The Road from Here, Reprise

It's a fair point, but let's consider how a fanbase for any professional team has historically evolved. It's a term more commonly used in the U.K., but consider the definition of "catchment area", which is generally defined as the area from which a company or institution attracts a population that uses its services.

When professional sports were in their infancy, a team's catchment area was localized -- basically the distance people could walk or easily travel to the ground to watch the games. The result is that sports that professionalized early, soccer and baseball included, had a lot of clubs representing highly localized populations, including specific neighborhoods and institutions. If there was a sufficient population with enough money and enthusiasm in the catchment area to support a team, there was a team to serve that demand.

As transportation improved, an ambitious team could expand its catchment area beyond its previously local confines, but given the demands of travel fans got more picky. Good teams were better able to extend their catchment area than bad teams. "Big" clubs were born.

Radio provided teams with the opportunity to expand their catchment area to a much larger region, but for the most part each team had to cut its own deals which favored the bigger clubs. Television followed this pattern early on too. As a result, in the NFL, by 1959, the Bears and Giants had all their games on television, but teams like the Packers did not, resulting in a huge disparity in broadcast revenue prior to the advent of revenue sharing.

The era of shared revenue and league negotiated and controlled broadcast deals allowed some teams to develop a super regional and even national catchment area -- to this day, the Cowboys even use the slogan, "America's Team." But since the pie was divided equally, it wasn't critical if any particular team expanded its catchment area to a national level as long as the league's broadcasts found a national audience. That's the model MLS is using.

With streaming, it's now possible for a team to have a truly global catchment area without the league brokering the broadcast deals and divvying up the cash with other members. They can go directly to their fans. It's the 1950s on steroids. That's where I think we are heading.

The problem with a global, digital market is how do you stand out in the clutter of hundreds of competitors? Obviously, for the big teams that already have a well known brand, they have a massive advantage as this moves to streaming. For the others, as the league brokered cable deals are supplanted by streaming, they will have to rely on customers who know them, meaning it will be more regional or local audience.

It's back to the future.

 

Early days, but I think this is the post of the thread so far, and you expand it well in your most recent post. The question -- the elephant in the room really -- is will this be good enough? Not for MLS to survive, but for the investors and fans and aspiring players? Clearly, MLS has been a niche league to date, but I'm not sure investors assumed it would always be so. That's going to be the first in a series of challenges IMO -- investor expectations. In the future MLS you (I think accurately) describe, the fanbase may not grow much, but I agree there are enough fans already who accept the league for what it is, and players willing to play for these wages, that MLS can keep the lights on. Whether that's enough financial upside for investors to continue to plunk down three hundred million dollars for a team, as Minnesota United has done (between the expansion fee and the stadium costs) is another matter.

But if you're right and the future holds slower growth for MLS (perhaps much slower growth, because I don't think replacing this broadcast revenue is going to be easy), even if that's not what owners had in mind, can they do anything about it?

I pulled out Simon Kuper and Stefan Szymanski's Soccernomics the other day, which I read many years ago and re-read several chapters. Now, in the past I've pushed back pretty hard here against some of Szymanski's views on MLS -- honestly I think he didn't fully factor how SUM works -- but I think he and Kuper had it right as to where the game is headed. In the chapter, "The Suburban News Agents", Kuper and Szymanski (applying Zipf's law) note that in soccer "giants are rare." So, if digital does create giants -- again I agree with you here -- it's likely there won't be many giants in the world of soccer. They argue the biggest provincial clubs have strong enough brands to remain atop European (and world) football and stay in the game, but clubs from the biggest cities, London, Paris, Moscow, will challenge them for financial supremacy.

Their argument is straightforward: when the game was young, it mattered a lot more in provincial towns than in the largest European capitals or larger economic centers. The best of the provincial clubs, the Bayerns and Barcas of the world, got a big head start and have cemented that advantage. In a free market, however, Kuper and Szymanski argue that money will increasingly flow to the giant, cosmopolitan cities that have the population, wealth and appeal (to investors and players) needed to sustain super clubs. In short, giants beget giants.

