News: USSF sued by Relevent Sports for denying Ecuadorian clubs permission to play match in Miami

If you remember the 90s then you should remember no one was watching. SUM served a purpose when it was formed but has become a monstrosity.

 

This is just a made up fallacy, and YOU know it. Maple Leaf Sports & Entertainment pays both Jozy and Bradley's salaries. Just like AEG paid Landon's salary & Joe Roth paid Dempsey's salary.

I get it, we all get it. You don't like MLS and SUM. Hey that's cool and you have a right to your own opinion. Bring hard evidence to support your claims though.

 

I am no fan of SUM but you have to at least know the MLS salary structure if attacking the pay structure.

The DP cap hit is paid by the league as the league pays salaries up to the cap limit and everything beyond is paid by the team.

I don't know if this is current but the DP cap hit was 335K recently. So of Bradley's 8M salary 7.65M is paid by TFC ownership.

That's an horrendous salary for such a mediocre player but it's team ownership floating the bill.

 

I don't remember that at all. The 1994 and 1999 World Cups were big media events with large TV ratings. The 1998 World Cup was also good in the ratings even as the US crashed out horribly. US games in 1998 averaged 3 million viewers, which is 15X higher than MLS usually gets on Fox. 1998 ratings were up 33% from 1994!!

It is more likely that Gulati used his connections with Blazer and FIFA and USSF to start a company and secure the exclusive rights. He then made so much money for his MLS partners, they got him elected to USSF President to make sure they continued getting the sweet heart deal. MLS's first choice for his replacement was also the CEO of SUM.

They can't tell that story, so they say nobody wanted the rights. But, whatever your motivation to defend SUM here, if 3 million people were watching in 1998, up 33% from a world cup in this country, do you really think nobody wanted the rights?

Let's put this another way. MLS was dead when SUM was formed. Knowing how a guy like Kraft spends money on his soccer team, with the league dying, why would these guys have funded a new marketing company to market the rights of a dead league? Do you really think Kraft invests in the rights if they were not a sure thing money maker?

 

I admitted I have no hard evidence. Nobody does. It is theoretical. Would MLS&E have even invested in MLS without getting a piece of SUM? When you enter MLS, you get to be a partner in SUM.

TFC paid all the salaries on the team. But if the league or TFC would not be able to exist without the subsidy, then USSF is supporting that payment. Even if you think a DP is a bad example, then pick any USMNT player that was not a DP. Dax McCarty was in Couva and was making the league max. That is 5X what Alex Morgan makes.

 

Again, would the club even exist without the subsidy? Would they be able to pay all that money to one player if most of their roster wasn't funded by shared revenue? Whatever.

Even the $335K cap hit is 3X Alex Morgan's salary.

What could the women be alleging? They agreed to their compensation from USSF. They didn't want the compensation deal the men have. But if USSF is supporting MLS to the tune of $30-50+ million to maybe $3 million for the NWSL that is a large disparity. If the NWSL was getting $30-50+ million from the USSF too, would Alex Morgan be making $150K/year?

 

Rerally??? Bringing NWSL salaries into this dicussion? What sort of ratings does the NWSL get? The league has trouble in getting fans to attend outside of Portland and Salt Lake City. What are the USWNT's ratings? Compare those to the ratings that the Men's team gets.

The networks didn't want to pay for the 2002 WC rights because the games would be on live at 3AM...............

Also IMG willingly sold the rights to SUM at a loss because they weren't making money on them and wanted out. How many people tuned into the 1990 World Cup?

No sh!t sherlock! This was part of the plan on how they could grow the game in this country. Much to many people's chagrin, MLS is part of that growth of the game. Without a top flight league in the US, how popular do you really, honestly believe the game would be here?

 

In my mind this suit has very little merit in a US court. In the end the Ecuadorian clubs and USSF are part of FIFA and should follow the rules as stipulated by that body.

 

So, that makes absolutely no sense. The USSF supports dozens of organizations that are for-profit entities. And USSF's job, "promoting the sport of soccer in the USA" requires them, by default, to give money to organizations.

We can haggle on what the most effective use of the USSF's money is. But I don't think it can be argued that the primary MO of a non-profit is to give monetary support and/or expertise to organizations that can accomplish its mission.

 

Well then, wouldn't they have to give equal money to the NWSL?

 

There was a time when this forum had signatures, chosen phrases displayed at the end of a poster’s post. I can think of no signature more suited to its author’s body of work than this.

 

SUM is a company providing the USSF a service. They guarantee payments and insulate USSF from the ups and downs of the market. With the MNT failing to qualify and SUM providing the same service for Mexico I'm not sure why we are still calling it a subvention.

Also, NWSL was formed in the framework of the USSF paying for a lot of players salaries. This is a true subvention.

 

Based on...? What?

