MLS to double expansion fee to $200m, hopes world doesn’t run out of rich guys

Major League Soccer is preparing to announce another round of expansion — this time to a whopping 28 teams — and is clearly determined to grab all the money it can in the process, as deputy commissioner Mark Abbott says the league is preparing to double its expansion fee to $200 million.

That’s a whole bunch of money for membership in a league whose own commissioner says it’s losing money, and which Soccernomics author Stefan Szymanski has called a “pyramid scheme” that’s eventually going to collapse. Given that the leading counterargument appears to be that “no, no, even if teams always lose money owners will count on making money when the sale value of the franchise appreciates,” it’s exactly a pyramid scheme — the only question is whether it’s the kind of bubble that eventually collapses, or one that can continue indefinitely.

The argument for the latter — and, presumably, the MLS business plan — goes back to the billionaire glut, which posits that there are so many rich people wanting to own a pro sports franchise these days, and such a limited number of opportunities, it’s going to be a seller’s market for the foreseeable future. With that the case, it’s understandable that MLS would want to get everything it can for new franchises while the getting’s good, even if it means becoming by far the largest soccer league in the world. (Most other leagues cap membership at 20 and relegate the teams that do the worst to a second division, something that MLS has resisted because it might limit the number of people lining up to sign expansion checks.) And with a list of prospective expansion cities that includes way more than they can possibly fill in this round — Sacramento, Detroit, Cincinnati, San Diego, St. Louis, San Antonio, Charlotte and Oklahoma City are all reportedly on the list — it makes total sense to weed out the winners from the losers by seeing who’ll balk at a higher price tag.

Clearly this isn’t sustainable in the long run, but MLS isn’t thinking about the long run right now, which is its prerogative. If you’re a city thinking about building a stadium for a new MLS franchise, though, you might want to at least keep in the back of your mind that there’s a decent chance the league could, years down the road, eventually contract again — or at least split into upper and lower divisions — and that your shiny new team could end up without a chair when the music stops.

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88 comments on “MLS to double expansion fee to $200m, hopes world doesn’t run out of rich guys

  1. Would those prospective MLS owners foot the entire bill for their must-have stadiums? Doubt it.

    1. That’s part of the plan, presumably — have the cities cover a sizable percentage of the building costs, or have them pay it forward over time (ie property tax breaks).

      Billionaires very rarely get to where they are without screwing over a countless amount of people along the way — public financing of sports venues is one of the grandest examples of that theory.

    2. I doubt that this will make new MLS owners any *more* likely to demand public money. If they think they can get it, why not ask for it, whether they’re paying $200m for a team or $1?

      It may make the whole enterprise too rich for some prospective owners’ blood, but as I said, there are plenty more where they came from.

  2. My first reaction upon seeing that blurb yesterday was, it’s really gonna be harder and harder for MLS to pay returns to investors. All those cities mentioned may or may not front the $200M+ needed for a team. But to belabor the point again: Once Dong Arber and his cohorts find that people from Buffalo, Jacksonville, Boise, Wichita, Birmingham, Albuquerque, and Beatrice, NE aren’t willing to plunk down $200M+ for a franchise (and everything that comes along with it), their paper castle could come down in a hurry.

    … to say nothing of the fact that $200M could buy you a pretty big club in Europe. It’s not surprising that more and more Americans are looking at clubs in England, Italy, Spain etc — in a lot of ways, it might even be a much safer investment than MLS.

    Side note: There are any number of people in the US soccer sphere — media, fans, league officials — who’ll talk up the growth of the league ’til they’re blue in the face. It’s always telling that they rarely mention the on-field product in the context of that discussion…

    1. … or that most teams still lose money – even in what is supposed to be the “salad days” period for the league and it’s investor/operators.

      Franchise bubbles don’t tend to deflate under controlled conditions any better than tech, real estate or commodity bubbles do (whether they are artificially induced or not).

  3. How many years did it take for Amazon to make a profit ? Just like every milestone before in US soccer it will happen overnight when no one except a handful saw it coming.

    1. For every Amazon, there are a dozen Pets.coms. MLS can certainly hope to be the exception, but the odds are against them.

      1. Well there were thousands upon thousands of dot-coms in the first boom. There are only so many sports and very few of those have such large participation numbers globally as soccer does. Soccer making it wouldn’t really be an exception. In fact, not being able to sustain a league in the world’s most popular sport would be a bigger surprise.

        Anyway, I think MLS could get $250M. Pro sports teams are pretty scarce. And people don’t seem to be putting them up for sale with much frequency. If you’re very rich and want to partner up with a buddy or two, then that kind of money doesn’t seem implausible.

        Now whether that’s a good idea to pay it… totally different question. Although, given the demographic shifts in the US, I’d be a little more optimistic than Szymanski (loved his ‘Soccernomics’ book though). The bigger problem (as Kei alluded to) is that the quality of play is ‘meh’ and until it gets significantly better, the league isn’t going to get the kind of TV deals that it needs to be able to pay salaries that allow it to attract the kinds of players who are good enough to make it worth watching. Yes, that’s circular.

