In a piece from last summer (Blog #23 – Konvergenz bei den nationalen TV-Erlösen im europäischen Fußball), I made the case that revenues from domestic media rights are going to converge among the Big-5 European football leagues: Whereas the all-dominating English Premier League experienced a significant market correction for its upcoming domestic rights cycle (2019 - 22) compared to its current deal (-9,6%), its peers were able to lock in moderate (Italian Serie A, +11.3% incl. variable compensation // Spanish LaLiga, +14.9% with live free-to-air packages still to be awarded) to impressive (French Ligue 1, +58.8%) increases. Another obvious difference in addition to the direction in which rights fees seem trending between the EPL and its competitors has been that the latter will mostly continue to rely on the established legacy and/or dedicated pure-sports rights holders for the foreseeable future when it comes to their most important source of revenues. The English Premier League, instead, seems to have desperately wanted to get into business with one of those “new players” from Big-Tech and was willing to take a deep discount to on-board Seattle-based Amazon into its set of rights holders for the next rights cycle: It reportedly paid anywhere between GBP 21-30m per season for its two-matchday schedule per season. However, I do expect that these numbers already include any costs for production, commentary, and other shoulder programming. Thus, it paid probably “almost nothing” in terms of actual rights fees. Since domestic markets have been moving towards saturation for most of the biggest sports media properties in all of sports, seemingly every league or sports organization has made internationalization a top priority going forward. However, first results from awarding live audiovisual rights for the three seasons from 2019/20 to 2021/22 in overseas market are mixed for the English Premier League as well: This leads to the question whether the tepid interest in becoming the league's next CEO is somehow connected to the fact that it will be an uphill-battle for any successor to come even close to Richard Scudamore's achievements during his stellar 20-year run at the top of the league?
In-between I took a look at the astonishingly effective defense vehicle that incumbent legacy media companies in the United States have implemented to deter new market entrants while the latter start to make inroads in Europe (e.g. DAZN, RMC Sports, Amazon). At the end, this time's version of my final hits tackle some interesting current storylines: US sports leagues looking at Europe for future growth, MLS' future media rights strategy, beIN SPORTS ongoing carriage dispute in the United States, and the English FA following EPL's lead when it comes to carving out rights packages dedicated to technology companies.
The reduction in the most recent UK media rights payment to the EPL for the upcoming rights period (2019 - 22) has probably contributed towards the difficulties the EPL has had in appointing a new chief executive. On the other hand, everybody is expecting international media rights income continue to grow. The Big-Six clubs are pushing to get a higher share of this source of revenue, which they were glad to forego in 1992 as a bargaining chip to gain support from smaller clubs to form today's EPL, and could become another headache for the new CEO. (see: Twitterpost⬇️)
But how did we get here, are increasing overseas revenues really a foregone conclusion, and has the new CEO actually anything to gain?
Leagues Giving Deep Discounts to get into Business with Big-Tech
Obviously, the English Premier League, and many other leagues for this matter (see: LaLiga in India, NFL in the United States), have been willing to take deep discounts to get into business with new players in the sports broadcasting market - in hope for a big payday further down the road. These technology companies are simply not paying market rate at this moment in time though. For comparison, Sky UK (GBP 9.3m) and BT Sport (GBP 9.2m) are going to pay multiple times over on a per-match-basis for the rights packages A through F with 32 games each. Admittedly, the comparison has its flaws (e.g. numbers of games vs. number of broadcast windows), but a certain discount for Amazon in order to engage with the EPL is undeniable. Another thing to consider in this regard is that the EPL has traditionally limited the supply of live games that are broadcasted in its domestic market: The league has just increased the number of available live games from currently 168 to 200 games starting with the 2019/20 season. Therefore, Amazon, or any other new rights holder for that matter, is not replacing any existing broadcasting partners (i.e. Sky UK, BT Sport) but was just awarded additional game inventory. In fact, BT Sport also benefitted from the league’s decision and effectively carries more games for a lower overall price tag. (Again, more games does not necessarily mean more exclusive broadcast windows.) Against this background, it is much easier for the EPL to give such discount to build an initial relationship with these technology companies than for other Big-5 European football leagues who have traditionally made all of their games available on a live-basis in their respective domestic markets – where it is much more painful to take less money compared to overseas markets given that is where league have to create the vast majority of their revenues. Relying on their traditional rights holders, who are currently still the more profitable option for these leagues, has been a logical decision for Ligue 1, LaLiga & Co. By implication, these legacy players have mostly maintained a monopoly on first-tier broadcasting rights in Europe and across the globe. Another challenge that I repeatedly mentioned in the past is the decade-long head-start of legacy media companies when it comes to the production of live sports events. With the exception of the German Bundesliga (via its subsidiary Sportcast GmbH) most of the premier sports leagues (e.g. EPL, LaLiga, NFL, NBA) continue to outsource production responsibilities to the rights holders - just another entry barrier for non-endemic sports broadcasters. (see: Twitterpost⬇️)
Amazon is going to outsource any production and shoulder programming to BT Sport and its long-time partner Sunset+Vine, a leading sports production and media company in the UK. Effectively, Amazon remains the distributing outlet, similar to what they have done in the NFL with Thursday Night Football – although on an exclusive basis this time around. BT Sport playing friendly with Amazon also shows that the incumbent players do not really seem to be worried by new players tipping their toes into the space of first-tier sports rights. Digital-only horizontal platforms such as Facebook, Twitter, YouTube, and Amazon have long been an outlet for lower-tier assets which are fine with being paid with reach/distribution plus some share of advertising revenue instead of guaranteed upfront rights fees. However, they are still in a period of experimentation, but it is much easier stay true to their culture of “move fast and break things” (i.e. test, learn, look at the data, move again) when you talk about low-risk and low-budget long-tail broadcasting rights instead of billion-dollar investments.
The LaLiga (Telefónica), Ligue 1 (MediaPro, BeIN Sports), and Serie A (Sky IT, DAZN) were not willing to forego any revenues today for increased hopes of an ultimate payday down the road – going with mostly established rights holders willing to pay market rate. The Bundesliga is the next league up and I think that there is a real possibility the German top-flight competition could be the first to get the best of both worlds: A technology company (read: Amazon) paying market rate for domestic broadcasting rights - more on that later.
