If MLS adopt 25% revenue sharing & 0.35% revenue salary cap, how soon will top MLS teams surpass FMF

Discussion in 'MLS: Commissioner - You be The Don' started by vevo5, Dec 1, 2012.

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If MLS adopt 25% revenue sharing & 0.35% revenue salary cap, how soon will top MLS teams surpass FMF

Poll closed Apr 1, 2021.
  1. MLS top teams will surpass Mexican top teams in 3 years (2016 season)

    33.3%
  2. MLS top teams will surpass Mexican top teams in 4 years (2017 season)

    8.3%
  3. MLS top teams will surpass Mexican top teams in 5 years (2018 season)

    8.3%
  4. MLS top teams will surpass Mexican top teams in 6 years (2019 season)

    0 vote(s)
    0.0%
  5. MLS top teams will surpass Mexican top teams in 7 years (2020 season)

    25.0%
  6. MLS top teams will surpass Mexican top teams in 8 years (2021 season)

    8.3%
  7. MLS top teams will surpass Mexican top teams in 9 years or more (MLS goal of top leagues in 2022)

    16.7%
  1. sidefootsitter

    sidefootsitter Member+

    Oct 14, 2004
    The problem here is the "busted" cap, not the revenues per se.

    Hypothetically, NYRB can spend $50M on a payroll without any local TV revenues.
     
  2. HailtotheKing

    HailtotheKing Member+

    San Antonio FC
    United States
    Dec 1, 2008
    TEXAS
    Club:
    San Antonio Scorpions FC
    Nat'l Team:
    United States
    PC4TH still shooting out crap without knowing the facts.

    How much of LA's TWC deal do they share again ? oh, right.
     
  3. vevo5

    vevo5 Member

    Nov 23, 2011
    Nat'l Team:
    United States
    Revenue Sharing (local):
    25% of ticket revenue
    25% of shirt sponsorship
    25% of local sponsorship
    25% of club merchandise
    25% of local tv/radio revenue

    Revenue Sharing (national):
    100% of national tv/radio revenue
    100% of national sponsorship
    100% of league-related merchandise

    After the revenue sharing is taken into account, each team can spend at most 35% of the "NEW" total revenue on players.


    Example: Team X generates $40 mil in revenue. It loses $7 mil due to the revenue sharing. Its "new" total revneue is $33 mil. It can spend at most 35% of this $33 mil or $11.55 mil on players. And best of all, it can spread this $11.55 million over its roster anyway it likes. It doesn't need to spend $8-9 mil of this on 2 players.

    Team Y generates $10 mil in revenue. It gains $2.5 mil due to revenue sharing. Its "new" total revenue is $12.5 mil. It can spend at most 35% of this $12.5 mil or $4.375 mil on players.
     
  4. HailtotheKing

    HailtotheKing Member+

    San Antonio FC
    United States
    Dec 1, 2008
    TEXAS
    Club:
    San Antonio Scorpions FC
    Nat'l Team:
    United States
    How many times are you going to copy/paste ?
     
    Jasonma repped this.
  5. vevo5

    vevo5 Member

    Nov 23, 2011
    Nat'l Team:
    United States
    Ives Galarcep wrote:

    The inevitability is troubling to some around MLS who feel successful teams are punished far too much for doing well while mediocre to bad teams are rewarded for failing with high draft picks and allocation money. There is a growing divide among MLS teams, with one side believing the league should do more to reward success - that giving teams the capability of sustaining success for longer periods of time isn’t necessarily a bad thing.

    There is that other side, though, the side that fears what might become of MLS if such changes are made to the league’s current structure. The worry sees a league of clear haves and have nots, a league that might begin to resemble the English Premier League (where the same big-market traditional powerhouses are almost always at the top of the standings) and the same small market, small-spending teams are constantly fighting for survival.

    That discussion is already taking place, and it isn’t difficult to figure out which teams are leading which sides.

    ---------------------------------------------------------------
    Compromise: The haves share their riches with the have nots (revenue sharing). The haves are allowed to GROW. Right now, MLS is trying to prevent the haves from growing in order for the have nots to catch up. This has stunted the growth of the league. TV rating, the main driver for future growth, has been the same in the last 10 years.
     
