MLS wants to improve ‘sad’ TV deal as guru warns league of ‘bad investment in sport’
Major League Soccer may be in a bit of trouble.
The league hoped to capitalize on the success of the 2026 World Cup held in the United States, Mexico and Canada.
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With the sport’s recent growth in popularity, which former US Soccer President Alan Rothenberg believes will see it “rocket launch” past other major sports leagues, including the NBA and MLB, in the next decade, MLS was hoping to attract more revenue.
It has seen a number of top talents join in the past few years – perhaps none bigger than Argentina star Lionel Messi – while Heung-min Son, Antoine Griezmann, and recent Inter Miami recruit Casemiro are some of the biggest names to arrive in America.
But they’re clearly interested in the sport after the record-breaking numbers it brought in US viewers for the World Cup, making FOX Sports’ $485 million gamble to secure English-language broadcast rights in the United States look like a bargain.
With that in mind, MLS Commissioner Don Garber wants to monetize the 30-team league that now brings in an estimated $2.5 billion in revenue, according to Sportico.
In the weeks leading up to the World Cup final where Spain beat Messi and Argentina, MLS spent tens of millions of dollars on an ad campaign with the tag line: “Thank you, world. We’ll take it from here.”
But according to the Global Football Rankings, the league is in tenth place as far as being the best league in the world, even though MLS has 17 of the 50 most important franchises in the world.
Most of this additional revenue comes from expansion teams, with the seven new teams added to MLS since 2019 paying a combined fee in the region of $1.5bn.
Now, there’s an ongoing debate about how to grow from here, the most obvious way to real – and organic – growth is through monetization.
However, this is where problems can arise.
Previously, MLS struggled with rights negotiations the last time it hit the market, eventually securing a ten-year deal with Apple TV through 2022 that paid them $250m over ten years.
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For the consumer, this meant paying a subscription fee, which for the average football fan, meant weighing up whether it was worth it.
Now, a report from ESPN’s Ben Strauss suggests that MLS owners have expressed their desire for a new rights fee that costs nearly twice a year.
“The owners have discussed the desire for a new rights fee in the range of $400 million to $500 million, which could be three times the amount that the Apple groups receive, according to two people with knowledge of the discussions,” wrote Strauss.
“That, of course, is easier said than done.”
The lack of ‘best talent in the world’ is a major problem
Stefan Szymanski, co-author of the book ‘Soccernomics’, argues: “There is no major sports league in the world that is not heavily dependent on broadcast revenue, and Major League Soccer it has a tragic broadcast advantage.
“How do you become the biggest sports broadcaster in the world? The answer is that you have the best talent in the world.”
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The truth is, MLS cannot attract the ‘world’s best talent’ like Europe, with its biggest stars choosing to go to the league to see out the short years of their careers instead of joining during their prime.
“The hope is that Americans get a taste of high-level soccer this summer, but they don’t have enough understanding to see that soccer is played in America — except for Lionel Messi — and it’s not played by world-class soccer players,” said Andy Schwarz, an economist at OSKR.
“They need the need for football to grow so that people start to be more interested in football, but it is not enough to realize that the great players are not there. It is a Goldilocks situation.
“The numbers have advanced in the chances of that happening beyond my pessimistic view. He could remove the salary cap and start spending like the Premier League, but I’m not sure how that creates good cash flow.”
As it stands, the current MLS salary cap remains around $6.4m, although allowing for more spending, which sees most teams’ salaries sit between $13m and $20m – Inter Miami’s, however, is $46m.
“MLS is dominated by the opinions of the NFL at the ownership level,” said one person involved in the league’s business, according to an ESPN report.
“The quality of the player lake can decrease by 25 percent and will have no effect on The NFL group balance. The level of play does not matter. That is not true of sports around the world. “
One lawyer who advises private equity funds on sports investments even admitted to telling his clients to avoid MLS.
“I advise all my clients not to use the MLS,” the attorney said. “It’s the worst investment they can make in sports.”
Still, MLS Commissioner Don Garber has remained steadfast throughout the situation, and told a large group of reporters before the World Cup final: “I’d rather be us than any soccer league in the world.”