      2. NASL……Anyone, anyone?

        We have seen this before…and as the famous cartoon by Bill Gallo showed…this will revert back to being a niche sport, again. Over-expansion because ‘the US is ready for the world’s game’ can only result in just a couple successes..with the rest being weekend pick up games, in oversized high school stadia.

        1. MLS isn’t remotely close to the old NASL business plan the league owns the players, teams and stadiums. Everything is slow and go without making poor business decisions.

    2. If Dong Arber announces that the league is $100M per year (his words, not mine), then I’m apt to believe that the number is closer to (or even over) $200M. He has all the credibility of a guy on the street corner fiddling around with peas and cups.

    3. “Soccer” in the United States is sustainable. It isn’t quite clear that MLS is.

      Unlike most leagues, MLS has so little broadcast revenue that adding more teams doesn’t really hurt the current ownership, which leads to the current idea of selling more tickets to the dance.

      The fact that MLS has trouble increasing its broadcast earnings suggests that in a highly-competitive international soccer market–the US is probably going to remain a selling league for the foreseeable future, like leagues in much of Europe outside France, England, Germany, Spain, and Italy. It’s tough to run a Class A league on Class B revenues.

      However, MLS does remain competitive in the key market of signing 35-year old European former stars to do whatever they want on the field

      1. MLS team owners do get a cut of money from other US soccer events (Copa America, etc.), right? So there’s an element here where Garber & Co. are selling off shares of future revenue streams for cash now, though I still say most of it is tulipomania + rich people not knowing what to do with their money.

        1. My sense is that Copa America was a bit of a bust overall on ticket sales–way lower than projections overall (with a couple exceptions).

          These pre-season tours seem to do better, and eventually a European league is going to do like the NFL does and move games against unfashionable opponents to the US (or China). Still, even with ESPNs constant promotion AC Milan vs. PSG in August in Chicago seems a few years away.

        2. So that’s the question: How much money is flowing through the SUM spigot.

          Mexico plays almost all of its friendlies in the US now. I’m pretty sure that’s SUM money. Put 80K people into a stadium to watch El Tri for $70 a throw a half dozen times a year and that’s real money. Although after you split it up amongst 20 owners, it’s less real.

          1. Except it hurts the local product which is Team USA Soccer and also the MLS. Just watch FOX gain domestic Mexican rights and they could end up blowing MLS out of the water. For example, they could air a match on Sundays on non-doubleheader weekends.

        3. They get a cut of the CONCACAF Champions league, but the other tournaments are through US Soccer, which uses the funds to pay for the USMNT and not to pay the USWNT.

          1. But each tournament does need its hosts and US Soccer will need to schedule stadiums that best fit the US National team. For the most part, matches will be held in a MLS stadium. As a result, MLS clubs will get a cut of USA hosted tournament action.

      2. “It’s tough to run a Class A league on Class B revenues.”

        Which is funny, because the commish himself said that he sees MLS becoming a top-10 league in the world by 2022. As far as how’d they go about reaching that status, or how they’d go about attaining it, well… I’m sure he and the owners will make it happen via, erm, the sheer force of will.

        Right now, their business plan seems to consist of little more than expansion fees, summer exhibition revenues, publicly funded venues, and artificially deflated wages (though the most recent CBA seems to have alleviated the last bit somewhat). Seems like there are more potential pitfalls than sure things on that list.

        1. ‘summer exhibition revenues’

          I don’t believe MLS/SUM has any connection to the International Champions Cup, so outside of the All Star Game, there’s no money there, unless you know something else.

          Also, the league does pretty well at the gate. I would imagine some (many?) teams could cover the player salaries up to the cap number via ticket sales.

          1. Double-checked and you’re right about the ICC part. Apparently taken over by Relevant Sports, so no money coming back towards MLS/SUM, unless there’s some totally convoluted arrangement between the two parties (not totally far-fetched, btw).

            The attendance talk coming from MLS has always seemed like a red herring to me, since teams routinely announce sellout crowds in the face of banks of empty seats, and just as often publish numbers that don’t come close to passing the laugh test. Certain teams do legitimately draw good crowds, but a fair few of them either have an abnormally high number of unused tickets every home game, or are simply making things up as they go.

            Cynically, I think it’s the latter.

          2. Re:attendance…

            Not many may remember this, but for a few years post the NFL blackout being lifted in the early 70’s, the Daily News, NY Times, the Post would publish two numbers for NFL attendees in the stats. The first being the ACTUAL attendance, the second being in parentheses, the CAPACITY. If this was done for MLS games, then others would see…at least in that form, that this is a niche sport. Not being mean….just this would be transparent.

            As for television….all that can be said from here is that seeing FOX now has the MLS contract, watch what will happen as far as the visibility is concerned. Not even Gregory House would be able to bring the ratings back from the land of barely being alive.