In a nutshell, the leading football leagues in Europe which have continued to rely on established rights holders have locked in significant increases, which fortifies their grasp on the premier broadcasting rights in Europe through at least the 2020/21 season (Serie A). The EPL, the only league to incorporate a technology company suffered a significant setback and any investment from Amazon, Facebook & Co. in the sports broadcasting market remains minuscule in the grand scheme of things: Amazon, probably the most serious contender for making any noise for multiple reasons (e.g. dual revenue stream of subscriptions and advertising, high household penetration in markets such as Germany or UK) when it comes to premium sports media rights, has merely committed to approximately USD 100m in annual rights across all territories and assets including the NFL (USD 65m; global rights), ATP World Tour 1000/500 Events (USD 12,9m; UK), EPL (see above; UK), or US Open (USD 7.0m; UK). (see: Twitterpost⬇️)
Considering that the sports broadcasting rights are a USD 50-billion-market globally, that is a lot of talk about a set of very insignificant players at this moment in time. Unsurprisingly, I would disagree with takes that Amazon, FB & Co. will be major competitors for upcoming sports broadcasting deal in the near term – except for the few instances here and there as part of their current period of experimentation.
US-Based Legacy Brands with effective Defense Strategy against New Market Entrants
Whether these technology companies will ultimately come to the conclusion that they want to go all-in with live sports – or want to have nothing to do at all with that – remains to be seen. However, US-based incumbents, in particular, have built a pretty effective defense strategy as far as I am concerned: First-tier rights remain essential for the ecosystem of linear free-to-air and pay television in order to drive subscriptions (i.e. retransmission/carriage fees from television platform operators) and advertising revenue. Their absolute unwillingness to concede these marquee rights to any new challengers has inevitably forced new market entrants, both financially powerful, global (e.g. Amazon, Facebook, Twitter) as well as pure-sports, local upstarts (e.g. FloSports/US, WatchStadium/US, FOOTTERS/Spain, Sporttotal.TV/Germany), to focus on lower-tier competitions and niche customer groups to build an awareness (and initial subscriber base) for their ambitions in streaming of live sports. Gaining any traction with non-marquee rights plus being digital-only represents an uphill-battle from the get-go. Additionally, established media companies such as ESPN, Turner Sports, CBS and NBC launching stand-alone digital distribution outlets (i.e. ESPN+, B/R Live, CBS Sports Network, NBC Sports Gold) creates an even bigger moat for these incumbents: Lower-tier rights – which these incumbents at least theoretically would have been willing to concede to new bidders given skyrocketed acquisition costs and / or limited space in the linear ecosystem to distribute and, therefore, monetize such content – have found a new home under the umbrella of legacy media companies while being kept away from the new competition. Opting for media rights deals with unestablished bidders (e.g. FloSports in the US) often reflects a trade-off between higher rights fees versus (I) limited visibility (e.g. low brand awareness / newness of rights holder), (II) distribution (e.g. small subscriber base of rights holder) and (III) accessibility (e.g. lackluster digital adoption across different demographics).
ESPN (e.g. for Pac-12 on ESPN+), Turner Sports (e.g. for UEFA Champions League on B/R Live), and NBC Sports (e.g. for English Premier League on NBC Sports Gold), instead, offer the best of all worlds for leagues/organizations: First, legacy media companies are willing to offer reasonable rights fees thanks to the incremental monetization of the content via new OTT services. Additionally, these second- and third-tier assets benefit from higher visibility among mainstream sports fans due to the pure association to and marketing power of legacy media companies, but also thanks to the opportunity of the occasional windowing across their fully-distributed, linear broadcast channels. Finally, having streaming platforms as their usual home allows for great flexibility via on-demand consumption.
In a nutshell, these complementary digital outlets such as ESPN+ and B/R Live are not a replacement for ESPN’s or Turner’s established brands. Rather, these are incremental platforms with exclusive content that take digital competitors off the table by allowing scaled distribution of second- and third-tier events while first-tier events continue to be aired on linear free- or pay-TV exclusively – in other words, consumers have to subscribe to the traditional pay-TV bundle. A general take is that the North American sports media market is always a few years ahead of its European counterpart. However, digital-only or -first bidders for sports broadcasting rights made much more inroads in the latter up to this point (e.g. DAZN in Germany & Italy; Eleven Sports and Amazon in the UK; RMC Sports in France). That prompts the question whether a similar strategy as currently observed by the legacy media brands in North America would have made historically dominating pay-TV operators such as Sky PLC (UK, Germany & Italy), Canal+ Group (France), or Telefónica (Spain) less susceptible to new market entrants. Currently the incumbents continue to use the digital ecosystem as a mere complementary distribution channel for its linearly broadcasted content but not as an incremental product. For example, ESPN+ and B/R Live pretty much suffocated any ambitions by aggressive upstarts such as DAZN. Other potential players such as Amazon, Facebook, or YouTube have unsurprisingly not even considered to enter the sports broadcasting arena in any serious manner in their domestic market up to this point. (see: Twitterpost⬇️)
Amidst the current rumours of the NFL potentially slicing the current NFL Sunday Ticket hold by AT&T into a streaming-only and linear-only package after the upcoming 2019 season, Disney and Amazon reportedly are the current front-runners for the streaming option: Disney preventing Amazon from taking advantage of probably the best opportunity for any digital-only player to become a serious player in the world’s largest sports media market would be the most-clearing evidence of the great effectiveness of leveraging digital platforms as incremental products for defensive purposes by legacy media companies.
International Media Rights as True Differentiator Between Big-5 Football Leagues?
Coming back to the current situation around the EPL, another conclusion of the seeming convergence of domestic media rights revenues has been that international markets will inevitably become the true differentiator between the “haves and have nots” among the Big-5 European football leagues. Unsurprisingly, every one of them sees a lot of growth ahead outside of their respective own borders. Looking at recent developments for the EPL, though, there is the question whether the English top-flight competition has not only been already overpriced in its domestic market, but also in multiple overseas markets: Is there any risk of a similar market correction of its media rights valuations in overseas markets like the EPL has just suffered domestically and, by implication, the opportunity for the other Big-5 leagues to close the gap even more?
To that end, any candidate for CEO position of the EPL is probably asking him- or herself whether there is actually anything to gain given that Scudamore’s successor will inevitably be compared to 59-years-old’s stellar two-decade-long run at the top of the league: Amongst other things (e.g. introduction of tiered sponsorship model), growing annual media rights revenues from GBP 520m to GBP 2,748m since 2001 (+6.0% p.a. [domestic], +16,4% p.a. [international], +8.4% p.a. [overall], 4.3x since 2001) and, thereby, transforming the EPL into a commercial powerhouse will always be top of mind when talking about his legacy.
