Expansion has been a key business driver for all the major leagues, but especially in MLS. Atlanta FC joined the league last year.getty images
The last 20 years has brought a litany of changes to the sports industry, perhaps no better reflected than in the growth of league business itself. Whether it was through bigger and better media rights deals, launching their own networks, forging new pathways into the digital space, expansion, or building out league-run events, the last two decades have seen league revenue figures grow significantly.
Reflecting on the last 20 years of growth, On Location CEO and former NFL and NHL executive John Collins highlighted the evolution of leagues going from “licensing/trade organizations to really dynamic operating units.”
Said Collins, “When I look back at the growth, there’s been a focus on finding ways to really complement the local businesses that the clubs have with a real complimentary driver at the national level.”
The evolution of sports media has played a critical role in league growth, not only in terms of the ever-increasing revenue streams that the deals themselves have brought, but just how the sports themselves were being consumed by fans.
MLS Commissioner Don Garber was running NFL International in 1998 before being named to his current position the following year. He recalled trying to evaluate how new technology and the internet would transform the way leagues do business.
“All of us in the industry were thinking about how the web was developing — how it would impact our lives; how would it affect the way we interact with fans; or even back then, how it would transform the way we manage our various commercial assets,” he said.
Garber said the “dramatic change in the media landscape, from how fans consume sports to how content is distributed,” strengthened the league business to what it is today.
Over the last 20 years, leagues saw great success in building out their content and carving up new rights and opportunities. The NBA was the first league to launch its own network in 1999, and the NHL, NFL and MLB quickly followed. The establishment of MLB Advanced Media transformed the way leagues approached the digital landscape, and propelled the live streaming business in sports and beyond.
NHL Commissioner Gary Bettman reflected on the state of sports media in 1998 and how digital platforms have since given the league more ways to increase its fan base.
“The landscape of opportunities and what leagues could do then was light years behind where it is now,” Bettman said. “It was really the infancy of digital platforms, and we were looking to establish for hockey a greater presence and to have a greater prominence on the national landscape, whether that was with our broadcast partners or expansion. The ability to reach out not only to our fans in new and better ways, but also gain more exposure with a casual sports fan, has never been greater.”
On the expansion front, the past two decades saw the NHL establish successful franchises in Nashville, Columbus, Minnesota and Las Vegas. That expansion and soaring growth in media rights deals have helped the league increase its national revenue by more than five times since 1998, aiming to eclipse $5 billion this year.
Expansion has played an especially major role in MLS, which has seen the biggest transformation over the past 20 years. The league has gone from losing tens of millions of dollars annually and being forced to contract two teams, to now having expansion fees that top $150 million with a long list of suitors for a franchise. Existing team valuations top $500 million, giving the league a seat at the table alongside the other “big four” North American leagues.
The past two decades have also witnessed a major push into league-run events. The NHL’s Winter Classic and subsequent annual Stadium Series outdoor games have raised the profile of regular-season games, galvanized local markets and attracted new sponsors. MLB has seen success with its World Baseball Classic tournament, as well as in recent years hosting games at compelling neutral sites, such as North Carolina’s Fort Bragg in 2016 and the 2017 MLB Little League Classic in Williamsport, Pa. Leagues also have done well hosting games overseas, from the NFL’s efforts in London and Mexico City, to the NBA’s Global Games.
And, finally, while Bettman has held his post since 1993 and Garber since 1999, MLB, the NBA and NFL have all transitioned to new commissioners during the past 20 years, looking to build upon the accomplishments of their predecessors.
What’s next?
Collins said he’s interested to see how the league media rights model evolves, and if the next wave of deals proves to be the end of the current cycle of enormous growth.
Bettman said the demand for content — even beyond the games — has never been higher, keeping him and the league on the lookout for new ways to serve its fans.
Garber pointed to technology as not only being a driver to evolving how the leagues do business, but also evolving the player side of the business, resulting in better scouting and evaluation, and improving the health and safety of players.
While it’s perhaps impossible to predict changes to come, Collins offered one thing that is here to stay: “Leagues are no longer just a once-a-week business; it’s 24/7/365 and that’s not changing.”