          3. And… I’m merely speculating here, but I would guess that a high percentage of tickets that do get used were either comped, given away, or sold at very steep discounts. (I recall Neil saying a while back that he routinely got dirt cheap tickets for Red Bulls games).

          4. Yep, all the time for less than 50% of face, via my son’s AYSO league. (Since he left AYSO for a travel league, we have been to precisely zero Red Bulls games.)

          5. MLS is not connected to the Champions Cup, but some MLS teams do use their own venues (i.e. Gillette Stadium for the Revs) for international scrimmages and in the past have played traveling European teams.

          6. Re: Neal’s half-price Red Bulls tix: This makes me think there’s a huge demand/revenue disparity between teams like the Galaxy and Sounders and everyone else, which does not bode well for expanding the league even further. I’ve never been offered or heard of any deal like that with Galaxy tickets. And I live right in the Galaxy’s backyard (South Bay), I have two kids who attend the local schools, play AYSO, Little League, go to sports camps, take classes at the YMCA etc., which are the normal distribution channels for cheapie/freebie family ticket offers. We’ve had plenty of such offers from the local WNBA, Arena Football, college teams etc. over the years, but never the Galaxy.

          7. It’s fine if the tickets are free. You will pay 15$ on parking, 35 on food, and 50 on merchandise. That’s 100 x number of free tickets that they wouldn’t have made if they insisted on selling the tickets… and more people in stands looks better on TV and makes the fans experience better for those who did pay, and therefore more likely to pay again.

          8. I always brought my own food (concessions at Red Bull Arena are terrible, and I seldom pay for stadium food regardless), never bought any merch, and usually took the train there.

            Not that I’m complaining, mind you — it was a great value. But I can’t imagine Red Bull is making a ton of money off the team.

          9. You are cheap, that’s rare. My last free tickets, was my first nhl game ever. I have since gone (and paid) twice since being introduce to it. I paid for parking and food since I didn’t pay for tickets, I indulge. I’m also upper middle class. If my kids are there, it’s hard not to buy them something.

          10. Also for “security” reasons, it will become harder to sneak food in. Just like bars don’t appreciate you bringing your own beer inside.

          11. Red Bull Arena allows outside food, as do all the other NYC-area outdoor stadiums.

  4. Maybe the bubble will burst from the bottom up – when fans and taxpayers wise up to the schemes or cannot afford to enable the billionaires.

    1. Well said, Mary.

      Whether we are complaining about scalpers at concerts, ticketbastar, or the costs for reasonable seats at any event… spectators need to stop complaining about the price while paying it.

      If we truly found the price of a ticket/beer/hot dog offensive, we wouldn’t pay it. Then the game changes… but not until (entrenched subsidy agreements in which cities or states buy tickets that cannot be sold or just were not sold notwithstanding, of course)

  5. At some point I think the league does need to move to promotion relegation. But not yet.

  6. The last CFL expansion went for $7,000,000 Canadian. If I had the money, I would rather buy one of those. A CFL expansion team. Put the team in St. John’s, and call them the Newfoundland Labradors.

    Or better yet, have a “name the team” contest.

  7. Not trying to pile-on the comment section, but this is insane.

    “Yeah, bought myself an MLS franchise. It’s a solid investment. Plan on making a profit 500 years from now.”

    1. True, but so was buying tulip bulbs in the 1500s.

      I guess it depends on whether the “investment” is intended to be a purchase of a cash generating and profitable business to operate, or just a parking place for money until you can find a bigger idiot who will buy it from you for more than you paid. (This is different from long term capital appreciation, which does happen… ask anybody who bought a team for $10m or less how they feel about their “investment” today…)

      In MLS’ case, with a few exceptions, I think all the ‘recent’ owners are in the latter category. There is little possibility that they will ever earn their investment back over the life of the team…. so it is all about either ego (who cares, it’s only money) or flipping (I paid $120m, someone else will pay me $180m in five years and I’ve only lost $15m net on operating the club…. I win…)

      It is very hard to see prospective MLS owners in 2031 paying $500m or more for a franchise, isn’t it?

      1. Good points. Never thought of that. Or maybe they will use a team as a tax write-off for other businesses. I have no idea how that works, though.

        Beyond my edumacation.

        1. In America, owners are allowed to depreciate 50 percent of purchase price. So yes, teams lose money on paper but not necessarily in real.

          Demographics are changing also. I played baseball every summer and my dad brought me to MLB games. My kid plays soccer every summer (parents are more health conscious now) and I bring my kid to MLS and nasl games a few times a year. And I’m white… there’s fewer of us ever year (demographics change).

          1. Sports numbers are usually EBITDA, so before depreciation.

            As for kids today, all of the ones I know (and my son’s on travel soccer, so I know a lot) spend way more time watching Premier League and La Liga than MLS. It’s a nice thing to go to every once in a while to see soccer in person, but I don’t expect any of them will grow up to be huge fans — my son has three Barça jerseys, and no Red Bulls or NYCFC.

