The MLS 3.0 Blueprint

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1:05Congratulations, you made the varsity, the podcast. My name is Jon O 'Ran and I am Puck's sports correspondent and the host of this pod. And today, we're gonna run a conversation that I had last week with Don Garber. Don is the longtime commissioner of Major League Soccer. He's been in that role for nearly 27 years, since 1999. Well, Don and I spoke in College Park, Maryland on Wednesday night as part of the University of Maryland's 20th annual Povich Symposium, named after the famed sports writer Shirley Povich. Don and I spent a lot of time talking about MLS 3.0. That's the branding that the league has put on the next wave of growth.

1:43Well, MLS is ending its 30th season this weekend, but it still feels like a startup to me. We talk about that during our interview. I think you're going to like this one a lot. Before we get to Don Garber. Today is Sunday, December 7th, and here's what I'm watching. And for me, it's all about Netflix's pursuit of Warner Brothers Discovery. As you know by now, Netflix has offered$72 billion for Warner Brothers Film Studio and the HBO Max streaming service. So what does that mean for sports? Really, not much. If the deal goes through, Warner Brothers Discovery is going to spin out its TV networks, TNT, TBS, True TV, into its own company.

2:21And those networks, combined with Discovery's international channels, are set up to operate on their own. Maybe somebody's going to swoop in and buy them. Maybe they'll continue to operate on their own. We don't know the answer to that yet. But I've talked to a bunch of people internally, and they're all moving forward with the belief that they're going to operate as their own company once a Netflix deal goes through. That means launching their own streaming service, something that's been in the works for a while. It also means TNT Sports and Bleacher Report are going to remain bidders for sports rights.

2:53So the main question now is how aggressive TNT Sports will be now that that doesn't have the backing of Warner Brothers Discovery. Even as one big entity, WBD passed on NBA rights. It has a Major League Baseball deal that's coming up in a few years. It carries the MLB playoffs through the championship series. And it has a hockey deal with the NHL that is up after the 27-28 season. TNT Sports carries a Stanley Cup Finals in some years. So those are some big time rights. And the question is whether TNT Sports is going to have the resources to renew those deals. Another question is whether MLB and the NHL will look to bigger companies with bigger footprints to carry their crown jewel rights.

3:41Then there's a question of Netflix, which has dabbled in sports. It doesn't appear that this deal is going to cause Netflix to alter that strategy one bit, which has really been to focus on one-off events that it can eventize. Sorry for the business jargon there. Netflix carries a couple of NFL games on Christmas. It's going to carry some baseball games next season. It has the rights to the 2027 Women's World Cup. Netflix is moving slow and methodically in the sports space, And buying a studio on HBO Max, well, that really shouldn't change that approach that much. But here's what I know. This is going to be a really fun story for me to cover over the next few months.

4:19But for right now, let's get to Major League Soccer Commissioner Don Carver. This is the capital of soccer right now. This weekend, there's the World Cup draw in addition to Maryland playing. the international soccer community really has just it's just it's descended on DC you're here obviously you have the MLS final coming up this weekend Messi in Miami against Vancouver down in Miami are you able to tap in to the celebration that's going on right now or you is it just too much going on with the final coming up. Well, first of all, let me start by thanking you, John, and thanking the university and the program.

5:11I knew George very well, and I remember when the center was formed, George, who was a soccer-friendly editor, there are a few of those, and he was the grandfather of Steve who is really one of the great soccer journalists in our in our country so I'm happy to be here John this is a big moment and I think it's the beginning of capturing all the momentum and excitement of what global football global soccer can be and all the energy that's been going on at so many different levels John and we'll talk I'm sure a lot about the media part of it but I've been doing this for a very long time I like to say when I started, I'm not quite sure what I was thinking.

