News: MLS in negotiations to sell part of SUM to equity firm

Discussion in 'MLS: News & Analysis' started by revsrock, Sep 12, 2011.

  1. ceezmad

    ceezmad Member+

    Mar 4, 2010
    Chicago
    Club:
    Chicago Red Stars
    Nat'l Team:
    United States
    Oh that is for sure, SUM and MLS LLC are totally different companies in legal terms, and they just share mostly the same investors.

    Legally speaking SUM can buy the MLS TV rights for say 1 million USD, and then sell those rights to ESPN for 10 Million USD, the players would only have the rights to the first million, and the SUM share holders get to split the other 9 million.

    I see a legal challenge for this in the future for sure.


    So when we say see ESPN, NBC, Univision paying 40 million (Canada also) for MLS games, that money belongs to SUM, we really need to ask (good luck finding the answer) is how much did SUM pay MLS for those same rights.


    But perhaps is not as Machiavellian as I make it sound.

    Perhaps the deal between MLS LLC and SUM is that SUM sells the MLS TV rights and they get to keep a percentage (say 10%) and the rest must flow to MLS LLC.

    Realistically we do not know, but as you say, the owners have claimed all the money belongs to SUM and not to MLS.
     
    SYoshonis repped this.
  2. SYoshonis

    SYoshonis Member+

    Jun 8, 2000
    Lafayette, Louisiana
    Club:
    Michigan Bucks
    Nat'l Team:
    United States
    And the line between the two is blurred even more by the fact that SUM also promotes games that have nothing to do with MLS or the players. In the same pot of money is that which came from summer friendlies featuring European teams as well as the US and Mexican national teams, and the players can't really claim a slice of that.

    Not that they did this on purpose necessarily, since SUM was born in a time when MLS still had to engage in creative bookkeeping in order to get any money at all from TV, but without SUM simply throwing open their books, the players can't really determine with any accuracy how much of the revenue should be in play.
     

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