CCL: If MLS gets rid of parity and lets teams spend the income they have

[pc4th]

For example, what if MLS use this UEFA Platini model: salary cap links to 25% of each club's total revenue with luxury tax ($1 for $1 over) for exceeding the 25% cap

http://www.independent.co.uk/sport/football/european/platini-aim-is-financial-fair-play-1547556.html
Platini's proposals: Wages could be linked to percentage of club turnover

Proposals being considered by the Uefa president Michel Platini:

* Clubs should live within their means and spend the income they have.

* This may mean wages being linked to an audited percentage of turnovers.

The model for most soccer leagues is no salary cap (free salary). Under this Platini model for MLS, each team can spend up to 25% of its total revenue. Teams can exceed this 25% threshold by paying luxury tax ($1 for every $1 over). Which mean the like of Los Angeles, New York, Seattle, Toronto could have payroll of $12-15 mil a year to spend on players, while paying luxury tax to MLS small revenue teams.

Right now, each MLS club can only spend $2.3 mil on players OR $1.875 mil + a Designated Player to allow all teams a level playing field and maintain parity. If MLS gets rid of parity and allow teams to spend:

LA Galaxy: generated $36 mil in 2007 according to Forbes. LA has a metro population of over 13 million, about 45% of whom are Hispanics.
Seattle: will generate about $34-38 mil this year (averaging 30,000+ paid attendance, $4 mil shirt sponsorship, sold $850,000 worth of merchandise before the season start at a single online store, $6-8 mil local sponsorship). It is likely that Seattle will pocket about $12-15 mil in profits this year while only spending only $3 mil in player salaries.
Toronto: if they can expand the stadium to 35,000, they would still sold out. Currently sold out 20,500 seats stadium and have 15,000 people on season ticket waiting list. Imagine the demand if the team is actually 'good' ($15 mil good instead of $2.3 mil good).

As for the New York Red Bull, it's on another level. They put huge money into soccer, extreme sports, and two Formula 1 teams (cost about $300 mil each to run). Red Bull Salzburg has 40 million euros budget a year and a playoff win away from UEFA Champions League group stage of 32 teams. Red Bull will put 100 million euros over 10 years to promote RB Leipzig from 5th division into German Bundesliga. Red Bull Arena for New York Red Bull cost $220 mil. They have the money and the willingness to spend big. They could potentially be one of the biggest soccer clubs outside of Europe because of their spending power and New York City market which has 18 million people, many of whom are soccer fans.

If the top MLS clubs are allowed to use a decent part of their revenue (40-50%) and spend $12-15 mil a year on players.....is that near enough to compete against top Mexican clubs in the Champions League?

The potential for growth is also great. Having a $15 mil team will attract many more fans compare to a $2.3 mil team, which allow the teams to build upon this success and grow even bigger. Bigger revenue = better talents = winning team = higher revenue. The cycle repeats itself.


------------------------------

p.s. For those interested in salary cap structures for various sports league, click on this thread to see salary cap and payroll for rugby, Canadian Football MLB baseball, NFL American football, NBA basketball, NHL hockey. It also has the payroll for all 20 EPL teams and all 18 J-league teams.

http://www.bigsoccer.com/forum/showthread.php?t=1126066
What kind of salary structure is best for MLS (to grow, succeed and prosper in the years to come)?

[tomwilhelm]

And if magical fairy dust was free at the supermarket...

[atlantefc]

lol maybe, but parity is always good for a league it makesit interesting

[pc4th]

lol maybe, but parity is always good for a league it makesit interesting

Soccer fans usually judge a league by its top teams. You hardly ever hear fans compare the Premiership and La Liga by their bottom half teams. MLS have a choice to make. Continue with parity (be as good as its weakest teams) and slowly improve. Or get rid of parity (be as good as its strongest teams) and drastically improve.