Based on every official and reported candidate for the league’s CEO position (e.g. BBC's Tim Davie, Discovery's Susanna Dinnage, ITV's Tom Betts) having a background in the media industry does not seem to be a “good-to-have” but a “required” prerequisite for any candidate. It not only shows that the league thinks the broadcasting side of things continues to be of paramount importance for the future of the EPL. It also tells any candidate that how the future CEO will cope with the current disruption in the broadcasting and streaming space (i.e. media rights revenue) will be the figure based on which his or her success or failure will be measured.
After the suffered setback in the domestic market for the upcoming rights cycle (2019 - 22), the initial results in some overseas market are not really promising neither: Significant corrections in some territories, that rank among the most significant contributors to EPL's overall revenues from international rights (e.g. Hong Kong, South-East Asia, Singapore), are reminiscent of the market correction in the UK after a fierce bidding war between Sky Sports UK an BT Sport just three years before. In fact, a less competitive landscape of potential bidders has clearly been the main factor for less profitable deals for the EPL across Asia in particular. Pay-TV markets in many regions seem to have moved towards a "winner-takes-all" scenario: Amidst skyrocketing rights acquisition costs, only a virtual monopoly on sports broadcasting rights seems to ensure a clear path to profitable operations. Increasingly fewer contenders are willing or able to sustain losses for a prolonged period of time to build up a meaningful subscriber base to evolve into a sustainable business: Examples like DAZN and Eleven Sports, who survive more than one rights cycle, remain the exception. Nonetheless, new upstarts continue to pop-up (e.g. Mola TV in Indonesia). The question will be whether these have the staying power to overcome the initial growing pains (e.g. lack of brand awareness, distribution, consumer trust) – most of their predecessors (e.g. LeSports) did not. Many industry experts still expect the great rights grab by "Big-Tech." However, even if Amazon, Facebook, YouTube & Co. end their current period of experimentation with the conclusion that at least a few of them want to become serious bidders in the sports broadcasting market, a new contender here and there will be needed to challenge the incumbents in the meantime and avoid a temporary downtick in market value of audiovisual rights. Another thing to consider and something that supports the idea of a value convergence of media rights across the European Big-Five is that the EPL has in many instances generated two- to three-times the amount in overseas market than its continental competitors. Since the latter, LaLiga and Ligue 1 in particular, have successfully moved closer to the English top-flight competition domestically, could there be a similar development abroad?
In the grand scheme of things, neither individual outcome is disastrous for the EPL and one or two major increases in the more significant football broadcasting markets (e.g. Sub-Sahara: +22.6% to $233m per season) can easily compensate for several minor setbacks. The league is about to complete the sale of its international rights for the upcoming rights cycle shortly, and as of late, most industry experts have continued to believe that the league is still on its way to a solid increase (approx. +25%), exceeding £4.0bn for the three-year period for the first time ever, and compensate for the drop in the value of the domestic rights. Total media rights income for the next cycle – domestic and international – will probably grow in the mid-to-high single digits (approx. 5-10%) compared to the current cycle.
With the increased reliance on media revenue, especially in the case of average to below-average EPL teams, to finance its day-to-day operations, the still-to-be-determined new CEO will primarily be tasked with handling the ongoing disruption of the sports broadcasting market. Even if the league will be able to squeeze out a small increase in total media revenues this time around (2019 - 22), the margin for failure (i.e. correction in individual overseas markets) certainly gets even smaller. It also remains to be seen how piracy will impact the value of sports broadcasting rights around the world: Saudi Arabian-based(-backed) beoutQ is the certainly most publicized example of illegally distributing valuable live sports content and had already real negative impact on the monetizability of premium sports rights (e.g. Formula 1 in MENA region). With a looming flattening out of rights fees and very few catalysts on the horizon, even smaller piracy operations in numerous territories could make the difference between an increase or correction of overall media revenues. Pirates of live sports continue to always seem one step ahead and the fact that the UK trade minister George Hollingbery recently admitted having never heard of beoutQ shows that the sports-media-complex will probably be on its own to fight the illegal distribution of its live content - it is simply not that big of a deal in the grand scheme of things, despite generating approximately GBP 4.8bn in revenues as a league during the 2017/18 season.
On the other hand, the rights cycle starting with the 2022/23 season should benefit from the fact that its broadcasting rights for the world's biggest sports broadcasting market (+/- $21.9bn or +/- 44.2% of global market volume) are back on the market: In 2015, NBCUniversal retained the English Premier League in the United States for a total of USD 1.0bn (+/- $167m per season) as part of a six-year deal (2016 - 22). The appetite for the English top-flight league has only grown since then, and is the only league (+/- 428,500 on average) that was able to rival the TV viewership of the uber-popular Mexican Liga MX (+/- 459,300 on average) during the 2018/19 season. The domestic MLS (+/- 290,300 on average) is a distant third while the LaLiga (beIN SPORTS), Ligue 1 (beIN SPORTS), Bundesliga (Fox Sports), and Serie A (ESPN) rarely crack the 100K - mark – if they make it into the limited space of linear television in the first place.
Other Big-5 with Promising Developments in Overseas Markets
As far as the EPL is concerned, tt remains to be seen whether exceptional growth in relative terms in some less-relevant markets such as Germany or Indonesia will overcompensate for any declines elsewhere. An overall slowdown in growth in both the domestic as well as international markets for the English Premier League is undeniable though. The league’s competitors, for their part, have made serious progress outside of their own borders and seem to deliver on the assumption that a stronger focus on internationalization offers tremendous upside compared to the increasingly saturated domestic markets:
The Italian Serie A locked in a significant increase in guaranteed rights fees for its current rights cycle (2018-21) from sports agency IMG (€371m per season) compared to its previous agreement with now-dissolved MP&Silva (€190m per season) – with Cristiano Ronaldo unexpectedly..
After having recently closed new deals in Italy (through 2020/21), United Kingdom (through 2021/22), Spain (through 2021/22), and France (through 2022/23), the domestic live broadcasting rights to Europe’s five biggest football/soccer leagues are now locked up to for at least the next two-and-a-half years, before the Italian Serie A and German Bundesliga are back on the market. Except for the English Premier League, which inevitably experienced a slight downward correction (-9.8%) and will move closer back to the pack, exceptional increases in annual domestic broadcasting revenue have been secured across the board - showing no signs of a bursting media rights bubble anytime soon.
Since it should be a rather quiet period on the media rights - front (ironically the news about digital-only streaming service Eleven Sports reportedly being on the brink of shutting down its operations in the United Kingdom just broke), I thought it would be an opportune time to take a look at the current state of European football’s sports broadcasting market and a looming issue that has recently caught my eye: The increased discontent of second divisions with the lack of attention by its current rights holders, most recently observed in Spain and Germany in particular.