5:55I left a pretty good job and MLS was pretty fledgling and then it went down a bit of a rabbit hole for a couple years. So I kind of look at these great moments as milestones for what everybody who cares about the game, John, has been dreaming of, which is establishing our country as a true soccer nation and having all of the pieces come together and harness the passion of fans and try to convince, as you can imagine, the political folks that are supporting both the World Cup but building stadiums and creating green fields for people to play. And it's all capped off by what will start on Friday with the draw of thousands and thousands of people from around the world.

6:43appropriately our state of the league of 30th season will happen on tomorrow night down in DC and there'll be hundreds and hundreds of media people there the draw will be spectacular they just announced the talent for that and then we got a little game on Saturday which I think will really capture a lot of attention and bring even more awareness to MLS so you know what I love about covering your league is uh you're wrapping up your 30th season I mean you've been around for a while, for 30 years. I happen to cover the NFL and MLB and the NBA. It feels like you're still a startup in some manner.

7:25Give me the state of your league. How does it feel internally? It is a startup, and it's rare. We're in a university setting and people thinking about how are they going to build their future and how's the center going to raise money to be able to expand the outreach for all the great young minds that are being educated here. We're unusual. There are very few 30-year startups. And I've had a lot of conversations with our owners about that. I'm kind of like a VC CEO, but I've been in the job way longer than most founders are. Generally, you're kicked out way earlier, and they bring in somebody that will be a proper CEO.

8:05This is cursed. It's about being as well-liked as you are. Or at least, like, they just, you got to keep the owners who hate you away from the ones who haven't really figured it out yet. You know? And there are lots of them. So you just keep them in different rooms, and it's worked out. But John's very true, and I think we'll get into it when we talk about Apple. We'll get into it when we talk about building stadiums that had not been built before in this country and thinking about MLS as a commercial driver to grow the sport that benefits all of the different soccer stakeholders. And it's very difficult to have to operate as if your next day is your first day and to have people that have been in this job a long time.

8:48Most of our senior executives have been around since the league's founding. That's highly unusual. Hank Paulson is one of our owners, and he once said to me after a long board meeting, He said, I hear you've been the commissioner for 10 years. I've sat on a lot of boards. That's my limit. When are you leaving? And that was 16 years ago. And I said, Hank, you'll go into the category for those guys. I don't want you to talk to that guy over there. So I think it's a great question. People don't ask me that very often. I think it's motivating. It's exciting. It creates innovation because you don't get steeped in tradition.

9:23All that being said, the NFL goes from strength to strength. I spent almost 17 years there. It's amazing to me how a league that can be that mature a business, that could be that mature, continues to take risk and innovate, thinks about their business differently, getting investment at media partners as opposed to taking rights fees and going about and coming up with stadium funding with their debt facility that nobody else had really thought of. So we can learn from the other leagues. John, you cover them all, and you've been around a long time. I like being a little engine that could, but being old enough to not have to worry about whether we're going to be able to cover all of our obligations.

10:02So it's funny that you mention that because that was leading into my next question about the NFL, of course, continues to grow as do all those other leagues. So with that knowledge, of course, you're always growing. Where is MLS right now in terms of the state of its growth? Way further along than we thought we would be because you're still in a... You thought you would be in 1994 or then... Well, you know, again, it's appropriate for those who don't know, MLS was founded out of the 1904 World Cup. So we're going to talk a lot over the next weeks about if not for the obligation that U.S. soccer made to FIFA.

10:37There was no MLS when young guys, you know, pre-Coby and pre-Taylor and maybe when, Sasha, you were thinking about being pro. The World Cup team in 1994, they were training in some facility in Southern California. They had no training grounds. They barely had uniforms. It's amazing that we did reasonably well. And here we are sitting here today with 30 teams and 26 stadiums and billions and billions and billions of dollars of investment in the league and obviously millions and millions of fans. John, the way I look at it is I think that it's a generational, the lifetime value of a fan, things that you all will be thinking about.

