26 November 2011
Posted in MLS
One of the big headlines last week, besides Sepp Blatter's latest debacle, was the announcement of the LA Galaxy signing a new TV deal. The deal is believed to be worth $55 million over 10 years. To put this into perspective, NBC Sports recently signed a deal with the entire league for $30 million over 3 years. Reactions to the deal seem mixed amongst fans and journalists. Some say the deal goes to show the strength of the league. Others say this will just lead to an even wider competitive advantage for the Galaxy. I do not think it is that simple to brand this deal in those camps.
In order to get your head around the size of the deal, you need to see who is signing the checks. Time Warner Cable Sports is being aggressive in acquiring properties for their English and Spanish channels. They recently signed the LA Lakers to a 20 year deal worth $3 billion. So right off the bat, one can see why this deal is somewhat inflated. Also, the deal is for Spanish rights as well as English and that will drive up rights in the Hispanic soccer hotbed of California.
The fact that some MLS teams are giving away their TV rights or splitting costs with networks, fuels the flames for some. Supporters need to realize that every team will never be on equal ground when it comes to finances in any league, not just MLS. At least the Galaxy will continue to invest in the club. Most MLS teams do not have the payroll costs the Galaxy have had every year they carry Designated Players. Those very same DPs drive attention towards the league and increase attendance at every match featuring the Galaxy. The salary cap will continue to ensure parity and it has, even in the DP era. This is evident by the 2011 Galaxy being the first team with a DP to win the MLS Cup. If you really think having multiple DPs will always lead to silverware, let me introduce to the New York Red Bulls. New York has had one of the higher payrolls in the league for years and has no silverware to show for it (unless you really value the Emirates Cup).
Long story short, this is good for MLS. It does not mean other teams will suddenly start signing similar deals but it is a step in the right direction. TV money is the lifeblood of any league, just ask NFL owners. The deal ensures the Galaxy of a revenue stream to support their ultimate goal of being a global brand. A team cannot accomplish that goal without several revenue streams and while the Galaxy have been in the red lately; this deal should push them towards profitability. Relax MLS fans, this is not NASL II. Maybe its MLS 2.5?