The common denominator between the “2. Bundesliga” in Germany and “La Liga 1|2|3” in Spain is that all of their live broadcasting rights are exclusively held by the first division’s main broadcasting partner: Overshadowed by the country’s top-flight football competition in Germany (Bundesliga; Sky Deutschland) and Spain (La Liga Santander; Telefónica), the second divisions struggle for any attention (think: airtime, level of production, news coverage) by its exclusive rights holder, making it even more difficult to become relevant for the mainstream audience. Domestic broadcasting rights to a country’s top-tier competition are usually shared between at least two broadcasting companies due to the public-serving, competition-creating approach of lawmakers in Europe (think: “No-Single-Buyer” - Rule). In North America, instead, the sheer costs and associated risk of exclusive ownership to the market’s biggest sports properties make exclusive ownership rather unlikely. In second-tier competitions of European football, however, having one exclusive rights holder of all games has become the standard. To make matters worse, said rights holder is more often than not also the primary rights holder of the country’s first-tier competition due to multiple reasons (think: bundled media rights tender, one market-dominating pay-TV operator).
In my opinion, it would more important to make sure that the first- and second-tier competition do not have the same primary broadcasting partner instead of artificially splitting the first-tier competition’s rights across multiple rights holders as intended by the “No-Single-Buyer” - Rule.
Artificially Creating Competition & Innovation Through Public Interventions
In-line with the more public-serving, competition-creating approach of European lawmakers, there are much shorter media rights cycles in European football with the well-intended objective of not hampering competition and innovation. The North American sports rights market, for its part, has rather adopted a “laissez-faire” - approach regarding the number of rights holders and length of broadcasting deals. This is also one reason why new (digital-only/first) market entrants in Europe got a much earlier shot at high-profile sports media rights (think: Amazon: EPL & Tennis US Open in the UK, Eleven Sports: Golf PGA Championship, NBA, La Liga & UFC in the UK, DAZN: Premier League & UEFA Champions League in Germany) compared to the United States, a market that is currently characterized by the unavailability of any premium (and second-tier) live sports content due to long-term lock-up of the NBA (9 Years through 2025), NFL (9 Years through 2021/22), NHL (10 Years through 2021), MLS (8 Years through 2022), and MLB (8 Years 2021, excl. FOX’s recent 7-year-extension through 2028).
Even in the absence of any significant intervention on behalf of public regulators, live broadcasting rights in North America are usually shared among different rights holders and distribution systems (think: free-to-air TV vs. cable/satellite pay-TV) because the enormous value of media rights, or cost depending on your point of view, effectively serves as a “No-Single-Buyer” - Rule for the NFL, NBA, and MLB: Nobody would assume the risk of becoming the exclusive rights holder by committing multiple-billion dollars per year to a single sports property. Therefore, it is also no coincidence that the least-valued property among the four major leagues (read: NHL) is the only one in exclusive hands of one broadcasting partner: NBC pays an average of +/- $187m per season for the NHL after the network agreed to pay +/- $2bn over ten years (2011-21) but handed the league +/- $200m in up-front payments once the deal was signed in April 2011. Operating still under a media rights deal which was agreed upon almost a decade ago and before rights fees literally exploded across the global sports rights market, any new deal for the NHL is likely to increase more than twofold once the current deal expires after the 2020-21 season. Committing annually more than tenfold that amount of the NHL to only one property, instead, is a financial commitment on another level. As a result, the NBA (+/- $2.6bn; ESPN & Turner Sports), MLB (+/- $1.55bn: Turner Sports, FOX & ESPN), and the NFL (+/- $5.5bn; CBS, ESPN, FOX & NBC) have almost inevitably multiple rights holders, who share the financial commitment (or burden), for the linear distribution on national airways alone. With a competitive media landscape obviously secured in North America, European lawmakers have argued that the long-term lock-up of sought-after broadcasting rights would negatively impact the right holders’ incentives to continue to innovate: However, examples such as NBC’s “Sky Cam” for NFL broadcasts on the production-side or Turner’s purchase options for individual quarters during NBA games on the consumption-side are admittedly only of anecdotal evidence but there is no argument against the fact that rights holders have continue to enhance the broadcasting experience in order to compete for the consumer’s attention and discretionary income amidst an increasing number of entertainments options in today’s media landscape. Moreover, it could actually be made the case that a long-term lock-up incentivises rights holder to commit additional resources to any innovative efforts since it does not face the risk of losing the just-acquired media rights anytime soon.
Across the pond, the intervention by European regulators does not just end with putting an artificial limit on the length of any rights agreement. Probably even more significant, the contractual freedom regarding the make-up of the set of rights holders for Europe’s most important media properties is limited: Currently the first-tier national football leagues in France (Ligue 1), Italy (Serie A), United Kingdom (Premier League), and most recently Germany (Bundesliga) have committed to the so-called “No-Single-Buyer” - Rule, introduced by the European Commission to ensure that no single bidder may be awarded all exclusive audiovisual rights for the competition’s live broadcasts.
Before focusing on the Bundesliga and the all-encompassing failure of the “No-Single-Buyer” - Rule in Europe’s second-largest sports rights market, you may wonder why I have not mentioned any other sports (think: Basketball, American Football, Motorsports, Tennis, Boxing) yet. In a nutshell: Excluding cyclical continental or global multi-sports events (think: Olympic Games), football is pretty much dominating all other sports properties, resulting in a highly-concentrated European sports market in terms of economic value. Therefore, almost every sports besides football struggle for mainstream attention and has inevitably to be categorized as niche sports in most markets. How big (read: dominant) is football/soccer outside of North America? Just take a look at the global sports media rights market: Although US sports properties boost three of the four highest-valued media rights on an individual basis (NFL, NBA, MLB), football properties (+/- $20.1bn) dominate the global landscape with a market share of more than 40% in 2018, .