11:16What's the lifetime value of a consumer? We're now a business that's gone through its first generation that have kids that have never grown up without MLS in their lives. So you have the ability for parents to take kids to games and see those kids wearing jersey or a kid as we call them and identifying with a player, going to a youth program and having that DNA connectivity that drives and has driven the NHL and the NBA and MLS and MLB. And all of them, John, have gone through different phases of growth. I had lunch with Gary Bettman the other day, and I remember sitting in the offices of the Maple Leaf Sports and Entertainment.

11:54We were convincing MLSC to buy an MLS team. By the way, it was$10 million when they bought it in 2006-7. And the CEO said, I got to take a break because Gary Bettman's having a press conference. They're going to have a lockout. And Gary, over that period of time to where we are now has built a great media property, a lot of great stadiums, teams that are now average value of two billion dollars. So as we go through the ebbs and flows, I try to remind a new version of owners, the industrialists are leaving and the new breed of owners, you write about them a lot, are coming in. Just this is a long-term play.

12:34It's a generational play. Be patient, be bold, be courageous, be willing to invest a lot of money. Soccer is the growth sport in our country. I have no doubt about that. In your first couple of answers, you shouted out Roger Goodell. You shouted out Gary Bettman. Soccer is unique, but how much do you lean on what these other leagues are doing to make decisions on MLS? That's a good question, John. I do this for a living. Yeah, man. Less than you think on some areas, but more than you would think on others. You know, clearly around COVID, about sports betting, what is happening? You might ask about that in prediction markets.

13:14You know, the NHL just did their deal, which kind of surprised us all. And that couldn't be more timely with everything Kaushche did over the last 24 hours. So I think, well, I like to say, well, if it's good enough for them, it ought to be good enough for us. They have much more congressional oversight. Baseball has its antitrust exemption. I like being sort of over here and not having the same level of scrutiny that we might have 20, 40, 50, or 100 years from now. But we do talk. We get together now and again. You know, Roger's at the head of the class, and regardless of how old he might be or how many years he's been in the job, and then it kind of goes downhill.

13:53But that being said, I'm the second longest-serving commissioner after Gary, and that surprised me. When I came in, I was 40 years old-ish. I knew nothing about how to run a league, really. David Stern once took me and put his arm around me and said, hey kid, just don't do what I say and don't talk a lot and you're going to be fine. And I used to talk to David a lot. He was an opinionated guy and I respected. I bet David had a few more four-letter words in there.

14:23Recently I've been writing a lot and reading a lot about MLS 3.0, which seems to be coming from the league about sort of getting ready for the next stage of growth. What does that look like? Again, I'm going to bring it back to the other leagues. and I'm a fan of all sports, and I worked in one sport for a really long time, think of how long it took for all of us who care about baseball to do the things that baseball did that have made the game way more fan-friendly for a whole new generation of fans that have kind of grown up with the game a bit. Maybe they weren't following it as much. Their parents weren't.

14:57They weren't playing Little League, et cetera, et cetera. The other leagues don't innovate that much because they're so mature, John. You know, the NBA has their in-season tournament. We launched the League's Cup. We play an in-season tournament against the Mexican League, and we do it in the middle of our season. We're constantly innovating as a business. A, we can't, we can. B, we have to because we're competing, unlike almost all of them, in a global market where the rest of the football world is very established. They are the NFL, if you will, of the sporting world. So we constantly have to take a sit back, work a lot on strategy, have the right planning in place, sit down and have strategy groups with our owners, all who are best in class and have run complicated businesses, and they're very engaged in MLS.

15:473.0 is just the next iteration of where we need to be. We need to get closer to the international standard. Changing our calendar is a massive undertaking. We have 10 teams in the northern part of North America. We've got teams in Vancouver and Toronto and Montreal and Chicago and Minnesota. We're going to be playing games there in February. So imagine what those owners are thinking about what that's going to be like. And then having to go and figure out why that makes sense, aligning with the international standard. We have three new stadiums coming on in Chicago, Miami in March, and New York City.