USSF is under no obligation to spend its resources "evenly" among whichever set of "groups" you want to divide the soccer world in. It's the infinite complexity problem all over again. Why doesn't the USSF spend equally between futsal, beach soccer, and 11-a-side soccer? Why doesn't the USSF spend equally between MLS/NWSL and the Major Arena Soccer League? Why does the USSF spend more money on youth leagues/coaching and not as much on pro leagues?

Why doesn't USSF spend the same amount on NWSL as they (maybe) do on MLS? Because they think it's a riskier investment. Or, that it's not as valuable of an investment. They've already been burned by the WPS, a venture that wildly overspent and ended up with a 100 million dollar loss by the time they folded ~2 years later. Before that, WUSA blew through its 40 million in funding after the first season and folded after the 2nd. Why, oh why isn't the USSF throwing money at the next iteration?

 

Again, WUSA blew through $40 MM, but USSF has been giving MLS at least that much...per year...since 2002. Has Garber ever said the league was profitable?

That is $680 million that USSF has given to MLS and nobody else. I doubt they have given that amount to all other groups combined. That is USSF throwing money at something every year. Why don't they do it for everyone? Because only one group controls the rights and the USSF board.

The USSF would have to pay the USWNT anyway. Just like the USMNT before 1994. So, there is really nothing given to NWSL at all but some office space.

 

First, you keep pulling numbers out of your ass. Please. Stop. You can read USSF's financial statements here, starting in 2006. Please show me where they leave 40 million on the table, a revenue source so big that it represents a doubling of their total assets in 2006, a WC year.

(https://www.ussoccer.com/about/federation-services/resource-center/financial-information)

Second, MLS has made over a billion dollars in expansion fees over the last decade, I think they're doing just fine. You should be glad too, because the Portland Thorns, Seattle Reign, Utah Royals, Houston Dash, and Orlando Pride, are all direct spinoffs of MLS franchises. Which means we can draw a direct link from MLS being successful to the NWSL even existing at all.

And it cuts both ways. USL is taking off because people are hoping to be the next MLS expansion team, or are otherwise being run like minor league operations, as they should. Because you're going to be hard-pressed to make money without TV revenue and by bringing 5,000 fans a game. So, just because it's a men's soccer team doesn't mean it's guaranteed to be a success.

Why isn't the USSF throwing money at the soccer equivalent of the WNBA? The same reason everyone else avoids sinking money into Women's professional sports leagues: people don't consume them enough. There's little money to be made in attendance. There's little money to be made in sponsorships. There's absolutely zero money to be made in TV deals in an extremely crowded sporting landscape. Which is why the only team that you can see on TV is Chicago (local Tv), and A&E pulled out of their deal a year early.

You seem to think that it's the USSF's job to fund a professional sports league out of nothing. They never have, never will, and are not required to. USSF funding is a small part of what makes a successful league. It helped get a Men's WC in 1994 by funding a soccer team that qualified for the WC, which got investors for MLS, which was saved in 2001 by Hunt, not USSF. They also lobbied for a WWC in 1999, which resulted in TWO failed leagues and giant losses. They've supported the existence of female professional soccer players in this country by continuing to fund a team of US players. That is the extent to which the USSF gets involved with the success or failure of sports leagues in this country, at least monetarily. Accordingly, the NWSL will succeed or fail based on its owners, as is per usual.

 

Really? Do you have ANY proof of this? You are aware that the USSF's Operating budget in 2014 was $53M. Of that total nearly half of it went to operating the National Teams..........
https://www.washingtonpost.com/news...surface/?noredirect=on&utm_term=.487b3971be5e

 

There are several strong arguments against the SUM/MLS relationship but I wouldn't use the women's soccer league as one of them.

To me the biggest current issues are:

• significant appears of conflict of interest coupled with a complete lack of transparency in the dealings between the two. the last second papering of a deal before Gulati left office was optically terrible, to say the least
• the appearance that USSF is stifling competition for SUM as I believe that SUM has a Right of First Negotiation which allows them to cut deals with the USSF without competition. This is terrible
• USSF has agreed to effectively take a debt position in its dealing with SUM where it gets the first $30M and then the rest goes to MLS. Effectively, MLS is the equity holder (with all the ups and downs associated with it). Even if USSF is happy with its debt position (which it shouldn't be given the dramatic growth in sports marketing value), they should clearly bid out to multiple parties who is willing to cut the highest guarantee to USSF - I'm doubting that $30M is the correct figure.

Cordeiro stated that “The unique ownership of SUM creates conflicts that need to be addressed" but really there doesn't appear to be anything material that has been done. It more falls into the plausible deniability category for the Board.

 

Not sure I see how USSF has done the women wrong. I think because of USSF the US women's program had a huge head start on other countries and their success has made them popular so that young girls keep wanting to be play for them.

 

Again, I've gone over how USSF uses SUM to subsidize MLS. If I haven't been successful in communicating that, then I doubt a fourth try will be.