Bundesliga: “No-single-buyer” - Rule As Flaw In Otherwise Successful Media Rights TenderAmong the European broadcasting markets, Germany is characterized by two specific observations: First, football is even more dominating than in almost any other European country, greatly diminishing the mainstream relevance of other somewhat popular sports (think: Winter Sports, Formula 1, Basketball). Second, the country has historically has a very strong free-TV landscape that is home to both Europe’s best-funded public broadcasting service (think: ARD & ZDF), reportedly having an annual budget of +/- €600m for sports content at its discretion, and numerous for-profit free-to-air broadcasting channels that are (purely) ad-financed but have carried a lot of live sports in the past (think: RTL, Sat.1, ProSieben, Sport1). Having had access to lot of a media content for free over the last few decades, an unwillingness of German consumers to pay for any content has been firmly developed - certainly a problem in times during which acquisition costs of premium live sports are increasingly only to be recouped by rights holders with a dual revenue stream of subscription and advertising revenue. Unsurprisingly, pay-TV operators in Germany had major problems to build a sustainable business model in the past (think: Premiere, Arena). Luckily for any pay-TV business, even the spoiled consumer in Germany started to get somewhat sensitized to the idea of paying for premium content or increased convenience as other paywalled services in the area of music (think: Spotify, launched in 2012) or non-sports video content (think: Netflix, launched in 2014) gained some traction. Those developments certainly contributed to the fact that Sky Deutschland, having been the exclusive rights holder of the Bundesliga from 2009/10 through 2016/17, reported its first-ever year of positive operating income (= earnings before interest and taxes; EBIT) in FY15/16. How tough and unprofitable has the German broadcasting market really been for any pay-TV business? The reported operating income for its German division (+/- £4m) contributed a mere +/- 0.2% to the London-based pay-TV operator’s bottom-line (+/- £1.558bn). At the same time, banking revenues of +/- £1.512bn during FY15/16, the German division actually contributed +/- 12.6% to the top-line of Sky PLC, making Sky Deutschland an operation running on razor-thin margins.
Just because the leading, and essentially only, pay-TV operator in Germany announced its first profitable financial year of its history did not mean that the German market was all of the sudden prepared to become home of another rights-buying entity trying to monetize its sports content through subscriptions. Before the 2016/17 Bundesliga season, less meaningful concessions (think: comprehensive highlights and selected live game broadcasts on free-to-air channels) made by Deutsche Fussball Liga (“DFL”), which is responsible for operating both the Bundesliga and 2. Bundesliga, were sufficient to assuage the German competition watchdog (“Bundeskartellamt”). In exchange, all 36 teams across the first and second division were allowed to sell their broadcasting rights via one centralized media rights tender to one single bidder. Starting with the 2017/18 Bundesliga season, however, the Bundeskartellamt demanded that more than one bidder may be awarded audiovisual rights for the Bundesliga’s full-length live broadcasts. Therefore, the DFL was suddenly tasked to come up with another viable option for at least 30 out of the 306 Bundesliga matches in order to satisfy the newly-implemented “No-Single-Buyer” - Rule for the current four-year rights cycle (2017/18 - 2020/21). Whereas the domestic media rights tender was a great success for the DFL from a monetary perspective, banking +/- €1.16bn per season (+73%) through 2021, it also resulted in an uphill battle for the successful bidders to recoup their rights acquisition costs.
Interested in additional insights into the current state of the sports broadcasting market in Germany?
Amongst other things, my book includes an in-depth case study of the Bundesliga and how the ongoing digitization will impact the segmentation, distribution, as well as monetization of its audiovisual broadcasting rights:
"Auswirkungen der Digitalisierung auf den Sportrechtemarkt in Deutschland"
The book can be purchased as E-Book (PDF) directly on my blog or as Paperback and Kindle-Edition over on Amazon.
For market incumbent Sky Deutschland, being a profitable operation (i.e. positive EBIT) was ultimately a short-lived aberration and the pay-TV operator was immediately back making operating losses (+/- £40m) once the new domestic rights agreement kicked in during the company's FY17/18. A similarly negative impact on the division’s bottom-line has been observed one year earlier in the UK, with operating profits dropping from +/- £1.504bn to £1.292bn (- 20.8%) in FY16/17, when the recording-breaking domestic broadcasting deal (+/- £5.1bn over three years) took effect. It will be interesting to see whether the German division can bounce back the same way like the UK business once it adjusted its operations (think: cost-cutting) after committing +/- €876m per year over the next four seasons to retain the majority of Bundesliga games (266 out of 309 matches) on an exclusive basis. On a positive note, Sky Deutschland was able to continue to grow its subscriber count by +/- 4.0% to +/- 5.191m since the new agreement with the DFL started - despite necessary but significant losses in the company’s rights portfolio (think: Formula 1, Premier League).
Increasing annual domestic broadcasting revenue by an astonishing +/- 73% compared to the previous rights cycle to +/- €1.16bn was the good news for the DFL. However, it was still tasked with finding a second viable bidder for a significant live package despite the fact that even exclusive ownership of the country’s most valuable sports property was a business with razor-thin margins for any pay-TV operator in the past.
Being the rights holder of the Bundesliga, besides the UEFA Champions League probably the only sports property able to drive any subscriptions from German consumers not willing to spend on content at all, had never evolved into a sustainable business model in the past. Until the 2017/18 season, the rights holder had at least the benefit of being the “Home of All 612 Bundesliga Games” per season - a message that was heavily pushed by every rights holder’s marketing efforts since both competitions moved behind the paywall starting with the 2001/02 season. The now-dissolved channels Premiere (2001/02 - 2008/09) and Arena (2006/07) never turned the costly Bundesliga into a profitable business before UK-based Sky PLC entered the market. Now, the Deutsche Fussball Liga (DFL) faced the challenge of coming up with another broadcasting company willing to invest in an inherently loss-making endeavour. With digital-only platforms such as Telekom Sport (launched in 2014) or DAZN (launched in 2016) not being serious alternatives for the DFL yet as German consumers have traditionally been slow adopters of digital technologies, Discovery-owned Eurosport, which largely operated as an FTA channel at this point in time in Germany, was effectively pushed into assuming the role next to Sky Deutschland. The pan-European pay-TV operator, who is actually not known for its ambitions in live sports content in its domestic market in North America, ultimately committed +/- €70m per season to broadcast 43 selected games on Fridays, early Sundays, and Mondays on an exclusive basis. Additionally, ZDF, one of the two largest public broadcasting services in Germany, acquired a minor non-exclusive package for three live games as the channel had already done during the previous rights cycle. Due to the aforementioned need for a dual revenue stream to recoup the skyrocketing rights acquisition costs, a more comprehensive live coverage on free-to-air channels had not been a serious alternative either - even for the well-funded public broadcasting service in Germany tasked to represent the entire breadth of the country's sports landscape by public mandate (think: backlash when spending entire budget on Bundesliga, limiting FTA distribution / visibility for niche sports).