16:19If you haven't seen that, we'll have a stadium next door to Citi Field, billion-dollar project. So that will be our 29th stadium. and all these things will position us post-World Cup to, A, ride a little bit of that momentum, get a little rocket fuel, and then hopefully build MLS. And the tailwinds of that will affect college soccer and hopefully lift up the women's game even more. And that game continues to grow. The league's doing really well. If you believe in the globalization and where demographics are shifting in our country, regardless of politics, soccer is moving in the right direction.

16:54and that's why our teams are valued at over$20 billion or$21 billion collectively. You referenced the calendar shift. Have you ever been in Minnesota in February? I was there for the Super Bowl. That was the coldest I've ever been. I was too. And in a previous life, the commissioner said, and I was an event guy, we're going to have a cold-weather Super Bowl, and we have this thousands and thousands of fans who are going to be hanging out outside the stadium, and I was the guy that came up with the idea for the NFL experience, which we did indoors for the first year in Minnesota as a way to kind of have a little bit of a theme park because you had all those people out in the cold.

17:32By the way, our first game in Minnesota, when they came into our league several years ago, was played in snow. It was pretty cool. And Atlanta played Minnesota. The fans were throwing snowballs. You have to be thoughtful. Our fields are going to have to be heated. We're going to have to deal with a whole bunch of schedule shifts. We've got now 30 teams. We can play a lot of the early games in the South. We have three teams in Texas and several in Florida and Charlotte and the like. So we'll figure it out. Does August and Austin equate February? I love this guy. So, John, you know, when Minnesota, Chicago, and Toronto, and those guys, I'm saying, like, have you been to a game in Miami in August?

18:19So when I just another fun story we have this dos acero thing we do many years ago we never beat Mexico and our national team we used to take them to Columbus and in February and we thought that would be a really good idea Because all these folks are used to playing in warm weather We'd come up and it would be like 20 degrees and they'd be wearing gloves and long pants and all that stuff And it would work really really well and those games were really cold and I'd say man Why do they do that? It's really cold in February in Columbus, let alone in Toronto. But, you know, ask Messi what it's like to play from Barcelona and play in August in Dallas or in Houston.

18:57Those are stadiums that are not, you know, domed stadiums. So you just got to manage it. Running a sports league is really hard and you just got to make, got to keep your eye on the ball. You got to get focused. You got to get your owners together. You got to make tough decisions. You got to have capital that is long. And so far, you know, it's working pretty well. So take us into the owners' meetings. Is this something that you were pushing for? Is this something that you sense that the majority of owners were... On the calendar change? On the calendar change, yeah. We should have, like, a roadshow, John.

19:31You know, that process was the most difficult process that I think that we had as a league in our history. Because it was complicated and it affected revenue. You know, how's a season ticket holder going to – will they buy season tickets if they might not want to go in the winter? What's your player strategy if you're going to have to play in Minnesota versus playing in Atlanta? What do you do with your sponsors? We had a summer competition less in the summer, et cetera, et cetera. But we'll get to media, John. We're also playing our playoffs up against the SEC championship. We had our playoff game up against the Duke game the other day.

20:08we can't compete in this time of the year against all of the major leagues and intend to be able to be successful with the postseason. At the end of the day, it's a media business, number one, and we've got to fix that. And also, we're aligned with the international calendar to buy and sell players. We sold$200 million worth of players this year. And we do that with calendars, windows that aren't aligned with the rest of the world. We're selling players in the middle of our playoffs. It makes no sense. We had our group work and create pods with our owners. We hired a consulting group out of the UK that, talking about data, did tons of data analytics and weather analytics and how do we work with the algorithm on the schedule if we had to move games.

