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Volume 21 No. 1

Leagues and Governing Bodies

Editor's note: This story is revised from the print edition.

Major League Soccer’s negotiations for new broadcast agreements will begin this fall with Gary Stevenson, the newly hired president and managing director of MLS Business Ventures, “leading the charge,” said Commissioner Don Garber last week in Kansas City.

MLS’s Don Garber speaks at All-Star Community Day in Kansas City last week.
Photo by: MLS
“Gary’s primary responsibility out of the gate will be these talks,” Garber said of Stevenson, the former Pac-12 Conference, NBA and PGA Tour executive hired in June.

Evolution Media Capital, an affiliate of CAA, will advise MLS in its media rights discussions. Garber said Alan Gold, a partner at the investment bank and advisory firm, will take the lead for Evolution Media Capital, which advised the Pac-12 Conference when it landed a 12-year, $3 billion deal from ESPN and Fox Sports.

“All of our agreements expire concurrently at the end of the 2014 season,” Garber said, referring to the league’s television deals with ESPN, Fox and Univision. “The talks will start with our current partners this fall, and we have great relationships with all of them. We’ve had a strong partnership with Univision for seven years. ESPN has really increased its coverage of MLS and all of soccer, and NBC has been doubling and tripling down in our sport, like its new deal to broadcast the Premier League.”

Univision signed an eight-year, $80 million deal in 2006 with Soccer United Marketing, MLS’s marketing arm, to broadcast 25 MLS games a year, 10 U.S. men’s national team games and five international games operated by SUM. That same year, ESPN paid about $64 million for an eight-year deal that includes regular-season games, the All-Star Game and the MLS Cup final match. In 2011, NBC signed a three-year, $30 million deal for 45 MLS matches and four U.S. men’s national team games each season.

In total, MLS has received about $28 million from its broadcast rights holders in each of the last three years. With a greater demand for live sports programming, competition from new outlets like Fox Sports 1 and BeIn Sport and the increasing popularity of soccer, likely to spike with the World Cup in 2014, MLS is expected to earn more lucrative broadcast deals.

MLS enjoyed regular-season viewership increases last season, but national TV ratings have yet to show consistent growth.

Garber, who declined to estimate what his league’s TV deals will be worth next year, met in Kansas City with MLS’s media committee to discuss plans for media rights negotiations. The committee includes the Kraft Group ­— owners of the New England Revolution — Seattle Sounders FC majority owner Joe Roth, Vancouver Whitecaps co-owner Jeff Mallett and executives from Providence Equity Partners, the private equity firm that bought a 20 percent stake in SUM for $120 million in 2011.

“Providence Equity and its managing partner, Al Dobron, have become very valuable resources for me and the league, particularly in the media space,” Garber said.

Among Garber’s responses on other topics:

World Cup break: Garber said MLS will likely have a recess for the first two weeks of the 2014 World Cup competition, as it did in 2010. “Based on the success with that approach in the last World Cup, it’s likely we’ll do something similar in 2014,” he said.

Player development investment: Garber revealed that MLS and its teams are together spending more than $20 million a year on developing home-grown players through club academies. More than 100 home-grown players have been signed by their local MLS clubs. “It’s an area we’re going to continue to invest in, but we’re also looking at whether the Reserve League system we have is the right one,” Garner said. “We’re going to take some time over the next year to figure it out.”

His future: The commissioner’s contract expires after the 2014 season, but Garber, 55, didn’t sound like he’s leaving his post any time soon. “It’s hard to believe I’ve been doing this for almost a decade and a half,” said Garber, who was named commissioner in 1999 and signed his latest contract in 2010. “I’m very happy with what I’ve been doing and hope to be able to do it for the foreseeable future. Ultimately, that decision is made by MLS club ownership.”

Anthony Precourt spent his first full day as owner and chairman of the Columbus Crew in league meetings at the Marriott Hotel on the day of the AT&T MLS All-Star Game.

“When this is over, I’m going to take a few days to reintroduce myself to my wife and three young children,” Precourt said with a smile of relief. “It’s been an exciting time, but a long haul.”

Precourt, the managing director of Precourt Sports Ventures, first expressed interest in buying a sports team a year ago. That’s when he contacted Rob Tilliss, the founder and CEO of the sports investment firm Inner Circle Sports, to begin the process. (Inner Circle Sports ultimately ended up advising the Hunt Sports Group, the original owners of the Crew dating to the league’s inception in 1994, on the sale). Negotiations took four months to complete.
The 43-year-old Precourt lives in San Francisco, but plans to attend at least five matches at Crew Stadium in the next two months: four featuring his MLS franchise and a World Cup qualifier between the U.S. men’s team and Mexico on Sept. 10.

“I won’t be an absentee owner,” Precourt said during a break in league meetings. “There’s a lot of opportunity to improve the club on and off the field. We’re going to take the rest of this season to evaluate before we make any changes.”

Crew Stadium remains without a naming-rights sponsor. Although Precourt said he did not have any prospective sponsors on the front burner, finding one was “hugely important.”

Precourt also said, “It was a little early to make promises” of championships and sold-out matches, but he shared the Hunts’ recent goal of signing up 10,000 season-ticket holders.

“Right now, we have about 7,000 full-season equivalents,” Precourt said. “That’s our first goal — getting into this community and having it feel good about the Crew. I’m going to take our attendance personally.”

WELLS FARGO’S FIRST LEAGUE DEAL: The roots of Wells Fargo’s new sponsorship of MLS, its first with a national sports league, could be found in the San Francisco-based financial institution’s partnership with the San Jose Earthquakes.