Having a few teams with $15 mil payroll (instead of $2.3 mil hard cap) will improve the league perception/image/reputation overnight because these teams can bring in much better players and hopefully do better in the Champions League.

Unlike most soccer leagues, MLS will be much more financial viable because the largest costs, player salaries, are capped at 25% of each club total revenue. Luxury tax will allow the rich clubs to spend more than 25% while helping the low revenue clubs be profitable. Basically, teams will live within their means and spend the income they have. If the team generate more money, the team can spend more money.

Right now, only Mexican teams have a very realistic chance to win the Champions League. In fact, they are favorite to win the next 10 titles. Would it be better for the Champions League if it has more variety of true competitors?

[atlantefc]

of course it'd be better for the CL, but would americans support a team with no chance at winning the the MLS cup? would they really stick with their team like other supporters around the world do, when the sport is still in its infancy in your country

[usafan12]

Right now, only Mexican teams have a very realistic chance to win the Champions League. In fact, they are favorite to win the next 10 titles. Would it be better for the Champions League if it has more variety of true competitors?

Deportivo Saprissa.

[It's called FOOTBALL]

The US league should just withdraw from the CCL. I'm sick of hearing the excuses every year

[Rjbatzler]

If MLS dropped the salary cap right now the league would collapse. Teams and the sport aren't developed enough in this country that fans would support their club even if they suck. But I can guarantee we won't see this happen. MLS will gradually increase the cap so teams can become more and more competitive without alienating some owners and fans. As the cap gets raised (next CBA is next year), we will see more players staying for longer, a few more players coming, but more importantly, teams will be able to pay their reserves more money and thus have a better bench. Decent players won't stick around in MLS if they're second string and only making $33k a year, they go to USL. When the salary cap increases, you will see more USL players going to MLS. I'm talking guys like Addlery in Puerto Rico who will make teams deeper and thus more competitive in Champions League.

[El CHarro_NEgro....]

The thing is, that there are leagues without cap and good parity (MFL, Brazil's).

[vargasv71]

Having a few teams with $15 mil payroll (instead of $2.3 mil hard cap) will improve the league perception/image/reputation overnight because these teams can bring in much better players and hopefully do better in the Champions League.

Right now, only Mexican teams have a very realistic chance to win the Champions League. In fact, they are favorite to win the next 10 titles. Would it be better for the Champions League if it has more variety of true competitors?

Ok,
but how about the rest of Concacaf? If the changes you propose end up being similar to "MLS 2.0" it seems like you would also need higher competition/reputation from CA & even Caribbean teams too- maybe not at the level of FMF or MLS super clubs. A single super league in both CA & the Caribbean could help, but apparently Fifa has only ok'd Wales & Canada
to join leagues in other nations/administrations. Imagine if T&T only had 3 strong clubs to play curacao/aruba & martinique/guadelope & PR islanders & nassau? Ditto for Central Amer. Also, how about having CCL just in 2nd half of the year & inviting the state champion of Recife & league champion of colombia into the final 16? They might opt out of copa sudamericana believing they have a better chance in CCL. A number of changes do need to be made to improve profile of CCL. MLS could make big changes, but it would need the profile of all of concacaf club play to improve in order to raise the international standing. CCL would not reach Euro Cl or Copa libertadores, but it could have a very high and admirable level of competition that could translate into higher tv rating.

[pc4th]

So basically, the answer is if MLS allow its biggest teams to spend, they will be much better in the CL. Seattle and Los Angeles generate over $35 mil a year in revenue. If the teams spend 50% of their revenue on players, it would mean $17.5 mil for transfers and wages. However, MLS is all about parity which mean the biggest teams and the smallest teams will all have to spend at most $2.3 mil a year on players (or $1.875 mil + DP).

This mean MLS teams will be on par with teams from Costa Rica, Honduras and so on for the next few years. It also means the like of Los Angeles and Seattle owners will pocket lot of profits since the player salary is so low and their revenue is so high.

