The salary cap needs a bigger change than what MLS is propising now

Baby steps is how you build a strong, viable business. The MLS does not need to rush in increasing the salary cap. They know better than you and anyone else on BigSoccer how much they can afford.

One of the top reasons businesses fail in the US is try to expand too fast and increasing expenditures beyond it's means. The MLS is doing fantastic. They dont need to increase the salary cap more than they already are.

 

so because NY is stupid enough to put most of their money into a few players we need to expand the salary cap?

RSL didn't get to the CCL final without depth. Their team is built ENTIRELY different than that of the NYRB's or LA.

Nearly doubling the salary cap is not the answer.
Slow growth is better than trying to overly inject life.

NY likes to learn the hard way.

 

The problem is that some of the owners do want to spend more and are being held back by the cheapskates.

 

Shouldn't this be in "you be the don"?

 

RSL lost the CCL and then have sucked since. If you want MLS to compete in these tournaments then teams will have to build better rosters.

 

RSL lost to a very good Monterrey team by a hair in a game they controlled in spurts. They are currently fifth in the West with at least three games to make up on all of the top four. They have the second best goal differential in the league and they've been playing without their best player for most of the year. Give em a break.

 

I dont really care what the cap is. What I care is that the league and the owners have taken the time to know what is right for continuing growth of the league. When they negotiated the CBA they looked into and made a decision using real data. They know a low more about the finances of the league and the projections for the future than you or I do and I trust that they made the right decision.

This league is still very young and nearly half the league is even younger. Businesses need time to grow before they can just start blowing millions and millions of dollars. Slow and steady is how you build a business that is strong and stable. Impatience is a business killer and that's exactly what you are asking for.

 

The OP asked why not raise the cap to around 5M. That is different than just blowing millions upon millions. You say slow and steady. I somewhat agree with that. But you have to differentiate between a smaller cap raise (1-3M), and blowing the roof off, which wouldn't make sense. Big difference between talking about possibly raising the cap to 5M over the next couple years, and asking for 10M+, which is obviously too big of a jump.

With the larger tv deals, money from all the friendlies, and 5 MLS teams making it to CCL group stage, and hopefully more teams advancing futher than before, IMO a discussion about raising the cap a little makes sense. It's almost as if you think any discussion about raising the cap is irresponsible. I have to disagree. There are responsible cap increase numbers to discuss, and irresponsible numbers. It's not a simple black and white argument.

 

I think there are two valid but different discussions regarding the cap. The first is whether the overall player expenditure should rise. The answer is yes, but in a manner that allows for profitable growth. So it will be slow. Quite frankly, the 2014 TV contracts will be a big input into how this number changes over the next decade.

The second discussion is whether the structure of the cap is correct. This is where I tend to agree with the OP that things need to be evaluated. Over time, the MLS has continued to improve on ideas to support both growth and parity. Somewhere along the way we have over complicated things and created a bit of a patchwork quilt of rules. I would rather see us get to a more simplified approach that keeps the financials in order or today's expenses but allows teams more leeway. As an example (and the numbers can be changed)

32 man roster:
1) Have a minimum spend of 4.5 million.
2) Have a maximum spend of 12 million.
3) League continues to pay the same amount as today, owners fill the rest
4) Keep GA and HG as non cap expenses (they have a different purpose)
5) Keep allocation money to spend below the upper cap, but not to buy below minimum.

Something along these lines keeps parity (within cap and with allocation). It supports growth (still have HG, and GA PLUS more flexibility on the rest of roster. It allows teams to make better financial decisions on the type of team they want and not have them constrained by DP spots and senior versus reserve roster (in terms of cap only).

 

I agree with the OP. I think MLS should expand their salary cap to 5M. At least we would be able to keep some of our more talented american players from going to mexico or lower leagues in Europe. Also if the cap was at 5M teams don't have to spend that much, teams just can't go above it.

