As the league enters a crucial round of negotiations for a new television deal, its ratings are behind those from last season.Let's say a casual soccer fan asks you a simple question: How is Major League Soccer doing?
For the most part, you'd probably tell them the league is really doing quite well. After all, MLS just announced its 20th team, a joint ownership venture between the nouveau riche at Manchester City and the nouveau soccer fans of the New York Yankees. Four more teams will join by 2020, and the league just signed U.S. legend Clint Dempsey in his prime, and kept American pillars Landon Donovan and Omar Gonzalez in Los Angeles.
All this, of course, is taking place in a league that was very much on the brink of extinction just over a decade ago.
So yes, you could say things are going pretty well. But not quite everything. In fact, the main outlier amongst all the uplifting news could be the most vital ingredient to the league's long-term success: TV ratings.
The league has advanced to the point where its long-term existence is no longer in doubt. But in order to reach its oft-repeated goal of being one of the world's top leagues by 2022, television numbers won't just have to improve, they'll have to experience a Lazarus-like revival.
Optimism was high after a 2012 season in which ratings were up on ESPN/ESPN2, and the league entered the first of a three-year deal with NBC. The Peacock delivered slick production value and the sort of commitment and focus on the league that previous partner Fox was just never able to provide.
In 2013, though, the league's ratings have taken a downturn.
ESPN/ESPN2 finished the 2012 season with an average of 311,000 viewers for its games, but that number is down to 227,000 this season. Meanwhile, NBC Sports Network averaged 125,000 viewers per game last season, and is currently at 102,000 in the 2013 campaign.
“To be honest with you, I was hoping that we would maintain last year's numbers,” NBC Sports and NBC Sports Network president of programming Jon Miller told Goal.
Any reasonable discussion of the drop-off in this year's ratings must include the unusually strong lead-in programming the league enjoyed in 2012. With NBC carrying the Olympics and ESPN broadcasting Euro 2012, MLS enjoyed a huge boost in ratings for games directly following those two events.
“We were fortunate last year during our inaugural season with NBC that we certainly had some very, very powerful lead-ins with Olympic programming, and we haven't seen that this year,” MLS executive vice president Dan Courtemanche told Goal.
Still, MLS lags badly behind its American competition in television numbers. For example, the National Hockey League – easily the closest of the so-called “big four” U.S. professional sports to MLS in terms of ratings - averaged 392,000 viewers per game on NBC Sports Network in 2013, more than tripling the MLS audience.
The downturn in television viewership this season comes at an inopportune time for MLS, as this month, the league will begin negotiations with all of its network partners for new television deals. All three of the league's American television contracts – NBC, ESPN and Univision – expire after the 2014 season.
When negotiations begin, though, the league will have a few aces up their sleeve.
First, there is the recent Dempsey signing, showing the league's continuing commitment to bringing top talent into the fray. There's also the matter of its newest team, New York City FC, beginning play in the country's largest TV market in ... 2015, which just so happens to be the first year of the new MLS TV deal.
Miller and Courtemanche insisted the timing of NYCFC's entry into MLS was purely coincidental, but Courtemanche did acknowledge “it certainly could have a direct benefit on our future television package and on TV ratings.”
The other reason for optimism is that MLS has brought in some outside reinforcements.
Gary Stevenson's hiring may have flown under the radar this June, but it could end up being the most significant move the league made all summer. Stevenson was named president and managing director of the league’s new business unit, MLS Business Ventures, and will take up a prominent role in TV contract negotiations.
Stevenson has held executive positions at the NBA, the PGA Tour, the Golf Channel and, most recently, with the Pac-12, where he helped the conference strike one of the richest TV deals in college sports history in 2011, with a 12-year, $3 billion agreement with ESPN and Fox Sports. The following year, he helped found the Pac-12 Network.
Stevenson's fingerprints are all over the second outside source MLS has called upon.
Courtemanche said the league will be advised by Evolution Media Capital in broadcast negotiations. EMC is a boutique investment bank and an affiliate of Creative Artists Agency, which has advised on more than $30 billion of transactions in less than four years of existence. Chief among those transactions? The massive Pac-12 deal with ESPN and Fox Sports in 2011.
With EMC and Stevenson, Major League Soccer has an experienced and familiar pair with a track record of securing advantageous television contracts. But will it be enough?
MLS will enter negotiations with its current partners first before entertaining outside offers. ESPN has been a partner from the league's beginning, and seems likely to re-up again. On the other hand, NBC is a much more ambiguous case.
NBC and MLS just announced a three-year deal in August 2011, worth a reported $30 million, but recent developments have put the pair's future in doubt.
First, NBC shelled out $250 million to secure exclusive English Premier League rights for three seasons, putting a glut of soccer programming on its airwaves. Already, EPL games have been easily beating MLS matches in terms of ratings.
The second deal probably went under the radar of most soccer fans, but could end up being just as significant.
In July, NBC announced it had acquired NASCAR rights in a 10-year deal worth a reported $4.4 billion. In addition to the massive financial outlay, most NASCAR events take place on weekend afternoons – time slots in which the network currently broadcasts many MLS games. Miller insisted that the NASCAR deal will have little impact on MLS's future on NBC.
“I think it's just going to be a question of strategic scheduling,” Miller said. The great thing about NASCAR, we have 20 races that go from July through November, it overlaps a little bit with the MLS season, but the nice thing is that we have two networks to carry it, we have NBC and we have NBCSN.
“We're going to have to program around it. So for example, if NBC has a game, a NASCAR race, then it creates an opportunity on NBC Sports Network and vice versa, so there's plenty of windows to go around to do a really robust schedule if and when the opportunity presents itself.”
Despite Miller's insistence, it's clear that, at the least, NBC can afford to lose MLS and, at worst, the league's departure will help the network clear some valuable airtime. Miller, for what it's worth, said that “if you ask me today, would I like to see MLS on NBC going forward past 2014? Most definitely.”
If NBC departs, that leaves two likely candidates to fill the void: Fox and beIN Sport. The former recently launched two new sports channels (Fox Sports 1 and Fox Sports 2), while shuttering another (Fox Soccer) and has World Cup rights starting in 2018, while the latter has been aggressively acquiring league rights since its inception last year.
Courtemanche said the league was pleased with its final few seasons with Fox, and seems open to a return should NBC not materialize, saying, “We're certainly monitoring the new network and are well aware of their commitment to the sport.”
Clearly for MLS, all options are on the table regarding its next television deal. As soon as that deal is signed, you'll be able to give a much clearer answer to that inquiring casual soccer fan.
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