What Messi’s MLS, Apple, Adidas deal means for others

Shwetha SurendranGAMEJuly 11, 2023, 11:00 am8 minutes of reading

Why is Lionel Messi’s Inter Miami deal so ‘unprecedented’?

Sebastian Salazar dissects the details of Lionel Messi’s contract that landed him in the MLS and Inter Miami.

The second seven-time Ballon d’Or winner Lionel Messi announced he was going to the US to kick off his MLS career, the «Messi effect» immediately taking hold. Inter Miami CF’s social media then exploded, ticket prices skyrocketed and upcoming matches sold out. And all before he signed the contract.

Ahhh, contract. As the league and club begin working on the specifics of Messi joining Inter Miami following the expiration of his contract with PSG on June 30, questions have arisen about how one proceeds. develop an agreement to compensate for that influence. Will just offering money be enough to attract a player who ranks second in 2023 on Forbes’ list of the world’s highest-paid athletes with $130 million?

What else can you bring to the table? Miami and MLS’s answer seems to be to bring in league partners.

The deal, nicely structured, raises interesting questions about revenue sharing among superstar athletes and the cascading impact on media rights negotiations.

According to Sportico, Messi’s two-and-a-half-year contract with Inter Miami «is worth up to $150 million in total from salary, signing bonuses and equity in the team.» Sources confirmed to ESPN’s Jeff Carlisle that the option to partially own Inter Miami would not be as subsidized as it was in 2007 for David Beckham, who could buy an MLS team for a discounted $25 million.

But that’s not all. In addition, revenue-sharing agreements with Adidas, Apple and others are being negotiated. Here are some key questions and answers about Messi’s «unprecedented» MLS deal and what it means for others.

Lionel Messi, the 36-year-old Argentine star, is set to join Inter Miami later this month.VCG/VCG via Getty Images

Why are we talking about Messi’s contract with Inter Miami?

Contract talk is usually boring talk unless you have a 36-year-old Argentine football legend attached to it. And this one does.

While multi-million dollar paychecks in contracts are old news in modern football, revenue-sharing agreements with federation partners offer something new. One industry expert called Apple’s part of the deal «unprecedented». Another called it «unusual.»

«That deal has never been awarded to anyone in baseball, basketball, football and so it’s very unique,» said Irwin Kishner, co-chair of Sports Law Group. «It’s a generational thing, and it’s hard to think if you’ve ever seen anything comparable.»

ESPN confirmed that part of the ongoing discussion is a cut in revenue from new subscribers to Apple TV’s MLS Season Pass streaming service. The subscription service on Apple TV+ was launched earlier this year when Apple and MLS kicked off their decades-long $2.5 billion media rights partnership.

«I think critically that what [Messi] «Customer acquisition is perhaps the biggest issue in sports and sports media today,» said John Kosner, president of Kosner Media, a digital media and sports consulting firm. «

Apple currently holds the exclusive worldwide rights to every MLS game, and the season ticket also features both English and Spanish broadcasts. «This [Messi’s arrival] «It’s particularly exciting for a global company like Apple,» said Ed Desser, president of Desser Media Inc.

A similar profit split – reminiscent of the Nike-Michael Jordan deal for the Air Jordan – is said to be in discussion with Adidas, the league’s official supplier and longtime sponsor of the player’s own. . The cut of those increases, if any, Messi is still unknown. Any deal between Messi and Adidas will be purely between the player and the company and will not be directly related to MLS, ESPN has confirmed in previous reports.

Ernesto Bruce, CEO of For Soccer and former senior director of football at Adidas, likens the deal to an «evolution» of Beckham’s contract when he signed with LA Galaxy in 2007.» David Beckham was the big catalyst when he arrived,» he said. «He had a deal with Major League Soccer, he had a deal with LA Galaxy, and he also happened to be with Adidas while I was there. It was a revolutionary moment as part of the deal. that deal has future ownership of shares in an undisclosed MLS team.»

That MLS team ended up being Inter Miami, where Beckham was a co-owner along with brothers Jorge and Jose Mas. Now, Bruce compares Messi’s contract and presence in the MLS to an «accelerator».

What does this deal mean for future star athletes’ contracts?

MLS, a fairly young and innovative league, and Messi, one of the sport’s greatest players, are uniquely positioned assets in their own right as parties to the deal. in this range. In the upper echelons of sports legends, only a few had the same influence as the man from Rosario.