If Toronto ever expands the stadium to 30,000+, it will be even more profitable. It has a 15,000 waiting list for season tickets.

[vargasv71]

I'm not sure that many knowledgeable bigsoccer forum visitors will see this post on this particular thread, but how are US leagues able to get waivers from FIFA or whatever for bringing teams from other territories/countries/autonomous regions? In all the soccer news & chats & podcasts I've ever heard only one other exception is occuring in the world- the situation of Wales-cardiff in English soccer and not in Wales league. Is TFC & Cardiff really the only exceptions? If all leagues are so nationallly-framed, how in the hell does USL get Bermuda & Islanders from Puerto Rico (which is still an autonomous region). With the changes occuring in USL, maybe this could be ideal in terms of strenthening CCL. Bermuda is very small, though very rich (I bet ticket prices there are probably like 50bucks), but the probability of their team attracting 10k per game is very remote. However, given the talk of a USL team in Hamilton, Canada, maybe USL could bring in a team from Martinique/Guadelope of former french league players or a former dutch-league filled Curacao/Aruba...these two regions also have a rather high per capita (20k vs. 11k for Mex). In other words, maybe USL could be refashioned to have maybe just 6 teams in US and 6 teams + in Canada & Carribean areas that could economically support a higher payroll...maybe even equivalent with MLS or even higher. People tend to think of Caribbean as dirt poor, but there countries/territories w/high per capita and populations of 500k and above. I believe this US-driven continental league could strenthen CCL tournament without challenging MLS since it would have so few teams actually in US

[newtex]

I'm not sure that many knowledgeable bigsoccer forum visitors will see this post on this particular thread, but how are US leagues able to get waivers from FIFA or whatever for bringing teams from other territories/countries/autonomous regions? In all the soccer news & chats & podcasts I've ever heard only one other exception is occuring in the world- the situation of Wales-cardiff in English soccer and not in Wales league. Is TFC & Cardiff really the only exceptions? If all leagues are so nationallly-framed, how in the hell does USL get Bermuda & Islanders from Puerto Rico (which is still an autonomous region). With the changes occuring in USL, maybe this could be ideal in terms of strenthening CCL. Bermuda is very small, though very rich (I bet ticket prices there are probably like 50bucks), but the probability of their team attracting 10k per game is very remote. However, given the talk of a USL team in Hamilton, Canada, maybe USL could bring in a team from Martinique/Guadelope of former french league players or a former dutch-league filled Curacao/Aruba...these two regions also have a rather high per capita (20k vs. 11k for Mex). In other words, maybe USL could be refashioned to have maybe just 6 teams in US and 6 teams + in Canada & Carribean areas that could economically support a higher payroll...maybe even equivalent with MLS or even higher. People tend to think of Caribbean as dirt poor, but there countries/territories w/high per capita and populations of 500k and above. I believe this US-driven continental league could strenthen CCL tournament without challenging MLS since it would have so few teams actually in US

MLS and USL have waivers from FIFA and the various national associations allowing teams from Canada, Puerto Rico, and Bermuda to play in the U.S. based leagues.

The Welsh teams are not the only other example of this.

New Zealand has a team in the A-League.
Berwick Rangers of England play in Scotland.
Derry City of Northern Ireland plays in the Republic of Ireland.

That doesn't count the teams that play across national borders because they don't have federations or leagues of their own like Monaco, Brunei, Liechtenstein, etc.

As far as expanding USL into the Caribbean, I think that is unlikely. I don't see any way such a league would strengthen the CCL or challenge MLS in the U.S.

[newtex]

BTW, tickets for Bermuda Hogges games are between $15 and $20 with everyone under 16 getting in for free. They average about 1,000 fans per game.

[vargasv71]

As far as expanding USL into the Caribbean, I think that is unlikely. I don't see any way such a league would strengthen the CCL or challenge MLS in the U.S.