Pivot To Long-Term, Multi-Territory Sports Rights After Unsuccessful Endeavour in Bundesliga
Not surprisingly, the lawmaker’s artificial attempt to change the nature of competition was bound to fail and Eurosport’s endeavour into the Bundesliga was not the breakthrough success that actually nobody expected from the beginning. The DFL itself provided probably the most obvious confession that nobody benefitted from splitting the audiovisual broadcasting rights between multiple bidders for its current rights period: Amidst heavy fan protests against an increasingly fragmented schedule, the league operator recently announced the elimination of any matches on Monday nights (20.15h) for the next rights period, starting with the 2021/22 season. Ironically, these stand-alone games on Monday nights were specifically created to increase the attractiveness / monetizability / exclusiveness of the second rights holder’s package.
The Discovery-owned pay-TV operator, for its part, also effectively admitted the failure when it comes to the Bundesliga: Although Discovery is not willing to leave the European sports rights market entirely, the company’s executives repeatedly hinted at a strategic pivot away from single-territory, short-term rights commitments (2-4 years) towards multi-territory, long-term partnerships in sports. Instead of facing the risk of losing broadcasting rights or at least the prospects of greatly increasing acquisition costs every other year given the short-term nature of rights periods required by competitive laws, it wants to focus its time and resources on long-term, multi-territory, if not global, broadcasting rights on a platform-neutral basis (think: linear, digital, mobile): Recent deals of that nature with the PGA Tour ($2bn/12 years; 2019-30) and Olympics (€1.3bn/6 years; 2018-24) underline the company’s vision to become a global player with exclusive rights to a comprehensive sports and entertainment content library. I shared my thoughts on Discovery’s vision for becoming a “global IP company” (think: sub-licensing its content to streaming platforms with similarly global operations such as Amazon, Apple, or Netflix) in a recent post on Facebook. (Facebook - Post in German-only) Despite being headquartered in New York, nobody should expect Discovery to become a serious player in the North American sports rights market anytime soon though, with higher price levels for sports broadcasting rights compared to Europe often cited as the main reason for the dislike for the world’s biggest media market by the company’s executives. The European market has certainly caught up over the last few years, costs for comparable broadcasting rights (think: size of audience, advertising inventory) are still priced about +/- 30% lower compared to North America and Discovery would certainly be late to the game in an increasingly crowded sports broadcasting market in North America.
With Eurosport likely to leave the field of potential bidders for Bundesliga broadcasting rights during the next rights cycle and no other contender being on the horizon, streaming platform DAZN - currently paying +/- €20m per season for digital Bundesliga highlights starting 45 min after the final whistle - will inevitably have a pretty clear path to carrying live games of the top-flight competition, assuming that the "Bundeskartellamt" will not revisit its ill-fated “No-Single-Buyer” - Rule to some extent. Nonetheless, it remains to be seen whether a complementary rights holder of Bundesliga rights - next to Sky Deutschland - will be able to build a sustainable business (think: ability of driving subscriptions relative to acquisition costs) with only a few selected Bundesliga games or whether exclusive ownership of (almost) all audiovisual rights is necessary to do so and competition should rather be driven through alternative means?
Exclusive Ownership Of Broadcasting Rights Necessary To Build Profitable Business For Traditional Pay-TV Operator?
As currently evidenced, 43 games of the country’s top-flight sports media property randomly scattered across Fridays, Sundays, and Mondays do not seem to be able to drive a significant amount subscriptions relative to its content acquisition costs. On the other hand, further cannibalizing the rights packages of the primary rights holder, who should be expected to remain Sky Deutschland beyond the current cycle, would be a questionable decision as well given the company’s latest financial results (think: stuck in the middle). This obvious need for exclusive ownership to a country’s leading football competition is a phenomenon that is not limited to the tough broadcasting market in Germany but can also be observed in other markets:
Although pay-TV markets in other European countries (think: UK, Spain, France, Italy) were and continue to be much more developed than Germany, housing more than one profitable pay-TV operator, who is actively buying sports rights on an exclusive basis to differentiate its services, has proven to be difficult as well.
Let us take a look at the United Kingdom: A similar “No-Single-Buyer” - Rule implemented by Ofcom, the government-approved regulatory and competition authority for the broadcasting and telecommunications industry of the United Kingdom, artificially forced similar and equally unsuccessful challenges of market incumbent Sky Sports UK by several pay-TV channels since 2007: On first glance, if one market should have been able to be home to more than one profitable pay-TV operator with a sustainable business next to one market-dominating rights holder of live sports content it was the UK: the world’s second largest sports media rights market with a total volume of +/- $4.1bn in 2016, or +/- 8.7% global market share, and comparatively high mainstream adoption of the pay-TV model, resulting in the world’s highest market share of a country’s GDP (0.15%) and market volume per capita ($63.21) for the domestic sports media rights industry. Seemingly attracted by that attractive market environment, affiliates from both Irish-based Setanta Sports (“Setanta UK”; 2007/08 - 2009/10; 46 EPL games per season) and US-based ESPN (“ESPN UK”; 2010/11 - 2012/13; 23 EPL games per season) grabbed the opportunity provided by the country’s competition watchdog and became complementary rights holder of the EPL next to Sky Sports UK in the past. This enthusiasm, however, was short-lived as the companies either ceased operations completely (Setanta UK) or were acquired by the competition (ESPN) after having secured rights to the EPL for only one three-years cycle each. In..
With the MLS Cup Finals between Atlanta United FC (defeating NY Red Bulls by 3:1 on aggregate in the Eastern Conference) and the Portland Timbers (defeating Sporting KC by 3:2 on aggregate in the Western Conference) all set after Thursday's semi-finals, it’s an opportune time to dive deeper into the league’s television viewership and stadium attendance during the 2018 regular season as well as the most-recent franchise valuations:
Increase on league-wide team valuations was driven by expansion franchises and catch-up of small-market teams.MLS - owned Soccer United Marketing has become a financial lifeline for a loss-making league in investment mode, but faces serious business challenges itself and becomes less valuable to the individual franchises every time another team joins the closed-league system.TV Viewership benefitted greatly from increased coverage on FOX broadcast channel as both ESPN and FS1 experienced declines on a stand-alone basis.Stadium attendance remained flattish compared to last season despite all expansion franchises boosting above-average audiences.Revenues from domestic media rights are expected to double in 2023 since "FLAT" being the new "UP" in today's media landscape is a common narrative anyways.
Finally, I share two final thoughts regarding efforts to measure a more complete audience (Linear + Out-of-Home + Streaming) and which role newcomer DAZN could play when it comes to the MLS, or soccer in the United States in general. Before, please check my preview of the MLS from March in which I tackled the league's expansion, first internationalization efforts, and the (delayed) roll-up of the league's subscription-based OTT service "MLS Live" into ESPN's direct-to-consumer streaming service: Verizon's Pivot-to-Video & MLS Season Preview (German-only).
