Los Angeles FC forward Carlos Vela (10) celebrates his goal scored against Inter Miami CF with midfielder Latif Blessing (7) and forward Brian Rodriguez (17) during the first half at Banc Of California Stadium, March 1, 2020.
Gary A. Vasquez-USA TODAY Sports | Reuters
It’s almost unfair what happened to Major League Soccer. Its regular season and 25th anniversary was interrupted by Covid-19.
And for a league “reliant on gameday revenue,” it was no surprise when MLS Commissioner Don Garber labeled this season “incredibly difficult” when considering money lost due to the season’s suspension.
But MLS positioned itself to be one of the first major contact sports leagues in the U.S. to resume games when it announced it would reopen on July 8 at Walt Disney World with its “MLS is Back Tournament” featuring all 26 clubs. Meanwhile, the National Women’s Soccer League will begin playing again on June 27 in Utah. MLS games will be played at the ESPN complex in Orlando, starting as early as 9 a.m. and going all day. The tournament will include group stage games that will count in the regular-season standings.
Garber spoke to reporters on Wednesday to discuss the reopening and said the league aimed to resume “games before many other leagues” as MLS wants to restore any “momentum that we had and continue our relationship with our fans, which translate into viewers.”
Though MLS wasn’t in a race, being the first major men’s contact league to reopen does have its advantages. First, the opportunity to set viewership records, gain new viewers and having daily live programming until at least July 31, when the National Basketball Association is set to return, is enormous.
So MLS needs this tournament to be a success. The league needs it to attract those new eyeballs, and if it can pull off this event, and boost ratings, MLS should be in a position to increase the value of its media rights deal, which Garber made clear is vital to MLS’ future. And the league will rely on its innovation around game broadcasts as a strategy.
Going all-in on technology
Garber said more broadcast plans would be announced in the coming weeks, but behind the scenes, MLS wants to roll out an enhanced experience, which it said will pay off in time with a new media rights pact.
According to league sources, MLS communicated with soccer leagues overseas and spoke with different tech firms about ways to improve broadcasts. MLS also explored various camera technologies and methods to implement virtual and augmented reality experiences. The people spoke on the condition of anonymity because they weren’t authorized to publicly discuss MLS plans.
MLS also discussed ways to “incorporate fans” with its partners such as Facebook, which recently launched its new Venue app for sports videos. Garber’s vision is to use in-depth fan engagement to amplify games, including “virtual advertising” and other production concepts that are in final stages.
“You can be assured that we will have an environment that will bring our fans and our supporters close to these matchups,” Garber said.
The league will use this tournament and as much technology as possible to “fulfill a portion” of the projected $1 billion in lost revenue due to Covid-19, Garber said. And with “new revenue” opportunities limited, Garber added the MLS would move forward with investing in these “unique technologies” for future monetization as game day revenue will continue to suffer from no or limited attendance.
Again, if the MLS can strategically resume and create an interactive game day experience, it can only support negotiations for its asking price for rights fees.
Currently, the package with ESPN and Fox is valued at $600 million for eight years. Its deal with Univision is valued at $120 million and generates only $90 million per season for MLS. That deal runs through 2022. Compare that with the media rights deals for the National Football League (roughly $7 billion) and the NBA ($2.6 billion) per year rights deals. MLS is miles behind other major sports leagues in the U.S.
Despite the current climate, Garber remains bullish MLS will strike a lucrative deal, which will keep the league aligned with its plans to become a significant player in the U.S. sports landscape.
This season, MLS’ broadcast schedule was favorable, as Disney followed Fox and moved four games to its ABC network, in addition to games on Univision. MLS having more network exposure increases sponsorship value for media partners and ratings for the league, especially in the era of cord-cutting. That’s why media partners presenting MLS the idea of moving some games to network TV made sense for both parties.
Also, when a new deal is reached, MLS will be able to keep a more significant cut at the start to make up for a decline in future revenue due to Covid-19.
Before finalizing plans to resume, MLS and its players’ union agreed to revise media rights percentages negotiated in its collective bargaining agreement as part of a new labor deal to reopen. According to the Associated Press, players’ share will drop from 25% to 12.5% in 2023, one year after a new rights package. The league will return to sharing 25% with players in 2024.
It all falls on a productive five weeks of drama-free, interactive and engaging experience in non-spectator environments in Florida. If MLS can pull it off, with plenty of eyes watching, its financial future looks bright.
“It starts by getting back,” Garber said. “Getting some momentum back into the league is something that I am sure will continue to help what I was convinced and remained convinced … is an increasingly valuable media property. And we’ll take that to market after the 2022 season.”
Correction: This story has been updated to reflect that the National Women’s Soccer League will be the first major U.S. contact sport to restart play on June 27.