pc4th Super Thread: Parity, Salary Cap, Spending, CONCACAF Tourneys, Attendance, You name it

http://www.realsaltlake.com/news/2010/04/mls-dp-teleconference-transcript

From the DP teleconference Transcript where Major League Soccer's Executive Vice President of Player Relations and Competition, Todd Durbin, reiterated MLS's stance on absolute parity.

$2.215 mil + DP------------------or-------------- $2.55 mil
$1.880 mil + DP + DP-------------or-------------- $2.55 mil
$1.545 mil + DP + DP + DP* ------or-------------- $2.55 mil + $15,625 allocation money and more if more than 1 team have 3 DPs.

*in order to acquire the third DP slot, you need to pay $250,000 in luxury tax. Every other teams will share this luxury tax as allocation money.

Is it an ideal structure for future growth if a $40 mil team can't be much better than a $8 mil team on the field? For most soccer league (including MLS direct rival - the Mexican First Division), their structure is designed so that a $40 mil team can be as good as a $40 mil team. For MLS, it’s the opposite in which the richest revenue club can't be much better than the poorest revenue club. Is that one big reason why MLS is doing poorly in the Champions League? Is it a big reason why MLS television rating has been stagnating for years now?

MLS will need to decide and decide soon if absolute parity is the best way for MLS to grow. It will need to decide if it's in MLS best interest to continue to artifically handicap clubs that have the potential to take MLS to the next level. Clubs like Los Angeles, New York, Toronto, Seattle, Vancouver, Philadelphia. Or would it be better served if MLS allow these clubs to grow to their natural and full potential?

 

Re: Is absolute parity the best way for MLS to grow from this moment on?

CONCACAF Champions League as of Feb, 2010 (not up to date)

Mexico: 67% (W44 D13 L15)
Panama: 50% (W11 D6 L9)
Honduras: 49% (W12 D1 L12)
Guatemala: 38% (W5 D3 L8)
MLS: 34% (W10 D13 L19)
El Salvador: 29% (W3 D5 L8)
Costa Rica: 28% (W3 D6 L9)

Absolute wrote it best on how it affects potential fans perception of MLS.

 

Re: Is absolute parity the best way for MLS to grow from this moment on?

http://www.chron.com/disp/story.mpl/headline/sports/5533458.html

Garber

http://www.chicagolandsoccernews.com/sections/mls2.php?article_id=6693

Outside of the league, Garber felt an MLS team must win the CONCACAF Champions League, to show the rest of the world it can play soccer.

"We need to win the Champions League," he said. "Those opportunities to compete in a global competition are important to show how far we have developed as a soccer nation, and the opportunity to do it on the pro club side is with the world club championship. We've got to win the tournament. We've won it in the past as the Champions' Cup. We need to prove that we can be among the best teams in the region, and that means beating Mexico."

 

Re: Is absolute parity the best way for MLS to grow from this moment on?

MLS average attendance


 2009: 16,037
 2008: 16,407
 2007: 16,770
 2006: 15,504
 2005: 15,108
 2004: 15,559
 2003: 14,898
 2002: 15,822
 2001: 14,961
 2000: 13,756
 1999: 14,282
 1998: 14,312
 1997: 14,619
 1996: 17,406



J-League average attendance


1993 - 17,976
1994 - 19,598
1995 - 16,922
1996 - 13,353
1997 - 10,131
1998 - 11,982
1999 - 11,658
2000 - 11,065
2001 - 16,548
2002 - 16,368
2003 - 17,351
2004 - 18,965
2005 - 18,765
2006 - 18,292
2007 - 19,081
2008 - 19,278
2009 - 19,126
2010 – 19,791 (thus far)




Urawa Reds (allowed to grow, no handicap, a $40-50 mil team that can really be a $40-50 mil team)


1993 – 11,459
1994 – 18,475
1995 – 19,560
1996 – 24,329
1997 – 20,504
1998 – 22,706
1999 – 21,206
2000 – 16,923 (J2)
2001 – 26,720
2002 – 26,296
2003 – 28,855
2004 – 36,660
2005 – 39,357
2006 – 45,573
2007 – 46,667
2008 – 47,609 (7th in league)
2009 – 44,210 (6th in league)
2010 – 45,662 thus far

 

Re: Is absolute parity the best way for MLS to grow from this moment on?

MLS attendance has been stagnating since 1996.