  6. HailtotheKing

    HailtotheKing Member+

    San Antonio FC
    United States
    Dec 1, 2008
    TEXAS
    Club:
    San Antonio Scorpions FC
    Nat'l Team:
    United States
    Yes, but TV monies are not the same over the last 10 years.

    Just like when you were posting as PC4TH, I'll ask you again. Why the blue fudge would the "haves" want to share EVEN MORE with the "have nots" ? Why should those that are doing give even more to those that aren't ? What sense does it make for the pretty girls at the party to get all dolled up, do their hair, and fix their make up .... just to have to cut off their nose so the ugly duckling can look like a swan in the dimly light dance hall ?
     
  7. Spursfan1

    Spursfan1 Member+

    Sep 7, 2010
    Atlanta
    Club:
    Tottenham Hotspur FC
    Nat'l Team:
    United States
    can anyone say what the total revenue is though?
     
  8. chapka

    chapka Member+

    May 18, 2004
    Haverford, PA
    Club:
    Philadelphia Union
    Nat'l Team:
    United States
    Team Z generates $6m in revenue (the 2007 Forbes estimate we have for the Columbus Crew). It gains little to nothing in revenue sharing under your formula that wasn't already rolled into that number. It has to cut total payroll to under $2.5 million.

    Then nobody goes to see the unrestricted $11 million payroll team play the $2 million payroll team, and nobody pays to televise it.

    Unbalanced leagues make interesting Champions League matches, but they make uninteresting domestic league matches.
     
    HailtotheKing, billf and Jasonma repped this.
  9. vevo5

    vevo5 Member

    Nov 23, 2011
    Nat'l Team:
    United States
    That was in 2007. Today is 6 years later.

    As for nothing to gain from revenue sharing? Hello?

    Revenue Sharing (local):
    25% of ticket revenue
    25% of shirt sponsorship
    25% of local sponsorship
    25% of club merchandise
    25% of local tv/radio revenue


    MLB and NCAA Football and NCAA Basketball is doing well with their disparity no?

    What MLS need right now is GROWTH. TV revenue will play the most important part. TV rating will increase when Big Club play another Big Club. Per triplet1, most MLS matches televised on ESPN involved New York, Los Angeles and Seattle. ESPN know that Big Clubs is good for TV Rating.
     
  10. sidefootsitter

    sidefootsitter Member+

    Oct 14, 2004
    With 20 teams, probably around $300M for the entire league.
     
  11. HailtotheKing

    HailtotheKing Member+

    San Antonio FC
    United States
    Dec 1, 2008
    TEXAS
    Club:
    San Antonio Scorpions FC
    Nat'l Team:
    United States
    What is being gained ? Hello ?

    As I told you SEVERAL times under your former screen name, you're not really gaining anything by weakening the "lower" half of the league. What is gained by making the "upper" half of the teams pay even more than they already are to prop up the other clubs in the league ?

    There is already a good amount of shared revenue that the bigger clubs are agreeing to. Why in the absolute blue hell would LA/SEA etc give up their money from the local market ? WHY ? What do they get from it ? Their marketing, their efforts in rooting their club in their area, and their reward ..... you know the very things that will help them grow as a club, you want to take from them ? This is idiotic.

    Why the crap should LA give a damn about local revenues if they're just going to have to toss 1/4 of it back to everyone else ? THAT'S A STUPID MODEL. IT'S IDIOTIC to want teams to pay, quite literally, their own hard earned money to those that don't run as good of a business.

    Here let's try this again and you tell me how it sounds.

    You and I will get the same job. You'll move to NY where the job pays 3 times what it does in Timbucktoo, where I'll hold the job. At the end of the year we'll both kick in a flat rate for our vacation fund ... but when we're on vacation you'll pay all the meals, drinks, rental car, and souvenir costs for both of us out of that extra money you got simply by being in NY ..... sound good ?

    Eh ?

    Good, because that's what it is steadily doing ... growing.

    Yeah, and telling them they need to kick in 1/4 of all of the very things that make them LA/NY/SEA isn't very smart. You want Big Clubs. Your idea to get there, is to cut off their left nut so the right one will get bigger ... or, in easy to understand words, counterproductive. TV revenue will indeed play the biggest part in the future growth of the league. Nobody in their right mind is denying this. However, if you want the league to be more attractive ... you certainly don't want to have a league half full of propped up teams. That isn't going to look good on TV.
     