Kuper and Szymanski wrote that a dozen years ago in 2006. There are some notable exceptions, provincial clubs like Manchester City that saw the trend early and invested huge sums of money have made the jump, while political considerations may have slowed clubs down in Moscow and Istanbul, but still there is considerable evidence that the clubs from London and PSG are rising, while some of the former provincial giants like the Milan clubs are fading. In the most recent Deloitte "Money League" rankings, while familiar faces continue to dominate the top five slots, three London clubs and PSG occupy slots 6 through 11.

Put aside the league and teams in its current configuration, does the United States have world class cities that meet that description: giant, wealthy, cosmopolitan places? New York and Los Angeles certainly are. A decent case can be made for a handful of other places as well, including Washington DC, Miami, and Chicago.

If the basic building blocks are here, and streaming provides the global revenue needed, why should this be impossible? I would argue only because MLS' vision is limited by it's current structure -- too much of the discussion is how to tweak the present configuration, which simply won't work if the teams aren't in the right places.

But if we start with a clean sheet of paper, is this possible? Set aside what MLS is for the moment, and ask how many giant teams could the United States support? Answer that question, and I think we'll see where the path starts.

 

If Kuper and Szymanski are correct, it stands to reason that we should see big, successful provincial clubs and clubs from bigger European capitals (London, Paris, Moscow and Istanbul) start to pull away from the pack. If that holds in the digital world, I wondered if social media might already provide some clues.

In the most recent UEFA benchmarking report (which you can download at the UEFA website: https://www.uefa.com/insideuefa/pro...-financial-fair-play/news/newsid=2435355.html ) there is an interesting discussion about how the top European clubs fare in social media presence on pages 16 - 18. The top European clubs are ranked by combined Facebook and Twitter popularity on page 16. The list isn't all that surprising, with Real Madrid, Barca and ManU at the top of the list, with followers that far exceed clubs like Dortmund, Schalke 04 or Marseille.

Business Insider looked at these social media figures and compared them to the top 20 teams in the Deloitte Money league here:

https://www.businessinsider.com/the-20-most-popular-rich-list-football-teams-on-social-media-2018-8

If you look at the numbers in the Business Insider report, 20th ranked Schalke 04, which hovers around 15h on the Money League list the past couple of years, has 3.6 million combined followers on Facebook and Twitter (with another 500k on Instagram), while top ranked Real Madrid has 139.9 million combined followers on Facebook and Twitter (with another 62 million on Instagram.) There is a huge disparity from high to low, but, again, that disparity exists in the Money League too, as the revenue of the big clubs at the top of the list is growing much faster.

Still, the most popular club websites might provide some foreshadowing of what Kuper and Szymanski suggest -- you'll find that list on page 18 of the UEFA report. Again, Real Madid is first, but ManU is second, followed by Liverpool, Arsenal, Barca, Chelsea, PSG, Man City, Fenerbahce and Bayern. That's a bit different. Fenerbache is about a dozen places higher than it places in the Money League list, while Bayern is quite a bit lower. Scan further down the list, and you'll see Zenit in 13th, Galatasaray in 19th and Spartak Moscow in 21st. UEFA's list has Schalke in 25th based on website traffic.

It certainly looks like the big clubs are well poised to transfer their advantages into the digital world, but for those in that next tier, membership in that group may be more fluid they we suppose -- favoring clubs from really big cities, just as Kuper and Szymanski suggest.

Now let's compare MLS:

Here's the most recent social media data I could find, but if someone has something more recent, by all means post it.

https://www.reddit.com/r/MLS/comments/5zs15g/ranking_mls_clubs_by_social_media_presence/

NYCFC has the highest combined following on Facebook and Twitter at 2.6 million, followed by the Galaxy at 2.2 million, Seattle at 1.1 million, and the Red Bulls and Orlando City at 950k. LAFC and Minnesota are at the bottom, although they are newer. Of the more mature teams, Philly is low at 276k.

Here are the bottom five of the top 20 European clubs from the Business Insider report I quoted from above (again, Facebook and Twitter only): Schalke 04 at 3.6 million, West Ham United at 3.7 million, Southampton at 4.1 million, Everton at 4.7 million, and Napoli at 5.5 million. Those five clubs also occupy positions 16 - 20 in the most recent Deloitte Money league, representing their world revenue ranking. And all of them get a large portion of their revenue from broadcast income.