I dont see the benefit of attempting to "challenge MLS" in the US. If USL were more continental and more internationalised in their rosters, this could appeal to fans who are more international-oriented in their soccer perspective. The aim would be to be as internationalized as NASL teams.
There would be some regional reflection: Curacao/Aruba teams filled with dutch-leaguers and surinamese or Quebec or Martinique/Guadelope filled with french ligue players or Edmonton fill with commonwealth players. Its about creating a radically different brand then MLS...not similar, but very different. MLS should not be the model. And before you say, "look at how NASL turned out", MLS aint nothing to brag about (miami, tampa bay, 400million lost league-wide, etc)

[PorMisAwakatls]

For example, what if MLS use this UEFA Platini model: salary cap links to 25% of each club's total revenue with luxury tax ($1 for $1 over) for exceeding the 25% cap

http://www.independent.co.uk/sport/football/european/platini-aim-is-financial-fair-play-1547556.html
Platini's proposals: Wages could be linked to percentage of club turnover



The model for most soccer leagues is no salary cap (free salary). Under this Platini model for MLS, each team can spend up to 25% of its total revenue. Teams can exceed this 25% threshold by paying luxury tax ($1 for every $1 over). Which mean the like of Los Angeles, New York, Seattle, Toronto could have payroll of $12-15 mil a year to spend on players, while paying luxury tax to MLS small revenue teams.

Right now, each MLS club can only spend $2.3 mil on players OR $1.875 mil + a Designated Player to allow all teams a level playing field and maintain parity. If MLS gets rid of parity and allow teams to spend:

LA Galaxy: generated $36 mil in 2007 according to Forbes. LA has a metro population of over 13 million, about 45% of whom are Hispanics.
Seattle: will generate about $34-38 mil this year (averaging 30,000+ paid attendance, $4 mil shirt sponsorship, sold $850,000 worth of merchandise before the season start at a single online store, $6-8 mil local sponsorship). It is likely that Seattle will pocket about $12-15 mil in profits this year while only spending only $3 mil in player salaries.
Toronto: if they can expand the stadium to 35,000, they would still sold out. Currently sold out 20,500 seats stadium and have 15,000 people on season ticket waiting list. Imagine the demand if the team is actually 'good' ($15 mil good instead of $2.3 mil good).

As for the New York Red Bull, it's on another level. They put huge money into soccer, extreme sports, and two Formula 1 teams (cost about $300 mil each to run). Red Bull Salzburg has 40 million euros budget a year and a playoff win away from UEFA Champions League group stage of 32 teams. Red Bull will put 100 million euros over 10 years to promote RB Leipzig from 5th division into German Bundesliga. Red Bull Arena for New York Red Bull cost $220 mil. They have the money and the willingness to spend big. They could potentially be one of the biggest soccer clubs outside of Europe because of their spending power and New York City market which has 18 million people, many of whom are soccer fans.

If the top MLS clubs are allowed to use a decent part of their revenue (40-50%) and spend $12-15 mil a year on players.....is that near enough to compete against top Mexican clubs in the Champions League?

The potential for growth is also great. Having a $15 mil team will attract many more fans compare to a $2.3 mil team, which allow the teams to build upon this success and grow even bigger. Bigger revenue = better talents = winning team = higher revenue. The cycle repeats itself.


------------------------------

p.s. For those interested in salary cap structures for various sports league, click on this thread to see salary cap and payroll for rugby, Canadian Football MLB baseball, NFL American football, NBA basketball, NHL hockey. It also has the payroll for all 20 EPL teams and all 18 J-league teams.

http://www.bigsoccer.com/forum/showthread.php?t=1126066
What kind of salary structure is best for MLS (to grow, succeed and prosper in the years to come)?



