VEVO5 catch-all thread on how to improve MLS

Given the bureaucracy, owner revenues separate from club revenues, SUM take, etc etc etc on down the line ... is it really a stretch to think that could be true ? Especially if we're counting in "investment" directly to the league from the ownership groups ?

Sure, I'm absolutely admitting that the "maths" probably have some lines that cure or dip in and out ... but I don't think it is a flat out lie, or THAT far from the truth to say the league (wording important) is losing money.

I'm not disagreeing with you, but rather adding to the broader picture with this:

There's never been another time in the league's history where the tide has been rising as quickly and as high as right now. Literally, everything has been in the pocket of the FO's and business end of these negotiations. Trickle down does eventually get to the field level (literally) and we're (depending on your outlook) either at, coming up to, or tripping over the first bump at this level with this next CBA. So far everything has been reactionary (rightfully so) but is there not a time to be proactive and take the risk ?

Risk of course, is relative to the situation. The risk now has changed ... but there's momentum/etc and other telling signs that to some people just might substantiate a push on this front in order to truly gauge things.

 

It's one solution. One reason MLS gets poor TV ratings is the lack of quality. One thing hurting the lack of quality is the salary cap. I can go through MLS rosters and find League 1 and League 2 quality players, who, if there was no salary cap, would not be on MLS rosters. Yet, many of these players are not only on MLS rosters, but they get a game.

I don't think there's been intelligent stuff in this thread why it won't work. I think there's been a lot of confirmation bias.

Obviously you can't have MLS clubs spending more than they take in and obviously there needs to be revenue sharing to pull up the weaker clubs. But to go from that reality and then suggest the only way the league to survive is to have a $3 million cap +DP rule? That's just nonsense. There are other ways of doing it. Something similar to FFP for instance combined with more revenue sharing. The current cap is just not compatible with the sport of soccer. It's compatible with the sport of basketball where a good team has two star players and then a bunch of role players. But that's not how soccer works.

There are close to 50 soccer leagues in the developed world. Not one of them has a salary cap. And last I checked not one of them has collapsed because of it.

 

I can do that with Premier League rosters too.

I'm sorry, where was that said ? It has been stated that the smartest and most viable route at the time is to maintain a cap + DP approach.

Obviously it is. The MLS has improved drastically and it has always had a cap. More revenue sharing is just stupid. Some is good, tacking on more isn't.

Really ?

What is your definition of "good team" ?

Not true.

A-League says hi .... and the J-League does have wage caps.

We do though, have a very big poster child for free spending in soccer from right here in the States. It set the sport back roughly 40 years ... you may have heard of it.

 

MLS has better attendance than the NBA. Nothing to see here

 

No leagues, but a hell of a lot of teams. Since, with single-entity, MLS is the team and the league, that's what they're trying to prevent;

 

Yes there's League One/Two players throughout MLS but no, that's not due to there being a salary cap vs not having a salary cap.

That issue can be solved by tweaking the system and allowing more balance and flexibility while still having a cap. It's not a black and white, either/or situation. MLS, if it chose to do it, could have more balanced rosters which reflect what we see in Liga MX while cutting out some of the dead weight while still operating under a cap.

What you're basically arguing is to get rid of guys like Riley or Leonardo on LAG(League One/Two talent), that the only way to do so is to toss the cap aside all together. Reality is, if LAG had another 2M to work with a roughly 5-6M cap, Leonardo/Riley wouldn't be anywhere close to touching the pitch for them.

The funny thing is some of the worst talent in the league is on the teams with the biggest name DP's. Why? Due to the DP cap hits they have less flexibility to fill out their rosters under the current cap. I'd take RSL's or SKC's or Portland's or Vancouver's 4-11 guys over LAG or TFC's 4-11 guys any day of the week. Goes for other teams too. But while you argue the way to solve that issue is needing to toss the cap aside, I argue any GM worth his salt with good scouts under him can solve that issue if given just 2-3M more in cap space to work with.

