Second-division soccer league reaping the rewards of deal with OTT streaming service

Legalized sports betting is a ‘concern’ and could affect some clubs’ partnerships with casinos

Cup competition between division two and three leagues planned to test interest in pro-rel

The growing success of the United Soccer League was highlighted on Tuesday with the announcement that one of its teams, FC Cincinnati, has been awarded a Major League Soccer expansion slot.

With Nashville SC also moving up to MLS and Sacramento Republic still in the running, US soccer’s second division has gone from strength to strength in recent years, as further indicated by its deal with OTT streaming service ESPN+.

SportBusiness International sat down with USL president Jake Edwards at the Leaders Sport Business Summit in New York to discuss digital broadcast rights, sports betting, expansion fees, and promotion and relegation.

Q What tangible benefits has USL received from its ESPN+ broadcast deal?

A “First and foremost, our partnership with ESPN gives us an instant visibility with one of the top sports brands in North America, if not the world. So having a partnership with that organization is massive for the credibility of our league.

“Accessibility through the new platform is also a big driver for us. We have USL games next to MLS games, English Football League games and international qualifiers, as well as the NHL, MLB and a host of other major sports in America. So to see USL games on the same platform shoulder-to-shoulder is great. It doesn’t just expose us to new football fans with all the football content on there but also sports fans in general who might be just flicking through, so a much wider viewing audience.

“Thirdly, some of the technological capabilities that we are able to tap into. For example, we have gone to great lengths to shoot our games with advanced cameras and full HD productions and we weren’t able to showcase that on YouTube. This year what our fans have really appreciated is that all our games are fully visible in high quality – so even watching on your phone the games are really high quality so it’s showing the investment in the camerawork and production has paid off. You also have mechanisms where you can have four games on at once so it gives us some interesting capabilities there.

“Finally, it gives us direct access to ESPN FC and some of the other ESPN broadcasts. We’ve featured on the SportsCenter top 10s 10 times this season so it brings us to a higher level of prominence being on the ESPN networks.”

Q Have you learnt anything from the data shared by ESPN?

A “With ESPN we are understanding who is subscribing to watch USL games specifically, consumption habits, viewership numbers and length of viewership per match. ESPN shares this information on a monthly basis. We are going through the data now and hopefully by the end of the season we will have some really useful data to show the engagement habits of the viewers. Perhaps that will inform how we look at our schedule – perhaps we will look at more daytime games that are showing strong viewership figures, for example.”

Q What is the USL’s position on legalized sports betting in the US?

A “We’re taking some time to analyze it – we certainly don’t want to be knee-jerk in a positive or negative way. It remains problematic for the league as we are national and we are going to see how each state regulates this.

“We have to consider a number of possibly controversial sponsorships out there. There are significant revenue and fan engagement opportunities that come with sports betting. From a league point of view I see a lot of upsides and a lot of headaches. We always have to make sure the integrity of the competition is not exposed in any way. Today we have allowed casino partnerships with our clubs – Las Vegas have a partnership [with Plaza Hotel and Casino], Tampa Bay have a sponsorship with Hard Rock Cafe and Casino. What the teams don’t do is encourage sports gambling within the building or as part of the sponsorship.

“Sports betting is a risk potentially all over the world but certainly a risk with leagues where there are not millionaire players. We’ve got to be mindful that players are not approached, that there is no temptation. It is something that I am concerned about and we will need to monitor it. People do bet on USL games overseas and if there is anything unusual then we do see it. It is something we need to double-down on a bit.”

Q Do you expect expansion fees to rise any time soon?

A “The expansion fee is $5m and has been for the past two seasons – it will go up. We are analyzing market demand and franchise values at the moment. If it’s not towards the end of the year, it will go up early next year. It’s very important that we keep driving up value and with ESPN and other commercial deals, the good quality of owners coming in, stadiums being built, fanbases growing… all these things contribute to affecting franchise values.”

Q What is the latest on the potential USL conference restructure and the planned division three league?

A “This year we are deciding with our teams whether we move from two conferences to three and who will be the make-up of each – East, West and Central. It will be around 12 teams in each conference. That will get decided at a mid-year board of governors meeting.

“With our division three league [due to launch in 2019], we have announced some teams and will announce more over the next few months. We already have two MLS [reserve] teams that weren’t playing in USL this season that are looking to come into USL division three for several reasons – in terms of a best fit from a business, player development and roster flexibility point of view. We also have a couple of MLS2 teams in USL at the moment that are strongly considering [moving down to division three]. There will be some change there.

“[In regards to official sanctioning] All the information will be given to the [US Soccer] federation in June – you need to have the minimum number of franchises in by then [eight], all the franchise documents, team business plans, stadium plans, all the financials. To get the ball rolling, we have engaged with the federation to do compliance work.”

Q Is promotion and relegation within USL still in the works?

A “It is an interesting opportunity to look at and we do discuss it internally. But we are split internally. Do we find that it would add much value and entertainment to the competition? Would it drive interest from a media and sponsor point of view? It would certainly bring in more interest from fans.

“In a model where you buy a franchise to get into the league and you set that price based on the division you are in, how do you square that if you are going down? We don’t have a parachute payment mechanism like in some leagues in Europe but equally we don’t have the same size and scale of revenue so the risk of moving up and down is not there. It would not have the same catastrophic impact than if you fell out of the Premier League.

“You can imagine a day where there is a commercial structure to address some of these concerns. I think it is something that our owners might be interested to look at but it is not imminent and not our focus. Our focus is getting the third division up and running, getting quality clubs, getting owners that will invest in the stadium infrastructure, getting a good match-day experience, getting better quality players into the league and then having a size and scale that looks a little like the second division.

“What we are looking at with our committees, though, is an inter-league cup – it’s something I’ve been thinking about for a while. It would be a League Cup between the USL second and third division. We also run the PDL, an amateur league, so it might be a way to bring them involved and also possibly the Mexican second division and Canadian league. That would serve as a possible testing ground for interest in promotion and relegation [within USL].”