1996

Los Angeles – 29,479
DC United – 21,810
Columbus – 20,807
New England – 19,025
San Jose – 17,209
New York – 14,416
Colorado – 10,213
Dallas – 9,963
Tampa Bay – 9,739
Kansas City – 7,753


1998

Los Angeles 21,784
New England 19,187
Chicago17,886
N.Y./N.J.16,519
Wash. D.C. (16,007
Colorado 14,812
San Jose (13,653
Columbus 12,274
Dallas 10,947
Tampa Bay 10,312
Miami10,284
Kansas City 8,072

2000

Los Angeles 20,400
Wash. D.C. 18,580
N.Y./N.J.17,621
New England 15,463
Columbus 15,451
Chicago 13,387
Dallas 13,102
Colorado 12,580
San Jose 12,460
Tampa Bay 9,452
Kansas City 9,112
Miami 7,460


2006

1. LA - 21109
2. Chivas - 19839
3. Houston - 19147
4. DC - 18152
5. RSL - 16365
6. Dallas - 15299
7. New York - 14569
8. Chicago - 14088
9. Columbus - 13293
10. Colorado - 12055
11. New England - 11785
12. KC – 11082

 

Re: Is absolute parity the best way for MLS to grow from this moment on?

triplet1 research to find out if there is any "growth" to the mature markets of MLS. His finding:


"Mature Market" Five Year Attendance Track
https://www.bigsoccer.com/forum/showthread.php?t=1430681

 

Re: Is absolute parity the best way for MLS to grow from this moment on?

Is it just attendance that has stagnated? or does TV rating as well?

193,000 viewers on ESPN2

http://sportsbusinessjournal.com/index.cfm?fuseaction=article.preview&articleID=65808
http://sportsbusinessjournal.com/index.cfm?fuseaction=article.preview&articleID=65759

Is there disparity in TV rating


Posted Howard the Drake:

Here are the club-by-club averages for each team on ESPN2 last year:

Seattle- 405.3 (4 matches)
Los Angeles- 366.7 (7)
Toronto- 348 (1)
Kansas City- 337* (2)
Chicago- 318.3 (6)
DC- 299.5 (4)
Houston- 285.0 (4)
Chivas- 273.8 (5)
New York- 263.8 (4)
Colorado- 255 (1)
Salt Lake- 253.5 (2)
San Jose- 253.5 (2)
New England- 238.0 (3)
Columbus- 199.5 (3)
Dallas- 177.0 (1)

I'm not sure what the home/away breakdown was for each club. Nor am I sure that these numbers prove anything, just offering up some fairly raw data.

 

Re: Is absolute parity the best way for MLS to grow from this moment on?

Richard Snowden takes on MLS extreme parity.

http://soccer365.com/us_news/story_81208190400.php

 

Re: Is absolute parity the best way for MLS to grow from this moment on?

Having elite teams similar to how Ajax, PSV, Feyenoord, Twente for the Dutch league or Benfica, Sporting, Porto for the Portugese league would do wonder for MLS perception and interest. TV rating would increase by big big margin. And having a $40 mil team that can be really be as good as a $40 mil team will put MLS on equal footing with Mexican top clubs. Winning a Champions League and competing for the trophy on a consistent basis will do wonder for MLS credibility and perception.

Yes, it will take some time for all MLS teams to adjust. Some will adjust upward, some downward, and others stay the same according to their revenue level. Within 2-3 years, top MLS teams in revenue will be as good as top Mexican teams. And bottom MLS teams in revenue will be only as good as top NASL/USL teams. And the middle MLS teams will be about where the middle MLS teams are today. But that's how it is with 99% of the soccer leagues around the world.

However, unlike many soccer leagues, MLS does have playoff. This gives more teams a legitamite shot the title. Playoff is a good equalizer. A good run near the end of the season could mean a $3 mil team defeating a $12 mil team. Much better drama.

DUTCH:

Code:

2009-10 Table
 Team	GP	W	D	L	Pts	GF	GA	GD	 
 Twente Enschede	34	27	5	2	86	63	23	40	
 Ajax Amsterdam	34	27	4	3	85	106	20	86	
 PSV Eindhoven	34	23	9	2	78	72	29	43	
 Feyenoord Rotterdam	34	17	12	5	63	54	31	23	
 AZ Alkmaar	34	19	5	10	62	64	34	30	
 Heracles Almelo	34	17	5	12	56	54	49	5	
 FC Utrecht	34	14	11	9	53	39	33	6	
 FC Groningen	34	14	7	13	49	48	47	1
---------------------------------------------------------------------------	
 Roda JC Kerkrade	34	14	5	15	47	56	60	-4	
 NAC Breda	34	12	10	12	46	42	49	-7	
 Heerenveen	34	11	4	19	37	44	64	-20	
 VVV-Venlo	34	8	11	15	35	43	57	-14	
 NEC Nijmegen	34	8	9	17	33	35	59	-24	
 Vitesse Arnhem	34	8	8	18	32	38	62	-24	
 ADO Den Haag	34	7	9	18	30	38	59	-21	
 Sparta Rotterdam	34	6	8	20	26	30	66	-36	
 Willem II Tilburg	34	7	2	25	23	36	70	-34	
 RKC Waalwijk	34	5	0	29	15	30	80	-50	