One step at a time. To stack a team with 11 DP quality players and attempt to go toe to toe with some of the better clubs in top leagues, obviously the cap would have to be much, much higher or tossed aside. But that's not the step we're looking to take. We're looking to boost the middle class, work on guys 4-11, add depth, get more creativity out there. To make that step, the issue isn't to have a cap or not have a cap, it's having a higher cap and more flexibility. If you need to toss the cap and completely toss aside this salary structure in order to improve the middle class, I'd argue you're an incredibly inefficient businessman. Just need more flexibility and more room to make it happen, as Kries recently alluded to in his interview from Barcelona.

 

Portsmouth, Rangers etc occurred before FFP. Rangers was actually tax and pension fraud.

If MLS had its own version of FFP (clubs can't spend more than 60% of revenues for instance) the league wouldn't collapse because of finances. It would be almost impossible.

 

Okay, I'll agree with you. I'm saying a cap more compatible with the sport of soccer that would lead to more balanced clubs would prevent League 1 and 2 quality players from getting a game. So if you had a $6 mil cap that would probably do that.

But my point is, that a cap isn't necessary anyway. It's not like baseball where there are a small number of clubs competing over an even a smaller number of players. A .500 pitcher in baseball gets $8 mil a year because there aren't that many of them available. An avg soccer player in MLS or in any other comparable league would not get inflated value for the simple reason that there are dozens (hundreds?) of players just like him. The market value of players is not as volatile.

I think some financial regulations are definitely needed but not so burdensome that they essentially make MLS clubs fill their rosters with League 1 talent. MLS should be on par with the Championship for players. The average wage needs to rise. And the salary cap structure prevents that.

Just look at where a lot of MLS players come from and go to after they leave MLS. Chris Birchall is a starter for LA Galaxy and then Columbus. He came from League 1 and now he's back in League 1. Nothing againt him but he was never a Championship quality player.

 

So wait, we're going to sacrifice stability and make the product worse in DC and New England, and in exchange we don't even get super-clubs? How does this solve any problems at all?

 

I'm not sure exactly what you're arguing here. To get rid of the Birchall type players, it can easily be done while still operating under a cap and if pushing League One/Two talent out of the league is your main priority, whether there'a cap has nothing to do with it. Can be accomplished under a cap, just a higher one.

Arguing we don't need a cap only makes sense if you feel the next step of MLS isn't improving the middle class and getting rid of League One/Two talent but rather if you feel the next step is going toe to toe with a Liverpool or Dortmund or Atletico(which I'd argue can still be done under a cap). But that's obviously not the next step. Even still, it's not a cap or no cap issue. If MLS theoretically had a cap inline with the NBA(58.7M), then we damn well would be the best league on this continent, be big players in Copa Lib and would have numerous clubs at the same level of upper mid table clubs in the top 4 leagues. If it was theoretically an NBA style cap with the luxury tax rule they have where you can still spend 80m or 90M+ on your roster, given you're willing to pay the luxury tax, we'd have some teams which could compete with just about any club in the world outside the monster spenders like a Barca/Madrid/PSG or say the top 15-20 clubs in the world. Could actually have a team or two push higher if they were willing to tkae the luxury tax hit, all while operating under a cap.

Not a cap issue. MLS could theoretically be the #1 league in the world with every team carrying 75-100M rosters with top Euro players flocking here in their primes while still operating under a cap. But, that's so far off I don't know why we're discussing it.

 

Yeah, a cap restricts what you can pay players. In a sport with a worldwide market for players, capping wages limits player quality. I think everyone understands and accepts this.

Okay, let's see

Correct. I don't think anyone has argued that the cap needs to nor will stay at $3 million.

What about how FFP-like rules with revenue sharing actually disincentivizes investment in long-term team projects, like stadiums and academies? If you disagree with triplet1's logic, please offer a counter-argument. I thought his reasoning was pretty solid.

