MLS's New Commissioner Larry Berg Sees Major Growth Potential in Media Revenue

Larry Berg, the recently appointed commissioner of Major League Soccer (MLS), is optimistic about the league’s media rights deal with AppleTV+, expressing a strong belief in the potential for substantial revenue growth. His comments come on the heels of former commissioner Don Garber's departure and amidst discussions about the league's financial model and broadcast strategies.

In a conversation with Front Office Sports editor-in-chief Dan Roberts, Berg acknowledged comments made by NYCFC CEO Brad Sims, who described the current broadcast revenue situation as a “one gaping hole” for the league's financial outlook. While Berg was diplomatic in his response, he emphasized a clear path for growth in media revenues, stating, “Let me say this: in my private equity business, if I buy or acquire a business that has a very popular revenue item that is low, that means a lot of upside.” This statement underscores his understanding of market potential and his confidence in transforming MLS’s media revenue landscape.

Exploring the Apple Deal and its Impact

The MLS and Apple struck a historic 10-year deal valued at $2.5 billion in June 2022, which marked a significant shift in how the league distributes its content. This deal created the MLS Season Pass, allowing subscribers to access all matches via Apple TV. However, while the deal laid foundational revenue, Berg notes that the league has not yet fully capitalized on the media potential compared to other major sports leagues, indicating there is considerable room for improvement.

Berg described the potential for increasing TV rights revenue as “uncapped upside”, though he refrained from labeling the situation as merely a “gaping hole.” He articulated a more optimistic view of the existing prospects for growth, suggesting, “I do think it’s an opportunity for growth and something we certainly plan to improve over time.” This sets a focus for Berg’s leadership—enhancing the league’s media strategy to align more closely with the successes seen in other sports.

Viewership Trends and Metrics Challenges

During Garber's tenure, there were notable increases in viewership, with averages hitting around 120,000 unique viewers per match, signifying almost a 50% rise from the previous year. However, as Garber pointed out, the league is grappling with the complexities of measuring success in a subscription-based model, which diverges from traditional linear broadcast numerics.

Garber had emphasized that the streaming metrics are still evolving, noting, “What we’re struggling with, and I think what the industry is struggling with, is there has been no system to be able to evaluate how people are in a subscription service, how they’re viewing and consuming games, and what is the metric that matters most.” This ongoing search for relevant tracking methods showcases the league’s efforts to refine its strategies and optimize viewer engagement as they transition from more conventional broadcasting methods.

Future Strategic Directions

As Berg takes the helm, his experience in private equity could inform a more aggressive stance on revenue generation. He may aim to bolster relationships with existing media partners and explore new avenues for reach and partnership, tinkering with how MLS packages and presents its broadcasts to attract a larger audience. There's an inherent challenge when comparing revenue streams, particularly where viewer personalization and consumption can vary significantly in streaming environments versus traditional broadcasts. This is an area Berg will need to navigate carefully as they look to innovate their offerings.

The introduction of insights from data analytics into subscriber behaviors and preferences could be pivotal in achieving deeper engagement. If leveraged effectively, such data can reveal preferred viewing times, popular matchups, and even the impact of localized marketing campaigns. The league’s ability to harness technology will be vital for creating a more interactive and engaging viewing experience, which can bolster subscriber loyalty and, subsequently, media revenue.

Berg’s forward-focused approach is likely to differentiate his leadership from that of Garber, which hinged on steady growth. Instead, Berg may opt for a more expansive vision, driving towards maximizing every opportunity in the burgeoning U.S. soccer viewership landscape.

As Berg embarks on this journey, all eyes will be on how he manages to transform these identified growth potentials into tangible results, especially as the MLS sets its sights on the 2026 World Cup being hosted jointly by the U.S., Canada, and Mexico, another chance to elevate the league’s profile.