Major League Soccer, the famously cowardly league so afraid of things like “competition” and “risk” and “good ideas that might hurt some obscenely rich guys a little in the short term but will reap immeasurable rewards in the future” that it concocted up some bullshit closed-league format to encase its teams in safe, perpetual mediocrity, recently received an intriguing proposal from a company interested in the league’s potential. Sports Business Daily has reported that MP & Silva offered to pay a whopping $4 billion for MLS’s worldwide media rights, contingent on the league switching from its closed format to a system of promotion and relegation. Naturally, MLS refused.
To be fair, it’s not like MLS really had any choice whether to accept or reject this specific offer. MP & Silva’s bid was for the league’s worldwide media rights starting when MLS’s current rights deals expire in 2023 and for the next ten years after that. However, as MLS said in its response to MP & Silva and in a statement to ESPN FC, MLS’s current rights holders have “exclusive negotiating windows and renewal rights,” which (allegedly) means the league couldn’t assess or accept MP & Silva’s deal at this time even if they wanted to. On top of that, MLS does not traditionally sell its domestic media rights to third parties—though it does do so with its international rights. Quite the helpful set of coincidences.
Thus, the deal on offer is best seen as something of a stunt bid. Not that that makes it any less fascinating—this bid wasn’t a joke or anything. MP & Silva is a legitimate, renowned media-rights company, and already has history with MLS in this realm. From 2008-14, the company was MLS’s designated international rights dealer. Also, one of the group’s founding partners, Riccardo Silva, is one of the owners of NASL team Miami FC. All of this is to say that while the proposal might never have been all that realistic when offered, those behind the deal are known, serious figures in American soccer.
The terms on offer seem tantalizing. From Sports Business Daily’s article:
Promotion/relegation was the focus of a June 26 meeting at MLS’s New York office, when MP & Silva Group founding partner Riccardo Silva told a group of MLS executives and owners that he would pay $4 billion to pick up the league’s worldwide media rights — including the U.S. and Canada — for 10 years, an average of $400 million per year. That huge payout — nearly four times higher than the league takes in today for media rights — was contingent on MLS adopting a promotion/relegation system with MLS, NASL and USL. MP & Silva then would have turned around and sold those rights to TV companies in the U.S. and around the world.
Again, because MLS is apparently precluded from any negotiations on its rights deal at this time, we have to look at the motivations behind making the offer to find the interesting parts.
In one sense, this could be seen as a smart way for Silva to get Miami FC into the big leagues. Right now, MLS charges its new franchises about $150 million in expansion fees for the right to enter America’s top soccer league. By setting up promotion and relegation, Silva could not only circumvent that fee by opening up access to MLS through promotion, but also could in theory wind up making lots of money on the deal by selling the rights off to media broadcast companies for a profit. And once in the league, which presumably would no longer be salary capped in a promotion-relegation world, Miami FC could be free to spend as much as it wanted in an effort to build a true world power should ownership push for it, making the team even more alluring then than it would be if it were to gain entry into the current version of MLS.
While it’s difficult to imagine the sports rights bubble continuing to expand by the time 2023 rolls around and MLS has to renegotiate its contracts, because the league has such high growth potential, MP & Silva would be betting that increased fandom and interest in the U.S. and beyond in the league would make the $4 billion over 10 years more than worth it. And, as Silva sees it, promotion and relegation would greatly accelerate this growth process:
In the letter [to MLS commissioner Don Garber and team owners], Silva cited the viewpoint that promotion/relegation tends to drive fan interest among teams in the bottom of the standings, as they fight to keep from getting relegated.
“I believe that MLS would be the major beneficiaries of an open, meritocratic system because it would stimulate greater fan interest, excitement, quality and engagement in the domestic game,” Silva wrote. “As a result, greater commercial revenues would flow not just to MLS and MLS club owners but also to all tiers of the U.S. soccer pyramid.”
For those of us who can see the myriad ways soccer in America would benefit from promotion and relegation, this proposal is an intriguing look on how it might one day come about. If MLS has intentionally set up its protectionist closed system in service of the greed of its owners, maybe the best way to get the league to do what’s best for the sport would be to appeal to that same sense of avarice by buying away the owners’ objections to promotion and relegation. After all, the best hope for getting promotion and relegation is for someone to convince either MLS or U.S. Soccer that razing the current system in favor of the one everyone else uses really is in the best interests of American soccer, from both the financial and sporting perspectives. This MP & Silva strategy appears to be a promising attempt at doing just that. Maybe by 2023 MLS will have seen the light too and might be willing to finally turn MLS into a real soccer league.