Let's break out some numbers, and see if that's true. I'm going to compare the spread in wages of Barcelona to the Galaxy's and RSL's. This table includes 4 different measures of spread. Generally, the smaller then number, the smaller the spread:

Team	FCB	RSL	LAG
Average/median	1.04	1.54	3.57
Max-min/median	3.88	5.10	47.76
st dev/average	0.86	0.83	2.70
Herfindahl index	0.07	0.05	0.26

As you can see, RSL's numbers are low -- above Barca's in two of the measures, but about equal in the other two. LA's indicate a huge spread in wages, with a high concentration in one or two players. If your hypothesis is right, then RSL should have absolutely annihilated LAG last season, since their wages are spread so much more evenly among the players. RSL is paying their players more like Barcelona, and, I'm assuming, Barcelona plays the way "soccer works."

Unfortunately for your theory RSL didn't run over the Galaxy. Granted, this is only one observation, but it's not exactly confirming that soccer can't work this way.

So you do think the salary cap should be eliminated? Like the others said, there's a pretty prominent example of a league collapsing without a salary cap. It probably wasn't the only reason, but it's also really difficult to ignore.

 

You can't use the Barca and Real Madrid salary structure to make the argument. Messi and Ronaldo get much higher wages than the avg player on the squad but the other players are 2nd division quality. They are all high quality. Instead compare MLS to its equivalent leagues - the Championship, Belgium, Norway, etc

Also, please tell me where in the world FFP removes the incentive to develop players in the academy. Or where it hinders development of stadiums. European clubs rely heavily on academies. This hasn't changed because of FFP. If anything, they will have to rely on them more now because of FFP.

 

I've posted in other threads that my guess is the statement "the league is losing money" is likely literally true. The league is really MLS, LLC, the payer of player salaries. To pay the bills, funds have to be put into MLS, LLC. That's done by teams turning over a share of gate receipts, national TV money (some of which I think stays at SUM), etc. That's probably not enough to pay all the bills, so MLS, LLC makes a capital call for the owners to equally make up the loss, essentially by design.

But as you note, just because the league is losing money doesn't mean the owners are. Unless the Forbes numbers are totally out of whack, many individual owners are making money at the team level, and if you add up the gains and losses, it's positive overall.

 

With the new TV deal, it's a reasonable proposal, but the TV deal is critical to fund it IMO.

The trick to an equalized salary cap is to fund it, well, equally.

Consider the beauty of the NFL model. I pulled the Packers numbers from 2011 (only because I had them handy). The Packers made $258m that year. Player payroll -- not the cap, total player salaries and benefits -- cost $161m. The NFL handed the Packers two checks, one for $96m, representing the Packers equal share of the TV money, and the second for $46m, representing the Packers cut of merchandise and licensing fees from NFL Properties. (SUM, patterned after NFL Properties, provides the same function for MLS). In effect, by dividing up shared revenue, the NFL gave the Packers $142m of the $161m they needed for player payroll.

Put another way, shared revenue distributed by the NFL provided a whopping 88% of the funds the Packers needed for player payroll.

Here's the key -- it's much easier to have an equalized salary cap when equally shared revenue funds most of it.

The dilemma MLS faces is what some of you identified earlier -- its hard to push the equalized salary budget if teams don't fund it equally. LA and other DP spenders are now using their own funds to exceed the salary budget the league provides. But just because AEG is willing to spend more of its own money on DPs for its own team, it doesn't follow that they would cut their own spending and send their money over to Chicago so the Fire can spend more for players. Whatever the merits of the position, I agree with those who suggest that's going to be a hard sell.

But what if MLS, which has borrowed so much from the NFL, adopted the same strategy to fund payrolls?

To set the salary budget for every team, take the total of:

1. The National TV Money -- assume $70m.
2. The MLS portion of the SUM money -- assume $65m
3. And, if agreed more cash is needed, proceeds from a capital call (that is the same for every team).