          2. Maybe that’s why you don’t understand the transformation happening in America. I admit I don’t know most rules of soccer. I also don’t know or care for European teams. I also don’t know anyone who does, except a few men who coach kids and who are more hardcore.

            My childhood park had four baseball fields and zero soccer fields. It has one baseball field now, and a bunch of soccer fields. Soccer registration is up, baseball is down or flat. The city invested in inside soccer infrastructure. The local AA baseball team draws fewer people than the local nasl team ( both are minor league).

  8. When I hear most of these “difficult to market”/”pyramid scheme” arguments against MLS – low-scoring, few U.S.-born stars, phantom attendance figures, zilch TV ratings, unsustainable star salaries, mania/fee-driven overexpansion – all I can think of is “NHL, NHL, NHL”. Especially in the wake of an NHL expan$ion team announced for Las Vegas of all places.

    Not that those arguments aren’t valid against MLS, but I wonder why the long-term sustainability of the NHL isn’t more heavily questioned. (The NHL does have one crucial advantage: It can leech off the NBA for its zillion-dollar venues – except in Vegas apparently.)

    1. The NHL seems more capable of floating a few dead-weight franchises on the backs of the rest of the league. At least the NHL as a whole is making money, which isn’t necessarily true of MLS.

      I don’t expect either of them to fold, but killing off a franchise or two (or relegating them, for MLS) seems entirely possible.

      1. Also, I think the NHL has a couple of “safety schools” (i.e. Canadian cities) in its pocket if expansion cities fail. But MLS expansion does remind me of Gary Bettmann’s attempt to make the NHL a nationwide brand.

        1. Why would MLS do relegation when no other leagues are doing it? Europe doesn’t matter to get fans or money. They only matter to get players. And relegation is a disaster since it means no competition. Hey, real Madrid and berca won 80 percent of they championships. US fans wouldn’t tolerate that. Even MLB had to introduce revenue sharing to reduce Yankees always winning.

          1. MLS has always had a difficult time threading the needle between what traditional soccer fans want, and what a general US sports fan wants. They dropped some gimmicks like overtime, But in country this size, I think they’re sold on a closed league, with the US style regional divisions and playoffs.

          2. I agree.

            The premier league is not a competition to MLS. Ukraine, Mexico and belgium are. Garber said MLS to become a top 10 by 2022. Not number 1. Who is number 10? It’s not UK or Spain. Can MLS earn more money (per team) and spend more on salary than Ukraine or belgium or Mexico does by 2022. I think yes. He will win his wager.

          3. It’s less what general US fans want than what the owners want. Given half a chance the European and South American leagues would drop relegation in a heartbeat (hell, Argentina has made it all but impossible to relegate any team but the last team promoted). It devalues the team too much when it drops a division for no other reason than “sucking”. It’s especially bad in the England where getting relegated will cause your revenues to drop by 175 million euros due to the difference in TV contracts.

            Also in terms of the top 10, a lot of rankings put the MLS right at somewhere between 10th and 13th in terms of player talent/league quality.

          4. “Also in terms of the top 10, a lot of rankings put the MLS right at somewhere between 10th and 13th in terms of player talent/league quality.”

            I’d be interested in seeing where these rankings are coming from, in all honesty. They must be watching a completely different game from the rest of us.

          5. I think most of it is that the MLS teams are more even in quality than most leagues (due to the lack of relegation/promotion). Most other leagues are just plain crap except for one to four teams. Using Ukraine as an example the drop off from Shakhtar Donetsk, Dynamo Kyiv, and Dnipro is pretty steep.

            Also all the MLS is likely to be able to pay it’s players which isn’t as sure fire in other leagues. It allows it to attract a slightly better player than other leagues. Again in Ukraine, Metalist Kharkiv, Hoverla Uzhhorod and Metalurh Zaporizhia all collapsed during last season for lack of funds and Volyn Lutsk also was found not to be paying players.

          6. Goldberg,

            Good point, but a league that basically equates to Belgium would be failure for MLS. As stated, with a couple of exceptions (Anderlecht, etc.) these smaller European leagues are basically minor leagues where teams hope to sell players and play a big team a couple times a year to stay alive. (Most folks don’t understand exactly how low attendance is at most European games–simply because the Swedish league is not strong even if Sweden might have a good national team).

            An MLS that was “top ten” but functioned as a farm team for Liverpool would not attract the kind of interest and investment desired. Making such a league even bigger makes it even worse.

  9. Given that many of the “new” MLS franchises appear to be leveraged purchases (and some of the originals have been purchased in recent years with significant debt attached), I think that this league’s future may be in greater jeopardy than we know.

    The truth is there are legitimate concerns about the league’s ability to generate revenue across the board. It’s not an NASL (original one) like franchise bubble, but outside of a half a dozen high revenue (or just insanely well capitalized) franchises, the outlook is not that great.

