More thoughts on the new MLS TV deal

Larry Marano

Yesterday was a big day for MLS, announcing a new TV deal worth, well, a lot of money. Just some thoughts on what this means for MLS.

More than any other revenue stream -- merchandising, ticket sales, concessions -- television rights make the sports world go 'round.

English teams have a pretty even distribution of domestic TV money, but the top teams get a nice cherry on top thanks to Champions League revenue. In Spain, Barcelona and Real Madrid dominate, a fact which correlates nicely with how much TV money they get at the expense of the rest of the league.

So when MLS comes out with a TV deal estimated to be $75 million a year on the low end and $90 million a year on the high end, it's a huge deal, especially when the last time television rights went out to bid, they got $10 million from NBC.

To say this could be transformational for the league is an understatement. They just walked away from the negotiating table with a financial windfall that could take MLS from an international oddity to a worldwide player.

Other SBNation guys, over at .com and here at Once a Metro have had their say, but here are a few more thoughts on the matter.

Either the salary cap goes up, or we'll have a work stoppage

MLS Commissioner Don Garber can cry poor all he wants, but the fact of the matter is, MLS is in a much different place than it was in 2010, when the last CBA was negotiated. For reference, Forbes estimated in 2008 that the Red Bulls were worth $4.5 million. In November, they did another round of valuations, and pegged the Red Bulls at $114 million.

We've opined on why the salary cap needs to go up before, but now that MLS just came up with a ton of money the players know the money is there for them to get a bigger cut.

One would imagine the league would want to give the players a bigger cut, if only for the obvious reasons: More money means better players and less turnover, which means a better on-field product. But, then again, no one from Once a Metro is invited to league meetings, so we can't be sure.

But if the owners, for whatever reason, aren't willing to make a significant investment in the on-field product, I don't think the players will hesitate to strike.

Has anyone been a bigger beneficiary of the growth of 24/7 sports sports channels than MLS?

There was a time when ESPN was the only show in town when it came to 24/7 sports channels, and if you wanted to be taken seriously in the American sports landscape, you needed ESPN.

But with the rise of well-heeled competitors NBC Sports Network and Fox Sports 1, that's not the case any more. It seems to me that MLS was able to, at least, play NBC Sports and Fox Sports against one another to extract the most money. They're also back in bed with ESPN, the network that still (unfortunately) controls much of the "national conversation" on sports.

The way of the (sports television) world is still dominated by ESPN -- just look at the network's relationship with hockey (and I say this as a big hockey fan) -- but the league has used the other, content-starved upstarts to its advantage. Good on them.

Has Garber's expansion strategy worked?

It's easy to have a knee-jerk negative reaction to some of the league's recent expansion moves. I'm still looking for the droves of city-dwelling soccer fans that supposedly exist to become NYCFC Founding Members and I don't blame anyone for fretting over a potential Miami or Atlanta team, as neither are known as rabid sports cities.

But New York is the country's biggest television market (opens PDF), by more than a million homes. Atlanta is number nine. Miami is number 16. Orlando, whose promotion to MLS followed a more Seattle Sounders/Portland Timbers model, is number 18, up one spot from 19.

For those of you scoring at home, that every city MLS has announced expansion into in the last year, have all been top 20 television markets.

Reading between the lines, you can start to see a discernible strategy: Get into bigger cities, expand the league's geographic footprint and simultaneously make the league's TV rights that much more valuable. It's easier to charge more for ad spots when those ads will, theoretically, reach more people.

Supposing this was the league' strategy, it's worked out perfectly.

Think about how much worse this could be...

There was, at one point, talk that Google could make a play for the league's TV rights, using YouTube, an internet connection and a computer to reach viewers instead of a cable box and television.

Which sounds cool. But MLS isn't the NFL, which was rumored to be playing Google and Netflix against one another, which could pull that off. MLS is a much smaller league that needs to gain relevance, not lose it. Pulling out of more traditional media is not the way to go.

MLS using YouTube or Netflix, would be more akin to dropping down to USL or NASL levels of media penetration than blazing a new trail for professional sports broadcasting.

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