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Volume 22 No. 34
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MLS could package local and national TV deals starting in 2022

MLS has instructed all 24 of its current clubs as well as its future expansion teams in Miami, Nashville and Austin to not have any local broadcast agreements that go beyond 2022. That is the year that the league’s national and international broadcast deals will expire, thus allowing MLS to potentially package any combination of those rights to future broadcast partners.

It is unclear how the league will go to market or how it would consider splitting its rights in those future deals.

“We are constantly thinking about our media rights strategy, and media rights and content are the most significant assets that we and any other league have,” said Seth Bacon, MLS senior vice president of media. “It’s the natural course of business in the industry that we’re in to think about the next deal as soon as you sign any deal, as well as how do you position yourself to take the most advantage of the rights that you have.”

Bacon did not offer specifics on the strategy the league will pursue regarding its next media deals.

The league has made it a priority to maximize its next media rights deal, one that is expected to help fuel the next wave of growth and investment across MLS and its clubs. The league’s current domestic deal with ESPN, Fox Sports and Univision is an eight-year agreement that began in 2015 and pays MLS roughly $90 million per year, the latter a figure that pales in comparison to the deals held by other North American leagues. However, MLS’s television ratings, while steadily growing, are modest compared to those leagues.

Likewise, local television deals have not been a huge source of revenue for MLS clubs, each of which has its own arrangement. The largest standalone deal is between the LA Galaxy and Time Warner Cable, a 10-year, $55 million contract signed in 2012. LAFC’s three-year deal with YouTubeTV, signed in 2018, is valued at more than $6 million per year but also includes rights to the club’s jersey front in addition to the local English-language media rights. While there are some clubs in MLS that don’t receive a rights fee in their local deals, every deal does generate positive revenue, according to sources.

“It’s no secret that the local rights have not garnered the kind of net revenue that we ultimately seek, and we need to continue to drive revenue to be one of those top leagues in the world,” said Adrian Hanauer, the owner of the Seattle Sounders. “I’m super bullish on what we’re envisioning, and I think we’re positing the league and the teams for the best possible outcome.”

Daniel Cohen, Octagon’s senior vice president of media rights consulting, said this approach will give MLS the most opportunity to be creative, potentially attracting a large, overarching digital buyer, or to go to the market with some sort of split between national and local or digital and linear packages.

“It’s very smart for MLS to say, ‘How do we make sure that when we’re preparing for war in 2022, that we have all of our arsenal and weapons at bay,’” he said. “No other league can really be in that position.”