  12. vevo5

    vevo5 Member

    Nov 23, 2011
    Nat'l Team:
    United States
    There is plenty to be gained for high revenue clubs. The ability to spend 35% of your revenue on player salaries, spreading evenly throughout the roster, will allow the club to do well on the field. Higher revenue = higher salary budget = better players = higher revenue. Rinse and repeat.

    It's worth the cost of sharing more revenue especially since LA, NY, SEA, TOR* have the potential to be among the biggest clubs in the Americas. Right now, they are no better than a club with $3 million payroll.

    (*Didn't Toronto had 15,000 on the waiting list? Toronto had the potential but it was wasted).

    You are vehemently opposed to the idea that the haves should share more revenue with the have nots even though the haves will have a spending advantage.

    But what if you are hired as a consultant and you will be paid $500,000 if you succeed in your job but nothing if you fail. Your job is to convince enough MLS owners to vote in favor a salary cap based on 35% of each club total revenue.

    As the consultant who want that $500,000, what would you suggest to get the "have not" owners on board? You already know my suggestion: "Share 25% of local revenue." Let's see if you offer a concrete/specific answer like I did or we will see if you will chicken out.
     
  13. billf

    billf Member+

    May 22, 2001
    Club:
    Philadelphia Union
    Nat'l Team:
    United States
    Are DCU1996 in disguise?
     
  14. HailtotheKing

    HailtotheKing Member+

    San Antonio FC
    United States
    Dec 1, 2008
    TEXAS
    Club:
    San Antonio Scorpions FC
    Nat'l Team:
    United States
    You're forgetting the 25% of everything on top of that 35% you're saying is "enough gained" ... that's added into the equation. That 35% of revenues isn't as big when you're taking 25% of every revenue stream they generate ... now is it ?

    You still haven't answered the question though. Why in the blue hell would these people agree to this ? Why would they say "sure, we'll do all the heavy lifting for you guys because we're good at this and you aren't" ?

    No, it isn't and yeah, at least two of those clubs ARE better than clubs with a 3 million dollar payroll. The regular season records of SEA/LA and LA's MLS Cup say so.

    However, no, there isn't a viable reason you've given for LA to share that money they got from Time Warner for TV. In no way, shape, or form is any other team entitled to any of that money. They got it for being the LA Galaxy and doing what they do (bringing in Beckham, winning a decent bit, etc) ... no team deserves a share of that. Not one.

    Tell me how any team in the league deserves any of LA's tv money from Time Warner. Go ahead.

    Then tell me how any team deserves any of the money they generate from Keane/Beckham jersey sales ... ?

    You can't.

    1 - They already are sharing revenue.

    2 - They already have a spending advantage.

    3 - Why do you think any team as a right to any other team's local revenues ?

    Answer my proposal first. Since you're such a fan of copy/paste, I'll do so here in case you forgot:

    "You and I will get the same job. You'll move to NY where the job pays 3 times what it does in Timbucktoo, where I'll hold the job. At the end of the year we'll both kick in a flat rate for our vacation fund ... but when we're on vacation you'll pay all the meals, drinks, rental car, and souvenir costs for both of us out of that extra money you got simply by being in NY ..... sound good ?"

    Chicken out of what, exactly ?

    You don't answer questions at all (see directly above) ... so I guess you're the mother hen yeah ?
     
  15. IndyMac

    IndyMac Member

    Nov 2, 2008
    Evansville, Indiana
    Club:
    Sporting Kansas City
    Nat'l Team:
    United States
    In baseball, teams share about 32% of local revenues and national TV money is disproportionately disputed to the lower revenue clubs to bring them up to the league average. It works too, the Yankees still make way more money than everyone else, however the small market teams are also profitable and not bleeding money and struggling to stay afloat like in the NBA and NHL. Because baseball does not have a salary cap/floor, teams are allowed to spend the amount on players that their revenue allows. Whereas, in the NBA/NHL, the salary cap allows the large market clubs to maximize profits while the salary floor forces small market clubs into bankruptcy.
     
  16. vevo5

    vevo5 Member

    Nov 23, 2011
    Nat'l Team:
    United States
    I guess you're not answering the question then. You chicken out. The question is still there if you want to answer it.

    As for answer your questions, I will be glad to.