    If SUM revenue contributions should happen to drop significantly, along with an expected drop in the revenues generated by most clubs as economic problems take firmer hold across the board, the New Yorks, Seattles, Los Angeles’ and Torontos etc will almost certainly survive it (they generate significant revenue AND have wealthy backers).

    What happens to the Dallas, Columbus, Kansas City, Chicago, Philadelphia and other organizations is less clear to me… especially if the average franchise value in the league drops below the amount of debt the club’s carry.

    That could happen in any league (and no doubt has… the league offices tend to respond quickly to even the hint of a cash call in order to prevent an avalanche of equity demands…), but it seems to me that MLS is much more susceptible to this than others.

    IF you have five dead ass franchises out of 30 (like the NHL arguably does), you might be able to convince the other owners that it is in their interest to shore them up.

    The calculation changes dramatically if you have 15 or 17 financial corpses being carried.

    1. Many, if not most, of the MLS stakeholders already own a team in one (or more) of the Big Four leagues. By and large, those owners — Bob Kraft, Kroenke, Lew Wolff, Hunt family, et al — pretty much sit on their assets and hope that the formula of running things precisely like a “big four” league will magically result in a financial bonanza down the road. That, or they just sit on their assets, period. Probably more accurate.

      At any rate, MLS is essentially trying to break into the “big four” club on an accelerated timeline, and hoping to achieve the kind of financial bonanza in 10-20 years that it took the NFL/NBA/MLB many generations to achieve — the pro sports version of a get-rich-quick scheme, if we want to call it that — all while running the whole operation under in a way that runs counter to virtually every other league (and soccer federation) in the world.

      It’s not a coincidence that the Soccer Dong used to be a longtime exec in the NFL before he was hired away by MLS.

  10. When Don Garber says the league is losing money, I’m not so sure I’d take that at face value. There are a lot of moving parts here – it’s entirely possible, for instance, that the Columbus Crew is losing money but Anthony Precourt, the owner, is making money as a result of owning the team.

    How so? If the Columbus Crew pay, say, $50K per game to Precourt for the use of the stadium, they can claim to be losing money.

    Also: Notice that Garber says the league is losing money. That’s an entirely different thing than franchises or owners losing money.

    Additionally, they could be depreciating assets to create a paper loss.

    It stands to reason that the people in charge of a league structure that literally exists solely to keep salaries artificially low would have an interest in claiming financial losses.

    Maybe they are losing money. Maybe the wheels are about to fly off the bus. But I’d like to see more than a vague quote before I believe the sky is falling.

  11. So many wrong assumptions. Many if not most MLS stadia have been privately funded and that includes most if not all of the last few expansion teams. If anyone out there would buy a CFL expansion team over a MLS team you have no business handling money on any level.

    1. Not sure where your getting your information from but this is from Judith Grant Long (where available and from Googling where it wasn’t).

      -Chicago Fire (Toyota Park) – Bridgeview 100% public
      -Colorado Rapids (Dick’s) – at least 85% publicly funded
      -Philly Union (PPL Park) – 65% public share
      -NYRB (Red Bull Arena) – Harrison 50% public (but I think that has actually gone up)
      -FC Dallas (Toyota Stadium) – 65% public
      -Seattle (Qwest/Century Link) – 65% public although the stadium is shared
      -DC United – New Staidum is over 50% publicly funded. Seen various reports for who is on the hook for what, but 50% is best case for the District.
      -Sporting KC (Children’s Mercy) – 100% public
      -Vancouver Whitecaps (BC Place) – this is publicly owned and a ton of money has been poured into it over several renovations the last and largest of which was for the Olympics (although I can’t recall if the roof was a separate renovation after that).

      So that’s 9 stadia that are at least 50% publicly financed.

      Houston, OCSC, Montreal, Real Salt Lake, Portland, NYCFC (there’s about $350M in public money in Yankee Stadium) all have various degrees of public money in their stadia. Portland was $12M as part of a renovation; Salt Lake ponied up over 40% the total cost for Rio Tinto Stadium. Oh, and the Atlanta and Minnesota teams coming into the league will have lots of public money in their venues.

      So no, MLS is not awash in fully privately financed stadia. I count Columbus, San Jose, LA, and New England. I’m not sure about Toronto.

  12. Some people have the foresight and most don’t. Most people didn’t see golf & NASCAR interest falling of a cliff but guess what its happened Overnight ! Same demographics of NHL , CFL & MLB. BTW the CFL went out of business until NFL rushed in to save them.

    1. No, it didn’t. The NFL offered a $3m interest free loan, which the CFL paid. It did not go out of business.

      1. Agreed, the CFL didn’t go out of business, but it was about to do so. What happened is that the CFL expanded into the United States and lost enough money that it was clear that the expansion was a major mistake.

