Since there are many opinions expressed on MLS’s relative place in the world of soccer, I thought it would be interesting to provide an objective model which can be used to anchor discussions comparing MLS to other leagues. The table below is a comparison 538 Global ranking from March 7 to Nov 7. There is nothing special about these dates other than I happened to download the data at those times and since the former is based on their 2017/18 model and the latter is based their 2018/2019 we can see how MLS place has changed in the context of 538’s model. Like all general models in works better at some things than others. For reasons that may be obvious to some, but not so obvious to others, I think it struggles with MLS. The leagues rapidly changing quality and non-standard roster structure in particular are do not behave like the large majority of leagues in its model. As such it probably closer reflects MLS of a year ago more than the league of today. It does far worse with USL. Colorado is bad but they are not close to 80 teams below Red Bulls II and Louisville City would not be favored against Colorado, let alone NYCFC, Seattle and LAFC. I should also not that the two rating periods aren’t apples to apples. 358 added a number of leagues including several Asian leagues (China, Japan, Australia), some leagues UEFA leagues that previously had their top teams itne UEFA competition category (Belgium, Greece, Denmark), a few more lower tier leagues (ULS, England League 1 and 2) plus Africa. As a result the number of teams increased from 454 to 628 with large majority of the additions being grouped near the bottom of the range. CountryLeague19Ave19top19Bot18Ave18Top18BotSpainLa liga36277451112EnglandPremier League641149785170UEFAChampions League773510914526270GermanyBundesliga79320949279ItalySerie A897200926249FranceLigue 110861731064209BrazilBrasileirão18564446181104301RussiaPremier League1985242014035375UEFAEuropa League2183741018949361EnglandChampionship227131393298134426TurkeySüper Lig2287339722446451PortugalPrimeira liga2362035023313339Mexicoliga MX239119408253132401SwitzerlandSuper League2473343123557349BelgiumFirst Division A25036448N/AN/AN/AArgentinaSuperliga26810739122173357ChinaSuper League28071435N/AN/AN/AAustriaBundesliga2942945526239449NetherlandsEredivisie3001248029342443GreeceSuper League30442493N/AN/AN/AGrand Total31516282281454USAMLS343176535366208441JapanJ1 League353124521N/AN/AN/ADenmarkSuperliga35880528N/AN/AN/ASwedenAllsvenskan38610860431286448AustraliaA-League403201581N/AN/AN/AGermany2. Bundesliga414218503292148399ScotlandPremiership42370617378111454NorwayEliteserien426195567356137440SpainLa liga 2447221565255123445FranceLigue 2479268599339144444ItalySerie B498332584349118446South AfricaPremier Division511253609N/AN/AN/AEnglandLeague One522265611N/AN/AN/AUSAUSL527231627N/AN/AN/AEnglandLeague Two600512628N/AN/AN/A
Since there is also a lot of discussion on parity, I figured it would also be useful to have a measure of that as well. So I took the standard deviation of the teams %of points to total possible points for their last full season. LeagueSt DevMLS 20167.77%MLS 20178.89%liga MX 201811.35%Championship12.14%MLS 201812.40%Bundesliga13.33%Ligue 115.05%La liga15.58%EPL16.39%Serie A17.57% What is interesting is MLS actually has less parity than Liga MX did in their 2018 season (combining both). I think this year was a bit of an outlier for MLS, but the trend is pretty clear. As teams are given greater resources, the impact of good management starts to create clear and lasting separation. It will be very interesting to see how San Jose changes.
For longer measurements of parity, I recommend @Knave Toast Thread. He's been tracking parity for...close to 10 years now I believe. All Hail Toast Jesus and his immutable laws of toast!
