This is my very firm belief as well; but only my opinion. Rather, I think they may be willing to write a check as well but have unrealistic expectations on the ROI of player acquisition for a sports team.
This list (scroll down to the sidebar) suggests you have several revisions to make. Most noticeably, Chivas and Dallas. Maybe not the best metaphor to make, lately
Bah, works just as well. You get a big, massive change followed by nothing for what seems to be eternity with the exception of some hiccups. It works just fine.
Again, I realize it's a hyper technical point, but I don't think they even can move it right into salaries from SUM. What they can do is distribute some or all of the proceeds to the I/Os with the expectation that they spend it on DPs, but I don't see how they force them to do that. That makes implementing this more than a little bit squishy, so some healthy skepticism is probably warranted. But taking this at face value (and it's a pretty good source as sources go), I agree with the general point that I'd be stunned if they spent it on "depth" or increasing the cap and messing with the new CBA in the process -- if they toss $100m into payroll, they'll only do it if it stands a decent chance of producing a lot of additional revenue, which realistically means DPs (just as the article suggests). Having thought about this a bit however, I'm not even sure a new batch of DPs would generate that kind of return. Yes, $100 million might bring in 20 great players (or at least big name players), but if they were scattered across the league I'm not sure they really would bump TV ratings that much. Are there 20 guys out there who are realistic MLS candidates and could "move the needle"? I'm not so sure.
You've mentioned this before, and it almost certainly has to be the case -- if the majority wanted to spend more, they would be spending more right now. I think the reality is that there aren't that many markets that really can sign and monetize big name DPs. I've posted this before too, but I thought RSL's reaction to the latest change to the DP rule was telling: http://www.mlssoccer.com/news/artic...used-youth-development-despite-dp-initiatives Now, these SUM proceeds might help a club like RSL fund DPs, but I'm not sure that would be their preference even if they were given several million dollars from the sale proceeds.
It's really interesting to me that even given the current state of parity in mls that RSL feels so driven to find other ways to be competitive in the face of relatively small measures such as the age-adjusted DP rules. While I'm sure SUM would still want more star power in the league even if it was forced to go against the wishes of a few smaller clubs, i'd really love to know what a small market team would do with an extra 5 million.
Never let the facts get in the way of a good meme. In addition to the three designated players that FC Dallas has had (Denilson, David Ferreira, Fabian Castillo), they also had Eddie Johnson and Carlos Ruiz on their books when those players were grandfathered.
I think its hard (and stupid) to try an pigeon hole what level a team spends. As it is fluid, for instance, Portland is currently one of the lowest spending teams in the league...think that is gonna last? How Toronto can not be seen as a big spender is weird as they currently have 3 DP's have had been using Dp's for as long as possible, has heavily invest in their academy and burn money on coaches and Kliny's "expert advice" Toronto tries, just fails. And Vancouver looks to be the same way. Hell, even RSL, Dal, DC, and KC each have 2 Dp's but no super huge salary's...so while willing to spend, they do have limits, unlike a handful of teams. And finally, a month or 2 ago I woulda said the Revs have been cheap without question. Now their is hesitation, as they have some what invested in their squad. Will this last? Who knows.
It's a equity firm, they are investing to make money. That's why you invest, with the hopes that value will go up and you can sell at more then you bought. And on top of that making a profit is icing on the cake. Most equity firms don't usually invest in a company to change how they do business. The exception of this is when a company is doing poorly and they shake things up in the managemet and some times sell off some of the assessts. And MLS really doesnt' fit that model. They bought in not becasue they are huge soccer fans or want to develop them game. They are buying in because they see a profit there. Which to me is a good thing. And to me this is solely a ruturn on the investment of the partners in SUM. Not som grand scheme to ralis salaries or increase spending on the league. You do those things when your operating revenue increases, not a one time bump.
Ok so this purchase says nothing about the value of the teams, I messed that up. This is more about the value of the marketing possibilities about soccer in the USA. SUM does control the marketing rights (well the right to market games in the USA) of teams like Barcelona, Chivas Mexico, The Mexican and American National teams, and of course MLS. This is bigger than just MLS, this company is betting on the future of all soccer in the USA.
Just a thought here. Why not use the money from the new investor to subsidize all the MLS team Development Academies and insure they are all free of charge. Possibly go down to the U9 level and include U20 teams. Would this not reinforce the idea that by the end of 2014 the league could be much stronger with 3 more years of development kids coming through and an even more robust pipeline feeding prospects at a much higher rate into the league for the new television contract starting in 2015?
You dont sell 25% of your business willy nilly. The Wilpons are selling because of their money problems. This isnt the case with MLS! So one might assume its about bringing these guys in as partners and taking advantage of whatever they bring to the table. The money could be spent many ways, maybe even land in Queens. Lets not forget that these guys have access to 22billion and are agressive and hands on.
Well, I think it is a two-way street. Certainly SUM feels that these guys are the right match, and it certainly helps that these guys want to invest in SUM. But SUM must also see a huge opportunity to leverage some of its equity to build its products. And since SUM and MLS are so related, it stands to reason that MLS could be a huge benefactor of this cash infusion.
If this is a cash out or cash call then one or several of the teams are in trouble and things are heading down hill. But there is another interesting POV, which is that they are creating a fund that will be used to buy players. Young players which will them be sold to Europe or anywhere else for a profit. Consider the recent DP rule change, which makes it easier for younger players to be signed. Also remember that the league holds the players transfer papers and not the individual clubs. Which makes it more correct for the cash to come from a league owned asset instead of the individual owners (i.e Uncle Phil, Kraft). If this player super fund really does materialize, then maybe just maybe the MLS has changed things in the world of soccer. This is something completely different and I APPLAUD them for doing it this way!
Should they choose to do it; it could be done since the I/O list is the same. Pay I/O $5m, immediately make a capital call to each team for $5m, then redistribute $5m in allocation money. Point is, there are ways to move into salary expenditure; I just don't think they SHOULD nor do I think they will.
Except the proceeds from a sale of a player is distributed based on the percentage that each entity pays in (minus fees etc). So, the I/O will recover any investment if they sell a player for a profit. Also, having a fund for young players that is only 150m isn't going to work. As someone pointed out, it is at most $5m per team. That is just over $1m per year on a four year contract for extra players (that does not include transfer fees, etc). At the end of that 4 years, the money is gone. If you use this cash to give it to teams for salary, they will be able to spend more for 4 years THEN REGRESS when the cash is gone. Makes more sense to either take the profit or invest in programs not salaries.
This is a better use of the funds than salaries in my opinion. Give each team several million for youth academy expansion.
I don't think this is accurate. I know there are investors in MLS that are not investors in SUM and I believe the reverse is true. For example former Miami Fusion operator Ken Horowitz is still an investor in MLS last I heard, he just doesn't operate a team and is not an investor in SUM.
I'd put the Union up on deep pockets. They built a brand new stadium, signed Mondragon and Adu and are spending to stay in the playoff picture. And I'd put Chivas USA down on sticking to the budget. It's a little too early to tell where Timbers and Whitecaps stand.
FC Dallas should think about using the money for a roof, as weird as that might seem. It would help them as much as anything.