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NBC out of bidding for MLS rights
by Paul Kennedy, January 10th, 2014 4:08PM

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TAGS:  england, mls, television

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[SOCCER ON THE AIR] NBC Sports confirmed on Friday that it was pulling out of the bidding for the MLS media rights, which it currently shares with ESPN, leaving ESPN and Fox as the two likely bidders for the new English-language package that begins with the 2015 season.

NBC's statement to the Sports Business Daily said, "We've enjoyed our partnership with MLS. [Commissioner] Don Garber and his team are building something very positive, and we wish them well."

One of the announcements that could come out of MLS's activities at next week's MLS SuperDraft is who'll get the MLS media rights. Sources told the Sports Business Daily that negotiations on a deal were in an advanced stage. The price tag: $70 million, which would double the current deal. The sticking point: the length of the deal.

Live sports programming is extremely valuable to networks. The NHL currently ranks fourth among the major U.S. sports leagues in terms of TV viewing, yet it garnered $200 million a year for a 10-year deal with NBC Sports. The three-year deal NBC Sports struck with the English Premier League was for $250 million, meaning MLS would earn close to what the EPL gets even though its viewerships are only a fraction of what NBCSN gets for the EPL. (The EPL deal is only a three-year agreement, however, and based on its current popularity among U.S. viewers, it would likely garner a lot more when a new agreement starts in 2016-17.)

The average viewership for regular-season games dropped 29 percent on ESPN/ESPN2 and 8 percent on NBCSN (which had benefited in 2012 from usually high viewerships due to lead-ins from its London Olympics coverage). The Portland-Real Salt Lake playoff game ranked 139th out of 139 programs of the week on ESPN.

A couple of aspects of what's involved in the negotiations are worth noting:

-- The rights will include those to U.S. national team games. The men's national team averaged 1,494,000 viewers for six World Cup qualifiers on ESPN, more than five times the average of 269,000 viewers for seven MLS regular-season broadcasts on the same network.

-- Fox's previous agreement with MLS ended after the 2010 season. It returned with an interim deal in 2011 that NBC took over in 2012. Since then, two events have transpired to make MLS more attractive to Fox. It has acquired the FIFA rights -- including the 2018 and 2022 World Cups -- and it has launched its new networks Fox Sports 1 and Fox Sports 2 to go up in competition with the ESPN networks. MLS would give Fox a vehicle to promote its World Cup coverage -- and vice versa -- and Fox would get live programming for its new networks. (As a practical matter, its FIFA rights require having soccer production/talent in place whose costs it could help amortize over its MLS coverage.)

-- A significant portion of the value in the deal would cover digital rights. Living streaming of games to authenticated users is becoming increasingly important as more (younger) viewers switch from watching programming on cable to watching on smartphones and tablets. MLS has made a huge push into nurturing the 18-34 audience of soccer fans that has been fueling its recent growth in so many markets. ESPN3 offers dozens of live sports events each day. Fox offers a smaller package of games on Fox Sports Go and its soccer-specific Fox Soccer 2 Go (on-demand) streaming video.


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