In regards to New York they made their own decisions with their team. They got rid of good players that could have provided depth. They could have gone out and found full backs but they didn't.

 

I think one financial issue in considering to raise the cap is that you can keep inflationary pressures under control by having the cap. For example, if the cap were to go up marginally (but not enough to really entice a significanlty number of better quality talent to come to MLS) the effect could be to raise the price for existing talent.

For example, if 20 people are bidding on the 20 items and each has $10 dollars to do so... giving each person another dollar only makes a difference if new/improved items can be purchased otherwise because Supply of items remained constant increased cash only went to the same 20 items. If that makes sense.

Now, in MLS you can get a certain level of talent (once you exclude DP's) in the $75-$250K range... or average non-DP of roughly $100K per team. So by now having the ability to spend $110K per non-DP player per team may not entice new talent to MLS only mean that you pay the same talent more.

I think the Players Union - MLS setup contributes to the slow increase. The PU is focused on getting more money for the same talent... but who's worrying about getting more money to bring in NEW talent?

DP's are interesting from a marketing standpoint but does anyone thing NYRB would be better purely in playing quality / ability to win games if they spent $15 million over 15 players rather than 3 players?

DP's allow teams to market but so far in MLS have not made too much of a difference on the actual playing quality of teams. Evidenced by teams like RSL who really have no DP's (Sabo's only a DP due to the cost to buy him, not what they pay him)... vs teams with 2-3 DPs or seem to be roughly the same.

 

https://www.bigsoccer.com/forum/showthread.php?t=1798382

https://www.bigsoccer.com/forum/showthread.php?t=1783454

Do we really need a 3rd thread? Discuss it all you want. Just go discuss it on the board it belongs in.

 

This would more or less be my answer. MLS is willing to spend more money if it creates new fans or new revenue. DPs can create new revenue and fans through star players that attract eyeballs and sell shirts. Investing in young players can create new revenue through transfer fees. Simply raising the base cap, however, will likely serve mainly to give raises to the players we already have or else just replace them with marginally better players that won't attract any new fans. Not to mention that the Players' Union generally does not care about DP salaries or Academy players so MLS can play with these numbers all they want without worrying about giving away their bargaining chips.

Gradually increasing the base cap will gradually increase the talent level of the league which will gradually increase the fan support. I'm not sure, however, that significantly increasing the base cap will significantly increase the talent level and significantly increase the fan support.

 

I responded to a post in this thread. I didn't start the thread. Your beef is with someone else.

 

"You be the Don" is the forum intended for threads in which the OP advocates significant changes to the way MLS is run. It is an effective mechanism to allow posters to publicize their recommendations, while keeping the "normal" forums free of these speculative and usually repetitive topics. For example, as posted above, yours is the third active thread on this topic.

edit: the reason there was no thread on this topic in MLS General is undoubtedly because they would have been moved here.

 

question isn't how much should the salary budget be, the question is how do you PAY for that budget. Unless we want to be swimming in debt, we have to look at new revenue sources to do this. And increasing our TV deal from 7M at FSC to 10M at NBC is only a 3M a year gain, divided by 19 teams and you can see how there just isn't the money to increase the budget to 5M or whatever (which is 2.2M more per team and would require the league to spend an extra 42M next year...increasing revenues by 3M and increasing spending by 42M is a good way to go bankrupt).

So how do we do it, where is this new revenue?

1. League naming rights. This is a big piece of real estate that has yet to be untapped. EPL does it, NASCAR does it, College bowl games do it...MLS needs to check the market for a league wide naming sponsor. "Honda MLS" "Chase MLS" "AT&T MLS" whatever they can get. Adidas has a sponsorship deal with the league reported at 8 years worth 200M (25M a year) if MLS can find a deal this large or bigger for a naming sponsor, they need to jump onto it. With a 19 team league next year the salary budget will probably be around 55M. If you can add 25-30M naming sponsor money to that pool, it would then be around 85M or 4.47M per club.