According to Forbes, the average MLS franchise is now valued at +/- $240m, up from +/- $223m (+ 7.6%) last season. However, excluding the three most recent expansion teams that have joined the closed-league system since 2016 (Atlanta United, Minnesota United & Los Angeles FC), the average valuation only grew by +/- 3.6% to +/- $232m compared to the previous year. In fact, Atlanta United, who just joined the MLS in 2017, is already considered to be the most valuable franchise at a lofty valuation of +/- $330m, largely driven by the largest EV-to-Revenue multiple (10.33x) among all 23 current franchises. The average multiple, instead, has virtually stayed flat across the league (7.18x in 2017 vs. 7.17x in 2018) and even compressed when recent expansion franchises (think: higher expected revenue growth from a smaller base) are excluded (7.18x in 2017 vs. 7.02x in 2018). The average revenue per team has increased by +/- 7.5% to +/- $34.6m in 2018.
Atlanta United’s lofty multiple, in particular, is driven by higher forward-looking revenue for 2018 as the team played half of its inaugural season in 2017 - on which the current valuation is based on - in another stadium (Georgia Tech’s Bobby Dodd Stadium) before moving in its multi-purpose retractable roof stadium (Mercedes Benz Stadium, 70,000 seats), leaving some revenue on the table during the last season. Having accounted for +/- 25% of all MLS merchandise sold via MLS’s Official Online Store during the team’s inaugural season and by far the highest average attendance during the 2018 regular season (+/- 53,001 fans) to show for make the two-year-old franchise the odds-on favorite for topping the league’s revenue table next year, resulting in a more reasonable multiple going forward.
(Admittedly, being an expansion franchise certainly positively impacted sales as the team’s kits and merchandise rarely change from year-to-year in contrast to European soccer and it was their fans’ first opportunity to buy that new merchandise.)
The franchise’s immediate on-the-field success while heading into the MLS Cup Final as a heavy favorite (-500, or betting $500 to win $100, via Westgate Superbook) should provide another boost for the team’s valuation and, maybe even more important given the ongoing expansion of the league to 26 teams by 2020, it provides evidence for potential investors in new franchises that not just an attractive team valuation but also success on the pitch can be achieved immediately - normally a rarity in North American major leagues for expansion franchises. What has Atlanta United done differently compared to other franchises? Many have attributed both their on-the-field and following off-the-field success to a refreshing attacking playing style that has rarely been seen in a league dominated by more conventional game plans.
On a more macro level, there are at least three other overarching takeaways from the most recent team valuations: First, small-market teams (think: Columbus Crew SC, Colorado Rapids, Vancouver Whitecaps FC, Real Salt Like) seem to have caught up to larger-market teams with each of them boosting above-average increases in valuations (> 10%) compared to last year. Second, absent of significant multiple expansion (unlikely) and one-off events (think: new or renovated soccer-specific stadiums), there seems to little potential grow revenues in-between media rights cycles with nine teams having showing little or no revenue growth (think: below 5%) and league-wide revenues only modestly up (+/- $2.4m) - providing more evidence for the reliance on media rights revenue which is cyclical in nature.
Important to note that franchise valuations by Forbes usually underestimate the transaction value of respective franchises (think: premium to investors due to scarcity, branding, publicity value): Case in point, a controlling stake in D.C. United including their soccer-specific stadium named Allianz Field changed hands for +/- $435m (+/- 64% premium) earlier this year - actually supporting these lofty valuations.
Howie Long-Short [View of Financial Analyst] on MLS Team Valuations
With the FIFA World Cup being played on North American soil in 2026 and the addition of new (think: United D.C., +15.2% to $265m) or renovated (think: Portland Timbers, +4.5% to $280m) soccer-specific stadiums (think: higher average ticket prices), there are more catalysts for further revenue growth and, by implication, higher valuations for MLS teams on the horizon. However, the MLS continues to be a league in investment and expansion mode (think: salaries for “Designated Players” such as Chicago's Bastian Schweinsteiger (+/- $6.1m in 2018) going far above the league-wide maximum salary of $504,375, new state-of-the-art facilities / training grounds): For this reason, it relies heavily on cross-financing of its loss-making operations (accumulated operating loss in 2018: +/- $63m) through the redistribution of the reliable cash flows from Soccer United Marketing (SUM), which has proven to be vital for the long-term investments thesis in MLS teams. The for-profit marketing and commercial arm of MLS, in which all franchise owners hold an equal share, started out in 2002 to serve as an in-house unit to market the league’s intellectual property (think: media rights, sponsorships, licensing), but has evolved into a dominating marketing and media powerhouse for soccer properties across North and South America including exclusive commercial partnerships the Mexican Football Federation (FMF), US Soccer Federation (USSF) and CONCACAF in addition to the MLS. Most recently valued at +/- $2bn, the teams’ respective share in SUM contributes significantly to the individual franchise valuation. However, with every additional expansion franchise further diluting the ownership stake in SUM, currently sitting at +/- 4.35% per team, more pressure is put on franchises to evolve into profitable operations to compensate for any further dilution going forward to keep up with the ambitious valuations. After years of tremendous growth, however, the soccer-dedicated marketing agencies potentially faces serious challenges for its business as well: Relevent Sports, a new agency backed by Miami Dolphins owner Stephen M. Ross and organizer of the annual International Champions Cup (ICC) with 18 of Europe's biggest soccer clubs as, certainly aspires to take a larger share of the commercial soccer market in the United States going forward - effectively challenging the monopolistic position of SUM for one of the country's fastest growing sports. (see Twitterpost)
Coming back the impact for the individual MLS franchises: Just over the last two years, the stake in SUM for every team has been diluted by 0.65 percentage points with three additional franchises joining the ownership pool, resulting in a hypothetical loss in valuation for every team of +/- $8m since 2017. Nonetheless, banking expansion fees of at least $150m for any new franchise joining the closed-league system should continue to mitigate any potential opposition by existing owners: FC Cincinnati (2019) and a yet-to-be-named franchise in Nashville (2020) are set enter the MLS shortly - in exchange for $150m each on top of the cost for the mandated soccer-specific stadium that could touch the billion-dollar mark.
