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Wednesday, July 26, 2017

Did MLS Really Reject a $4 Billion TV Deal?

I see many headlines on my Twitter feed.  One that drew notice was a report that MLS rejected a $4 billion TV contract because it did not want to agree to having a construct that called for promotion and relegation.  The tree for that decision must have been interesting. 

One branch might have suggested taking the contract, agreeing to the construct, and using the $4 billion to buttress all teams in MLS.  $4 billion?  Wow, that would be an amazing contract for a league whose best teams would not be in the English Premier League but probably somewhere in the lower half of the Championship League in England (an improvement over, say, five years ago).  Imagine what MLS and its teams could do with that money.  Sounds like an easy decision -- just agree to promotion and relegation, right?

Wrong.  MLS is run in an American way.  Owners put up big money for a franchise, and, when doing so, put up money for a franchise in a certain league, not a certain universe.  So, for example, the owners of the Red Bulls bought an MLS franchise, not a franchise in a potential sub-league.  The consequences of relegation of big-city teams in MLS could shake MLS to its core, at least right now.  Imagine if in the same season franchises in New York, Los Angeles and Chicago got relegated.  What would happen?  Those franchises would not draw any fans playing the likes of current second- and even third-tier teams in stadiums meant for the big time.  The would go broke and spiral into a precipitous decline.  Precedent for this abounds in England.  So, MLS rejected the potential for $4 billion out of a lack of confidence that U.S. soccer could absorb the downside to relegation as opposed to benefit from the upside of promotion.

Right now, the decision makes sense on its face.  U.S. soccer still has a ways to go to match the overall (if not top-to-bottom) strength of the top 5 or 6 leagues in Europe.  Until the U.S. is certain that the franchises in the major cities will become as robust as say the likes of Manchester United, Chelsea, Liverpool, Manchester City, Tottenham and Arsenal, who are all but assured of remaining in the Premier League each and every year, MLS does not want to take the risk.  Because should one of the big-city franchises plummet, that franchise could take the entire league down -- at least right now.  I don't know whether that's true, by the way or what MLS has modeled, but it stands to reason right now that MLS wants to strengthen its core a little more before agreeing to a big TV contract with that type of requirement in it. 

All that glitters is not gold, even if it has many, many zeroes after a crooked number.  The powers that be in MLS must think that a bigger and better contract will come in the near future.  They could be right.


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