The MLS deal, completed last week before the All-Star Game, runs through the end of the 2016 season and, according to an industry source, is for more than $2 million a season. Negotiations were conducted directly between Wells Fargo and Soccer United Marketing.

“We’ve been very happy with our Earthquakes partnership, especially in our community programs and ability to reach key demographics like millennials and Hispanics,” said Wells Fargo sponsorship manager Nick Carey. “With our MLS deal, we want to replicate that on a national scale.”

In 2011, Wells Fargo signed a multiyear sponsorship with the Earthquakes that focuses heavily on youth soccer programs.

Carey said Wells Fargo will consider sponsoring other sports leagues, “but right now, we’re focused on our deal with Major League Soccer.”

NYCFC’S NEXT: NYCFC, the expansion franchise that will become MLS’s 20th team when it begins play in New York in 2015, has begun a search for a chief business officer. The CBO would be the club’s second employee, joining director of football Claudio Reyna, who was hired in May.

NYCFC, which is owned by Manchester City of the Premier League and the New York Yankees, continues to explore sites for a permanent stadium. According to a source, team representatives met recently with Queens officials to restart talks about property in Flushing Meadow Park, near Citi Field and the USTA Billie Jean King National Tennis Center.

MLS Digital ran a social media hub out of downtown Kansas City.
Photo by: MLS
SOCIAL HUB: As a test case for future big events, MLS Digital ran a social media command center at the H&R Block building in downtown Kansas City during the league’s all-star festivities. H&R Block hosted a similar media hub for MLB during its All-Star Game in the city last year.

The joint effort by MLS Digital, Sporting KC’s social media staff and @VisitKC — the city’s Twitter feed for tourism — was aimed at heightening the conversation around the all-star events. Led by MLS social media director Amanda Vandervort, the staff aggregated fan postings on Twitter, Facebook, Instagram, Pinterest and Google+. The H&R Block office also served as a host site for MLS Editorial and KickTV, MLS’s YouTube channel on global soccer.

“We’re preparing for significant on-the-ground work next year at the World Cup,” said MLS Digital vice president Chris Schlosser. “It’s a great opportunity to promote everything happening in Kansas City, but also analyze the best uses of fan engagement as we get ready for Brazil.”

D.C. EXCITED: Jason Levien described D.C. United’s 2-15-4 season at the all-star break as “one big punch in the gut,” but the announcement July 25 that the club and Washington, D.C., had signed a public-private term sheet for a new soccer stadium in the Buzzard Point district is more important to the bigger picture.

“I’m very optimistic that the project will be realized,” said Levien, the club’s co-owner and managing partner. “We took a very significant step. There are still more hoops to jump through in the process, but we’ll be as patient and as expeditious as we can.”

Once community groups are heard from and District-owned property on the site is swapped, plans call for the stadium to be built in 18 months and ready for the 2016 or 2017 season.

Without revealing specific financial data, Levien said that while the club has played at outdated RFK Stadium, profitability has been a challenge. But with the new stadium, revenue development will come.

Former player Kasey Keller suited up for a trip around the speedway.
Photo by: MLS
“Now that we have the inevitability of a new stadium, we’re already seeing more interest in our team,” Levien said.

SCENE & HEARD: The day before the All-Star Game, MLS players, executives, partners and media sat in the passenger seat for rides in excess of 160 mph with Grand-Am drivers on the track at Kansas Speedway. The event was run by Continental Tire, which sponsors MLS and Grand-Am Road Racing. “It’s a chance to promote our brand, but also to show the soccer world what racing is all about,” said Travis Roffler, vice president of marketing for Continental Tire. “If there was any question whether these drivers are athletes, you get your answer by getting in the car with them.” … Timbers COO Mike Golub had a delegation from the club and city with him in Kansas City, as Portland prepares to host next year’s all-star game. “Like Kansas City, we’re treating it as a weeklong celebration of soccer, MLS, the Timbers and our community,” Golub said. “There’s plenty to learn here.”

The NFL is consolidating some of its disparate batch of mobile applications, and is focusing its efforts on a newly redesigned and rebranded flagship product, NFL Mobile.

The new NFL Mobile app replaces both an app that carried the same name but was available only to Verizon subscribers as part of the carrier’s broad partnership with the league, and a separate but similar product called NFL ’13 that was not carrier-specific. The league will still operate and support its stand-alone NFL Fantasy app, but many of those fantasy features are also now present in the NFL Mobile app.

League partner Verizon retains branding and several exclusives for its subscribers.
The reorganization seeks to end a period of market confusion when fans did not necessarily know which apps they should have to get the most content on the league.

“We’re really putting our energy behind NFL Mobile as the one flagship mobile application from the league, and getting that right,” said Manish Jha, general manager of mobile for NFL Digital. “We think this will help a lot in terms of user discovery, marketing and distribution.”

The new NFL Mobile comes in Apple iOS, Android, BlackBerry and Windows Mobile versions that are available now or should be in the coming days.

Verizon will still have several exclusive elements, even as the new product works with all major carriers. The company will have prominent branding on the smartphone version of the app in the U.S., and Verizon subscribers have exclusive access to several key pieces of content, such as live streaming of Thursday, Sunday and Monday night games, NFL RedZone, and a continual live stream of the NFL Network. Those elements were core features of the previous version of NFL Mobile.

But other, cross-carrier features have also been boosted, such as additional highlights and video-on-demand content, video embedded in news stories, and a redesigned game tracker. The app also features the league’s first foray into mobile video advertising, quickly becoming popular throughout the industry.

“This is going to help us get on the leading edge of all the emerging mobile advertising formats and all the interest and energy that’s happening in that space,” Jha said.