There's enough there to fund a $6m salary budget for every team without any capital call, although the league office undoubtedly has other expenses the owners need to pay for so some capital call might be needed. Still, use the shared revenue to equally fund the salary budgets.

It's a lot less contentious because every one funds and receives an equal share, and it gets the cap to a level you suggest IMO.

As for the gate receipts, in the NFL the home team has long shared gate receipts with the visiting team. To even out the highs and lows of attendance and ticket prices, now about 34% of the gate receipts are sent to the league, tossed in a pot, and sent back to the teams in equal shares. That represents their "visitor's share" of the gate. Instead of using gate receipts to fund payrolls and league costs (as I think MLS now does), I'd copy the NFL formula and send that money back to the teams -- it would cushion the blow from pushing the SUM and TV money into payrolls.

Link to Packers data:

http://www.nytimes.com/2011/01/28/sports/football/28packers.html?_r=0

 

The important comparison was between RSL and the Galaxy. Barca's numbers were just there to benchmark the table. If having huge wage disparity was really that detrimental in the sport of soccer, the Galaxy would have been garbage the last five years, instead of being one of the best teams in the league.

I didn't say that's how it works elsewhere in the world. I said that FFP-like rules, plus revenue sharing would probably disincentivize investment by MLS teams. Triplet explained the mechanism upthread.

 

It's a question of quality. When you have League 1 players playing alongside DPs there is a quality gap.

um no. It wouldn't. If you have FFP-like rules you'd have higher quality. The median salary would rise and you'd see teams stop overspending for has been Euros. Give me $8 mil to field a club and I could field a better club than $3 mil + DP's that add up to $16 mil. There's a whole South American market of players and guess what? They'd be worth something towards the end of their contracts too.

 

Is it better to raise expectations ahead of a deal or lower them?

The players that are going to be replaced are the low quality players who aren't in the league very long. The middle class North American guys will still make what they make, but will be more role players. Frankly if I'm the union I'm negotiating over money anyway. I'm negotiating over freedom of movement which will allow them to get paid closer to they way the perform. Right now the North American guys are paid something like 25% less than the same level of productivity.

What do you characterize as small and what do you characterize as big?

 

What?

How would TFC be a super club if under your proposal they can't afford Bradley and Defoe? If they can't afford those two, then who is going to fill the 30K seats to watch a crap team? Without the ability to have Bradley and Defoe, and the hope to add more big names to them down the road, why would TFC even consider expanding?

And you're asking whether that's rewarding to their fans or not?

The basis of any proposal should be to add to the current, not subtract from it. Taking the stars out of the league, which is what you're basically proposing rather than finding a way to bring more stars is, makes such little sense I wonder if you know how sports works.

Star power is one of the most valuable commodities in sports. The league will not grow without it. Future success and growth to a large extent depends on it increasing. Your plan to essentially gut the league of stars, then expecting that league to grow is just an unbelievable point of view.

 

Then why is the Galaxy so successful in MLS?

Alright, fine. You're not understanding the argument, so I'll concede it.

The bigger problem with FFP is that it's terrible. MLS would suck if teams like RSL, SKC, and CLB couldn't put together a great team now and again, and if they were restricted to 25%, 20% of income they'd never, ever be able to match LA, NY, SEA in quality. I realize it's a matter of preference, but personally, I hate it. If someone realy wants to watch a league with FFP, go watch the EPL. I hear it's on tv.

 

Really ? Because you say it below right after you try to jump tracks and hope nobody notices ...

See, that's not what was pointed out and what you quoted ... but nice try. Now, back to the actual point of it:

So the current = 3.38M OVER your cap example ... and gives you Henry and Cahill. Just their salaries put NYRB spending more than half of your example cap, by more than half of it. So yeah, they'd significantly spend less.

.... which they're struggling to do even with two bonafide superstars that put asses in the seats.

BUT, you want them to take those players away AND share 35% of their revenue

... in order to attract bigger/better sponsors and increase their attendance ?


