League reacts in attempt to offset financial losses as a result of the COVID-19 pandemic.
MIAMI, Fla. — (24 June 2020) Major League Soccer is expected to allow its teams to sell sponsorship patches on shorts this year in an attempt to offset the devastating financial losses of the global Covid-19 pandemic.
According to the Washington Post, the league will open the additional space to teams in time for the “MLS is Back Tournament” taking place at the Disney ESPN Wide World of Sports Complex in Bay Lake (Kissimmee), Florida, outside of Orlando this summer. It is not known whether any teams have begun negotiations or have sold the advertising space.
MLS commissioner Don Garber has said MLS is going to lose $1 billion due to the huge economic impact of the COVID-19 pandemic, which he said was the primary motivating factor behind staging a summer tournament in a neutral single-site location.
MLS Sleeve Sponsorship Quick Facts:
- Introduced sleeve sponsors for the 2020 season
- Only four teams have sold the new inventory
- Existing sleeve deals valued between US$500k and US$1m a year
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Upon completion of the “MLS is Back Tournament,” the league plans to continue its regular season with a revised schedule in home markets, followed by the postseason MLS Cup tournament. The regular season plans are as yet unclear. It is also unlikely that fans would be allowed to attend the games, and, even if that is allowed, it will certainly be a logistical nightmare trying to determine which ticket holders can go to a game and which cannot. The uncertainty, says the commissioner, makes the additional revenue streams all the more important.
While creating an additional source of revenue is the primary focus here, shorts sponsorships could also enable MLS teams to meet their contractual obligations with sponsors, who, for example, have signage in stadiums which have been closed for a number of months. Presumably, some sponsors have not made payments to teams becuase of their own COVID-19-related financial losses.
The league is also reportedly looking into allowing corporate logos on the left sleeve of team jerseys, currently occupied by the MLS badge tailored to each team’s colours, but such a move is still in the exploratory stage. MLS allows right-sleeve sponsors since the 2020 season. Among the teams that have already procured sponsors under the initiative are Atlanta United, LAFC, DC United, Sporting Kansas City, and Toronto FC.
The Washington Post also reports that some MLS teams want their affiliate teams in the USL Championship and USL League One to sit out the lower-league season for financial reasons. The second-tier USL Championship and third-tier League One have plans to resume their seasons in July.
On a national level, the United States Soccer Federation has claimed it is projecting a deficit of nearly $28m for the 2020 fiscal year, which is $16.8m more than planned. US Soccer has already implemented a number of cutbacks including terminating its boys and girls’ Development Academy (although this might have occurred even without the pandemic), closing down the majority of its youth national teams until 2021, as well as staff pay cuts, furloughs, and layoffs.