The Long Read: Riccardo Silva’s American soccer power play

1. The Long Read: Riccardo Silva’s American soccer power play SportsPro Americas editor Michael Long ponders Riccardo Silva's reported US$4 billion offer for the global media rights to Major League Soccer and considers what it might reveal about the Italian's broader intentions. The Long Read: Riccardo Silva’s American soccer power play Riccardo Silva is one of the sports industry’s best-known luminaries. A respected entrepreneur who has built MP & Silva, the international media rights agency he co- founded in 2004, into a billion-dollar enterprise, the Italian is an artful dealmaker whose reputation and influence in the business of sports rights arbitrage are arguably unmatched on a global level. As a soccer powerbroker, Silva has yet to reach such standing. Nevertheless, over the past two years the 47-year-old from Milan has made repeated attempts to assert his influence in the American game, the most recent of which came in June when he presented Major League Soccer (MLS) executives and owners with an offer they surely couldn't refuse.

2. On Monday, it was revealed by John Ourand of SportsBusiness Journal that Silva travelled to New York for a meeting with MLS commissioner Don Garber in which he offered the ludicrous sum of US$4 billion for the global media rights to MLS for ten years from 2023 - an offer that would have quadrupled the league’s media rights fees some six years before those rights were even due to go to market. Crucially, Silva’s bold proposal was made on the proviso that MLS would agree to introduce a system of promotion and relegation at some point in future, a caveat that rendered the offer a non-starter for a league historically averse to the idea, even if the money on the table would prove transformative for its teams. “As commissioner Garber stated in his letter to Mr Silva, we are not in a position, nor are we interested in engaging with Mr Silva on his proposal,” said Dan Courtemanche, the league’s executive vice president of communications, in a statement. So what is Silva trying to achieve? With the man himself refusing to comment on this week's reports, there is some talk that his outsized offer amounted to little more than grandstanding - a way to keep the topic of promotion/relegation in the public forum whilst rousing the interest of team owners throughout the American soccer pyramid. After all, Silva must have known MLS couldn't possibly accept his proposal. As many observers have noted, the league is contractually prohibited, under the terms of its current domestic TV deals with ESPN, Fox and Univision, from discussing a new media rights agreement until at least 2021. Even then, each of the incumbent broadcasters will have exclusive negotiating windows and renewal options to exercise before their contracts expire in 2022. Still, it is no secret that Silva has a vested interest in seeing a system of promotion and relegation introduced in North American soccer. In May of 2015, he teamed up with his fellow countryman Paolo Maldini, the retired soccer star, to buy Miami FC, an all-new franchise that debuted in the second-tier North American Soccer League (NASL) last year.

3. Silva has since described the club as his “passion project”, and he has certainly put his money where his mouth is. His exuberant spending, at least by NASL standards, on highly regarded players has positioned Miami FC as a major force in the league - this year, they claimed the NASL spring title in style and defeated two MLS sides in US Open Cup play. But Silva has long made it known that he is not content with lower league soccer and the lack of prestige that comes with it. Ever the ambitious enterpreneur, he has previously discussed the possibility of moving Miami FC from their current home to the Miami Dolphins’ 65,000-seat Hard Rock Stadium, while unconfirmed reports last year said he had spoken to the United Soccer League (USL), which enjoys a close affiliation with MLS and was recently upgraded to division two status, about a possible switch. What’s more, last year Silva International Investments, another of Silva's companies, commissioned Deloitte’s Sport Business Group to conduct a report into the pros and cons of inter-league movement in North American soccer. Not surprisingly, the report concluded by recommending the introduction of promotion and relegation into the existing American league system, saying the global model of divisional ups and downs ‘could have numerous long-term benefits, including increased attendances, increased broadcast audiences, improved commercial revenue and a positive impact on both elite players and grassroots participants.' Though it did note that North American soccer is not yet ready for a drastic structural overhaul, the report was criticised for failing to bring anything new to the discussion surrounding the contentious issue of promotion and relegation. It also did little to ingratiate Silva to the US soccer establishment. Garber, for one, was personally unimpressed by Silva's flagrant attempt to sway opinion, as was his deputy, Mark Abbott, who said at the time that the very fact the study was funded by an NASL team owner raised “serious credibility questions”. Yet, if nothing else, the report was revealing for highlighting the way in which Silva wants to engineer change in a market he feels has yet to live up to its undoubted potential.