  13. Leverage the American way. I guess most people pay cash for their homes when they have to turn around and build a 200mil stadium. Give me a break , if your rich but the government or “bank ” wants to give you money at 14 of a percent , are you going to refuse and pay cash. If you do your probably buy CFL teams nobody wants to buy.

    1. 14 percent? What???? Who are you borrowing money from, a local leg breaker?

      Leverage might be the American way, but no more than bankruptcy is the American way.

      People do buy houses freehold for cash. Sometimes they even build up their house value by employing sweat equity (instead of taking theoretical equity out of their houses as soon as they learn they have appreciated – in someone’s opinion and then not bothering to do normal maintenance). Those in the first group tend to end up reasonably well off. The people who buy more house than they can afford by signing up for ARMs have tended to end up homeless and blaming someone else.

  14. Something nobody talks about, society is more health conscious than ever before. I played baseball as a youth but I registered my kid into soccer. I want him running a lot! My daughter plays soccer too. That will become 2 adults who will play adult soccer leagues in evenings rather than softball, they will have kids who play soccer, and we will be 3 generation of soccer fans. My dad finds soccer boring and can’t stand to watch it. I’m ok with watching. My kids love watching it. My family is not unique in America. MLS TV revenue could equal nhl soon, and NBA in 20 years.

    1. NHL signed 10-year rights deals in US and CAN with a combined worth of close to $7 billion in 2010. That’s $700 million per year for the league.
      NBA signed a 9-year, $24 billion TV rights deal with ESPN and Turner Sports that kicks in next year. That’s $2.67 billion per year for the league.
      MLS signed an 8-year, $720 million TV rights deals with ESPN, FOX Sports, and Univision in 2014. That’s $90 million per year for the league.

      NHL stands to make almost the same amount of TV money in one season that MLS stands to make for the duration of their own “watershed” TV deal.

      But…… “MLS TV revenue could equal nhl soon, and NBA in 20 years.”

    2. While it’s fun to talk about demographics when it comes to soccer in America (whether it be age, race, socioeconomics), tying the increase in the number of kids playing soccer to the emergence of MLS seems outrageously dubious in and of itself. If anything, the popularity (and the subsequent TV numbers) of the Premier League and the Champions League are growing at about the same rate as those for MLS, and maybe even at a higher pace.

      This is to say nothing of the gigantic following that Liga MX has always had among the Mexican population here in the US. Its ratings blow even the EPL out of the water, never mind MLS. Kids tend to grow up supporting whatever their team their parents and grandparents grew up rooting for — and my guess is that there are more people, on both sides of the border, who were brought up as Club America or Chivas fans than as, say, NYCFC or Orlando City fans. And given the way MLS is set up, I’d honestly expect that to be the case for generations to come, even here in the US.

  15. As a dedicated picker of nits, I must ask… Wouldn’t a city that built a stadium for a team, that later ended up eliminated by contraction, have a chair but no team when the music stops?

  16. A stadium built on the public dime for the NFL or MLB years before an MLS team came into town is in your world a fair comparison. Soccer stadium built in a ghetto should be on the public dime like all other economic development that takes place in ghettos.. The Vancouver owner bought downtown land to build a SSS but was blocked from doing so and forced into BC place. In Chicago the team wanted A 50/50 split but the village insisted on owning 100%. I can go on & on. Do your homework on what led to these deals. Anyone who believes DC United is getting their stadium for any other reason than to make room for the return of the REDSKINS is a fool. Funny how you didn’t mention the multiple teams that are in process of building privately funded stadium. Yes all owners will take public dollars if thrown at them and MLS owners aren’t saints. But compared to other sports they haven’t gotten a fraction of corporate welfare and shouldn’t be compared to leagues where operating subsidies are part of their business model. As for Mr. Mike 1/4 of a percent , really couldn’t figure that out. As for the CFL a bailout is a bailout. MLB did the same recently with the Australian baseball league. There’s a reason why American sports leagues are richest in the world and it’s because their business model reliance on tax dollars.

    1. Lot to unpack here, but a stadium might be “new” but stadiums have minimal economic impact, as lots of stadiums demonstrate. Even you could read up on it. The MLS stadium in Chester’s lack of any impact at all on the surrounding community has been carefully covered by a number of press outlets, as one example.

      The problem with many MLS teams is that the “split” often includes development rights, which might not have an immediate cash value or see the actual transfer of money from a budget but which certainly represent cost to the public.

      The DC soccer stadium deal is perfect evidence of that–where the team will construct a nearly “free” stadium but will get a lot of free land in a hot real estate market to play with (whether a stadium will actually make DCU more popular or whether a development a long haul from a Metro stop or parking will work is an open question, but whatever).

      I’d say the DCU deal is more evidence that most DC politicians are bored, have few upward mobility options, and thus like giving each one of their teams a new place to play. Bored politicians are working hard to ensure the Skins get the same treatment.

