News: Monday , Dec 04 , 2017

I wonder why the league is borrowing $425M. Is this simply a bridge for cashflow issues or are they about to take on some sort of capital investment?

 

They need it to buy out Beckham’s option.








(Yes. Kidding.)

 

This has been one of the longest most drawn out smallish stadium construction projects I have ever seen. I thought there were supposed to already be done with this.

 

MLS is gonna announce four new teams, collect the expansion money, default on the loan, and the league will collapse! That was always the end game....right!?

Look at it like the Providence Partner deal, except that no one is "betting" on the rate of growth. There will be growth, and MLS won't have to rebuy their shares back.

I'm sure there is some type of plan to invest to raise the product profile overall, and MLS will repay the loan across soon to be 28 teams, probably 30 by 2025 or so.

In that time MLS will have a new TV deal in place, and the $$$ benefits of WC2026 here are right around the corner.

Makes a lot of sense to take another step now to increase league image for when the cup is looming. Eight years isn't that far away.

MLS is simply wagering that the value of the league/revenue generated will rise at a significant rate over the loan interest rates being charged. With the TV deal and WC2026 on the horizon it looks like a pretty safe bet, and they don't have to give up any ownership to get the cash infusion, which I am sure is at much more favourable rate than they could have gotten when they went to PPartners.

Here's hoping it is a plan to put acadamies and youth signings into overdrive....or at least a good portion of it will be used for that.

Think of what the Glazers did at Man U and all the outrage and panic that ensued. Well, their teams value keeps rising, they keep spending on the club, and the loans are being payed down regularly to the point where the ratios aren't even much of a though to anyone anymore. This is tame compared to what they did.

 

What did ESPN just do to ESPNFC????

http://www.espn.com/soccer/?src=com. If you go to ESPNFC.com it just re-routes you to the ESPN soccer page, which is now integrated with ESPN.

I saw ESPN announced they were going through another round of cutbacks with another 150 people cut.

• https://www.wsj.com/articles/espn-to-cut-150-more-jobs-1511964242.
• http://money.cnn.com/2017/11/29/media/espn-layoffs/index.html

However I haven't seen a list of who or what programs will be cut. Curious what this means for MLS and soccer coverage?

 

Honestly I have always thought having ESPNFC and ESPN be separate sites was really confusing. I never understood why soccer wasn't just treated like all other sports on their site.

According to Scott Van Pelt ESPN is not struggling and even though they are getting ready for their second massive layoff and cut backs. Those that think they are struggling are living in make believe.

http://awfulannouncing.com/espn/sco...e-make-believe-world-everyone-talks-shit.html

 

Maybe SUM/MLS is setting up shell companies to purchase parcels of land in NYC so NYC proper can finally have a stadium. Though borrowing for cash-flow is probably more likely.

 

There are a couple of Business Journal articles concerning Austin and San Antonio MLS situations.

Not necessarily MLS related, but maybe SUM / US Soccer related:

1. CONCACAF League of Nations - is there any SUM involvement in putting it on? If so, maybe that is what some of the funding is for.

2. Related to above - could U.S. Soccer and SUM stage a mini-tournament for non-WC bound teams?

3. Sunil Gulati is strongly considering not running for re-election and may support SUM president Kathy Carter instead (per Grant Wahl via Twitter).

 

Proving...to me at least...that everybody loves a story that has a villain.

 

The money is to buy back the share in SUM they sold off years ago to regain full ownership.

 

I quietly have calculated the new TV deal in 2022 to come out around 427.5 million. Taking in current growth ESPN went from paying 10 mil to 45 mil = 4.5*
FoxSports is paying 35 mil= and Univision has been getting a good deal underpaying the product per the rating at 15 mil. I think they catch up with what the rest were paying next tv deal.

So next tv deal looks like this IMO
ESPN 45 mil to 202.5 mil
Fox Sports 35 mil to 157.5 mil
Univision 15 mil to 67.5 mil
= 427.5 million for 28 teams = 15.3 mil per team add in the the Adidas 117 mil per yr deal, the Canadian and 10 other foreign tv deals you can safely estimate the total revenue available for the 28 teams to be 600 million by 2022 or
21.4 mil per team. All the league would need to do is add a couple DP spots to attract the world stars and fill out the remaining roster with depth.

But this may be what they are thinking here. I always thought the MP Silva 4 billion over 10 yr 400 mil per yr offer deal was more the league sending out a expectation of what they are expecting from the next US deal.

 

Ah....I just assumed that was already done. Still a win for MLS overall, but it puts a dent in the investment for TV contract/WC2026 thoughts. I am sure MLS will invest more, but I was hoping/thinking big.

 

The good news is....in either scenerio for what the cash is for...is that growth is still clearly on the horizon for the net decade or so.

There will come a day in MLS, just like the failure to qualify for the 2018 WC, where things stagnate/money flow slows significantly, and those who only know growth will have a hard time coping.

I can see BS now....ugh.

 

Although Hawaii is located in the tropics, it contains high mountains which receive snowfall every winter. On the Big Island of Hawaii, Mauna Kea (13,796' / 4205m) and Mauna Loa (13,660' / 4163m) get at least some snow every year, usually between October and March, although snow can fall any time from August to May.

Just have to go to the right place in Hawaii.

 

Big News!!

http://www.espn.com/soccer/united-s...nt-run-for-re-election-as-us-soccer-president

"And there was much rejoicing."

 

And it was snowing on those peaks last week

 

At least based on that article (I did not listen to the podcast), that's not what SVP said. He said that the "too much politics/social commentary" issue isn't the reason that ESPN is suffering. He did not claim ESPN was fine or wasn't struggling.

 

https://www.si.com/tech-media/2017/11/17/scott-van-pelt-rips-espn-critics
"I guess people believe that we’re hemorrhaging money when that’s not the case."
Normally companies that aren't losing money don't layoff around 300 employees (with this current layoff that what it will be around). He says he is basing his opinion that everything is fine off of the fact he still gets a direct deposit every couple of weeks and no one has said to his face "espn sucks."

 

Meh. You read the whole article and I think I understand what he's trying to say. I don't think he's denying that ESPN is struggling, he's pushing back against the idea that ESPN is on its last legs. But, admittedly, his phrasing is a bit tone deaf and could easily be taken as "I'm getting paid so everything is good".

 

ESPN isn't really "struggling." They are changing to adapt to the times. They made some mistakes in regards to sports TV rights deals, but for the most part, they are changing to try and adapt to a new business model where their revenue does not all come from people paying for cable tv. Now they have to compete on delivering information via apps, phones, tablets, computer, etc. I was told that ESPN now has a mini sportscenter on snapchat.

A decade ago, being the Ombudsman at ESPN was a big deal. Now, the position might as well not even exist due to the way people view and consume media.

Their biggest problem is that they are owned by Disney who doesn't eat any losses they may have had they stayed the course. They are spending more for on-air talent and are building a large studio/office in NYC.