Major League Soccer increased viewership this season. Now it has to convince networks it's worth $300 million per year

  • Major League Soccer put its entire rights catalogue up for auction as the U.S. soccer league seeks a new media deal that could be worth $300 million annually.
  • The league finished its 2021 MLS Cup championship game with increased ratings, as 1.14 million people watched New York City FC beat the Portland Timbers last weekend.

While other U.S. sports leagues battle another Covid outbreak, Major League Soccer ended its 2021 season with some good news as it attempts to convince TV networks they should pay $300 million a year to carry its games.

ESPN said this week the 2021 MLS Cup on ABC averaged 1.14 million viewers, peaking at 1.6 million viewers, delivering the fifth-most watched audience for an MLS Cup on a Disney-owned network since 2009. New York City FC beat the Portland Timbers in a penalty kick shootout (4-2) to win their first championship.

That's up from the average 1.07 million viewers who watched the 2020 game on Fox Sports last year, and up 38% from an average of 825,000 viewers for the 2019 game.

The viewership report arrives at a good time for MLS as the league seeks a significant increase from networks. Industry sources suggest MLS is seeking $300 million per season – up from the roughly $90 million it brings in from ESPN, Fox Sports, and Univision combined.

But, the MLS rights package could be devalued due to key aspects of its offerings.

"They will do well," said Lee Berke of LHB Sports, a sports media consultancy firm. "But there's things that are working for them and things that will perhaps reduce their increase."

MLS leveraging entire fleet

Let's stay on the viewership front – as it's the most critical metric in rights deals. MLS had some exciting moments for its 2021 season, which the league can use to highlight increased fan interest.

Fox Sports aired the Thanksgiving Day playoff game between the Timbers and Colorado Rapids, which attracted an average of 1.8 million viewers on Fox platforms. That became the most-watched MLS game on the network and the highest MLS audience since April 2004.

That year, soccer star Freddy Adu, then age 14, made his MLS debut with D.C. United at RFK Stadium against the San Jose Earthquakes. The contest drew an average of 1.97 million viewers.

For the 2021 regular season, MLS said it averaged 276,000 viewers for 31 regular-season games across ESPN channels, including ABC. That's up from the average 233,000 viewers who consumed 39 MLS games in 2020 on ESPN platforms. 

And on Fox channels, MLS said viewership increased 4% compared to the 2020 season.

"Ratings have been OK in terms of linear, but they still struggle compared to ratings for Liga MX or Premier League," Berke said, referring to international leagues.

MLS said it averaged 284,00 viewers per game on the Spanish-language network Univision. But soccer viewers have shown more interest in consuming international leagues over MLS.

NBCUniversal, the parent company of CNBC, said it averaged 414,000 viewers for its English Premier League soccer package for the 2020-21 season. And so far in EPL's current season, NBC Sports said games averaged 609,000 viewers across its TV channels.

The network reportedly agreed to pay $2.7 billion to retain Premier League U.S. rights. That figure is up from the $1 billion EPL received from the network in the previous agreement.

Berke said networks will pay premium rights fees for soccer since the sport's fan base tend to be "younger and more tech-savvy."

"That's why you're seeing Paramount+ aggressively bidding for a variety of international soccer packages," he said, referring to Viacom's streaming service. "That's why you saw the huge bump that NBC paid to retain the Premier League. And that will work well for MLS."

MLS commissioner Don Garber said all of MLS's content will be leveraged, including games in local markets and the league's data rights, for the 2023 media package.

"Many years ago we went to our clubs and said, all of your local deals need to expire by the end of the [2022] season," Garber told reporters on Dec. 7.

"All of your streaming deals need to expire," Garber added. "All of your data deals, all of your sports betting deals, everything that has a touch point with a consumer is all now in a package that we're able to engage with traditional media companies that are transforming themselves digitally, to new media companies."

Does MLS have bargaining power?

The new MLS agreement may differ from its current rights package, which former ESPN boss John Skipper once labeled a "futures deal" and like "buying pork bellies."

In the current deal, ESPN has the rights to most MLS games and rotates All-Star games and MLS Cup events with Fox. The companies also share an inventory of U.S. men's national games. 

The national team media rights were negotiated by Soccer United Marketing, the marketing arm for MLS. But the U.S. Soccer Federation, which operates the rights, ended its partnership with SUM last May. That means MLS can't add those rights to its new package.

It's unclear how that will impact MLS's position at the negotiation table. Media pundits estimate MLS could draw closer to $200 million for rights since it lost the U.S. national rights.

"They have to balance out the range of factors that are enhancing the value of soccer versus the fact the SUM involvement with the men's and women's team isn't there anymore," Berke said.

"And the NFL took a lot of money off the table for everybody," added Berke, referencing pro football's more than $100 billion deal last March.

MLS adding more content

MLS could make up for losing the national team rights with its new Leagues Cup format.

The new month-long championship tournament starts in 2023 and will feature all of the MLS teams playing against clubs from Mexico's Liga MX league. MLS can capitalize on Liga MX's popularity in the U.S., since Liga MX can attract more than 3 million viewers for games on Univision.

MLS will add TV markets in Charlotte in 2022, St. Louis in 2023 and is eyeing a 30th MLS franchise in the Las Vegas market. It will also leverage its rights to feature additional teams in its MLS Next Pro minor league operation.

The minor league component could help streaming services create story-telling opportunities, which can attract viewers. The concept helped Liberty Media-owned Formula 1 expand its audience via a Netflix series, for example.

In an interview with CNBC on Thursday, Seth Bacon, MLS senior vice president of media said this MLS offering is a "package for the 21st-century media landscape."

Bacon said MLS had "numerous and productive discussions with every rights distributor," though he declined to name specific networks. He also concurred with Garber's comments that a new agreement would be reached by the end of the first quarter in 2022.

"We have a ton of momentum from our regular season and playoff viewership," said Bacon. "And we have the tailwinds of the 2026 World Cup," which will be played in the U.S., Canada and Mexico.

When he was asked about the confidence level of luring a favorable media deal that will help stabilize MLS, Bacon said the league is "very enthusiastic about where we're going to land."

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