      1. But part of the deal for the Washington Football team will be a name change which Dan Snyder doesn’t want to do at all. Heck, Dale Earnhardt Jr. has said that he supports the Redskins nickname and he is a fan of the team. Finally, the rivalry between Dallas and Washington will be renewed in Week 2 and it invokes a sense of Cowboys battling Indians. If I personally had a say, I would allow the team’s name to be changed to “Hogs.”

  17. Also the top teams in LigaMX are looking to maybe set up a merger on some level with MLS ! Even they see the future of MLS and reason they’re in line trying to sign deals with SUM. I believe both LigaMX & EPL had higher ratings than the NHL.

  18. The TV network in Canada that did that NHL deal is taking a bath. They couldn’t even get Canadians to watch the playoffs. They’re laying off workers left & right to cut their losses. Again when it happens it will happen overnight. Nobody saw it coming except for the guys who profit from it. And me.

    1. Is this just math that you do as a fan of American soccer to make yourself feel better, or is this real?

      I’d be interested to see what kind of deal MLS has with TSN as well (I’m assuming they broadcast the league games north of the border), and how many viewers they get on average. My guess is that they won’t make for pretty reading.

      1. They don’t, Kei.

        Both TSN and Rogers Sportsnet air MLS games. They air the Canadian teams’ matches for the most part, with an occasional MLS game of the week (maybe 1/month) between LA, Seattle or NY and some other US based team.

        Good luck trying to watch in Canada when the playoffs roll around…. last year we saw both “wildcard” games, then nothing until the semifinals – of which we saw just one leg – and then the final.

        Ratings loser would be putting it mildly… MLS doesn’t even offer their direct kick package in Canada (I’ve asked Greg Lalas a bunch of times when it’s coming and have yet to be provided a date).

    2. That is because there were no Canadian teams in the NHL playoffs while 100% of the Canadian teams in the NBA made the playoffs. You can bet your dandy that Montreal will be lifting the Stanley Cup next season while a helpless US team looks on and Bob Costas is crying crocodile tears while saying to an American audience that Lord Stanley’s Cup had been stolen by Montreal.

  19. I agree that stadium don’t spur economic development but politicians will do anything to get anything built on empty ghetto land. If you to build a stadium with 100% your money would you blow it on the south side of Chicago. Also keep in mind that the Philadelphia project wrap up at same time as the 2nd depression. “Great Recession ” The market in many places for condos and townhomes built on ghetto land hasn’t bounced back.

    1. I think what you’d find historically is that when owners build a stadium with their own money they build it well outside of the city center, possibly near some transit (Yankee Stadium I, Fenway Park, Wrigley Field, Dodger Stadium, FEDEX Field). Only when the public picks up the tab does the real estate bill go up.

      As for the “ghetto” I don’t think that would describe the DC United Stadium site. The genius of stadiums is that when you build them on valuable land, the development happens anyway, and when you build them in the middle of nowhere, development doesn’t happen. So I guess you could say the stadium has no impact at all.

  20. I can tell you really like the term “ghetto,” Steven, but you should be aware that “ghetto land” doesn’t have any actual meaning. Land can’t be poor, only the people who live on it. (And “all economic development” in poor neighborhoods isn’t subsidized — though poverty is often used as an excuse for developers to demand subsidies.)

    As for MLS owners getting a somewhat smaller percentage of public funding overall than other leagues, that’s arguably true. But it’s more a matter of leverage than intent — it’s harder to get cities to cough up massive subsidies for MLS stadiums because, frankly, most mayors and city councils don’t give a crap about MLS.

  21. Totally agree with your point. Most people running things are older and won’t throw tax dollars at MLS. As for poverty vs ghetto I understand how most have to be careful but I am biracial and call it as it is. Obama isn’t buying land on the south side of Chicago for his library but the city is giving him south side park land. I my world high crime areas where nobody seems to have any respect for rules or Police , fireman or even ambulance workers I consider Ghettos.

  22. @ Kei …Google it…NHL..record low Canadian ratings… I didn’t give numbers so not sure what math you speak of. There are multiple stories out there about how that network overpaid for those rights. Demographics in Canada show a shift away from hockey among young people. Google it.

    1. You will also find that ZERO Canadian based teams made the NHL playoffs this year…. which, as you might expect, tends to reduce appeal for the Canadian viewing public. Much like Baseball, which chose to lock it’s players out after two seasons in which a Canadian based team won the world series and during a season when most people believe the best team in baseball was that “other” Canadian team, the Expos… so we don’t have a monopoly on liking our own up here…

      Rogers did not buy the rights in order to capitalise on ‘traditional’ media viewers. They bought them to force mobile customers to purchase their services (which have a much higher profit margin than the more regulated cable/satellite TV segments) rather than their competitors (Bell, Videotron, a few others). I believe you will find their mobile revenues are up significantly since they signed this deal, even in a negative economic environment.

      Roger is probably losing money on the product thus far. They have also canned a few on screen personnel. That likely has more to do with a poor fit into the sports programming (they brought in several people from outside their network) than dollars and cents, but whatever. Your point on terminations is correct, they have done some.

