In the latest interactive data report SportBusiness Sponsorship analyses the sponsorship landscape in Major League Soccer (MLS). The report covers all central deals, team jersey deals and their full sponsorship portfolios where available.
Major League Soccer is set to earn between $190m (€171m) and $230m from centrally sold sponsorships in the 2019 season, experts believe. This is about double the amount the league was earning in 2017.
MLS, which is in the middle of its 24th season, has become an increasingly attractive platform for brands, enabling it to increase the value of its sponsorships year on year.
Much of the uplift since 2017 came from one deal: the six-year, $117m-per-season agreement with German sportswear and equipment manufacturer Adidas, which came into force this season. The deal represented a five-fold increase on the amount Adidas has paid in its previous deal.
MLS is not enjoying such multiples in all deals. However, it is seeing increases across its entire portfolio. It is also steadily increasing the number of sponsors it has by adding new categories, which enable it to bring in new brands. The league currently has 24 sponsors – up from 20 in 2017 – and the number is likely to expand.
In April, it agreed its first deal with a gaming company, following the liberalisation of sports betting in the US in 2018. It signed a four-year deal with MGM worth between $2m and $4m per season.
In July, it agreed a deal with Diageo’s rum brand Captain Morgan, which became the league’s official spiced rum and spirits partner for the MLS All-Star game, the Campeones Cup (between the champions of MLS and of the Mexican Liga MX) and the MLS Cup final.
MLS targets a renewal rate of 90 per cent of its corporate partners. It renews about a quarter of its sponsorship portfolio – four or five contracts – each year. When renewing with existing brands, the league is looking for uplifts ranging from 10 to 20 per cent at the lower end to double or more at the top end, informed sources say.
Major League Soccer clubs earned more than $80m (€72.5m) combined from their main jersey deals in the 2019 season. The 22 deals are worth about $83.1m in total, at an average of $3.77m per year each.
Excepting some outliers at the top and bottom of the league, the majority (14) of MLS club jersey deals are worth between $3m and $5m per year.
The biggest deals, above $5m per year, are with four clubs: LAFC, Seattle Sounders, Atlanta United and New York City.
The smallest deals, worth under $3m per year, are made with Colorado Rapids, Columbus Crew, Philadelphia Union and Sporting Kansas City.
New York Red Bulls were not included in the figures because energy drinks brand Red Bull owns the club and brands the jersey. The San Jose Earthquakes are the only MLS club without a jersey deal this season.
The four jersey partner outliers on the high side reveal the beginnings of a more European-style price spread based on big city teams or very successful smaller city teams.
LAFC’s deal with YouTubetv.com, for example, is worth about $6m, and as much as $7.5m when streaming rights are included. It is thought that when LA Galaxy goes to market before the expiry of its Herbalife deal at the end of 2022, it will also claim one of – if not the – highest jersey deals.
New York City FC’s $6m-per-year deal with Etihad is at the top end of the range because the sponsor contributes as a partner in the club’s overall investment by the City Football Group – the umbrella organisation that also owns Premier League side Manchester City and five other clubs.
Seattle and Atlanta, the ascendant small city clubs, have successful, well-supported teams – both have average attendance over 40,000 – and share modern stadia with local NFL franchises.
At the bottom end, two of the founding clubs from small markets – Columbus Crew and Colorado Rapids – have struggled with out-of-town stadiums, or poor facilities, which has a knock-on effect on their marketability. When these problems are resolved, it is expected that deal values will recover.