Think about the opportunity here for a moment. If the battle is fought on league negotiated broadcast deals, you can forget it -- no MLS team can ever catch even the bottom tier of the Rich List clubs. But in the digital world where those streams can be marketed to fans by the teams themselves? Social media following suggests that the top MLS teams aren't that far away from some of the biggest clubs in the world even now. Add some of the hugely popular players who have followings that exceed many clubs -- see page 16 of the UEFA report -- and that doesn't seem out of reach for those top MLS teams.

Think of it this way, MLS gets, what, maybe $3 million or so per team from national broadcast revenue. If those MLS teams with large social media followings can get one million fans to pay $25 a year to follow the games and the team, that's $25 million per team.

Yes it will be disruptive, but digital is potentially the great leveler for some MLS teams -- those prepared to compete globally. And there's the rub. Many MLS teams barely have a digital pulse. What represents a fair share? Keep in mind, while MLS shares national TV money brokered by SUM equally, teams keep local broadcast money all to themselves.

So what happens with streaming revenue?

Again, for a handful of MLS teams, it might provide a path forward. Yes, the broadcast dollars may stagnate worldwide as cord cutting and digital streaming intensifies, but that will only serve to bring the Evertons and Southamptons of the world back to the biggest MLS teams. It moves the battle to a field where MLS may have a better chance to compete.

Will the few that might have a realistic chance give it up to stay with the others?

We'll see.

 

Expanding on the social media data, here is a link to the 2018 Global Digital Football Benchmark from Results Sports:

http://digitale-sport-medien.com/global-digital-football-benchmark-summer-2018/

The Galaxy are 74th in the world rankings with 3.75 million followers. Other MLS teams include NYCFC in 79th with 3.27 million followers, Seattle at 129 with 1.8 million, Orlando at 159 with 1.4 million and NY Red Bulls at 161 with 1.38 million. Sporting KC and TFC also made the list at 178 and 181, respectively.

To frame this, Money League teams like Napoli are 39th at 6.94 million, Schalke 04 are 45th at 5.85 million, Everton 48th at 5.72 million, West Ham are 60th with 4.6 million, Southampton 64th at 4.56 million. Compare that to Liga MX clubs like Club America in 20th at 16.3 million, Chivas in 29th at 11.7 million, Cruz Azul in 41st at 6.3 million, Pumas in 49th at 5.5 million, Tigres in 62nd spot at 4.6 million and Monterrey in 68th place at 4 million.

The difference, of course, is the huge disparity in broadcast revenue the European clubs receive. Schalke 04 made 230 million Euros in 2017, 82 million (36%) of that from broadcast revenue. Everton is even more dependent on broadcast revenue -- 76% of it's nearly 200 million Euro income in 2017 came from broadcast revenue.

But if the value of these broadcast deals does start to fade and streaming replaces those dollars where fans purchase individual games or team subscriptions, that huge gap in broadcast revenue potentially starts to close. Even with differences in per capita income, there are a lot more Club America fans than Southampton fans.

And here's the chance for some MLS teams IMO. The Galaxy and NYCFC already have more followers on social media than Sevilla, Fiorentina, Stoke City, Celtic, Borussia Mochengladbach, Hamburger SV -- and many others. In a streaming world, why can't they compete?

Here's where being an attractive place to play could make a huge difference. Ronaldo's signing had a huge impact on Juve's social media numbers, increasing the number of followers by a whopping 6 million in a month.

https://www.rt.com/sport/437526-ronaldo-social-media-juventus-madrid/

DP signings suggest LA and NYC can attract big name players.

Again, the league's structure would have to change, but 30 clubs in the world have at least 10 million followers across social media platforms. I'm not sure MLS can't have a some teams that can do as well. It would give those teams a huge leg up in generating streaming broadcast revenues.

 

I think 2018 will be remembered for two important events that occurred in the English Premier League which may finally trigger the long anticipated European Super League.

First, the domestic broadcast rights auction fell short of expectations, causing the revenues to actually decline from the previous deal.

