True enough the US economies would be affected by turbulence in the global market but MLS wouldn't necessarily be negatively affected by that. Why? A turndown will affect the leagues that leveraged to the hilt on labor. European soccer would be in big trouble with a 25% drop in revenue. Several major American sports would be too - hockey and baseball perhaps. Because of the tight cost controls MLS is in better position to ride out that sort of thing - a 25% revenue drop doesn't currently cut into the bone the way it might in other leagues. That being said, past economic downturns haven't hit the entertainment industry the way you might expect. Even though money is tight, when conditions are bad people need that getaway or escape and are willing to pay for it. It is the discretionary non-essential spending that gets cut or postponed - cars, applicances, and so on. Sports, movies, etc. have actually incrased in past economic down cycles. In the 1930's, for example, horse racing (one of the big 3 sports at that time along with baseball and boxing) had a great upswing.
Great point. The sporting intelligence research group just did a study on the world's best paid teams - http://www.sportingintelligence.com...ity-close-in-on-barca-and-real-madrid-010501/. The main points that the author Nick Harris has been pointing out in interviews are as follows: 1) it may be suprising to Americans that the 7 of the top 10 teams in average annual pay per indvidual are soccer teams 2) and also that the salary structure of those teams is much flatter - Leo Messi for example, consumes a much smaller percentage of the Barcelona wage pool than an NFL QB might on their roster. There is less variance in succesful soccer teams than in the top US sports. MLS, on the other hand, has a wage disparity based on a unique marketing quality or specialized skill set that is more in line with other US sports.
While I agreed with the rest of your points, I disagree strongly with this. 1) One of the best benefits of MLS has been not only improving the player pool but also the domestic coaching pool. Providing opportunities to guys who are either American (or have been in America a long time and are familiar with the culture and have a personal stake in the growth and development of American soccer ie Sigi Schmid, Schellas Hyndman, Peter Nowak et al) has been even more important for the long term prospects of American soccer than building the fanbase or player pool. Providing opportunities and experience for young guys like Jason Kreis, Ben Olsen, Robin Fraser, Jay Heaps, Jesse Marsch and even international guys with either a playing or coaching background in the US like Martin Rennie or John Spencer is huge. 2) They domestic coaching approach has also been more successful by and large than the import approach. Gary Smith obviously had some success (Winning an MLS cup, although the regular season record was far from dominant). Others like Osorio, Backe, Ruud Gullit (!), Queiroz, Mulitinovic, Parreira, Thordarson, and most glaringly Winter have all had at best mixed and really poor results. Please don't bring in any more Hans Backe's - not only is a neutral step in terms of developing a US coaching pool but they don't even bring any more success. I would so much rather see Oscar Pareja or Jesse Marsch get a chance than a second-tier Euro retread. I'd even rather see a Curt Onalfo inexplicably get a third chance.
To keep domestic players ("stars" especially) playing in the domestic league? I know it is only one data point, and that we could also get into a discussion of what is legitimately "artificial" vs what actually fits with what "the market dictates," but: http://www.guardian.co.uk/football/2011/jan/31/andy-carroll-liverpool-newcastle-transfer Again, it is not done on a league-centralized/controlled level elsewhere (as there are no other single-entity leagues, afaik perhaps outside of India), but surely there are clubs that are setting/adjusting their acceptable transfer fees (paid to) levels beyond what the international market dictates. (although, in Carroll's case, Liverpool remained in the market and did buy at that elevated cost -- although I'm not sure if there were any other potential suitor clubs willing to push the "market value" for that player up to that final level that Liverpool and Newcastle agreed to.) And there have been "un-sellable" players in foreign leagues (Beckham at RM comes to mind, but I'm sure there are others) who have opted to play out their contract and then leave on a free transfer (in part because their club has set such an unattainable beyond-market transfer fee for that player during the duration of their current contract).
Look let's keep this simple... increasing the cap does not improve domestic talent. If you raise the cap, it gives incentive for international talent to go to MLS. This increases the quality of play. The DP is an over-simplification of this. And if domestic guarantee slots continue, domestic talent playing in such a league would get better, and ergo worth more because they can market themselves overseas. This is already happening, where it can, in England and Germany with "lunch-pail" players are cheaper and fit a system. Clint Dempsey is the archetype for this. The REAL problem are transfer fees. How do you reduce the cost to get a player in contract? That's why most DP come over on free transfers. MLS can use its single point of negotiation to help reduce prices because they are controlling the American market. For the players you offer financial stability and quality of life. This is why we don't get player in their prime. Otherwise we would. The competitions themselves are meaningless. See NASL > Cosmos for more details.