Yup, especially soccer in Europe. I dunno if it is wishfull thinking by the Americans in the investors group, projecting the American continent wide sports scene on Europe as a continent and draw from that conclusions. The matter of fact is that Europe's sport scene isnot continent wide and willnot be that for decades to come. The dismissal of the national leagues as going to crumble by the assault of the ESL is not supported by current data that map matches that would be part of the ESL fixtures played at the same time as for instance this weekend ManCity-ManUnited match. This match is very easy to watch in the Netherlands etc. and not expensive too. But the fans of Feyenoord, PSV, Ajax etc. watch their clubs play and not this big guns match, which is also an indication of the pull of those matches in the ESL. A change of label isnot going to make the product more appealing. Juventus vs ManUnited in the CL didnot attract many Dutch viewers either, which also is a potential ESL match. Maybe the ESL is pulling away from the EPL non British viewers with the top clubs and for a part their local fans, but it would be foolish to suppose the epl would become nothing after the 6 would leave. In fact, those six must compensate financial revenues lost by leaving the epl completely with those epl revenues. The local fans of the non-six clubs were watching those matches of the six, when they played their clubs, plus the inter six battles as these were part of the EPL title run. When those six are out of the equation, these fans arenot going to abandon their clubs. On the contrary. With the six left the epl truly becomes fun for them to watch as a title becomes more within reaching distance. So the argument can be made the appreciation of the epl within the UK goes up and the ESL 6 lose more revenues than can be made from the esl on ots own.
Here's the list of the largest digital companies: https://www.forbes.com/top-digital-companies/list/#tab:rank To pick one, Netflix began sending out rental movies on CD via the mail, switched to a digital delivery and became a giant. The more interesting piece of the story is Blockbuster, at the time the largest video rental company in the U.S., passed on the chance to buy Netflix -- and now is basically gone. I believe they still have a few stores, but they fell hard. https://www.businessinsider.com/blo...p-chance-to-buy-netflix-for-50-million-2015-7
Since we are talking about a MLS - Liga MX working together Unlocking the Power of the Hispanic Soccer Fan in America has some discussion. "the U.S.–Hispanic market—which boasts the highest movie-going rate among any other ethnic group in the nation and a purchasing power close to $2 trillion" "The the Hispanic and Latino soccer audience ... accounted for 68% of soccer’s U.S. viewership in 2017, a number that will surely increase this year." “Both Mexico and the U.S. are going to have one of the most vibrant, wealthy and profitable soccer markets in the world and leagues, such as Liga MX and MLS, should work productively without industry politics and focus on the real growth of the sport.” It’s just one of the reasons why the Campeones Cup was created, a match hosted in September between MLS Cup champion and Liga MX’s Campeon de Campeones winner. It’s an initiative that marks the beginning of a long-term project for both leagues, where aside from cultivating every supporter who invests in these leagues, there is also a specific attention to the MLS/Liga MX Hispanic fan. [Dario] Brignole, [CEO and founder at Shine Entertainment Media, whose company represents Hispanic talent], thinks it’s a win-win: “Liga MX brings the fans, purchasing power and talent. MLS brings the wealth and the infrastructure.” The question posed by Triplet1 is whether you are going to reach these fans better by building on two of the more balanced leagues in the world or should you try to build a few very good teams that are much better than everyone else in the Americas but not as good as the top 10 in Europe?
https://www.forbes.com/sites/chrissmith/2018/11/14/mls-most-valuable-teams-2018/ Team: Value ($m) 1. Atlanta United: 330 2. LA Galaxy: 320 3. Seattle Sounders: 310 4. LAFC: 305 5. Toronto FC: 290 6. Portland Timbers: 280 7. New York City FC: 278 8. Orlando City SC: 275 9. Sporting KC: 270 10. D.C. United: 265
If each conference's 1 seed plays in MLS Cup, it will be between the 9th and 11th (Red Bulls) most valuable clubs. Correlation ranges from -1 to 1, and correlation between value and 2018 points was .2676.
Been busy - surprised there wasn't more discussion of latest Forbes numbers. I still don't understand where some come from. I realize the number are 2017 so they were looking when Atlanta only played about half their games at their own stadium but that doesn't how the Galaxy gets $16K more in revenue. Sure the Galaxy has their $5Mm Time Warner deal but Atlanta not only has much higher attendance but was also responsible for 1/4 of MLS merchandise sales. I'm kind of curious how the merchandise sales work. When DC shells out money for Rooney's contract and a ton of EPL fans buy his DC shirt. What does DC get from the sale and what does Kraft get?
