A sports league that's unprofitable—but hopeful

Zac Bissonnette, Special to

Major League Soccer is, by some measures, very successful. The problem is that it doesn't make money.

Los Angeles Galaxy’s Landon Donovan (10) shoots to score in the second half of a match against Real Salt Lake in Los Angeles, Nov. 9, 2014.
Getty Images

With the MLS championship game set for Sunday, indicators for the future of the league are mixed. On the one hand: rising attendance, an influx of interest driven by this summer's World Cup, and the largest TV contract in American soccer's history. On the other: dismal TV ratings, and league-wide losses of more than $100 million per year.

One thing that is certain is that the quality of play has improved: The 2010 World Cup featured six MLS players. The 2014 edition featured 31. Luring athletes of that caliber into the less internationally prestigious American game has come at a high cost, and no other professional sports league exhibits the income inequality of MLS. Seven of the league's 572 players earn about a third of the league's total annual payroll of $130 million, according to a New York Times analysis. For the non-millionaires, player salaries start as low as $36,500.

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Historically, marquee contracts for international soccer stars have failed to lead to widespread interest in the United States. When Pele signed a $4.7 million contract to play for the North American Soccer League's New York Cosmos in 1975, he declared that "You can say now to the world that soccer has finally arrived in the United States." It had not; the league was out of business 10 years later.

For now though, improved quality of play and average in-stadium attendance figures that rank below only the National Football League and Major League Baseball among American sports have TV networks feeling optimistic. A new, 8-year contract to air MLS games on ESPN, Fox Sports, and Univision will bring the league revenue of $90 million per year, up from $18 million per year under the contract that expires this year.

Starting a league is a generational proposition, and can't be measured in 4- or 8-year horizons. Now we're closing in on 20 years. We're going into a second generation, and we're picking up fans who weren't even born when the league was born.
Douglas Logan
First MLS commissioner

That deal was surprising to many in light of the league's struggles with drawing television ratings. In spite of slight year-over-year growth driven by the exposure that came with the World Cup, this year's MLS games on ESPN and ESPN2 had their second-lowest ratings since 2008, roughly on par with the WNBA.

"It's a difficult sport to televise, in that (American) football uses a similar-sized field, but all the players are concentrated in a very small area," said Douglas Logan, the league's first commissioner, from 1995 until 1999, and now an adjunct professor at NYU. "[With soccer], the players are widespread. If you show it all, you can hardly follow the ball. It's difficult to provide the American audience with the kind of pictures they want."

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Dan Courtemanche, the league's executive vice president of communications, said that more standardized viewing times that come with the new contract will help MLS games become "appointment viewing" and lead to higher ratings.

"There are 70 million soccer fans in this country," he said. "The opportunity is there. We just need to convert all those soccer fans into fans of their local MLS clubs."

Willing to take a chance on that opportunity, more national brands than ever are establishing sponsorship deals with the league, with Heineken and Chipotle among the most recent sign-ons.

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Jim Foster, a former National Football League promotions manager and the founder of the Arena Football League, said that MLS looks better positioned to break into the elusive top tier of American sports than any other sports league ever has. Foster's optimism starts with a young, diverse fan base that is, according to the league, 30 percent Latin American. Overall, the league has a higher concentration of fans in the coveted under-30 demographic than any other sport.

"Major League Soccer now has the tangibles it needs to be successful," Foster said. "You have so many transplants in this country that have come with an interest in soccer. Then you have these suburban white boys who grew up playing it. They have a much better base to work with than they did the first time around."

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Logan, the league's first commissioner, is also optimistic—but dismisses the grand ambitions of a new major American sport that come with much of the media's coverage of MLS.

"My position on 'making it' as a sport is that you have the resources to play next year," he said. "Starting a league is a generational proposition, and can't be measured in 4- or 8-year horizons. Now we're closing in on 20 years. We're going into a second generation, and we're picking up fans who weren't even born when the league was born. It's a real success."