That's easy, if a team doesn't want a player to be picked up via transfer they will set their price expectation so high there are no takers or set it so high that a team willing to spend will have to give more than they really should in order to get a player. Happens all the time in the EPL, especially for 'in demand players'. Often times this artificial inflation ends up causing real inflation in the market if teams like Man City with no budget limitations end up spending to get the player. It doesn't change the fact that the inflation was not caused by market forces so much as greed or desire to maintain a player being the cause of the 'artificially' pumped up transfer fee.
But that's not the league doing that, and setting a price high on a player is a market force, there is nothing "artificial" about it. In fact, IIRC there is a law on the books in the UK that bans teams from setting a price that's too high for the purpose of preventing a player from leaving.
so if the UK government took the effort to put a law on the books to prevent such a thing as "artificial" inflation of football player transfer fees, then clearly there were past instances of such "artificial" inflation.
so, you've got a link to this law (that you may recall correctly)? are there not conditions in the EPL that encourage English players to be "over-valued" by clubs and to have their potential transfer fees set beyond what would naturally (or internationally) occur in the market? or, was Andy Carroll going to be sold to someone else (outside of England specifically) for close to 35million pounds if Liverpool didn't agree to that fee with Newcastle in January 2011?
By clubs, maybe. By leagues, as you originally stated, no. But, clubs setting prices on players IS what naturally occurs in the market, nothing artificial about it.
I've tried to say (in all of my posts) "in other leagues at the club level" and indicated that most (almost all) other leagues are not single-entities, so any "artificial inflation" would be (and is) happening at the club level. see the below post for the context in which I initially made the "league" comment. but "clubs" aren't setting prices with "club/soccer money" -- they are "artificially" setting prices with outside money (huge cash gifts/infusions from wealthy owners who have previously made money outside of soccer, and are now willing to spend -- at a loss -- on soccer players, and at a level that is beyond what the "soccer market" itself would sustain. interesting reading here: http://en.wikipedia.org/wiki/UEFA_Financial_Fair_Play_Regulations spending more (on transfer fees) than the club earns seems like the very definition of artificial inflation within the market. UEFA having to create confederation-wide rules aimed at "preventing clubs with very wealthy owners who make substantial cash gifts to their club from gaining an unfair advantage over other clubs who may be run on a more sustainable business model" seems like evidence of widespread (and artificial and non-sustainable) transfer fee inflation. the market (for rights to soccer players) is being artificially propped up with non-soccer monies.
You ain't getting it bro, there isn't any collusion here, so there is no "artificial" inflation. Wealthy people are buying at a premium. SYoshonis is right on. UEFA want to makes sure the Champions League stays competitive lucrative. They don't give a shit about "unfair advantages".
I'm not pointing to collusion (other than those handshake agreements in Mexico), I'm pointing to the "premium" that wealthy people (owners) for (or as gifts to) their clubs around the world (be they ManCity or PSG) are buying at levels that are "above market value" (or what can honestly be sustained by just the soccer market and local club revenues alone). but those owners are buying (or setting a premium) at a level that can not be funded by just the soccer operations. outside money (oil and other sources of revenue/business) is driving up transfer fees in football. owners are running clubs (in some/many cases) as playthings for their previously earned money. a lucrative tournament (or any competition) is one that stays "competitive." "financial fair play" in and of itself should in fact make for a better (and in the long term, more competitive and lucrative) UEFA CL. (and it could also help foster more sustainable leagues on the whole across Europe.) perhaps the best way to protect (and safely grow) soccer is to keep too much "non-soccer-sourced" money out of the clubs. And in that sense, MLS and its tight budget controls were a step ahead of what a lot of other soccer business are doing. UEFA's "Finanaical Fair Play Rules" are an attempt by that organization to have all of their members operate under a uniform (and controllable/known) set of financial guidelines. That's not all that different than some of the centralized roster constraints that MLS puts upon itself. (but that's not to say that some clubs -- or in the case of MLS, the league itself -- are not experiencing/setting "artificial" inflation within the transfer market by setting "transfer fees" at a level that would never be met, for some players.)