20:54It took us a year, literally a year, to create all of the work through owner groups with chief soccer officers and with our chief business officers. The first vote, I kind of knew I had the vote, but it, I know Steve's here, there are probably not that many other media people here. We didn't announce it because we wanted to be sure we wanted to get it pretty close to unanimous, and it was. And they're great partners, you know, they're partners in the boardroom and they're fierce competitors on the field, and we just laid out why this made sense and hopefully it works and if it doesn't mls 4.0 sooner than we think

21:41no one goes to hank's for his spreadsheets they go for a darn good pizza lately though shop's been quiet so hank decides to bring back the one dollar slice he asks co-pilot in microsoft Excel to look at his sales and costs and help him see if he can afford it. Co-Pilot shows Hank where the money's going and which little extras make the dollar slice work. Now Hank's has a line out the door. Hank makes the pizza. Co-Pilot handles the spreadsheets. Learn more at m365copilot.com slash work. History That Doesn't Suck is a legit, hard-hitting American history podcast told through entertaining stories.

22:17As we approach America's 250th anniversary, now might be the time to go back and learn how we got here. With more than 200 episodes, you can bend your way decade by decade, defining event to defining event from the founding into the 20th century. Join me, Professor Greg Jackson, for History That Doesn't Suck, an Odyssey podcast, available on Apple Podcasts, Spotify, or wherever you get your podcasts. You mentioned that this is a media business. It's good to get into my sort of pet project. You're going to stop saying I'm asking good questions now that I'm bringing up Apple, I think. Oh, you know what?

22:50I do this a lot, John. Most of the time, the questions aren't great. You just redid your deal with Apple. It's going to end now three years earlier. It was, in my opinion, a great deal that you struck because it comes in front of the paywall. Everything comes in front of the paywall. Why did you do that? Well, for those in the room, I told John we were going to have fun. you probably weren't the biggest fan of the deal when we announced it and we respected that it's part of why we recognized when you do bold things that anticipate the future you got to break some glass and those that are traditional thinkers and I'm not saying you are but the industry didn't quite understand what we were trying to achieve so let me go to that I'm going to bring it back to Puck as a subscriber and an avid reader, where was Puck?

23:47Where were you four years ago? We were consuming all of the things that matter to us in the industry. Maybe when we got Vanity Fair online before that, we needed to read it on a regular basis in a magazine. There were things that were popping up, and now we have, for those in the entertainment, media, and sports industry, a must-read newsletter that gives us information that we weren't getting in a way that matters to us. I feel the same way about what was going on with broadcast media, John. Nobody talks about the fact that all of the major leagues have local, the five major leagues, I'm not, there are many other leagues and NWSL, I think is a major league, but I think what differentiates the major leagues is local broadcasts.

24:30Every single game was broadcast. So when you're in DC, it was on the regional. When you're in Vancouver, it was on the local TSN affiliate, TSN 7 or whatever it might be. every single game. We have 600 games, 500 of them were local. And we saw four or five years ago, what is happening now. I just saw your podcast, which we listened to on the train, what's happening to the RSNs. And we saw... Nothing good. Nothing good. But John, we saw that. And we needed to not just renew 100 games. We had 30 with ESPN, 30 with Univision, and we had 30 with Fox. We had some international distribution that we pieced together.

25:08But we had 500 games that we're not going to continue. We certainly weren't going to get paid. We wanted to aggregate all that into a global package that anybody anywhere without blackouts can go with the touch of a button and capture the excitement of Major League Soccer. What was criticized was you're walking away from the ubiquity of having a Red Bull game that was on MSG. Maybe 20 ,000 people were watching that game on a good day. So what we were looking to do is have a Red Bull New York City game be treated as if it was on ESPN, no differently than Columbus, Cincinnati, or San Jose playing LA.

25:47Every single game is available the exact same way, same number of cameras. People like Taylor and other great broadcasters are broadcasting those games and aggregating it in what Apple, Eddie Q, who you know well, believed would be the ultimate disruption of the sports media business, which was direct-to-consumer global subscription service. And we believed it. Ultimately, they were not able to achieve that with other leagues because it requires exclusivity. If you know that you can get something from anywhere for free, not free, cable subscription, satellite subscription, streaming subscription, then ultimately that would inhibit your ability to sell this subscription.