Notable to our discussion here, in the run up to the auction, there were reports either Facebook, Google or Amazon might launch a large bid to stream the games and thereby drive up the price, but that did not materialize. Goal noted, “Sky won four of the five packages awarded, with rival BT securing just one . . . Two more packages – designed primarily for online content providers – were unsold amid reports they failed to meet the Premier League’s minimum price. There was no great play on the part of Amazon or Facebook and it’s left the league, and therefore the clubs, someway short of the sums they’ve gotten used to.”

Amazon did buy a package later, but it was for only 20 games and is regarded as modest.

As a result, for the first time in a long time, the Premier League will see its domestic broadcast revenue fall from the dizzinging heights that only three years earlier propelled many of its clubs into the Deloitte Money League.

The website Goal continued, “The 2019-2022 cycle has gone for about £1.5 billion per annum for 160 games,” says Sam Boor, a consultant in Deloitte’s Sports Business Group. “The previous cycle was for 168 games and it went for £1.7bn. That means the current cycle just went for £9.3 million per match as opposed to £10.2m per match.”

That’s still a huge amount of money, but even in the EPL the shortfall must be dealt with. To make up the difference, Goal noted, "‘clubs will now have to look elsewhere to make up the shortfall and it is likely that overseas broadcast rights will become the next major battleground for revenues.”

http://www.goal.com/en-us/news/uk-premier-league-money-drying-up-and-overseas-broadcasters/1o9jxjqmksfzg1mok462gnlslj

Second, with more pressure to make up lost revenue falling on getting more for the overseas broadcast rights, in June the “Big Six” clubs in the Premier League succeeded in changing the allocation of the international broadcast money.

Instead of the money being divided in equal shares, under the new deal the big six will get a larger slice of the pie. Talksport explained, “The domestic TV cash has always been distributed on a meritocratic basis, depending on where clubs finish in the league but proceeds from foreign broadcasters have been shared equally since 1992. In recent years, however, the league’s top clubs – Arsenal, Chelsea, Liverpool, Manchester City, Manchester United and Tottenham – have argued they should get more of the overseas income as they are the clubs foreign fans want to watch.”

It could have been worse for the smaller clubs – only the “new money” from the international deals will be allocated differently. For the new deal, the big six will get a larger share of only the revenue that exceeds the levels of the previous deal, but the trend seems clear enough.

https://talksport.com/football/380360/premier-leagues-big-six-win-fight-secure-larger-share-overseas-tv-rights-180607285533/

Even that may not be enough to placate the big clubs of the Premier League for long because if the global audience is where the revenue growth is, why share that money with clubs that have limited global appeal? With much of the future growth in broadcast rights likely to come from overseas, the imputes for the Big Six to leave the EPL is growing.

In May, 2018, nearing the end of his career at Arsenal, Arsene Wenger told the Guardian that the long predicted European Super League was now inevitable in his opinion. The Guardian reported, “Wenger, who is impeccably connected at Fifa and Uefa, described the change as “inevitable” because the big clubs will no longer want to share broadcast revenues with the smaller ones, whom fewer fans are keen to watch.

He claimed that audiences were down for midweek Champions League ties and a move to glamour European fixtures at weekends under a new format would be attractive. Elite-level clubs in mainland Europe, he added, would be receptive to the Super League because it would enable them to attack the financial dominance of the Premier League.

Wenger said:

“It is inevitable. Why? First of all, to share money between the big clubs and small clubs will become a problem. Why? Because the big clubs will say that if two smaller clubs are playing each other nobody wants to watch it. People want to watch quality. The big clubs say: ‘So we have to share the money but nobody is interested in you?’

“The Premier League will get smaller. If you want to make it more attractive, you have to go down to 16 and make a real competition of it. But it will be smaller if it goes to Europe.”

https://www.theguardian.com/football/2018/may/10/arsene-wenger-european-super-league-premier-league-arsenal

I think there are three learning points that may be relevant for MLS:

First, even for the most lucrative deals, the revenue generated from conventional broadcast deals limited to domestic audiences may have peaked;

Second, digital providers may not replicate the structure of the broadcast deals – there is no real evidence the digital audience is willing to pay a huge amount for a large number of games. Instead, the digital audience seems to prefer a more customized menu limited to the clubs and games they want to watch on their choice of platforms, which puts a premium on “big games”, but probably decreases the value of others.

Third, as the audience for games becomes global, the desire to share revenue with, and even participate in the same league with weaker domestic partners with no international appeal has limited value to big clubs.