Howie Long-Short [View of Sports Fan] on TV Viewership and Stadium Attendance
The league's three most recent additions actually ended up with above-average attendance figures during the 34-game regular season: Atlanta United (1st place, +/- 53,001), Minnesota United (5th place, +/- 23,902), and Los Angeles FC (8th place, +/- 22,042) ranked all among the Top-10. Overall, average attendance during the regular season in 2018 (through 33 out of 34 weeks) has been slightly down to +/- 21,803 compared to last season (- 1.4%). If you are not into the in-stadium experience, domestic soccer fans will have to rely on the league’s broadcasting partners ESPN and Fox Sports (+/- $75m per season) as well as Univision (+/- $15m per season) through 2022 to get their weekly dose of MLS games.
Total viewership for the 2018 regular season was up +/- 5.7% from 26.3m to 27.8m viewers across all broadcasting windows and networks, via Sports Business Journal. At first glance, these viewership numbers are tremendous given today's on-demand culture when it comes to media consumption. Although a similar year-over-year increase for the NFL through week 12 across all broadcast networks and windows (+/- 5.0%) makes even great headlines currently and the previously high-flying NBA is actually down one month into the season (TNT: - 26% & ESPN: -6%), there are some caveats for the MLS which is supposedly still in major growth mode: MLS viewership is probably somewhat inflated by the carriage of six games on the FOX broadcast channel (+/- 988,000 viewers on average) during the FIFA World Cup 2018 in Russia, benefiting greatly from highly-watch lead-in programming in addition to the broader over-the-air distribution (+/- 120m TV households) instead of the rights holders’ pay-TV channels (max. +/- 90m subscribers). In fact, linear viewership numbers on both ESPN (-8%) and FS1 (-15%) were actually down compared to last season on a stand-alone basis.
The problem going forward: Being right in the middle of its current domestic media rights deal (2015-22) without a FIFA World Cup on the horizon until 2022, the MLS will probably face a slight pull-back in TV ratings until the next rights cycle be negotiated around 2020/21.
It should still be expected that the MLS will be able to at least double its domestic media rights revenue, exceeding the NHL’s current deal with NBC (+/- $200m per season) and, therefore, challenging ice hockey in yet another category for its fourth place among US major sports leagues. However, non-monetary aspects should also be considered given the league’s overall objective: turning the United States and Canada into soccer-nations. Prioritizing increased broadcast coverage on over-the-air channels over slight differences in revenues might be a reasonable approach in order to penetrate the North American market beyond the hardcore soccer fans (think: EPL’s breakthrough thanks in part to broader coverage on NBC). Such considerations could certainly be an obstacle for digital-only player DAZN, in particular, who I consider a dark horse candidate (read: front-runner) for an MLS package starting 2023: DAZN Chairman John Skipper is a vivid soccer fan and probably losing out on any NFL package in 2021 (ESPN) and 2022 (CBS, FOX & NBC) could quickly shift their focus to the MLS. However, we might not even have to wait much longer until we see some more soccer programming on DAZN as I recently pointed out on Twitter. (see: Twitterpost)
Another positive note from the media side: According to Forbes, MLS Commissioner Don Garber said the MLS has actually done better than expected during the league’s first year on the newly-launched ESPN+ platform, after the league-owned OTT service called “MLS LIVE” was rolled up into ESPN’s new streaming platform before the season. In addition to ESPN being one of two rights holders for the English-language broadcast, both entities were already tied up on the technological side as Disney-owned BAMTech Media provided the backend infrastructure for MLS LIVE since its launch - making ESPN+ the exclusive home of Major League Soccer’s out-of-home streaming package an obvious decision. Important to add that total viewership on ESPN (Linear + Out-of-Home + Streaming) was actually up by +/- 13% compared to last season, which comes to no surprise given these changes. ESPN has been at the forefront of trying to measure a more complete audience that goes beyond the traditional ratings by signing up to Nielsen's new measurement as the first major television network at the end of last year: Although "The Worldwide Leader in Sports" saw immediate returns with a significant uptick in total viewership (+/- 23%) for October 2017 and a broader adoption by other networks over the last few months, establishing this new measurement as official currency in the advertising market will be another discussion going forward. (see: Twitterpost)
Then there is the recently discussed merger with the Mexican Liga MX. Although the scenario of a "North American Super League" across Canada, the United States, and Mexico should remain a pipe-drive of a few executives (think: Enrique Bonilla, President of Liga MX) for several reasons (think: MLS's closed-league system and opposition of promotion/relegation, total league size of 50 teams, franchise vs. association - model), the two leagues at least entered a formal partnership (think: Campeones Cup) for the first time in order to compete together with leagues in Europe and the rest of the world. But even in absence such drastic measures, in which, at least from a fan interest's point of view, the MLS would actually be "the little brother," media revenues for the MLS should continue to rise: Being located in the world's biggest sports media rights market (+/- 40% share of $49.5bn global market volume) should certainly help in this regard.
Other challenges such as the quality of the on-field (or -pitch) product and limited integration with the rest of the soccer world (think: anti-cyclical season schedule, salary cap, closed-league system) will keep MLS executive busy, nonetheless.
Next Saturday (12/9) at 8pm ET, the MLS will return to the FOX broadcast channel with its all-deciding MLS Cup Final taking place in the Mercedes-Benz Stadium. Since 2012, the finals have been hosted by the participant with the highest point total during the regular season instead of a predetermined neutral-side venue. Fifth-seat Portland Timbers (54 pts.) will have to relish the underdog role (+375, or betting $100 to win $375, via Westgate Superbook) one last time against Atlanta United (62 pts.) that finished second in the West Conference during the eight-months-long regular season running from March through October. An interesting thing to watch will be whether this match-up will become the most-watched game of the season: Atlanta United against Seattle Sounders, immediately following the FIFA World Cup Final on July 15, averaged 1.59m viewers on FOX, the best figure for any MLS match since 2004. Another record that might be broken on Saturday: With the more than 70,000 seats at Mercedes-Benz Stadium, it will be the highest attendance to date for an MLS Cup Final. Despite the great ticket supply, even the average resale price on the secondary market could be the most expensive in nearly a decade, currently hovering around +/- $300 per seat, according to The Atlanta Journal-Constitution.
This column was published in an edited, shortened version on JohnWallStreet.com, a daily newsletter covering the intersection of sports and finance. If professional teams & stadiums, television networks, and companies in the area of apparel/footwear, equipment, ticketing, or content trade on Wall Street, and have a sports angle, it’s in their wheelhouse. Get your daily dose of sports business with Howie Long-Short (financial analyst) and Fan Marino (sports fan) each providing their expert opinions on the day's top stories: Subscribe here to the JWS Newsletter. You can also follow me (@yannickramcke) and the friends over at JohnWallStreet (@JohnWallStreet) on Twitter.