    Why would the rich clubs share money with the poor clubs? That's easy.

    The ability to spend 35% of your revenue (after revenue sharing) on player salaries, spreading evenly throughout the roster, will allow the club to do well on the field. Higher revenue = higher salary budget = better players = higher revenue. Rinse and repeat.

    MLS structure is designed for a "level playing field." You use SEA/LA as example. I can use Toronto and NY as the "counter" examples.



    Sure, it sucks to force the successful to share revenue with the unsuccessful. But in return, LA would have:

    the ability to spend 35% of your revenue (after revenue sharing) on player salaries, spreading evenly throughout the roster, will allow the club to do well on the field. Higher revenue = higher salary budget = better players = higher revenue. Rinse and repeat.




    There is no such thing as a spending advantage in MLS. MLS structure is designed to be "level playing field." Even the DP Rule is designed with parity in mind. Go ask Toronto if you don't believe me.

    In a perfect world, MLS salary cap would be "each team can spend at most 35% of its revenue on player salaries." But we don't live in a perfect world. The turkeys won't vote for Thanksgiving. Likewise, low revenue clubs won't vote for a structure that kill their competitive advantage without significant compensation in return.


    I didn't reply to this comment of yours because it is not the same situation at all. A better example would be. You own a company in Columbus. I own a company in NY. But I can't invest in new technology to improve my company even though I have the means to do so. Because the government cap my technology spending so I am stuck at $2.8 mil spending each year.

    I would be willing to share some of my revenue with you. In return, I would be allowed to invest in better technology. This will widen the gap between us since with the new technology, my company can produce much better results. My company will "win" more. Your company will "win" less. But I am willing to share some of my hard earned money with you in order to get rid of the government cap.



    I answered your question. Now will you answer mine or will you chicken out again?

    How would you convince enough MLS owners to vote in favor a salary cap based on 35% of each club total revenue? My suggestion: each club share 25% of their local revenue. What's your suggestion that would win you that $500,000?
     
  17. vevo5

    vevo5 Member

    Nov 23, 2011
    Nat'l Team:
    United States
    What I want: Each MLS club can spend at most 35% of their revenue on players budget. This will help MLS top clubs overtake Mexican top clubs in a very short time.

    The reality: the turkeys won't vote for Thanksgiving and likewise, small clubs owners won't vote for a structure that put them at a disadvantage to the big clubs. If I am in their shoes, I know I would be vehemently be against it too.

    The solution: A compromise that both side can live with. Each club will share 25% of their local revenue. This will benefit the small clubs. This will cost the big clubs some of their hard earned money.
     
  18. HailtotheKing

    HailtotheKing Member+

    San Antonio FC
    United States
    Dec 1, 2008
    TEXAS
    Club:
    San Antonio Scorpions FC
    Nat'l Team:
    United States
    That isn't answering the question. That is merely copying and pasting your fantasy answer to what you feel the MLS should do. We know that the end game for your fantasy world is 35% of revenue as wage spending.

    Now, quit using your pre-determined outcome as the answer here. It isn't what is actually being asked of you.

    WHY ? would a highly successful club ever agree to give their own individually garnered revenues to any other club when they are already sharing revenues with other clubs that they themselves are driving. Why would they allow themselves to be gouged even more than they already are ?

    Toronto has been horribly run since day 1. That isn't the discussion we're having.

    SEA has 4 playoff appearances in 4 seasons. LA has 14 in 17 and NY has 13 in 17.

    Even with the "level" design, these clubs are making the playoffs pretty much every season. Making the playoffs, is half of the point (as it sets you up for the other half, winning the cup).

    Wow, copy and pasting in the same freaking reply. Wonderful.

    That 35% of revenue isn't all that much when you take 25% of your total revenue away and give it to the other clubs, and it doesn't give the gap you think it does:

    http://kirsoccer.wordpress.com/2011/03/26/mls-highlighted-on-sportsmoney/

    This little link says that the average MLS club has 15.6m in operating revenue .... and 14.2m in operating expenses.

    The last 'known' figure for LA in terms of revenue was roughly 36m.

    So take the 11.2m for operating expenses and 12m for payroll (roughly what it was in 2010 for LA) and you're left with 12.8m

    Now, from that 12.8m that's left .... we need to take 25% of it (actually 11.2 because 1.6 of that revenue is nationally shared) because of your grand idea.

