soccer in the US, it hasn't always had the best track
record. Its popularity waivers and interest is usually tied to
major events such as the World Cup or the Olympics. Major
League Soccer has spent over 25 years trying to change soccer
sentiment in the US while competing with more fast paced
high scoring sports like the NFL and NBA,
you know, you could just tell that the players are better than
the speed of the game. You know, not being the biggest soccer fan
you could just look at it's night and day you know, MLS it
looks like it's more minor league, it looks like it's
growing. But you know, listen, they have the signages all over
the place, very innovative league the MLS is but they got
to improve that competition.
Over the last 10 years, the MLS has become increasingly popular,
the league garnered the attention of top talent across
the world, brought in significant investments in
celebrity ownership, and generated a massive presence on
social media.
We think the internet, you know, puts us in a position where we
can talk to this enormous fan base around the world. And what
we've done over the past 10 to 12 years is really increase the
investment in making the US and MLS one of the top leagues in
the world.
But the MLS has rise in popularity has seen its fair
share of obstacles, financial woes, leadership changes and
shakeups and its continuous fight to draw in a TV audience
following its 2021 season, things may be shifting in the
MLS favor, with new expansion teams, rising popularity, and a
new media deal that can bring millions of fans and billions in
revenue. This is
the largest sport in the world. And the US is the largest sports
economy in the world. And so there's something really special
in the making here. And it just requires steady investment but
you think about the ownership group and MLS and the amount of
capital that has been invested, it's never gone back. It's only
going forward.
Before the MLS became well the MLS there was the North American
Soccer League, which ran from 1968 to 1984. And it was
considered the blueprint for what the MLS should and
shouldn't do. The North American Soccer League was a free
spending decentralized League, meaning teams spent excessive
money on star players like Pele to draw in fans. The league
never generated meaningful revenues or substantial growth
that it needed. By 1984. financial tools from
overspending cost the league almost all of its clubs, as they
began shuttering their franchises. In 1985, the North
American Soccer League officially suspended operations.
This is Jim Curran. He's the head coach of the Philadelphia
Union, and has been with the MLS from the very beginning.
You know, there was a time in the 70s and 80s that, you know,
75,000 people were coming out to watch soccer games in the New
York Cosmos as the kind of example of that. But what did
happen is, it was kind of a reckless spending, it was maybe
too much too soon, there weren't the soccer specific stadiums
that there are now and it was kind of like a traveling circus
almost almost. And it was a little bit out of control. And
without a real kind of vision and longer term plan. I think
the lessons learned where they got a little too big for
themselves too quickly, and, and all of a sudden now the money
dries up.
By 1993, the new MLS League was announced, with a centralized
structure that controlled costs similar to the NFL clubs were
split into divisions and run by investor operators or owners. 10
clubs were created for the initial debut in 1996, with two
more clubs added just two years later,
I think back to when I first started in Major League Soccer
in 2001. As a rookie, we were playing games in high school
football stadiums in Dallas. We were playing in division three
colleges in Naperville. Early on, we were down to 10 teams.
There was real discussions in my rookie year in the offseason
that the league might not make it at the time. Phil and shoots
was in charge of an own seven of the teams of the 10. So it was
on life support and Don Garber came in and injected this this
life into a league that was quite literally in trouble.
The league was met with strong pushback during its early years.
Traditional soccer fans were opposed to some of the rule
changes and scoffed at the MLS his attempt to Americanize the
sport, then in 2002, and had to full two teams, the Miami fusion
and Tampa Bay mutiny.
And what happened after that and what was probably one of the
most important things was the the the building of the soccer
specific stadiums, you know, a real brick and mortar building
that our supporters and fan bases could call their own. They
weren't, you know, old college football stadiums or old NFL
stadiums. They were soccer specific. And now I think we're
up to 27 of these state of the art, you know, beautiful, you
know, facilities that can can house uh, you know, 30,000
people and in some cases down in Atlanta 50,000 people at a game.
So that's something that we really, really was important and
it was a real turning point.
by 2007, things begin to trend upward for the MLS with the
establishment of the designated players rule. This rule allows
teams to sign star players from abroad, most famously the
signing of David Beckham to the LA Galaxy with a deal that was
worth $250 million.
That rule certainly has paved the way and has been a smart
initiative in that we grew the league in a in a, in a smart
way, it wasn't that you could have 10 of 10. David Beckham's
on your team where you know, previously, in the former NASL,
they may be expanded too quickly. With the way they
strategically went about the designated player role slash
David Beckham rule was calculated, and it didn't put
all your eggs in one basket, you know. So I think that was a
really intelligent move that put our league on the global level
because David was a, you know, an icon on and off the field
early 2000s was really r&d is to figure out how do we attack this
and I think the soccer specific stadiums, the designated player,
all part of that r&d process to figure out how do you build a
league, unique to our country, the playoff systems, the
different formats. When I got involved in sort of, oh 708, I
sort of thought the next 10 to 15 years would be the investment
phase, where we grow from 15 teams to 30 Plus, you know, 30
teams cover the map much more completely, like other major
sports.