4. For Silva, sports ownership requires a free-market approach, one that is prevalent in soccer leagues outside the US but generally deemed incompatible with the culture of American sport. Not so long ago, he balked at the inflexibility of what he considers a restrictive franchise model in MLS, not to mention the league’s US$150 million expansion fee. That figure, he said, is grossly disproportionate to that of the NASL, whose price of entry is around ten times less, and he has cited it as the number one reason for why he deemed that league a more attractive investment opportunity. “I am not sure that the closed rules of the MLS will be successful in the long term," he said in an interview with FourFourTwo last year. “The NFL, the NBA, and so on, are different. They are either the best league in the world in their sport or the only league, so it makes sense to have a closed league and use salary caps. “But the MLS is not like that. It is probably number ten or 15 in the world. So, the best way to grow it is to be open, for the teams to be independent. I believe the NASL has more potential, even if it is much smaller at the moment.” For MLS, on the other hand, a successful model relies on an approach that values infrastructure investments, stable ownership and grassroots development over rapid expansion and quick-gotten gains. Indeed, it is clear Silva has his work cut out to convince a group of executives who view a system of promotion and relegation as a risk too far, especially at a time when MLS is eyeing further expansion and franchise licence fees are on the rise. As MLS sees it, committing to introducing such a system now, or at some point in the near future, would only create uncertainty and inhibit the league’s growth efforts, regardless of the short-term riches Silva was putting on the table. Yet, on closer inspection, it could be that Silva's mega-bucks media rights offer was about more than just opening up the market and giving lower league clubs like Miami FC a chance to reach the top level. While observers speculate about his possible motives, it is worth remembering that Silva has history when it comes to stepping on the toes of the establishment. Consider, for example, his ongoing efforts to establish the Americas Champions League (ACL), a

5. proposed knockout competition for 32 clubs from across North, South and Central America that is slated to launch in 2019. Though the competition has yet to materialise into anything tangible, Silva has insisted such an unprecedented pan-American property would satisfy broadcaster appetite for a competition that marries the commercial might of the north with the fabled team brands of the south. He has set what he calls a “conservative” target of US$500 million annual revenues for the competition, generated largely through sponsorship and media rights sales handled by MP & Silva. On paper, the competition looks a tantalising prospect for soccer fans as well as a commercial money-spinner, but it is also logistically unsound and dogged by the politics of a region whose soccer leadership is still realigning in the wake of a power vacuum that ensued after the Fifa corruption scandal of 2015. If the ACL project is to get off the ground and flourish, then, Silva will need high-level support from the close-knit establishment he is seeking to woo. When it comes to governing and growing soccer in North America, the ultimate power is wielded by Concacaf, the chief decision-making authority in North and Central America and the Caribbean that is under the auspices of Canadian Victor Montagliani. Concacaf is closely followed in the pecking order by MLS and US Soccer, which is led by Montagliani’s long-time friend Sunil Gulati, the well-connected Fifa vice president who is currently spearheading a three-way bid for the 2026 Fifa World Cup. That trio of Concacaf, MLS and US Soccer is propped up, at least financially, by Soccer United Marketing (SUM), the increasingly influential media and marketing arm of MLS that now distributes commercial rights to all three organisations. Crucially, SUM is, by definition, a direct competitor of MP & Silva, which previously distributed international media rights on behalf of MLS and US Soccer but was replaced in the role by IMG, a longstanding partner of SUM, in October 2014, just months before Silva launched Miami FC and embarked on his ACL project. Could it be, then, that Silva’s offer to MLS is also an attempt to wrest back the influence - as well as the rights - MP & Silva lost three years ago? If nothing else, injecting an eye- popping US$4 billion into the US game would surely increase the agency’s chances of

6. securing support within Concacaf for the ACL, which has yet to receive any kind of official seal of approval. That is just one reading of the situation, of course, but there can be no denying that Silva finds himself fighting battles on multiple fronts, battles exacerbated by the fact that the ties between SUM, MLS, US Soccer and Concacaf appear stronger than ever. No matter that his signature business is one of the world’s go-to sports media rights companies, or that he has friends in high places and the wherewithal, resources and connections to match his lofty ambition. No matter that Miami FC are already beating MLS sides and now play their home games at Riccardo Silva Stadium, a venue recently renamed by Florida International University (FIU) in recognition of Silva’s financial contributions to the college’s athletic programmes since 2015. Soccer in the Americas has never been a more exclusive club and, for now at least, Silva remains an outsider looking in. The question is how long MLS and US Soccer can continue to rebuff his advances, especially when the figures being discussed are so astronomical. Source By: http://www.sportspromedia.com A new community dedicated to connecting black culture through soccer. Join Join us for our kickoff events in San Jose and New York City us for our kickoff events in San Jose and New York City