PORTUGAL

Code:

1	 Benfica	30	24	4	2	78	20	58	76
2	 Sporting Braga	30	22	5	3	48	20	28	71
3	 FC Porto	30	21	5	4	70	26	44	68
4	 Sporting CP	30	13	9	8	42	26	16	48
5	 CS Marítimo	30	11	8	11	42	43	-1	41
6	 Vitória Guimarães	30	11	8	11	31	34	-3	41
7	 CD Nacional	30	10	9	11	36	46	-10	39
8	 Naval	30	10	6	14	20	35	-15	36
--------------------------------------------------------------------------
9	 União Leiria	30	9	8	13	35	41	-6	35
10	 FC Paços de Ferreira	30	8	11	11	32	37	-5	35
11	 Académica Coimbra	30	8	9	13	37	42	-5	33
12	 Rio Ave FC	30	6	13	11	22	33	-11	31
13	 SC Olhanense	30	5	14	11	31	46	-15	29
14	 Vitória Setúbal	30	5	10	15	29	57	-28	25
15	 Belenenses	30	4	11	15	23	44	-21	23
16	 Leixões SC	30	5	6	19	25	51	-26	21

 

Re: Is absolute parity the best way for MLS to grow from this moment on?

Many would ask: If MLS switch to a free-spending model, there will be wild spending and huge losses for the owners. Some teams will definitely fold and the league might go under. MLS created the salary cap back in 1996 to prevent such a thing.

That's a very legitimate question and any free-spending model would need to address this point. I believe I have come up with a solution.

https://www.bigsoccer.com/forum/showthread.php?t=1472256
Under UEFA salary cap, top MLS teams could be on par with top Mexican teams in 5 years time

It's basically a break-even free-spending model:

1) teams can spend as much as they want on players so long as they break-even.

2) the "haves" share more revenue with the "have nots", to ensure that more owners would vote in favor of this fundalmental structure change. And to ensure the gaps won't grow too large. And to ensure that all teams will be profitable.

All MLS clubs will share these revenue equally:

100% of national tv revenue
100% of national sponsorship
50% of each club gate receipts (currently only 30% is shared equally)
50% of each club shirt sponsorship (currently 0% is shared)


Every teams will be required to live within its means. If you have $40 mil, you spend $40 mil and live within your means. If you have only $8 mil in revenue, you spend only $8 mil and live within your means.

Keep in mind that the lowest revenue MLS team would get these revenue sharing:

$1 mil from national TV deal
$2 mil from national sponsorship deal
$1 mil from SUM
net gain from 50% ticket revenue sharing
net gain from 50% shirt sponsorship revenue sharing

So before anything, you get about $6-7 mil from revenue sharing. Which mean that each team will be profitable. Any team that can't be profitable with $6-7 mil of revenue sharing on top of what it earns from local sponsorship, parking, concession, merchandise, local tv, 50% of ticket revenue and 50% of its shirt sponsorship DOES NOT DESERVE to be a MLS team.


A league can't fold if every team is profitable. There is no soccer league on earth that share so much with its "have nots." 50% of ticket and shirt sponsorship revenue. 100% of national sponsorship and national sponsorship revenue. Do you think Bolton would like to share 50% of Man Utd's ticket and shirt sponsorship revenue?







Does this mean MLS will no longer be single entity?

No, MLS will still be single entity. The league will own all the player contracts. MLS is just switching from one form of salary control (hard salary cap) to another form of salary control (break-even spending cap).

 

Re: Is absolute parity the best way for MLS to grow from this moment on?

One last thing. Spending doesn't necessarily mean winning. So there is hope if your team is the Wigan/Bolton/Burnley/Hull City/Stoke of MLS, specially since MLS have playoff and MLS share revenue heavily.

To demonstrate: J-league 2009 spending and J-league 2009 final standing. Fyi: J-league doesn't have playoff, not anymore, so it's harder to become the champions.



