results for 2022 are in keeping with last season; per Nielsen, 475,000 viewers tuned in for Fox’s coverage of the March 5 Charlotte FC-LA Galaxy match, whereas NBC served up 900,000 viewers earlier in the afternoon with its West Ham-Liverpool broadcast.
Speaking last month during a preseason media call, Garber said he expected a new rights deal would be hashed out before the end of the first quarter. MLS continues to negotiate with its legacy partners and a few first-time shoppers in the TV space, while fielding calls from the tech leviathans as well.
“We continue to be very encouraged by all the interest,” Garber said, noting that the “unprecedentedly unique package” includes TV, streaming and the expanded Leagues Cup tournament. “As you would expect, there’s a lot of interest in that. But as the world continues to shift from a media perspective, we’re talking to anybody that is in this business, whether it’s a streamer or a more traditional media company.”
As part of the evolving partnership between MLS and Liga MX, the Leagues Cup tourney has been expanded to include all 46 clubs. The month-long showcase bows in 2023, and if last year’s MLS All-Star Game is any indication, the Spanish-language rights holder is likely to draw the lion’s share of the impressions. Per Nielsen, FS1’s coverage of the summer scrimmage eked out just 175,000 viewers, while Univision and TUDN combined for an average draw of 1.4 million viewers, or 89% of the game’s overall audience.
If in the greater scheme of things MLS’ target price seems like a steal—it’s less than half the $600 million per annum the NHL secured with its new deal—the networks’ pockets only go so deep. Fox punted its Thursday Night Football rights after the NFL’s primetime package proved too costly to retain, while ESPN recently cut corners with a significant reduction of its MLB commitment. NBC uncoupled from the NHL in favor of re-upping with the Premier League, and given that all three outlets are about to engage in a bidding war for a portion of what is expected to be a $1 billion Big Ten jamboree (that’s up from the current $440 million per year tag), it’s clear that there’s only so much money to go around.
Toward the end of last year, Garber indicated the local and national rights would be bundled together as part of the MLS’ new 600-game package. Each club’s streaming deal is set to expire at the end of 2022, and all data-related incentives (think: gambling) are to be reconfigured under an all-inclusive offering.
Balancing the reach of linear TV with a streaming environment that’s far more likely to attract soccer’s younger fans is a work in progress, but exposure via broadcast TV remains critical if MLS is to achieve its desired growth spurt. Cable alone isn’t going to grow the sport; per Nielsen, ESPN now reaches 78.7 million pay-TV homes, and while that makes it one of the most broadly distributed sports outlets on the dial, it’s still a good 17 million homes shy of ABC’s broadcast range. Similarly, while the trillion-dollar-plus market caps of the FAANG set might make for a happy partnership, MLS isn’t interested in dumping its distribution eggs into one fur-lined tech basket. As counterintuitive as it may seem in light of the plummeting TV usage levels, traditional TV remains the key to expanding the fan base.
The expansion markets are a key to understanding how the MLS is approaching this rights haggle. After adding Charlotte to the mix this season, MLS gained a foothold in the nation’s 22nd-largest media market. With an estimated 1.29 million TV homes, Charlotte is a slightly larger DMA than St. Louis (1.24 million), which joins the party in 2023. And if Vegas gets the nod to become the 30th MLS franchise (in December, Garber said Sin City is the frontrunner), the league gains a seemingly insignificant 833,510 TV homes. (Wedged between West Palm Beach, Fla., and Grand Rapids, Mich., Vegas is only the nation’s 40th-largest DMA.)
But as Garber said earlier this winter, there’s more at stake than an influx of new TV homes. “In the future of media, market size is probably going to be less important than market engagement,” Garber said. “So we’re thinking about, where is the future growth and opportunity happening in North America and where do we think MLS can be successful? What are the demographics in that community? What’s the corporate base in that community? … And what’s the likelihood of getting the right stadium in the right location?”
In other words, a host of factors inform the MLS’ economic projections. Cost isn’t necessarily the only thing holding up the process, and knowing full well that it will have to live with its new contract for a very long time, MLS isn’t rushing headlong into a resolution.