In the NBA, one can argue, what about Steph Curry? LeBron James? Does Messi’s potential revenue-sharing deal inspire something similar for them?

«That would really set off alarm bells,» said one former NBA agent. «For the right players and the right representatives, if they have individuals who can actually move the needle – like Giannis Antetokounmpos of the world, Nikola Jokics of the world, Joel Embiids of the world world, they’ll look at this in the next collective bargaining and say, ‘Listen, players control the league,'» he said.

But even with the power of NBA stars, perhaps not enough to match Lionel Andrés Messi Cuccitini. «I don’t think they have the same strength as Messi,» Kishner said. «There’s a global reach, but not nearly what Messi has.»

Just like on the pitch, Messi is in a league of his own at the negotiating table, his influence only matched by a few extremely elite. The Argentine boasts the third-highest number of followers on Instagram – 478 million – behind only the social network and fellow soccer star Cristiano Ronaldo, who has 596 million followers.

However, there may be other ways to creatively approach such negotiations. Cara Lustik, a branding and licensing expert, says: “What I’ve learned during my years working in licensing is that there’s such a thing as ‘slicing’ — because you have You can cut the cake.

Lustik explains that while not every athlete can match Messi’s sphere of influence in securing revenue-sharing arrangements, splitting the subscription model into smaller segments in Specific areas may benefit other athletes. “There are a lot of tournaments that can use extra eyeballs, and to do that, the easiest way is to take advantage of the talent that has them and everyone wins,” she said.

Another tournament that could be in the spotlight? NWSL, Bruce said. “America leads football in the women’s game,” he said. «And how does the NWSL adapt to this?»

What about Apple, MLS, and a hint of the future of live sports programming?

The streaming giants wanted a live sports show, and in recent years, they’ve scaled back. Amazon’s Prime Video features the NFL’s «Thursday Night Football.» Apple TV+ partners with Major League Baseball to stream games. Google’s YouTube TV is now home to NFL Sunday Tickets, and you can add MLS’ Apple TV+ deals to the growing list.

Research by Park Associates, a market research and consulting firm, shows that «annual sports OTT subscription revenue in the United States is $13.1 billion by 2022 and will almost double to about 22 $6.6 billion by 2027.»

Eric Sorensen, a senior contributing analyst at Park Associates, attributes this change to the pandemic and the need for more immersive experiences for sports fans. “Online sports, on streaming services, are much more attractive thanks to interactive feature sets ranging from opportunities and possibilities to bet and bet, stats and data as well as data,” he said. integration appears on the screen”.

But it’s not all and bleak for traditional broadcasters. Kosner, a former executive vice president of ESPN, emphasized that tech companies are not media companies first. «I think we’re going to see a really different division of rights based on the interests and priorities of these bidders, including traditional companies and also just the viewing habits of fans. sports graves,» he said.

The selections available and the competition for live sports programming set the perfect stage for the NBA’s $2.66 billion-a-year deal with Disney and Warner Bros. Discovery expires after the 2024-25 season.

«I don’t think the NBA could have planned much better,» said Desser, who served as chief negotiator for all of the NBA and WNBA’s national media deals. «The combination of different parties trying things out for the first time and seeing what can happen will benefit the NBA.»

Who is the real winner in this deal?

Umm, so far… people?

Messi, Inter Miami, MLS and all their league partners look great. And while the Saudi Pro League may have missed the chance to sign one of the greats, the footballer still has a $25 million public partnership with the country, as reported by the New York Times. The only ones missing out are the Barcelona faithful, whose hopes of Messi’s return may have to wait a few more years.

And while the terms of his master deals are still shrouded in secrecy, one thing is for sure: the 36-year-old Messi is still Messi.

You just have to watch a recent clip from the recent international friendly match between Argentina and Australia. It was the 33rd minute of the game, and Messi – unwavering, unwavering, with the ball glued to that left foot – gliding between the four defenders like a player at his peak. And it won’t be long before that talent is on full display in the US, as he is expected to make his club debut on July 21 against Cruz Azul in the Leagues Cup.

As Inter Miami co-owner Jorge Mas told the Miami Herald, «I think there will always be Messi before and after we talk about the sport in the United States.»

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