    That leaves us with 3.2 million dollars of actual revenue ...

    ... of which LA can spend 35% .... that's freaking awesome bro.


    Actually the DP is designed exactly for the spending advantage. It's designed for LA/NY/SEA/etc to go out and get a few players because they have the advantage of being able to spend due to their circumstances and/or ambition to do so.

    Ask Toronto what exactly ? Just a few paragraphs ago you were saying Toronto was a "have" or a "big" club by lumping them in with LA/NY/SEA .... but now they're not as the DP is designed to help them ?

    What ?

    Except that 35% of is revenues isn't really 35% of its revenues when you're giving away 25% of it on top of what is already being given to the league. How do you not grasp this concept ?

    Except that you can. The government has given you 3 ways to spend on R&D and use your advantage of being in NY and your ambition to invest in yourself. You can spend whatever you want on a single item. If you invest in technology that is only researched a little but worth expounding on the government will give you a bit of a break. If you invest in groundbreaking tech you get an even bigger break.

    Ahh see, this is where you make the mistake in your business plan. Simply being able to spend more money means nothing. You have to still be able to run your company and produce the results. Can does not mean you will. Money doesn't automatically equal "winning more."

    This is exactly why we've all adhered to the government putting restrictions on our spending. We're saving ourselves, from ourselves.

    I wouldn't ever try to convince any MLS owner to vote for this because it's retarded. I did the numbers in this post for you. It's stupid, makes zero sense, and isn't even worth investigating at this point. LA generates the most revenue and would only be allowed to spend 35% of 3.2 million dollars ....

    .... that gets us nowhere. I would shit can this idea, right in the ass.
     
  19. Spursfan1

    Spursfan1 Member+

    Sep 7, 2010
    Atlanta
    Club:
    Tottenham Hotspur FC
    Nat'l Team:
    United States
    ok that didnt answer my question at all.

    can anyone (i have tried) gather the actual revenue for the MLS. even in 2009? 2008? anything?
     
  20. chapka

    chapka Member+

    May 18, 2004
    Haverford, PA
    Club:
    Philadelphia Union
    Nat'l Team:
    United States
    No. The revenue figures are not public and are not the sort of thing that can be easily figured out from outside the organization.

    The last reasonably reliable estimates we have are the Forbes numbers from the 2007 season:

    http://www.forbes.com/2008/09/09/mls-soccer-beckham-biz-sports-cz_kb_0909mlsvalues.html

    They had team revenue ranging between $5m for the Wiz to $36m for the Galaxy; total league revenue for all 13 teams was $166 million, for an average of about $12.5m and a median of about $10.5m.

    Given expansion, new stadiums, new shirt sponsors and the new TV deal, those numbers have almost certainly gone up since then, but by how much would be hard to pin down.
     
  21. Spursfan1

    Spursfan1 Member+

    Sep 7, 2010
    Atlanta
    Club:
    Tottenham Hotspur FC
    Nat'l Team:
    United States
    So in 2007 it was 166 million. Ok 300 million seems certain then. no doubt. just dont know where from there.
     
  22. jond

    jond Member+

    Sep 28, 2010
    Club:
    Levski Sofia
    Nat'l Team:
    United States
    Arlo White@arlowhite
    Garber reaffirms #MLS aim to be one of the best leagues in the world by 2022. "I can assure you, we will reach our goal"
     
  23. Spursfan1

    Spursfan1 Member+

    Sep 7, 2010
    Atlanta
    Club:
    Tottenham Hotspur FC
    Nat'l Team:
    United States
    Serie A, epl AND bundesliga. if not as good by 2022 then failure the MLS will be.
     
  24. ceezmad

    ceezmad Member+

    Mar 4, 2010
    Chicago
    Club:
    Chicago Red Stars
    Nat'l Team:
    United States
    One of the best in Concacaf sure, #2 :p
     
  25. HailtotheKing

    HailtotheKing Member+

    San Antonio FC
    United States
    Dec 1, 2008
    TEXAS
    Club:
    San Antonio Scorpions FC
    Nat'l Team:
    United States
    Absolutely 100% false statement there.

    Key point in the entire phrase is one of ..... The Dutch league is one of the best leagues in the world. Being that good wouldn't be a failure at all.
     

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