 

Thanks for the kind words and welcome to the conversation.

I'm continually impressed by the quality of some of the posts on Big Soccer. At its best, this is a thoughtful, smart, diverse group of people who care passionately about the game and MLS.

I've spoken a bit about my background before on Big Soccer and in this thread only because it's relevant for what I hope this thread can achieve. Twenty five years ago, I practiced corporate law at one of the country's great national law firms, but these days much of my time is spent as a director on a couple of corporate boards for some very successful organizations run by very capable management teams. Like more organizations, periodically we get away from the business and we have a strategic planning session. We look at data, we look at trends, we pull threads and we talk -- we talk a lot -- in an attempt to refine plan and pick the path. Its a challenging process occasionally filled with disagreements, sometimes passionate ones, but the idea is to try and figure out the best way forward.

When it works, a strategic planning discussion can be very rewarding, forging a better understanding of what confronts us and what lies ahead. I would like to replicate that process here -- a virtual strategic planning discussion with a number of smart people who want to see this work. So I urge you all to keep the good stuff coming.

Like the first rendition of this thread, I hope people both enjoy it and find it thought provoking.

 

Boom!

It is worth quoting:

"ESPN reported on Wednesday the comments of Liga MX president Enrique Bonilla, who spoke of the possibility of a combined North American league between Canada, the United States and Mexico arising from the 2026 World Cup, to be held jointly in the three countries.

It's a possibility, a North American league," Bonilla told reporters at the Leaders summit at Chelsea's Stamford Bridge stadium, as quoted in the report. "We have to determine how and see the pros and cons, but I think that's a way to grow and to compete again.

If we can make a World Cup then we can make a North American league or a North American cup. The main idea is that we have to grow together to compete. If not, there is only going to be the rich guys in Europe and the rest of the world."

And that's on the MLS website.

During this time of sweeping change, the best and brightest (and, yes, most expensive) consultants are admonishing management and boards that the most dangerous course of action right now is to do nothing. Status quo. That's counter intuitive, I know, but their point is that we are in a period of sea change and the decisions made now will likely determine an organization's future. In other words, the battle won't be won today, but it can be lost.

For those who say steady on, I would encourage you to read Bonilla's words again: we have to grow together to compete. If not, there is only going to be the rich guys in Europe and the rest of the world.

Fortune favors the bold.

 

Good stuff. But I also think we need to note much of this is probably defensive -- teams are going to have to look at streaming because they don't really have a choice. I'd use banking as an analogy. The industry has thousands of drive up branches that are effectively being replaced by mobile devices. Millions of dollars of real estate and tens of thousands of people are dedicated to those branches which are now being repurposed or closed. It's both painful and expensive. Trust me, no one looked at this data early on and said, "wow, this will be fun, a huge portion of the business may be obsolete!" But what the banks wanted soon didn't matter, because customers are making their preference clear -- they want the convenience of mobile over driving over to a branch drive up.

With that, consider what's going on with ESPN and other cable channels dedicated to live sports. By using bundles -- tiers -- ESPN has made a fortune off of subscribers who have no interest in the channel at all.

Cass Anderson wrote this in a column last year:

"Given that 53% of pay TV subscribers don’t care if they have ESPN or other live sports channels, that means 46,294,970 of ESPN/ESPN2’s subscribers don’t really want the channels. At $8.11 per subscriber, that’s $375,452,207 people are shelling out every single month despite not wanting those channels. That’s $4.5 billion a year!"

https://brobible.com/sports/article/espn-earning-billions-cable-bundling-scam/

Give people choice, and they are going to figure out how to save that money. Skinny bundles and streaming are opportunities to do that. Yes, ESPN offers ESPN plus, but that's not going to recapture the millions of subscribers that didn't want ESPN in the first place. That's how ESPN lost 13 million subscribers in six years.

https://www.businessinsider.com/espn-losing-subscribers-not-ratings-viewers-2017-9