2. Secondary shirt sponsors. Yes I know not all teams have shirt sponsors yet, but MLS should allow teams to not only sell ads on the front of their jersey but also on the back (similar to what Barca has this year), I'm not saying they go crazy like S. American teams, just one front and one back sponsor. Whatever a team can get for this sponsor can be used in the salary budget of this team. The league doesn't need to pay another dime. With teams like Vancouver and LA getting as much as 6M a year for a front sponsor, I am sure some of these teams could get as much as 1M for a back sponsor (especially if ratings on NBC are solid). It also allows for the teams to sell 2 levels of ads. Maybe Chicago Fire can't find someone willing to purchase a 2M front sponsor, but they might be able to find a smaller company willing to spend 500k on a back sponsor.


I think this is a realistic way to get salary budgets up to 5M as soon as next year, without having teams get into debt nor cutting into profits.

 

Here's a radical freaking idea I have:

The league has made huge strides in the last 5 years and has done so at a managable and sustainable rate/method. These guys have been making many more smart decisions than stupid decisions, and have found a way to continue to push growth while maintaining their stability. SO ....... I dunno, HOW'S ABOUT WE TRUST IN THE FACT THAT THEY KNOW WHAT THE FRUCK THEY'RE DOING ?

I know, I know .... just waaaayyyy to outlandish.

 

No, they don't.

Seriously; we need to have some perspective here. The average MLS team salary is getting close to $5 million these days. That's up from $1 million in 1996. It's up from about $2 million in 2006.

If you think more than doubling one of your major expenses in five years is "baby steps," I'm guessing you've never run a business.

I'll tell you a secret. There's nothing stopping them. In fact, they are ready and willing to push the cap up by an extra $2.5 million a team, as you're suggesting. It's the easiest thing in the world, and you, yes you can be the one to make it happen.

All you have to do is write them a check. For $50 million dollars. Every year.

Seriously, I don't understand how the people who complain (over and over again) about the salary cap don't get this. The reason MLS doesn't want to raise the salary cap by a few million dollars a team is because it would cost a few million dollars a team. And there's no particular reason to think they could recoup those costs anytime soon.

People are excited because the Comcast deal MLS just signed brings in about $5 million a year more than the old Fox deal. That's a good sign for MLS. But it would pay for about a tenth of the boost you're asking for. Where is the other $45 million going to come from?

People mumble about "spending money to make money" but that only works if there's a potential revenue stream that could let you make money. TV is not that revenue stream; the TV revenue MLS is going to get is now set through 2014. You're asking the league to spend $150 million or so in salaries before those negotiations happen.

So start writing checks, and your dreams can come true. Otherwise, I'm not sure what, exactly, you expect to accomplish.

 

Raising the cap to 5 million is nearly doubling it. On top of that it isnt just raising the cap from 2.8 to 5 million. It is raising the cap from 2.8 million times 18 to 5 million times 18 so we are talking about millions and millions of dollars. That 2.2 million increase per team is an increase of nearly 40 million a year in expenses for the league. That's a lot of money and could be the difference in the league doing well and struggling.

You act like the salary cap they set was done years ago. This was just done last year. They set the salary cap for that season and the following season based on financial data. Do you not think they know a little bit more about what is feasible and appropriate for the growth of the league than you do?

If the salary cap we were dealing with had been set 5 or more years ago I would agree that revisiting it would be appropriate but we are talking about something that was done just last year. It isnt outdated yet.

 

So exactly what do you see? You know the TV deals, sponsorship deals and attendance ........ show me where the $95m annual league salary costs (plus DP's) would come from?

 

So with only 3-4 clubs being profitable you think that after all expenses are paid that the league is taking in well over the 90-100m that this bump of yours would cost ? Which would include monies left over for comfortability and good margins going forward ...

Yeah, you're going to need to show me what work you're doing to come up with that pipe dream.