MLS poised to sign $70 million broadcast rights deal, but at what cost?

Jamie Squire

While that's a ton of money by MLS standards, going back to Fox is a gamble that the league can't entirely afford.

MLS has never been a big draw on TV, routinely bringing in ratings that rival bass fishing, the WNBA and other clearly niche sports programming. That hasn't stopped them from being able to reportedly command a annual rights fee of $70 million from ESPN and Fox Sports. Without even including the Canadian and foreign-language broadcasts, that already represents an increase of more than 250 percent over the current total package (reportedly about $27 million).

This should be the kind of news that has MLS fans doing hand springs. Even assuming that money is split up amongst 25 entities (equal parts for a projected total of 24 teams and the league), that's a healthy haul of $2.8 million each. Put another way, that's nearly as much as the $3.1 million salary budget teams will be working with in the 2014 season. Put yet another way, if the league simply agreed to invest most of this new money into player salaries, we could be looking at salary budget of at least $5 million in 2015. These numbers probably aren't totally accurate because U.S. Soccer is also going to likely take a big cut as their games are also being included, but let's just agree that there's going to be a lot more money available than there was during the last Collective Bargaining session.

More money should mean a better standard of play. A better standard of play should mean more viewers. More viewers should equal more money.

But this is also where this new deal starts to look less awesome. For starters, MLS is talking about going back to Fox Sports. It was only a few years ago that MLS couldn't get away from Fox fast enough, reportedly agreeing to take less money from NBC because of how truly awful Fox was treating the product. When NBC swooped in with promises of classy production value and ancillary programming, MLS fans rejoiced. This was was going to be the future home of MLS.

Over the past couple years, NBC has pretty much come through on their promise. They've shown more games than they were contractually obliged to, including quite a few on the main NBC channel (something Fox would never do) and doing it with the quality and production they had promised. They even started airing a couple different magazine-style shows that MLS produced and aired games on their streaming service. Sure, NBC Sports wasn't available to literally everyone, but it was a lot easier to get than the now-defunct Fox Soccer. It seemed to be a marriage made in sports-programming heaven.

Even before anything has been finalized, they've already announced that they have dropped out of the running for the next rights deal.

It would appear this is the product of Fox and ESPN simply outbidding NBC.

Anyway, back to problem I got distracted from...

Assuming my little process works, resulting in dramatically better viewership numbers, this deal could end up looking really bad in a few years. Sure, $70 million seems like a lot of money right now. Heck, by MLS standards it IS a lot of money.

But it's still just a drop in the bucket compared to what every other "major" North American league is getting. The NHL, which we're constantly told is in danger of being surpassed by MLS in terms of popularity, is getting about $200 million a year from NBC. If MLS can simply get to the point where they are reliably drawing a 1.0 rating -- which really is a pretty low bar -- that $70 million is going to seem like the deal of the century. And if the reports are to be believed, Fox and ESPN are going to be locked into that rate for another 8 years.

It's understandable why the networks want a long deal, especially since this would carry them through the 2022 World Cup. But MLS should not be so quick to take it. If all goes well, the value of those rights should be at least double that amount in four years. At the very least, I would hope that MLS is getting guarantees -- especially from the still less-than-impressive and newly rebranded FS1 -- that they will be able to get the time slots that allow them to succeed and the outside of gameday coverage that will really promote growth.

Let's also point out that we know how FS1 handles soccer, as they've been carrying UEFA Champions League to decidedly mixed reviews. The production quality is basically on par with what it was on Fox Soccer, which is to say that it hasn't been very good. They've also at least temporarily pulled the plug on their short-lived Fox Soccer Daily, whose ratings were roughly on par with its quality.

Obviously, the league has spent big money to bring in players like Michael Bradley and Clint Dempsey. But simply taking Fox's money without any assurances of broadcast quality would greatly diminish the value of those investments.

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