The Unraveling of Live Sports TV: Unpacking the contributing factors and how brands can respond is from early this year but I don't recall it being mentioned by anyone and does a reasonably good job discussing Triplet1's topic of the rapid breakdown of the lynchpin that is holding together the entire U.S. pay TV ecosystem. While Triplet1's posts have primarily focused on the impacts of digital, this article points out some other underlying trends impacting sports in general: "As the U.S. population continues to shift towards multiculturalism, audience interests will continue to diversify and likely result in an even more fragmented market. More importantly, the younger generations today simply don’t care for sports TV as much as the older generations, thanks in part to the swath of entertainment content services available online today. Participation in youth sports has seen a steady decline over the past decade across all major sports. And as the participation rate drops, so do the TV ratings among younger viewers. A recent McKinsey study showed that more Gen Xers than millennials follow sports closely (45% versus 38%). " One benefit of adding teams is the additional content they bring. Viewers may gravitate to big games, but younger viewers are increasingly gravitating to highlights. "Even among the audiences that do still care about traditional sports, there is a cultural shift towards consuming highlight clips and summaries over watching the live TV broadcast. And the truth is, a lot of sports content can be easily condensed into highlight clips of goals, near-misses, VIP plays, and other key moments, all packaged nicely without the interruption of commercial breaks. Watching highlights grants you enough cultural capital to talk about the game without having to sit through a whole game." One thing I didn't realize was how drastically youth participation in soccer has dropped. The Washington post article linked above shows participation is which was rising had been rising, until 2010, showed the biggest drop in participation both in terms of percentage and total participation. I hadn't realized that US soccer's epic mismanagement of the sport at the youth level had taken such a large toll in such a short time. As a result I've probably been more optimistic on the long term outlook than is warranted.
This would be deadly for that Euro SL. And if this is true for the Euro fan too, it means even more problems as in Europe highlights are on the open net because of the cltural heritage soccer represents in Europe.
Wow, after reading every person's post there are some things I have heard from the technology grapevine that might change some minds on what's ahead. First, from what I have been told the internet as we know it today will not be what we think it is. The Comcast tech guy explained to me a better form of WiFi is on the horizon and currently Comcast is working on it to possibly replace the internet. They expect it to revoultionize everything from the devices to cable. If anybody here believes Comcast or Direct TV are going to stand around and do nothing then you are sorely mistaken. So if we start seeing companies like Netflex compete in the soccer-football world I would expect Comcast will still have a say in it. Currently, we have cable for my family, they watch Youtube and other internet channels through Comcast support network. This way if people who only have internet access and no cable will be the first people who's internet slows down before Comcast's cable customers.
Sorry, I've been busy at work and just getting back to some of these replies. This was an interesting study -- it's unclear to me what exactly it means for soccer since all major sports are showing participation declines in youth participation levels. It may be competition with esports, as the article notes, “You can’t stick a kid in right field and he touches the ball once or twice a game . . . That’s not the same level of excitement as you can get on a video game.” So while I tend to agree with you that US soccer hasn't done a great job with youth development, my guess is what we are seeing here is more of the fragmentation I discuss below, which increasingly includes e sports.
