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Riccardo Silva’s Unsolicited $4B Bid For MLS Broadcast Rights

MIAMI, Fla. (July 30, 2017) —

Riccardo Silva is a respected entrepreneur who has built MP & Silva, the international media rights agency he co-founded in 2004, into a billion-dollar enterprise that has had significant success in the business of sports rights arbitrage.

The 47-year-old Milanese has made repeated attempts to assert his influence in American soccer over the past two years via his founding of the Miami FC along with ex-AC Milan defender Paolo Maldini.

His latest attempt to influence the game in America came in June when he presented Major League Soccer (“MLS”) executives and owners with “an offer they surely couldn’t refuse.”

According to a report by John Ourand of SportsBusiness Journal, Silva met with MLS commissioner Don Garber. At that meeting, he offered the astronomical sum of US$4 billion for the global media rights to MLS for ten years from 2023 forward. This sum would have quadrupled the league’s media rights fees some six years before those rights were even due to go to market.

There was, however, one catch. Silva’s bold offer was conditioned on MLS agreement to introduce a system of promotion and relegation at some point in the future.

The alacrity at which this offer was dismissed would make even Usain Bolt look slow by comparison. The phrase “pro-rel” is pretty much on the list of banned words on the 7th Floor of 420 5th Avenue in Manhattan. MLS has always been opposed to the idea, even with four billion dollars on the table.

The money would no doubt be transformative for the league and 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.

Some say that Riccardo Silva’s offer was nothing more than a publicity stunt or move to make MLS look bad. He likely knew that MLS could not accept his offer even if they happened to be interested.

The league is contractually bound to its current broadcasters until 2022. MLS is 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. At that point, the agreements in place allow each of the incumbent broadcasters an exclusive negotiating windows and renewal options to exercise before their contracts expire in 2022.

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 joined the second-tier North American Soccer League (NASL) last year.

Silva has exhibited a great deal of passion for the Miami FC. 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, Orlando City and Atlanta United, in the US Open Cup.

It is no secret that Silva, an ambitious entrepreneur, does not want Miami FC to be stuck in lower league soccer and the lack of prestige that comes with it. 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.

The Deloitte Sport Business Study

In 2016, 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. To the surprise of no one, 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.’

However that same report also pointed out that North American soccer is not yet ready for a drastic structural overhaul. The gap in quality from one division to the next was a primary reason. The lack of proper infrastructure in many lower tier clubs is another factor.

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 with MLS or the US soccer establishment. Garber classified the study as a flagrant attempt to sway opinion. His deputy, Mark Abbott, said report raised “serious credibility questions” since it had been commissioned by an owner of an NASL team.

Silva believes 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. He certainly could have invested in MLS if he wanted to, but the restrictive, single-entity business model is one he finds overly inflexible. Certainly the US$150 million expansion fee factors into his assessment. By comparison the NASL expansion fee is roughly ten times less, and Silva 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.” He added:

“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.”

MLS “owners,” on the other hand, are actual members (read investors) of MLS, LLC, the limited liability company that owns the league. The MLS model succeeds by increasing infrastructure investments, having stable ownership and grassroots development, rather than teams coming and going and short gains.

What’s clear is that Silva has his work cut out to convince a group of executives who view a system of promotion and relegation as a top great of a risk, especially at a time when MLS is eyeing further expansion and franchise licence fees are on the rise.

MLS sees a pro-rel system now, or down the road, as a vehicle that would only create uncertainty and inhibit the league’s growth efforts, regardless of the short-term riches Silva was offering.

There is also the issue of Soccer United Marketing to consider. 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 look 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.

The ties between SUM, MLS, US Soccer and Concacaf appear stronger than ever. Despite his signature business being one of the world’s go-to sports media rights companies, despite his determination, resources and connections to match his lofty ambition, for now at least, Silva remains an outsider looking in. Whether that changes only time will tell.

MP & Silva was appointed as the SPFL’s overseas broadcast partners for nine years, from season 2014/2015 to season 2022/2023. | Photo: SPFL

Information source:

The Long Read: Riccardo Silva’s American soccer power play, by Michael Long, Sports Pro Media, July 25, 2017.

By Ken Russo

My work in the business of soccer applies skills acquired in law practice with a focus on the sport's commercial, communications and sporting components. Russo Soccer aims to inform, educate and engage in dialogue on news and relevant issues in the game.

Um advogado por formação, concentro meu trabalho nos negócios, comunicações e operações de equipes no futebol mundial. | Abogado con fundación avanzada en comunicaciones, enfocado en los negocios del fútbol y las comunicaciones. | Je suis un avocat experimenté dans les affaires de football.

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