The U.S. Soccer Federation and Soccer United Marketing -- the marketing arm of Major League Soccer -- announced on Sunday that they will not renew their commercial rights partnership when the current deal expires at the end of 2022.
The Sports Business Journal was the first to report the news.
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As a consequence, the USSF will bring the task of selling items such as sponsorships and media rights in-house. While this will require increased staffing that will likely reach well into double digits, the USSF says now is the time to make this step and take over ownership of the commercial rights side of the business. Multiple sources with knowledge of the decision added that the plan is for the USSF and MLS to no longer bundle their rights together.
"While U.S. Soccer has made this important business decision, the Federation is deeply grateful to [MLS commissioner] Don Garber, Gary Stevenson and the entire staff at SUM for helping us reach so many of our goals and objectives during the past two decades," said U.S. Soccer Secretary General and CEO Will Wilson as part of a joint statement between the USSF and SUM.
"Due to the incredible professional and personal relationships developed between SUM and U.S. Soccer, and the commitment by both organizations to collaborate together on all aspects of the business, U.S. Soccer has a bright future within the sports landscape as we look to take the next step in the evolution of U.S. Soccer and continue to strive to be the preeminent sport in the country."
SUM was founded in 2002 after the fact that no English language broadcasters had bid for the rights to the 2006 and 2010 World Cups. SUM and the USSF have been partners since 2004, when SUM bought out previous commercial rights holders IMG. SUM also has a relationship with the Mexico Football Federation to promote national team friendly games in the U.S., and manages CONCACAF's global sponsorship rights.
Critics of the relationship between the USSF and SUM felt that there was an inherent conflict of interest given that the federation was in business with a league it was ostensibly governing. Part of the basis for a current lawsuit filed by the now-dormant North American Soccer League contends that the USSF made decisions to the benefit of MLS and the detriment of competitors like the NASL. The fact that no subsequent commercial rights deals between the two sides since 2006 were up for competitive bidding, has also been criticized, the implication being that money was left on the table.
The deal's proponents countered that SUM contributed over $300 million in guaranteed revenue into the USSF's coffers, providing a financial boost that allowed it to increase funding of various programs. SUM also contended that much of the revenues it earned have been pumped back into the game. (Editor's note: ESPN is among the broadcasters who purchased through SUM the broadcasting rights to MLS and U.S. national team matches.)
As for the lack of competitive bidding, SUM CEO and MLS commissioner Garber said previously they were negotiated during exclusive renegotiating windows that are standard practice in the industry.
A source with knowledge of the reasoning for the decision said that SUM had expected this move for some time, especially given that Wilson and USSF Chief Commercial Officer David Wright are both former SUM employees.
"Soccer United Marketing is proud to have worked closely with U.S. Soccer for nearly two decades to elevate soccer in this country," said Garber in the joint statement. "During the last two decades, SUM's support of the federation was steadfast, and we achieved all of our goals to improve the commercial value of U.S. Soccer. While we will always be available to collaborate with them in our collective goal of advancing soccer in the U.S., Soccer United Marketing looks forward to focusing on new, exciting and valuable opportunities for Major League Soccer and future partners. A 20-year commercial representation relationship is extremely rare in the sports industry. We are proud of everything we accomplished together, and we wish U.S. Soccer well as they embark on this next chapter."
Despite the ending of the partnership which will begin in 2023, the two sides said they are committed to continue working together.
"The close relationship between SUM, MLS and U.S. Soccer will continue to be a priority and remains a critical component to the overall development of the sport at the highest levels, and we are looking forward to the next steps in the continued growth of soccer in the United States."