The MLS is focused on expanding its clubs to massive sports
markets and increasing popularity with younger
generations. for over 25 years, the MLS has grown to a massive
operation, clubs now spanning from coast to coast, with Austin
FC debuting in 2021, and new clubs in 2022, and 2023. For the
Charlotte football club in St. Louis City, respectively.
You've seen the break through city by city, but the critical
mass of the league really won't be apparent until we reach that
sort of 30 team milestone. And I and, you know it is sport is
something that you enjoy together as a community as a
family as intergenerationally. So we're still building the
storylines, we're still building the rivalries, we're still
building the traditions. And that's something that takes time
and will happen organically. It's not something we can
naturally unnaturally force, the clubs
are becoming more valuable than ever. In 2008, the average
valuation of MLS teams was about $37 million. Today, clubs are
valued at $550 million dollars, higher than some teams in the
Premier League. Currently, the Los Angeles Football Club is the
highest valued MLS team at $860 million.
It's almost alarming to see some of the valuations of the teams
in Major League Soccer, because you think of some of the old
English teams that have 100 100 plus years of history or teams
in in different parts of Europe that have been around forever.
But what you see now with our league is is these brand new
stadiums, these these young, exciting ownership groups that
are coming in the advertising dollars that come in they
amazing facilities, and they're really jumping in value. At a
really quick quick rate. Sometimes it's shocking for
people to see that as an example. lafc is valued at
higher than a even a club like Newcastle who just had basically
trillionaires come in and buy you know, so it's incredible to
see the growth of this league.
In 2018 Gallup issued a report that tied soccer and basketball
for second and popularity for sports to watch among 18 to 34
year olds overtaking baseball,
when I walk my kids to school in Center City, Philadelphia and
drop them off. I used to 10 years ago I used to only see NFL
NBA you know maybe a Major League Baseball, you know, a
couple hockey flyers jerseys. When I walk my kids to school
now, it's not just Lionel Messi or Cristiano Ronaldo. I'm seeing
Philadelphia Union jerseys. But then I'm also seeing now rivals
of the Philadelphia Union. I'm seeing New York City FC jerseys
I'm seeing as LaTonya Ibrahima vich. From the LA Galaxy jersey.
I'm seeing a throwback you know David via from New York City FC,
and you're kind of going, this is different.
And a study done in 2020 By morning consult, found that
soccer is the most popular sport among generation alpha. And Los
Angeles football club owner Larry Berg believes that the MLS
could overtake Major League Baseball as America's number
three sport in 10 years time.
MLS still has to improve their product, they got to go out and
get better players, right. And so if again, if that soccer
popularity continues to rise with Generation Z and then
Generation Y, that's going to help the MLS right? Image
generation Alpha Generation Z generation generation alpha, if
that soccer continues to you know that trajectory that's only
going to help the MLS again, how big we don't know because right
now that popularity seems to be from an international standpoint
they like Premier Li they like to see the big stars they that
competition is completely different from MLS
but before the MLS can attempt to overtake the MLB anytime
soon, the league still needs to dominate in one crucial area TV
viewership. While the MLS is rapid growth has been able to
overcome financial issues, fan pushback, and leadership
shakeups. The one thing that has been slow to grow over the years
is its television footprint. Meteorites are a massive
cornerstone to how league functions and operational
revenue. Just take the NFL for example, in 2020, the league
made an estimated $9.89 billion from its media deal, which is
evenly distributed amongst all 32 teams. This gives teams like
the Green Bay Packers something called National revenue of $309
million for 2020. For the 2019 2020 fiscal year during the
pandemic, this national revenue help teams stay afloat as most
stadiums remain closed, and teams were unable to generate
local revenue or revenue from ticket sales, merchandise or
stadium rentals for the Packers 2019 2020 fiscal year, they were
only able to generate $62 million in local revenue,
compared to its 2018 2019 fiscal year were generated $211 million
in local revenue. The MLS is a localized sport, meaning a
massive amount of the team's revenue is generated from ticket
sales, merchandise and player contracts and sales to other
leagues around the world.
media rights keep harping on that. But that's going to be
that's the foundation right now of all the leads meteorites
because in his age of content, content content, MLS is going to
need that money to grow. Now they're going to need a network
that's really going to invest in them be able to tell their story
be able to introduce fans to their stars of the sport, being
able to market their sport better so that people can
gravitate because right now, a lot of people do not watch MLS
from a national level is more of a localized market. Right? This
is why your Austin's and your Charlotte. Hopefully those two
markets continue to rise. And that's going to help you know
MLS grow but they need a national audience.
The MLS is looking to establish a new media rights deal in 2022.
The MLS is current eight year media deal with ESPN Fox, and
Univision has generated an estimated $90 million per year
since 2015. The league hopes that it can capitalize on the
success from its younger fanbase, social media presence,
and the FIFA World Cup that's being hosted in the US in 2026.
I think the way we're going to broadcast to our fan base,
you'll see another leap some time between now and 2026 in the
way fans can participate and consume, you know the quality of
play and they'll see that it is comparable to some of the best
to best leagues.
If we continue to do the work that we're doing with the unique
fan bases that we have with a great ownership that we have
with the product on the field that's continuing to improve as
the TV production gets better and better. I think that the the
sky's the limit for Major League Soccer