NBC Set to Lose MLS TV Broadcasting Rights

After signing a three-year deal in 2011 for the 2012-14 seasons, NBC is set to lose its MLS broadcasting rights to rival Fox, according to reports from both Goal.com and Philly.com.

NBC’s current deal’s value  has been reported to be worth around $10 million annually, and the new rights deal, which is still being finalized, has been said to be worth “significantly more”. NBC did make a bid to maintain the rights to MLS, however, they were outbid to a large degree. ESPN is also expected to maintain some ownership of the rights as well, though it could be sharing coverage of the U.S. Men’s National Team as part of the package deal, for which they have traditionally held exclusive English-language rights since the 1980’s.

Source: Sports Business Journal

Source: Sports Business Journal. Analysis by Business of Soccer.

Broadcasting and television ratings have been a pain point for MLS this year, having to compete with the “all-access” approach from NBC for the English Premier League for the first time ever in the U.S. For fans of the game, and of the BPL, this was a coup of sorts. But for MLS, this meant serious competition for viewing time in an already competitive market, and the viewership has not been ideal to say the least, depicted in the graph above.

Though the USMNT and ESPN have experienced a significant increase in viewership in 2013 vs 4 years ago prior to the last World Cup (+72%), MLS has certainly felt the impact of having the BPL available to the masses for free this year. ESPN is down -31% in average viewership per MLS match in 2013, and NBC is down -13% versus the prior year.

Source: Sports Business Journal

Source: Sports Business Journal

An article from Sports Business Journal put these numbers into perspective for the general public by comparing MLS to other sports. The fact that the WNBA enjoys more than double the viewers on average per game than does MLS really throws into shock the hill MLS still has to climb relative to the American sports market on television. To be fair, the Premier League has not thrown up gigantic numbers by any means on NBC, coming in at about 137,000 average viewers per match, up 52% versus last year.

Fox, on the other hand, has positioned themselves very nicely to be an integral part of the rapid expansion amongst the American market that MLS is experiencing – not just in terms of popularity amongst sports fans, but in actual expansion of the league itself in the number of franchises. Commissioner Don Garber has said that the goal is to get the league to 24 teams by the year 2020. After the Orlando City SC announcement in November, the league is only 4 teams away from reaching that goal, with plenty of big-time markets jostling in line to become the next expansion franchise for MLS, including Miami, Atlanta, and Minnesota. After losing their rights to the Premier League in the U.S. to NBC, Fox needed to make a play for MLS to maintain relevance within the American soccer market.

While numbers are down for viewership, Fox still had to pay good money for their chance to partner with MLS. Currently, according to Sports Business JournalMLS pulls in about $18 million annually in broadcasting rights revenue between NBC and ESPN, and an additional $9.9 million from Univision. MLS was looking to almost double that figure with this new deal, reportedly aiming for a $40-50 million target. Though no figures have been released yet for the value of the new deal with Fox, if we assume that ESPN and Univision will maintain their respective share of the revenue contribution to that $40-50 million target, this would mean that we can expect Fox to pay anywhere between $14.3-17.9 million annually for the MLS TV rights. After shelling out approximately $83.3 million annually for their newly acquired Premier League rights, apparently there was not enough room in the budget for NBC to outbid Fox to maintain its rights to MLS. The next three years are going to be very telling about whether or not NBC placed the right bet.


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Reporting on the business side of the world's game.