      But this is a 12 year deal remember. The sports viewing world and pro sports itself will have changed a lot by the time it expires. Rogers may be in an enviable position in another ten years, or they may have gone broke and sold themselves to one of their rivals (doubtful, but…). Judging a decade long deals success in year 2 or 3 is an absolute fools errand.

  23. 75 comments on an MLS article…. seems like Garber may be setting the price low at $200m… demand is obviously high.

    1. It really is either a bargain or a massive kickback scheme depending on the area of the country. For the record, Hank and Hal Steinbrenner could end up forcing NYCFC to close its doors after being kicked out of Yankee Stadium. No problem since the club could end up moving to San Diego. From there SDFC signs a deal to be co-tenants with the Chargers.

  24. I don’t know why there’s so much debate over Canadian NHL ratings while ignoring the elephant in the room: Only one-fifth as many U.S. viewers watched the NHL Finals this year as the NBA Finals (3.9 million to 20.3 million), and even that understates how bad the NHL’s ratings are, as any heavily hyped live competition program, in prime-time on NBC, is going to have a baseline audience in the millions (e.g. “Celebrity Family Feud,” which aired at 9pm on ABC against the Tony Awards *and* Stanley Cup Game 6, drew 5.2 million).

    And then there’s the fact that almost nobody in America has any personal connection to hockey or really understands it, since nobody plays it and nobody’s kids play it. Per USA Hockey, there are only about 350,000 youth hockey players in America, vs. 4+ million in soccer, and once again, even that understates the problem, as youth hockey players are concentrated in the Northeast and upper Midwest, while the post-1991 NHL boom has occurred mostly in the West and South. And there’s not much room for grown either, for a sport that’s simultaneously (a) costly and inaccessible, and (b) violent and injury-causing, especially with the ever-increasing concern over long-term effects of concussions and other sports injuries.

    I’m under no delusions about the MLS’s popularity, but the American soccer conundrum has always been “Why isn’t it more popular on American TV if everyone played it as a kid, and everyone’s kids play it now?” That question at least suggests potential for growth. With hockey, nobody played it, nobody’s kids are playing it, AND nobody’s watching it. How long can that be sustained?

    1. “Why isn’t it more popular on American TV if everyone played it as a kid, and everyone’s kids play it now?”

      Well, I’m sure we can all think of things that are fun to do but not so much to watch. And even if soccer isn’t one of those things, as mentioned previously in this (very, very) long series of comments, watching on TV isn’t limited to MLS. Combine MLS with imported broadcasts from England, Italy, Germany, Spain, Mexico, etc and the viewing popularity looks quite a bit better. It’s a unique situation in American professional sports. MLB, NFL, NHL, NBA don’t have to figure out how to get viewers with a second- or third-tier product.

    2. The NHL has been on “national” TV in the US since the early 1960s. National is in quotes as CBS and other networks (NBC, ESPN, ESPN2, OLN, Versus… ESPN ‘ocho’… you name it they’ve been on it) often scheduled a national game, but did not require regional affiliates to pick it up.
      People do know it exists and some even play it (as kids and then as adults).

      The problem is it has always been and will likely always be a regional sport in the US. Several of the US markets are among the best in the league… but too few for a large US broadcaster to pay ‘real’ money for content. NBC’s “$2bn” deal was made for advertising purposes (for the NHL… $2bn is a nice number… way nicer than ‘we got about the same for our full league’s rights as the Rangers get from their Dallas RSN’) and for cheap content (as many games/broadcast hours as you want for $200m/yr).

      Either way, it’s been on US tv since the early 60’s, so I’d say it can be sustained for quite a while. It will have it’s strong markets (Three major Canadian cities, NY, Detroit, Boston, Chicago, Philadelphia etc), but it will never thrive in 8-10 of it’s also ran markets. The NFL has it’s dog markets too, but you never see them or hear about them (vast national TV deals – which is what Bettman has always been chasing – make surviving in poor markets possible for any sport)

      Whether the NHL ever graduates past “poor sister” class and joins the big four/five (I’d include a couple of NCAA sports in there as TV properties) is another matter. It’s unlikely IMO, but then, it doesn’t have to. Since 1990 NHL total revenues have more than tripled. It may not be getting closer to the other leagues, but it is growing as a business.

  25. For what it is worth, the Sacramento Republic and San Jose Earthquakes are ending their partnership after this season.
    That is probably a key indicator that MLS expansion is happening sooner rather than later.

  26. I like this a lot. It keeps cheap owners out of the league and brings in only people willing to spend to have a winning team. I like the Bundesliga way better where the fans own most of the team but I don’t see any interest from the top in that.

    1. MLS is a parking lot for the “big four” owners. There’s no need to care about building a winning MLS team when there’s enforced parity (or a mirage of one) in place — designated players, allocation rankings, “superdrafts” etc etc

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