(1) Urawa Reds - 1,250,000,000 Yen = $12.5 mil------------6th place
(2) Gamba Osaka - $10.5 mil------------------------3rd place
(3) Kashima Antlers - $8.3 mil-----------------------1st place/champions
(4) Vissel Kobe - $7.3 mil
(5) Kyoto Sanga FC - $7.0 mil
(6) Oita Trinita - $6.5 mil--------------------------relegated
(7) Jubilo Iwata - $6.4 mil
(8) Kawasaki Frontale - $6.2 mil--------------------2nd place
(9) Kashiwa Reysol - $6.1 mil----------------------relegated
(10) Shimizu S-Pulse - $5.9 mil
(11) Nagoya Grampus - $5.8 mil
(12) FC Tokyo - $5.6 mil-------------------------5th place
(13) Yokohama F Marinos - $5.2 mil
(14) Omiya Ardija
(14)Sanfrecce Hiroshima - $5.1 mil ---------------4th place
(16) JEF Utd Chiba - $4.8 mil----------------------------relegated
(17) Albirex Niigata - $3.6 mil --------------------8th place
(18) Yamagata Montedio - 250,000,000 Yen = $2.5 mil -----15th


http://en.wikipedia.org/wiki/2009_J._League

Code:

1 	Kashima Antlers  (C) 	34 	20 	6 	8 	51 	30 	+21 	66 	
2 	Kawasaki Frontale 	34 	19 	7 	8 	64 	40 	+24 	64
3 	Gamba Osaka 	34 	18 	6 	10 	62 	44 	+18 	60
4 	Sanfrecce Hiroshima 	34 	15 	11 	8 	53 	44 	+9 	56
-------------------------------------------------------------------------
5 	F.C. Tokyo 	34 	16 	5 	13 	47 	39 	+8 	53
6 	Urawa Red Diamonds 	34 	16 	4 	14 	43 	43 	0 	52
7 	Shimizu S-Pulse 	34 	13 	12 	9 	44 	41 	+3 	51
8 	Albirex Niigata 	34 	13 	11 	10 	42 	31 	+11 	50
9 	Nagoya Grampus 	34 	14 	8 	12 	46 	42 	+4 	50
10 	Yokohama F. Marinos 	34 	11 	13 	10 	43 	37 	+6 	46
11 	Júbilo Iwata 	34 	11 	8 	15 	50 	60 	−10 	41
12 	Kyoto Sanga 	34 	11 	8 	15 	35 	47 	−12 	41
13 	Omiya Ardija 	34 	9 	12 	13 	40 	47 	−7 	39
14 	Vissel Kobe 	34 	10 	9 	15 	40 	48 	−8 	39
15 	Montedio Yamagata 	34 	10 	9 	15 	32 	40 	−8 	39
-------------------------------------------------------------------------
16 	Kashiwa Reysol  (R) 	34 	7 	13 	14 	41 	57 	−16 	34 	
17 	Oita Trinita  (R) 	34 	8 	6 	20 	26 	45 	−19 	30
18 	JEF United Chiba  (R) 	34 	5 	12 	17 	32 	56 	−24 	27

I don't think many fans of the small revenue teams will be in favor of MLS abandoning parity. I wouldn't either if it means my favorite team will be at a big disadvantage. Right now with parity, you have just a good shot at anybody else at seeing your team lifting MLS Cup. If MLS abandons parity, it will decrease your chances, maybe significantly. I'm sure the same view is shared by the owners of small revenue teams.

People judge a league by that league's top teams, not its average teams. I believe the turning point for MLS is when MLS tops teams are on equal footing with the Mexican top teams. Which means MLS need to win the Champions League and the sooner the better. I believe this is the best way toward that goal. If that means sacrifying parity, then so be it.

 

Re: Is absolute parity the best way for MLS to grow from this moment on?

Current salary cap under the 2010-2014 CBA:

2010 - $ 2.55 mil
2011 - 2.68 (5%)
2012 - 2.81 (5%)
2013 - 2.95 (5%)
2014 - 3.10 (5%)

If the salary cap increases by 10% per year under the next CBA (2015-2019):


2015 - $3.41 mil (10%)
2016 - $3.75 (10%)
2017 - $4.13 (10%)
2018 - $4.54 (10%)
2019 - $4.99 (10%)


With parity in 2019, it would mean the DP will still be charged toward the salary cap in order to prevent giving teams with DPs an advantage. $335,000 out of $2,550,000 is 13.137% which mean if it stays the same, the charge would be $657,000 in 2019.


The structure would look something like this.

$4.343 mil + DP------------------or-------------- $5 mil
$3.686 mil + DP + DP-------------or-------------- $5 mil
$3.029 mil + DP + DP + DP* ------or-------------- $5 mil + $31,250 allocation money and more if more than 1 team have 3 DPs.

So if you have say $60 mil in revenue in 2019 and you want to have 3 DPs, your team will have a $3.029 mil budget + 3 cap-exempt DPs. Teams without DPs will have $5 mil budget. This is to prevents (quoting MLS executive Todd Durbin) "the risk of giving teams a competitive advantage on the field." This is parity at works.

Can a $3.029 mil team + 3 DPs compete against Mexican top clubs in the year 2019?