I'd take a step back further. Here is my argument: 1. I think the audience for all sports -- not just soccer -- is fragmenting. 2. Thanks to changes in technology, it is now possible to buy games "à la carte" which allows fans to only buy individual games, or games from individual teams, they are interested in instead of purchasing a channel like ESPN that buy's a full slate of games from a league. This technology is perfectly suited to maintain and even grow this fragmented audience by targeting a very narrow, specific segment of sports fans on a global scale. 3. Given the option of buying games that more directly match their interests, fewer people will pay for sports channels like ESPN. They will do that by either "cutting the cord" and dropping their cable and satellite subscriptions to purchase streams of specific games, or, for niche and non-sports fans, by demanding "skinny" bundles from cable and satellite providers that don't include expensive sports channels. Either way, without this cable and satellite subscription money, the result will be much lower revenues for the sports channels, which we are already seeing at ESPN. 4. The dramatic decline in revenues for the sports channels will put pressure on what they are paying leagues for sports content. The value of the broadcast deals from the most popular leagues -- NFL football, for example -- may hold, but the revenue decline at the sports channels is so great (literally billions of dollars) that cuts will have to be made somewhere. As sports channels like ESPN perform this triage trying to save what can be saved, leagues like MLS probably won't fare well -- for a channel like ESPN the consequences of cutting what it pays for less viewed and less popular leagues like MLS are simply less severe than losing marquee leagues that drive more viewers to its channel. That's going to put huge pressure on the value of the MLS national broadcast deals. 5. The greatest opportunity to hold the value of these league broadcast deals is to make the league itself more popular so more fans will demand the games. For MLS, the easiest path to quickly get more eyeballs on its broadcasts is to combine with Liga MX, which already has some of the most popular soccer clubs not only in Mexico, but the United States as well. 6. The other option for more popular clubs to hold and grow their broadcast revenue is to reduce or eliminate the revenue they share with weaker teams in their league who don't generate much of an broadcast audience. The most extreme way to do this is for the big clubs to break away and form a super league where they cut out the smaller clubs in the league altogether. Another extreme option for the biggest clubs is to demand total control over their digital broadcast rights and sell their games directly to fans on a live stream or specialized cable/satellite subscription sports channel. To be clear, everything I am suggesting is an approach to deal with what appears to me to be a real problem, not because I expect most current fans of smaller clubs favor these changes. I think MLS is incredibly vulnerable to the loss of national broadcast revenue and competition from global "super clubs" that try and further grab a bigger share of the U.S. soccer audience. For the future of the league and its teams, I think it has to look at options to hold and grow that broadcast revenue, if it can. That will mean some tough choices. And of course, nothing may work, in which case MLS and its teams will simply have to live with less broadcast revenue going forward -- and the consequences for what that means.
This I think is only true in USA styled closed shops/geographically limited number of clubs. Fans that havenot access to the real thing=experience it at the stadium are doomed to be consumers and thus more likely to be tempted away by alternatives. Just look at the USA map and the mls clubs in it. The fans with real access are confined to a number of dots on that map.
The methodology Forbes uses (and how it factors SUM) has never been all that clear, but assuming they are consistent in how they have made these calculations over the years, I think the Forbes rankings are probably accurate for trend and, roughly, for ranking the teams. A number of teams show increasing revenue in the latest rankings, which is a good thing. Even so, despite this increasing revenue a number also show operating losses -- 15 of the 22 teams that Forbes projected. Some of the bigger losses for higher revenue teams such as Toronto FC and NYCFC are probably do to big DP expenditures and therefore are somewhat by design. They seem to have concluded that they are willing to fund those losses to drive revenue and market share, at least for now. For lower revenue teams like Montreal or Colorado with significant losses, however, those may be more concerning. Particularly Colorado has put its income in a lot of silos and we don't know how successful Forbes is at consolidating that, but still if Forbes is consistent the trend is too. But here is why I am so concerned about a significant reduction (or even loss) of the national broadcast revenue. All of this national broadcast revenue is equally shared by the teams to fund payrolls, which makes it very important for clubs with lower revenues. Since the national broadcast revenue is turned over to the league by SUM to fund payrolls, if it drops significantly the teams have two choices: make up the difference and increase their losses or cut the payrolls. Making up the difference isn't as easy as it sounds. Pull $3 million or so out of the revenue for each of team, and only two MLS teams would have operated in the black, with only one breaking even. Even successful, profitable teams like Orlando and Kansas City rely on this national broadcast revenue to fund much of their salary budget -- they would really miss it. Yes, some bigger revenue teams can probably afford bigger losses and would choose to do so -- they have shown a willingness to pay more for payrolls to drive those revenues and a tolerance to keep funding more expensive DPs despite those losses -- but it's going to put lower revenue teams like RSL in a tough spot. Ultimately, it has the potential to be a wedge issue IMO. Now, it's possible cutting payrolls won't be a big deal, but I am far from convinced that would be true. It's hard to believe it won't result in a step backwards in quality of play, which will, in turn, impact the league's revenues even more.