THOSE MATHS DON'T WORK GUY

NO, he's talking about the fact that only 6 teams would truly be of any value/worth/etc with this in place. It would only further separate things just like you see in Europe.

What's laughable is your comprehension level, or lack there of.

All that anyone has done in this thread (and all of your others) is give you legitimate, strong, and very real debate points as to why this is stupid. It's not our fault you can't comprehend.

Considering you're only looking at revenue and not taking into account actual costs/debts/etc .... yeah you are suggesting overspending for damn near all clubs.

That's exactly what happened in 2008 when the mortgage issue shit the bed here in the USA. Numbers look great when you only look at what is coming in, and not at what is coming out.

Let's fix your table and adjust for "profit" .... IE, the money after expenses:

1. Seattle: 48 mil x 20% = $9.6 mil Actual profit = 18.2m ... so 9.6m on players leaves 8.6m in the green
2. LA 44 mil x 20% = $8.8 mil Actual profit = 7.8m .... so 8.8m on players leaves -1m
3. Portland 39.1 mil x 20% = $7.82 mil Actual profit = 9.4m .... so 7.82 on players leaves 1.58m in the green
4. Houston 32.6 mil x 20% = $6.52 mil Actual profit = 8.2m ... so 6.52 on players leaves 1.68 in the green
5. Toronto 30.9 mil x 205% = $6.18 mil Actual profit = 4.5m ... so 6.18 on players leaves -1.68m
6. New York 28.1 mil x 20% = $5.62 mil NO PROFIT, -6.3m ... so 5.62 on players leaves -11.92m

7. KC------27.7M x 20% = $5.54 mil Actual profit = 5.1m .. so 5.54m on players leaves -.44m
8. Montreal- 26.2M x 20% = $5.24 mil Actual profit = 3.4m ... so 5.24m on players leaves -1.84m
9. Chicago---24.5M x 20% = $4.9 mil NO PROFIT, -3.2m ... so 4.9m on players leaves -8.1m
10. FC Dallas -- 24.2 x 20% = $4.84 mil Actual profit = .6m ... so 4.84m on players leaves -4.24m
11. Vancouver------23M x 20% = $4.6 mil NET ZERO ... so 4.6m on players leaves -4.6m
12. Real Salt Lake ---23M x 20% = $4.6 mil NO PROFIT, -.1m ... so 4.6m on players leaves -4.7m
13. Philadelphia---21.4M x 20% = $4.28 mil Actual profit = 1.1m ... so 4.28 on players leaves -3.18m

14. Columbus Crew ----18.6 x 20% = $3.72 mil NO PROFIT, -1.6m ... so 3.72m on players leaves -5.32m
15. Colorado 18.1 mil x 20% =$3.62 mil NO PROFIT, -2.9m ... so 3.62m on players leaves -6.52m
16. DC 17.7 mil x 20% = $3.54 mil NO PROFIT, -2.8m ... so 3.54m on players leaves -6.34m
17. NE 17.1 mil x 20% = $3.42 mil Actual profit = 2.6m ... so 3.42m on players leaves -.82m
18. SJ 15.0 mil x 20% = $3 mil NO PROFIT, -4.5m ... so 3m on players leaves -7.5m
19. Chivas 15 mil x 20% = $3 mil NO PROFIT, -5.5m ... so 3m on players leaves -8.5m

YAY ! In year one you've managed to actually take 2 of the biggest revenue clubs and swing them to a LOSS !!!! you've also taken another and doubled their loss !!!!

You've also cut the profit of the biggest earning club in half and two others even worse than that !!!!

Only 3 clubs that did make a profit still do !!!! We went from half the league clubs making money to THREE !!!!

GREAT JOB, YOU'VE MANAGED TO LOSE THE CLUBS 49.8M !!!!!

And yet, Seattle does everything you can possibly do ... and they're butting up against 50m. THINK ABOUT THAT.

And yet you get Buttner playing along side Vidic.

IT IS EVERYWHERE.