With that amount of money... the MLS would be able to compete with MFL for South Americans NT players. However, unless you are going to have all foreigners on the MLS teams... you are still at a disadvantage because:



The American players on MLS are not as good as the Mexican players on MFL.
If MLS becomes an economic competitor to MFL... then its going to raise MFL's cost of doing business under the current model (recruit in South America for game changers)... such that it would make financial sense for MFL teams to really invest in youth development at the level the Argies & Brazilians do... you would inadvertently push Mexico to become the super power it has the potential to be... and the MFL would still be much better than MLS

[vargasv71]

With that amount of money... the MLS would be able to compete with MFL for South Americans NT players.
[/LIST]

With the extra money to spend, MLS will go to Europe for players. Ok, so US & MFL/FMF is better but how does this help CCL? Higher level play in 2 countries is great, but you need other areas of concacaf to step it up. Remember Euro CL is made up of 4 very very strong leagues (EPL, La Liga, Serie A, Bundesliga).
Hopefully the new Canadian MLS will spend much more since they are very limited on their won players. Of course, Canadian teams will also want to go to Europe since Canadian cities have very few hispanic populations and the soccer fans are almost exclusively only aware of the European leagues. I dont see central american league improving alot the way MLS plans on doing.

[pc4th]

http://www.bigsoccer.com/forum/showthread.php?t=1126066
What kind of salary structure is best for MLS (to grow, succeed and prosper in the years to come)?


Poll: What kind of salary structure is best for MLS (to grow, succeed and prosper in the years to come)?

The current MLS hard cap structure 8 7.48%
NRL (rugby): $2.5 mil floor; $2.8 mil ceiling 2 1.87%
CFL: $2.5 mil hard cap; luxury tax $3 for $1 over starting at $2.8 mil 2 1.87%
NFL: $2.5 mil floor; ceiling ~$2.9 mil; incentive bonuses not counted 6 5.61%
$2.5 mil cap with paid attendance bonus (1000 over MLS paid ave = $100k) 2 1.87%
$2.5 mil salary cap with DP salary exempted 2 1.87%
$2.5 mil salary cap with 2 DPs (1 exempted, 1 not) 4 3.74%
$2.5 mil salary cap with 2 DPs (both exempted) 11 10.28%
NHL: $2.5 mil lower limit; $3.5 mil upper limit 3 2.80%
NBA: $2.5 mil soft cap ; luxury tax ($1 for $1 over) starting at $3 mil 16 14.95%
NBA/Snowden: $2.5 mil soft; $6 mil hard; lux tax $1 for $1 start at $3 mil 8 7.48%
Snowden's two tiers cap: $2.5 mil soft cap; $7.5 mil hard cap (3:1 ratio) 13 12.15%
UEFA Platini: cap links to 25% of each club's total revenue with lux tax 10 9.35%
MLB: no salary cap; luxury tax starting at around $5-6 mil 11 10.28%
EPL, La Liga, FMF, J-league, Serie A, USL etc... no salary cap 9 8.41%

107 votes

Only those last 3 options allowed MLS top earners to spend on par with Mexico.

Seattle generates about $40 mil in revenue this year and spend a total of $3 mil on players ($1.885 mil for 23 players + DP in Ljungberg who makes about $1.3 mil a year). Any club in the world that spend only about 8% of its total revenue on playing talents? Seattle owners will pocket about $20 mil in profits this year.

[stonesean]

If parity were something fans looked for, or even cared about, the EPL would not be the most popular league in the world.

The free spending model also seems to be based upon predictions of future income. Unless you plan on signing every single player to one year contracts over and over again. Predicitons of future income are often wrong...

[tomwilhelm]

The free spending model also seems to be based upon predictions of future income. Unless you plan on signing every single player to one year contracts over and over again. Predicitons of future income are often wrong...

The free spending model has nothing to do with predictions of future income and everything to do with ultra-rich Arab, Russian, American and other moguls looking for a plaything. At this point, many EPL teams would immediately collapse if their sugar daddy went away.

If you think that MLS is going to move toward that model, you've got it the wrong way around....