There is a difference between saying a) a few wealthy clubs are artificially inflating the transfer fees for a very small number of players and b) that the market as a whole exhibits artificial inflation. I think where you miss the mark is to assume that inflation propogates through the market as a whole. I think you did see a cycle where teams tried to follow that lead but what we've seen is that in cases where teams overpaid on the transfer market they experienced the impact of having done so and as a whole the market is in a correction back to sustainability. It took a major event - high profile clubs going into administration - but the trend seems to be that the transfer market is now operating like the real estate market - different neighborhoods have different price levels and compete on an intra-community basis.
I don't believe MLS artifically inflates transfer fees at all, in the sense they put a discouragingly high transfer market price on player to discourage bids. Rather, I think that there are frequently cases - especially for domestic players - where a player is worth more to MLS than potential suitors because a domestic player with name recognition carries a certain marketing value that doesn't transfer to the potential buying party. Take a Chad Marshall, for instance. He has been in Colombus a long time, he is a fring USMNT team player and a team leader on the Crew for an extended period. He has a marketabilty that helps C-bus sell tickets that just doesn't translate to say Belgium. So let's say Anderlecht starts scouting Chad Marshall and decided to prepare a bid. Their scouting evaluation may see Chad Marshall is worth $1M transfer fee based on his technical ability and contract status and MLS may agree. But to MLS he is worth $1.5M because his value is based on technical ability, contract status, and marketability. So why would MLS sell? There is a difference between 1) two parties have differing valuations of a player and 2) artificially inflating transfer fees.
certainly. (although, it could be argued that one's perspective would affect if that difference is relevant.) party A (the domestic league in MLS's case -- or some other team elsewhere in the same domestic league such as Newcastle and Liverpool within the EPL) sees it as a reasonable (perhaps marketing based) strategy and valuation, while party B (a foreign-to-the-player club) may see it as an unreasonable and "artificial" inflation upon what would be the standard/reasonable market fee for that player (internationally). Be that player Chad Marshall (for MLS) or Andy Carroll (for Newcastle-then-Liverpool).
I get what you're saying, but the remaining sections of your next two paragraphs seem to argue to support "b) that the market as a whole exhibits artificial inflation." or that the market did indeed very recently (and may still) exhibit some real signs of artificial inflation.
Hmm, not sure I follow you here. If I was going to translate what I wrote to the terms used in technical analysis of financial markets, I would be saying: The upwards pressure or price escalation at the extreme upper end of the market temporarily caused upwards pressure, but the movement could not be sustained based on market fundamentals and the market fragmented. Baseline prices in all sectors excepting the extreme upper end of the market returned to a price point more in line with the expected value based on the historical mean and market fundamentals. The bottom line is that the market as a whole corrected and does not exhibit signs of sustained artificial inflation.
When did the market fragment? It seems like there are an ongoing and endless supply of wealthy owners who are willing to step in and participate in the continued movements that are a result of and reinforce that upward pressure. Gotcha, but what is the cause of that "whole market correction" (if such a thing did occur or is occurring)? Was it the reality of a few clubs going into administration (Portsmouth, Rangers, etc) or was it more tied to a centralized financial organiztion and restraint system (such as UEFA's Financial Fair Play rules that were recently adopted and are planned to be soon enforced)? And what removed those signs of sustained artificial inflation? Won't certain players (be that player Andy Carroll, or Chad Marshall, or Bastian Schweinsteiger, or Alessandro Nesta) always be more attractive (and more highly valued by) teams in their domestic league?
1) This is going pretty far off topic from the original question of what plans the Don might have in mind with regard to reaching his vision of MLS 2022. 2) What are you driving at really? What are you trying to say and what is the point for MLS? In all honesty inter-Euro transfers don't really interest me that much and MLS isn't doing too much business with those elite clubs, so until Citeh is bidding for MLS players the type of arguments and distinctions are six of one, half-dozen of the other to me.
