Major League Soccer Is Wrong About the Value of Its Rights

Soccer Rights Bubble
Cheyne Gateley/VIP+

Major League Soccer’s U.S. TV and streaming rights package is up for grabs.

With recent rights increases in mind, the MLS is reportedly seeking a new rights deal of $300 million, which would represent an increase of 233% on the current deal of $90M split among Disney, Fox and Univision.

The problem is MLS’ popularity, measured by its TV ratings, doesn’t justify such a massive increase.

Along with the NFL’s Sunday Ticket and mobile, tablet and computer rights, as well as Fox’s half of the NASCAR package, MLS is one of three U.S. sports to see current rights expire in 2022.

Clearly MLS’ heads have been turned by the recent huge increases that the NFL, MLB and NHL have been able to eke out, and they want in on the booming rights pie.

MLS also will be bolstered by recent soccer rights deals, led notably by the English Premier League (EPL), which saw a stunning increase from $167M to $450M a year. This is a special case for soccer, as NBCUniversal was afraid of losing the rights to another bidder and made a huge offer to keep it. All other league rights are valued between $41M and $175M annually.

When considering the relative value of MLS to other U.S. sports, a key to consider is the overall reach. The easiest way to demonstrate that is to compare the audiences for the marquee event of the season.

On this measure, MLS falls considerably short of other domestic sports, barely hitting a million total viewers for its biggest game of the season. For comparison, the Super Bowl’s TV audience was 80.4x greater than the MLS Cup Final, and the deciding games of the MLB World Series and NBA Finals were 12.3x and 11x greater, respectively.

It’s worth noting that when the $90M rights deal was signed in 2014, it was reported at the time that ESPN and Fox were happy with the large price tag as they thought the sport had room to grow.

That arguably hasn’t happened. Four of the five MLS Cup Finals taking place since 2016 have seen viewership below the audience of 1.4 million seen that year.

With the EPL not having a postseason tournament to crown a champion, a fairer comparison for the MLS Cup is the UEFA Champions League (UCL). That tournament’s final has consistently outdrawn the MLS equivalent, with 2021’s final on CBS seeing almost double the audience for the MLS Cup on ABC.

It’s notable that several soccer finals airing on cable drew a wider audience than the MLS Cup. UCL-aside, these tournaments were ones featuring national teams rather than individual clubs, but their success points to the wider interest in soccer in the U.S.

The EPL airs live on TV, with weekend games scheduled to kick off from 7:30 a.m. to 12:30 p.m. This is quite unlike MLS, which airs games either in the afternoon or in primetime evening slots. Yet comparing viewership of the most watched regular-season games between the two leagues sees the EPL with an audience of around double that of MLS, even with the arguably worse timeslots.

A key point to note for MLS rights is they don’t actually televise a lot of games. The majority are currently locked up on ESPN+, as streaming services have leaned upon soccer to bolster subscriptions.

The question is if the investment is worth the boost. VIP+ calculated that the 28 regular-season MLS games saw an average total audience of 379K. Assuming not all of these would be willing to shell out for an additional streaming service, VIP+ estimates there would be a customer base of around 250K for full MLS streaming rights.

The current MLS rights package also includes rights to international friendly games for the U.S. Men’s and Women’s National Teams, but the next one will not. These games are not quite the audience draws one would assume. Most USMNT and USWNT games belong to other rights packages for the competitions being played (i.e., FIFA World Cup or CONCACAF Gold Cup).

The majority of USMNT friendlies in the MLS package are ones played outside the major international window and featuring a mainly B-list cast of players. On top of that, the USMNT’s TV appearances in their regional competition this summer (Gold Cup) were outdrawn in the U.S. by both England and Italy in their march to the final of the UEFA European Championship.

In other words, the USMNT isn’t even the most popular national team in the U.S.

A spokesperson for the MLS confirmed to VIP+ that the next rights deal will include rights to MLS Next Pro, the new soccer minor league in the U.S., as well as those for MLS Next, the youth developmental league, and may also include rights to the new Leagues Cup tournament that will be held in conjunction with Mexico's Liga MX. Based on this analysis, a fair fee for MLS rights would be one that puts it akin to the UCL; $150M annually would represent an increase of 67% on the current rights versus the 233% increase the MLS is seeking.

This fee would also place the MLS at the right place on the popularity totem pole in the States, ahead of Serie A and Bundesliga but behind La Liga and the EPL. The constant bullish statements by MLS for valuation of the rights suggest it sees it otherwise, but the end date of the current rights deal, December 31, keeps creeping up. It wouldn’t be a surprise to see negotiations for the new deal take their time given the differences in valuation that currently exist.