For the cable sports channels like ESPN, billions of dollars are at risk, and probably are lost. Dollars that fund sports broadcast deals. Now, it's true, if you read the Business Insider article linked above, for those subscribers that remain, they appear willing to pay more for the channel. Still, I am not persuaded that's going to work out as that Business Insider article suggests. Rather, for those who do want ESPN, I suspect they too don't want all of it. The data suggests digital viewers want more customized options. They want specific teams in specific sports, they don't want to pay for this "bloated buffet" of games that ESPN buys to provide content for all these channels. Increasingly, as you note, they don't even want the entire game, just highlights and maybe the big, special games.

https://www.wazeedigital.com/blog/followers-and-fans-evolution-sports-consumption-digital-age

So ask yourselves this, whether the broadcasters and leagues like it or not, if we are moving into a world where fans can pick and must pay for what they want to watch, would fans rather buy every MLS game, or just the games for the teams they follow?

I'm betting most will chose to buy games for specific teams, perhaps with some option to buy selected "big" national games. That changes everything. Much like the drive up bank, digital is going to radically alter the cable channel model of sports broadcasting -- and what those broadcasters can and will pay for these games.

Again, this is back to the future. In 1961, Congress passed the Sports Broadcasting Act allowing "pooling" of broadcast rights by all the teams in a league under a single contract with a broadcaster -- a practice that previously had been ruled to be a violation of the antitrust laws. Prior to that, individual teams marketed their own games, both on radio and television.

I think we are headed back to where we started, not with leagues marketing a big bundle of games for all of the teams, but with individual teams selling their games and their games alone to their fans. Games that will be streamed. The only difference is that this time, it isn't the antitrust laws that compel that result, it's going to be the consumers who do.

Once the teams accept the fact that there really is no choice, they will start to see opportunities. Chances to compete in larger territories and offer services that were not practical before. To go from defense to offense.

And then it will get really interesting.

 

Agreed. Unless you don't care if you do.

It's been interesting to see the reaction of some MLS fans' to the floated merger with Liga MX; a common theme is that they would rather watch games between MLS clubs. Looking at those Digital Football Rankings again where Club America has the 20th largest number of followers of any soccer team in the world, one of six Liga MX clubs have a larger number of MLS followers than the two largest MLS teams (the Galaxy and NYCFC), and they clearly have a lot larger following (even in the US) than MLS. So, respectfully, I'm not sure the preferences of those fans of smaller MLS clubs that don't even register on the digital rankings are going to be that important.

The more probative question is probably what MLS teams do the fans of those big Mexican clubs want to watch? I wouldn't assume a merger means everyone gets a chair.

 

I think this is where the structure of MLS probably makes this realignment easier, not harder to achieve. Let me explain.

First, let's call MLS what it is, a corporation. The corporation, not individual owners, owns 100% of each and every "team." The corporation is also an affiliate of another corporation, Soccer United Marketing (meaning they have shareholders in common). And the obligation of every director and every management team of every corporation is to enhance shareholder value.

So the relevant question is, does some combination with Liga MX involving some, but not all of the corporation's teams enhance MLS and SUM shareholder value? Is the stock worth more? Are the dividends higher?

To dig into that deeper, let's consider what this "merger" would really be. I think the combination would actually be a "joint venture" between the corporation (MLS) and several other corporations (the Liga MX clubs), that is to say, it would be a business arrangement in which two or more parties agree to pool their resources for the purpose of accomplishing a specific task while retaining their separate corporate identities. They may call it a "merger", but, again, in fact I think its going to be the classic joint venture. And with that, they'll share profits between the joint venture partners. Added profits that include money generated by the big Mexican clubs that still have the much bigger following in the US than any MLS teams.

Now it just becomes math. Based on limited reports over the years, I guesstimate they've got about 30 individual shareholders of the corporation (MLS), some who operate teams and some who don't, and to this they'll add a number of Liga MX teams owned by different people. How many teams in each country are needed in this new super league to generate the maximum net return and most benefit shareholder value? And which ones?

As fans, the immediate reaction will be to include every team and create a bloated 40 plus team competition that fans already are saying has little appeal. Their criticism -- too many clubs with limited appeal -- gives the answer: A limited super league will generate more money. More to the point, why would the super league include a small market team with modest ticket sales and a small social media/TV following that struggles to turn an operating profit? They represent a drag on income and the value of MLS and SUM shares. They do even less to generate added income for the Big Mexican clubs.