That's only true if for the players there's an alternative that pays more. Frankly for America's big Four sports there isnot. So the quality stays the same at a rduced price.
It would be interesting to see what %% the media revenues are of the total expenses payed by the clubs. That would show which clubs are at the greatest risk of a digital revolution.
For the players as a group, that's true, but for individual players of quality they will always have options to personally make more. They may have to move abroad, but those opportunities will be there. They won't have to accept a cut in pay -- but those are the very players that provide MLS with the additional quality to make the games more watchable for a TV audience.
I've done the math in other threads and given not all information is public we have to make some educated guesses, but for what I call league funded payroll -- the payroll dollars the league itself is responsible for as part of every team's salary budget -- it appears to me that about a third of that revenue comes from national broadcast revenue (via SUM), a third from national sponsorship revenue (via SUM) and a third from shared ticket revenue.
Sure, but remember, MLS potentially has a problem because the sports channels like ESPN have a problem. Even if all of this is true, will the same number of subscribers keep shelling out over $8 bucks a month for ESPN/ESPN2? ESPN alone has already seen revenue drops in the billions of dollars. When the sports packages come up for renewal, they can't pay more to every league they are playing now -- it's just not possible. I think even ESPN would acknowledge as much. For the sports leagues, I think people are taking comfort that their broadcast revenues can still grow despite the loss of subscriptions suffered by the big sports channels because they are assuming the digital companies will simply replace those revenues. Maybe they will, but unless and until Youtube or Netflix or Amazon show that they will not only buy these broadcast rights, but pay as much if not more to do so, it's an open question. And make no mistake, without someone else making up this money to broadcast these games, it's difficult to see how all of the leagues in various sports can continue to grow these broadcast revenues. More likely, many leagues, even the big, powerful ones, will see declines in broadcast revenue, meaning there is less to share. That's why the latest EPL domestic broadcast auction results are worth paying attention to IMO -- they thought digital providers like Amazon would more than make up the difference from any drop from the other broadcasters. It didn't happen and the domestic rights revenues actually declined. The immediate reaction of the Big Six clubs was to demand a bigger share of the foreign broadcast rights instead. I think that foreshadows the future. Again, assume MLS is getting about $70 - $75 million of the broadcast revenue from it's $90 million bundled deal with USSF. What would it take to increase that number? If you are ESPN, do you put the money you still have towards a bigger share of MLS games, or do you redirect it to help you keep Monday Night Football or some other league where the games get bigger audiences and are worth more to advertisers? If not ESPN or Fox or Univision, is Youtube willing to step in and pay that and more? Honestly, we won't know until we get there and it probably won't happen in a single cycle. Different broadcasters may have different strategies. But if the total money following into these sports broadcast deals declines, someone is going to get hurt. Lots of someones probably. But the bright side of this is that MLS/SUM is well run and these guys are really smart at negotiating these broadcast deals. I think they see one way to make MLS games more popular to a broadcaster like Univision or a digital streamer is to have more games with big clubs from Liga MX -- hence the press release we have been discussing about some joint competition with MLS and Liga MX. I know fans don't like it, but to defend this national broadcast revenue, I suspect MLS knows it simply has to look at this option.
There's no competition for the big four sports abroad that comes close to what is payed in the USA. So even for the best a lowered pay in the USA is still preferable to go abroad.
Forbes interview with Don Garber At the 3:05 spot Don Garber talks about the big positive MLS impact numbers of the streaming service from ESPN+ and at the 9:30 spot they discuss the MLS broadcast deal will double.[/URL]