Among the biggest blows to MLS' revenue this year was game-day revenue, which was down 95%GETTY IMAGES
MLS Commissioner Don Garber said that leaguewide revenue is "down close to $1 billion compared to last year and unexpected expenses in restarting the season during a pandemic were 'enormous,'" according to Steven Goff of the WASHINGTON POST. A source said that the biggest blow was "game-day revenue, which was down by 95 percent." Most of the league's 26 teams "were not allowed to host fans amid restrictions necessitated by the coronavirus pandemic, and those that were able to do so welcomed only small percentages of stadium capacity." With a modest national TV contract worth about $90M per season, MLS "relies more heavily on game-day revenue than most other U.S. sports leagues." On top of the revenue shortfall, MLS "incurred additional expenses conducting the Florida tournament and by chartering flights for almost all matches for the past several months." Teams typically charter for "fewer than half of their away matches" (WASHINGTON POST, 12/9). Garber said, "The impact of all this is probably deeper than what we expected, and that is concerning to us. ... We are concerned about what this will look like leading into 2021, and are working as I’m sure everybody can imagine on figuring out how we could manage through that. I am very very hopeful that 2021 will be way better than 2020, because I don’t think any business could sustain the kind of impact that we sustained in 2020 for two years in a row” (SI.com, 12/8).
DIFFERENT MEANS: In regards to how MLS clubs are working individually or with the league office around possible needs for cash -- like the NBA doling out $30M to each club -- Garber said the league is not in a position to sell hundreds of millions of dollars on the private market like the NBA and then distribute that to clubs. Garber: "You think about $30 million, that distribution would do a lot to support the losses at the league level. When you start thinking about the total number of losses, $30 million would not solve that issue for all of our teams. The losses have been dramatic." He added, "Right now our teams have been able to manage through it through their own equity infusions and their own ability to put debt on their clubs up to the limit that we have established for our teams, as all leagues do." Garber said MLS, which is currently looking at additional means of financing, has not expanded the debt limit for teams (Mark J. Burns, SBJ Unpacks).
FULL STEAM AHEAD: Garber said that the league's 26th season "will kick off in March, whether fans are allowed into buildings or not." Garber: "The challenge is nobody has that magic date, right, and it will vary state by state and province by province. So we need to make a schedule for all the reasons that you would expect. We can't wait for an understanding of the impact of the vaccine. We're going to need some flexibility but we are not going to be able to wait to make a decision until somebody decides that fans will be able to attend stadiums. That is a date that is so uncertain at this point" (BOSTON GLOBE, 12/9).
FORCE MAJEURE IN PLAY? THE ATHLETIC's Stejskal & Tenorio reported Garber "left open the possibility that the league could trigger the force majeure clause in the collective bargaining agreement ahead of the 2021 season." A force majeure clause "allows one or both parties to back out of the CBA if circumstances arise that are beyond the parties' control." Triggering it "would force MLS and the MLSPA into a new round of negotiations, potentially leading to a pay cut, an entirely new CBA or, if things take a turn for a worse, a work stoppage." The previous edition of the CBA, which was agreed to prior to the start of the pandemic but never ratified, "did not include a force majeure clause" (THEATHLETIC.com, 12/8).
SOME GOOD TO COME OUT OF THIS: In Orlando, Julia Poe notes Garber pointed out the '20 season "wasn’t entirely unsuccessful." MLS became the only league "to complete both a bubble tournament and the completion of a regular season in team markets." Additionally, MLS "launched two expansion sides and Black players led a league-wide social justice initiative" (ORLANDO SENTINEL, 12/9).
WHERE MLS SITS IN ECOSYSTEM: Garber briefly voiced his frustrations about where soccer and MLS still fits into the broader sports ecosystem, both domestically and internally, and how league and sport are perceived by key stakeholders. He said, “One thing that is continuing to frustrate me is that soccer continues to struggle to get its fair share of the recognition of how important and influential and relevant our sport is and Major League Soccer is in the sporting landscape. I think we’ve made great strides in that area, but not as much as I would hope. When I see us being left out of the narrative of the things that are going on in the professional sports landscape, it insults me, it doesn’t just frustrate me." He noted the perception of MLS internationally “ebbs and flows.” He added that some members of the international community view MLS as “one of the smartest, most strategic and most thoughtful and most important leagues in the world,” but that is not necessarily the same with others. Garber: "At times, particularly at the governing body level, I don’t think our league is recognized for the contributions we’re making to the sport and contributions to influencing the positive things that come out of well-run and popular professional sports businesses here in North America" (THE DAILY).