For someone who asked above--according to the other thread, it's 5 non-Mexican or Mexican descent players allowed per team in LMF, and naturalization of players like Zinha, Luduena, Chango Moreno, etc. can take place in a few years. That means Mexican teams are bidding against one another for Mexican players, inflating the price. That's different from the Pacto de Caballeros limitation, which is about free agency and switching teams within LMF. This is exactly why all these Mexican League-affiliated academies are flourishing in Chicago, Texas, SoCal, etc. The players see LMF as paying better, and LMF needs Mexican or Mexican-ancestry players. You wonder why Mexico isn't raiding the Colombian league for $200K players the way MLS is and this is your answer--most of those players aren't considered good enough to take up a precious foreign spot on the top teams in Mexico, which almost have to go to $1M-$2M/year attacking players. Then the ones they do buy--if they aren't at a level to play for their S. American national team, they naturalize them as quickly as possible same way MLS has its players pursue the green card. On average, there are double the number of foreigner slots on an MLS team as on a Mexican League team. That's yet another factor that will help us compete in the CCL even with far lower overall salary expenditure. Once MLS is willing to pay four attacking players $1.5M-$2M each per team the way they do on the top teams in Mexico, everything changes. We can send out $15M teams to compete on equal footing with $30M Mexican League teams, no problem.
Your comments and insight into the FMF rules and salary structure have been fascinating - the highlight of this thread for me. Since I see reaching FMF quality and providing legitimate competition to FMF in regional tournament as probably the most important stepping stone, this insight is really appreciated. Question - what do you think the FMF response would be if MLS quality did start approaching the top end Mexican teams. Given the mentality of Mexican soccer toward their neighbors up north, my strong assumption is they would response in kind with rules changes and probably increased wage expenditures. When MLS gets close will Mexico expand the number of foreign player spots and increase the numbers they are spending, especially on the 3-4 top end offensive player slots you mentioned, in order to maintain superiority? A lot of the discussion about MLS quality and approaching the Mexican level assumes a static Mexican presence but I highly doubt that will be the case in reality.
Interesting thread. I want to reiterate the basic proposition because its important not to lose sight of it -- can MLS be a top league in the world by 2022 if its team payrolls are a fraction of those other "top" leagues? Let's look at some benchmarks. Even low revenue EPL teams -- the Bolton's of the world -- still have payrolls in the neighborhood of $70m. http://www.scribd.com/fullscreen/55741334 But, it's true, the EPL is the highest revenue league in the world. What about the other top four leagues? To put the EPL wage bills in context, according the latest UEFA benchmarking report (2010 data) which you can download at their website, the average club revenue in the top five leagues ranges from $173 million per club (EPL) to $70 million (Ligue 1). Much of that money goes into wages. Across Europe the average club spends 64% of its revenue on wages which often includes other staff, but is predominately spent on players. Of the top five leagues, German clubs spend the lowest percentage of revenue on wages (51%), while French and Italian clubs spent the highest at 71 and 74 percent, respectively. Put another way, in France, which has by far the lowest revenue of the top five European leagues, the average wage bill is still $50 million. As we ponder what Garber is saying, even accepting that (i) there is a "home grown" discount on player wages if you can develop your own good players, and (ii) player movement is subject to restrictions that make it easier to retain players then if movement was less restricted, and (iii) the pay in Europe may be inflated as about a hundred top clubs chase these players, it's still hard to imagine how an MLS team with a $5 million payroll could be competitive with a team paying from any of these top European Leagues paying ten times that. It's a big hill to climb. But let's drill down a bit deeper. How does a club like Wigan -- with MLS like attendance -- afford huge wage bills? Wigan's revenue from match day and commercial income is only about $8.5 million -- low by even MLS standards. But Wigan also gets over $60m from the EPL in shared revenue. http://swissramble.blogspot.com/search/label/Wigan Athletic I've made this point before so forgive me for the repetition, but it's critical to understanding the challenge. Single entity though it may be, if you look at the Portland pro forma it's pretty clear that there is virtually no revenue sharing in MLS. In other words, the capital call payment and the ticket receipts given by the I/O to the league roughly equal the value of the players and the SUM distribution the I/O gets back. It isn't just the lack of TV revenue that holds down MLS payrolls, although more TV money would certainly help, it's the lack of shared revenue. Under the current rules MLS teams have to each generate enough money to boost their payroll -- they don't get much help from the league or other teams. The vast majority of the nice pile of money Seattle or LA may makes stays in Seattle or LA. It isn't available to help Columbus or Colorado afford higher wage bills. Again, for the most part, MLS teams must each pay their own way, even for player payroll. Unlike Wigan, they can't just show up and get a check from the league to cover most of their expenses. Just the reverse, MLS gives them a bill to pay. So, as long as the salary budget acts as a salary cap, MLS doesn't have to just grow revenue to increase it, it has to either grow local revenue in every market (which seems very difficult) or grow league revenue (TV and commercial) that can be equally shared. It's not a simple problem.
