Mexican megaclub Chivas could build streaming-only broadcast model

The last time Chivas Guadalajara, Mexico’s most popular club, moved aggressively to monetize its considerable following north of the border, it all failed rather spectacularly.

Chivas USA lasted just a decade in Major League Soccer, and its enduring and incorrigible mediocrity was such a burden on the league that it decided to buy out owner Jorge Vergara, handing him a tidy profit, just so it could dissolve the club. In that sense, perhaps, it wasn’t all bad for the controversial owner.

Now, per a Bloomberg report, Chivas is considering pulling its games from Univision the season after next, in the fall of 2018. Instead of broadcasting on an American network, it would only offer its games through a streaming service, at $12 per month, probably including access to analysis and other assorted club-generated content.

Alternatively, you could probably buy the games on a pay-per-view basis. That, after all, is an option offered in Mexico, where Chivas has already taken its games off the domestic broadcasters and transitioned to the streaming model.

Univision apparently averaged 1.3 million viewers per Chivas match last season, suggesting to the club that it could do far better if it monetized those viewers, or some portion of them, by itself. It would take NFL-type money for Chivas to consider staying with Univision, or something like what Premier League clubs get for their domestic rights in England, which seems an impossibly remote likelihood.

In Mexico, Chivas has 100,000 subscribers to its streaming service, even though it’s fairly expensive when compared to the Mexican cost of living — according to Bloomberg, the fee is twice what a Netflix account costs there.

“It wasn’t logical for us to accept less money [to stay on Mexican television],” Chivas CEO Jose Luis Higuera told Bloomberg. “One of the only forms of TV content that’s increasing in value these days is sports because there’s still plenty of interest. The proposals we received weren’t realistic and didn’t value our content the way we thought they should have, so we had to go at it alone.”

“We’re a powerful brand,” Higuera added. “And if we’re not the first to see its value, then no one else will.”

Per Higuera’s math, Chivas has between 15 million and 20 million fans stateside, which, on the face of it, seems like an absurd claim. Per the latest census, there are about 35 million Mexican-Americans living in the United States. Half of them would have to not only be soccer fans but be partial to Chivas. The club currently collects $16 million annually from Univision. So it’s betting that, at $144 a year, it will sell at least 111,000 subscriptions to do better on the terms of its current television contract.

That’s more than it has shifted n Mexico, a country with a population of almost 120,000.

It seems like a big ask.

But it would be a daring experiment watched closely by the soccer industry as a whole. Other clubs have toyed with streaming their games in the past, but none of Chivas’s size, following and cultural resonance have attempted it before. They haven’t needed to. While broadcast rights values apparently dipped in Mexico, they exploded by multitudes in almost every other country, underwriting the game’s continued growth around the world.

Peering out to the horizon, however, a future where other clubs elsewhere could follow Chivas is conceivable. While the going is good now, and clubs are cashing in, there are distressing signs in the form of cable-cutting and the 19 percent drop in viewership of even Premier League games on Sky, its dominant domestic carrier in England. Television in its traditional form is troubled. Streaming, plainly, is the future, requiring customers to pay only for the things they actually want.

Chivas could prove foolhardy, turning away guaranteed income over a multi-year period — its current contract with Univision runs for five years. Or it could prove visionary in a shifting landscape.