Followup on MLS Merchandise Sales

Yesterday in regards to the revelation that MLS annual merchandise sales were in the $300 million range, I made this comment:

And $15 million a year was the best licensing deal MLS could get? It's too bad they didn't have some kind of escalator clause.

Last night a commenter pointed out that in the $150 million deal over ten years, adidas paid for the following:

For the next 10 years, adidas will have the exclusive rights to sales of all MLS league- and team-branded products, including apparel and equipment, and will also work with the league to feature MLS apparel in major retail stores around the country. MLS will also be the beneficiary of adidas advertising campaigns that feature the league.
. . .
Other aspects of the agreement between adidas and MLS, including adidas becoming the only athletic brand with exclusive broadcast advertising right for all league games and, through SUM, adidas' new role as the presenting sponsor of the U.S. television coverage of the 2006 FIFA World Cup on ABC, ESPN and ESPN2. adidas will also become a sponsor of InterLiga, the annual qualifying tournament for Mexican clubs to the Copa Libertadores.

In short, the $150 million over 10 years existed to shut out Nike, PUMA, and other supplier sponsors MLS had at the time.

However, as pointed out by the commenter, that does not in any way preclude MLS receiving a percentage of all merchandise sales:

[For example] MLB has exclusive deals for hats and jerseys, but it's not like Russell or New Era gets to keep all the money from every MLB jersey and hat sold. No, they pay for the right to be the exclusive provider. Then they pay their licensing percentage on actual sales just like anyone else.

After thinking about it for not very long, this sort of scheme makes much more sense, and as such, my initial response is very likely wrong. Of course, we still don't know what percentage MLS is receiving from merchandise sales, but so long as they are getting something close to a standard rate, I don't think there's a question that the exclusive adidas deal was on the whole a good one to make.

Continue the discussion in the comments if you think I've missed anything else, and I'll be sure to follow up again if something interesting comes out.

-FS