Will a League Two style Wage Cap work for Major League Soccer?

It really depends what you mean by "work". But generally speaking, you're not wrong.

 

With a League 2 style wage cap the league would be better quality.

Right now the wage structure is this: $2.95 salary cap+ 3 DP's. No one who knows the sport of soccer would say you could field a quality team where you have to fit 8 players and the rest of your squad under a $2 million budget.

Take a team like DC United with revenues of 17.7 million. 60% of that is 10 million. So they wouldn't be able to go over 10 million in wages. They wouldn't be forced to spend that much either.

If I'm the GM I look at the South American player market. I go out and get 5 or 6 Brazilians or Argentinians, Colombians etc. Not EPL quality but players who are much better than current MLS players. South America is full of them and they aren't on high wages.

With the current salary rules you can't do that. You have to overspend for a couple of DP's and then field a team of low quality players to go with them.

MLS could be a much better league with a Leage 2 style wage system. Allow clubs to sign players they want to under whatever terms they want to. The only rule is they can't spend over 60% of revenues.

You field your $2.95mil salary cap +DP's team and I'll field my League 2 wage cap team and my team would wipe the floor with yours.

 

Except with the current roster limits you can't do that. 8 international spots per team X 19 teams = 152 foreigners in the league. Right now the majority of what jumping the cap to 10 million would due is pay the average American more than they're making now, which doesn't improve the quality of the league, so there's no revenue gain by the move.

Now you could change the roster limits and the salary cap, but that's a whole different can of worms.

 

8 international slots per team and i said i would go out and get 6 South Americans. I don't see the problem there.

 

Well I meant in a general sense. Due to existing contacts and such every team isn't going to be able to go out and sign 6 South Americans. And a lot of those type of players in the league are the ones already getting the significant contracts. The general point is that just raising the cap without changing the roster limits isn't going to significantly raise the quality of play IMO, which would be the business reason for making this change. Better quality, more/higher-priced tickets sold, better TV ratings, etc.

Say what you want from a soccer perspective about having Beckham as a DP at $6.5 million/year (and you're not wrong about a lot of it), financially it paid off.

 

Well..that's right..but clubs are creating their rosters under the current MLS rules where signing foreigners at 100k wages is the standard. If you look at Toronto FC they have 8 non-North Americans and most of them are on wages in the 100k range. With a League 2 style wage budget you wouldn't waste an international slot on a 100k player.

I'm saying that the DP rule doesn't help quality. In the case of Beckham it helped the image of the league and raised the brand of LA Galaxy. He was well worth it. But LA has and had revenues to field a much better side during Beckham's time there. It would have been much better for the league if a Galaxy team during Beckham's time was winning the Champions League. They had the revenues to do it, or to give it a good run, but MLS's salary cap prevented it.

 

That's the Catch 22 ... if you aren't forcing the bottom line (literally) then the structure won't guarantee anything. There are those in this league (and every league) that either won't, or can't spend. Period.

Operating Income and Revenue relationship would be a much better measure of things rather than merely revenues. Nobody here is interested in creating the pool of red tape that is hamstringing leagues across the world and creating the great divide in the top leagues.

 

40% is too high of a threshold for MLS.

25% salary + net transfer fee cap is more doable.

Team	Revenue ($M)	25% salary/net transfer fee cap($M)
Seattle Sounders	48.0	12
LA Galaxy	44.0	11
Portland Timbers	39.1	9.78
Houston Dynamo	32.6	8.15
Toronto FC	30.9	7.73
New York Red Bulls	28.1	7.03
Sporting Kansas City	27.7	6.93
Montreal Impact	26.2	6.55
Chicago Fire	24.5	6.13
FC Dallas	24.2	6.05
Vancouver Whitecaps	23.0	5.75
Real Salt Lake	23.0	5.75
Philadelphia Union	21.4	5.35
Columbus Crew	18.6	4.65
Colorado Rapids	18.1	4.53
DC	17.7	4.43
New England Revolution	17.1	4.28
San Jose Earthquakes	15.0	3.75
Chivas USA	15.0	3.75

Teams can always spend less than the cap. They just can't exceed it. DP Rule will be abolished.

MLS revenue sharing structure will remain in place (30% ticket revenue, 100% national tv revenue, 100% national sponsorship).

 

If your goal is to make sure that teams like Seattle and LA that are already successful stay that way and teams like DC and Chivas that aren't already successful stay that way, this would be a great plan.

 

Having League 2 style regulations wouldn't harm the health and stability of the league. It would increase the quality of the league and that would create a healthier league. If you allowed clubs to spread their wages around instead of just giving it to three players you will have better teams and better quality. Take a club like FC Dallas who had $24 million in revenues. Lets say the cap was 50% of revenues and the international player cap was six. That would give them a wage budget of $12 million. They don't have to spend that much. But for that much they could go into the South American player market and sign some pretty good players. The rest of it could be used on domestic players , national team players that play in fringe Euro leagues, and academy grads (who are increasingly being poached by foreign clubs because they can offer competitive wages). If every clubs is allowed to do this, how does that harm the health and stability of the league? It doesn't.

Remember, there are no Messi's or Ronaldo's coming to MLS. The types of players the richest MLS clubs will sign will not be so much greater than the players on other clubs that it will tip the balance. One advantage though that the richest clubs will have is they will be able to add depth. And that depth will help in international competitions.

Why doesn't LigaMX need all these salary rules? Its a very healthy and stable league without them. Monterrey and Club America are far richer than clubs like Tijuana and Atlante, and last I checked Atlante wasn't going bankrupt, and Tijuana won the league recently.

 

You really don't see how, under this system, the rich get richer and the poor get poorer?

And you understand the MLS, unlike the Football League, exists exclusively to benefit the 20 clubs we already have and for no other reason?

 

The mistake you're making is missing the fact that a league without DPs would have significantly less revenue...mostly less TV revenue, but somewhat less gate revenue as well. MLS didn't put in the DP rule just to ******** with people like you, they put it in because they made the business decision that it was the right way to bring in high profile players, who do so much to help drive revenue.

I just want to reiterate that every time one of you guys make this "point" about how MLS teams would be better if, for example, NYRB spread Thierry Henry's salary among several really strong players, you pretend that you don't know the purpose of the DP rule.

 

My goal is for MLS top teams to surpass Liga MX top teams in just a few short years and MLS small market teams to survive.

And I believe it is very doable.

 

This goal sucks. This is one major reason why everyone hates your plan, even if it would work.

 

Eh, in all fairness I don't think the goal itself sucks ... but rather the fact that he's trying to base an entire strategy behind it.

As a secondary or indirect goal I see no issue with it.

 

There's no reason why small market teams shouldn't be able to compete.