What I'm saying is by limiting the size of the joint venture to the most profitable teams with the biggest following and market share, a shareholder may make more money on his MLS shares and SUM shares than he would lose on the value of his operating rights for a specific MLS team that wasn't part of the new super league.

The excluded MLS teams don't have to go away. They would undoubtedly be operated more cheaply in the future, but they can continue playing what's left of the same teams they do now. My guess is for the new joint venture league, 16 teams is probably the optimal number, 8 from Mexico, 8 from MLS. Which means there can be plenty of MLS teams still around to have a good competition that won't have to travel to Mexico to do it.

Let me give you an example. To pick on Colorado, which, if you believe the 2017 Forbes article had operating income of just $19M and lost $6M in 2016 -- and I'll stipulate the numbers are impossible to verify, it's just an example -- consider could KSE make more money on its MLS and SUM shares if the Rapids were actually excluded from the joint venture league and remained in MLS with lower costs playing the likes of RSL, Vancouver, etc.? Honestly, that would not surprise me at all -- for the Rapids and maybe a dozen other MLS teams, Minnesota United included. Again, for a joint venture to work, it has to be accretive, meaning the parties have to make more money than they would separately.

So when I said they wouldn't care, I didn't mean to suggest a few MLS shareholders would simply override the shareholders that operate these other teams, I meant for the MLS shareholders who also operate marginally profitable teams with smaller followings, they may well conclude what they gain in the value of their MLS and SUM shares will more than offset the difference of the hit they take in the value of their operating rights. For an extreme example, that's what happened when MLS contracted Miami -- the owners gave up their operating rights where they were bleeding money and continued on as shareholders in MLS where they have likely done very well. Here, if the operators of smaller teams can go from an operating loss to break even or a small profit on their operating rights by remaining in MLS Classic, they will do even better if the super league makes the value of their MLS and SUM shares really jump.

If the math works as I suspect it will, all that remains is how MLS wants to link its teams, those that are in the new joint venture super league and those that remain in MLS classic. Pro/rel is obvious, but I'd be surprised if they go there because neither the Mexican clubs nor MLS really wants truly open pro/rel IMO. They could let MLS teams apply every 7 to 10 years to move up to the super league based on criteria and a vote. They could take Wenger's European super league proposal and have the MLS teams in the super league also compete in the MLS classic league, shifting the MLS games to mid week. Or they can just have a league cup -- another event for SUM to sell -- where all MLS teams compete each year. There are advantages and disadvantages to each idea, but they can work it out.

As Wenger said last spring, he believes the European super league is now inevitable.

https://www.theguardian.com/footbal...-european-super-league-premier-league-arsenal

And, again, Bonilla's words: "we have to grow together to compete. If not, there is only going to be the rich guys in Europe and the rest of the world."

It appears the discussions between MLS and Liga MX heated up about the same time Wenger gave that interview. As they remind us all the time, Major League Soccer, LLC is a business. And fans need to remember just because we are passionate about an MLS team, businesses seek to maximize return and shareholder value which doesn't really take fans' opinions into account, at least not at face value.

We are going to see some major changes soon IMO.

 

I think that's right -- and then the battle shifts down a division. Note Leeds Utd. owner Andrea Radrizzani has encouraged the Championship to break away from the rest of the Football League so they don't have to share TV revenue with them:

“It is not sustainable to stay in the Championship. This model, and also the small money they [the EFL] generate from TV rights, split between 72 clubs, maybe they need to reconsider, and consider another way, to create a Premier League Two or something else that can be sustainable . . . “We should concede that a club like Leeds that is watched by 500,00 to 600,000 people live on Sky is getting from the league only £2m to £2.5m [TV income] and are actually penalised, because we are more than 20 times on TV. Maybe we should reconsider the system because it doesn’t work.”

https://www.theguardian.com/football/2018/oct/10/leeds-owner-premier-league-two-replace-championship

 

I would sort the list two ways, first by social media followers as a proxy for future broadcast revenue potential, and second by attendance. Given that criteria, my guess is Seattle (high attendance, high social media) should be included. The tough call will be the teams like Chicago, Houston and Dallas which are in markets with large Mexican American populations that would probably turn out to see the Big Liga MX clubs when they come to town, but otherwise have much lower levels of organic attendance and social media followers.