It will not show up on the financial statements, that is the point.

You never answered the basic question: If I give you something worth $1.00 for the price of $0.30, have I given you $0.70?

 

Patrick,

I do agree that the value of USSF’s marketing right is greater than the $30m they received but they have made the decision to value certainty of payment over amount (debt vs equity position) so you have to account for the structural primacy issue that they receive before you can say that it’s a giveaway.

Another reason why transparency is so important.

 

I find it almost funny that people just buy these things. If something is worth $90 million, and you are getting $10 million guaranteed from one group, is it hard to believe you couldn't get $20 million guaranteed from another. Heck, if I could get a bank to get behind me, I would give them a guaranteed $35 million and then sell the rights for market value.

But no market has ever been explored. So, I can't take this, "guarantee over uncertainty" argument at face value. You make a point about the structure of SUM that I'm not up on. But most people who work in the business all express the opinion that the rights are wildly undervalued.

I would think guarantee over uncertainty would be $0.50-$0.70 on the dollar, not $0.10. The risk premium of the S&P 500 over the 10-Year treasury is in that range.

USSF offered $millions to COMNEBOL recently to host the 2020 Copa. There was no guarantee they needed in that deal. They have no guarantee to make a profit of any kind from the 2026 World Cup from FIFA and seem perfectly happy.

 

You are still pulling 40 million (or 70 million now?) right out of nothing.

We don't know what the number, the difference between what USSF could get in terms of marketing fees with SUM vs. a competitor, is. Maybe it's 5 million. Maybe it's 100 million. Maybe SUM overpaid in 2002, USSF jumped at the opportunity, and it's SUM who've subsidized USSF through the lean years of MLS almost folding (before being saved by private investor billionaires), WUSA and WPS flopping, and general corruption/incompetence (e.g Chuck Blazer's Trump Tower cat penthouse isn't cheap). Maybe it's Maybelline.

And, in the absence of public contracts that we can understand (e.g 200 million over 5 years, or whatever), we not only have no idea what the difference is, we don't know the specifics about how each USSF piece (WNT, YNT, MNT, other soccer events, etc) is valued, by SUM, USSF, or SUM's competition.

Sink money into a league for the USWNT, because you assume MLS has these massive subsidies, as is only "fair", despite the fact that it was started by billionaires, is funded by billionaires, and even the wildest valuations of USSF marketability are dwarfed by the billions of dollars tied up in MLS and the Mexican National Team (in the USA) now.

If the USSF, and SUM (who would also get money) thought they could get their money back from the NWSL, they would invest more money there. They don't. And they should not, because very little suggests that it's going to do well.

 

I started this with just a hypothetical about what the USWNT could be suing about. I just don't understand how they agree to a contract then sue about how much they agreed to make.

It isn't that USSF should pour money into the NWSL. It is that they ARE pouring money into the MLS. That is where the gender discrimination is because there are USMNT players being paid by MLS. Most being paid orders of magnitude more than USWNT players. There must be some Title IX exposure for USSF through the USOC because the EEOC said the USWNT could sue.

USSF is not looking to get any money back from the NWSL or MLS. They would be foolish to think so after years of losing money. They are giving money to each in vastly different amounts.

Kartik Krishnayer (sp?) is in the sports marketing world and talks to TV execs and promoters for his job. He is the one that has suggested the rights are worth $90 million per year or more. The rights have not been marketed openly for 17 years, so nobody knows for sure. But the value of SUM and a partnership in SUM, suggests they are very valuable.

The lawsuits against USSF are piling up and they all are targeted at the SUM/USSF relationship expressly or tangentially.

 

There isn't anything in the USSF charter that says that it must allocate resources the same way for Men's or Women's soccer. At least as far as I know. Certainly, the contracts of the MNT/WNT have almost always been different.

USSF could, if it so chooses, spend comparatively more money on the WNT, on girls soccer programs, and on a Women's professional soccer league if it so chooses. They don't expect some giant check at the end of the year for partnering with SUM, but clearly, they think that it's something worth investing in. There's a conflict of interest still, particularly around the specific dollars-and-cents of the value of the contracts, but I don't think you can look at the women's professional sporting landscape and conclude that the USSF is discriminating against the WNT by not investing as much money in their league. They are discriminating against risky ideas. If the NBA can't make the WNBA work, I don't think the USSF looks at NWSL and sees it as a stable investment.

And, funnily enough, isn't the reverse also true, if you're going to start alleging sexism? The WNT clearly benefit from being tied to the MNT, how much we don't know. Yet funds raised by the MNT can be funneled into girls soccer programs? Gasp!

 

Yeah, I remember Dan Rather make a poor joke at the expense of soccer during the CBS evening news in the midst of the 1994 WC being played in the USA. The gist of the message was that who cares about soccer in the US? The game is tainted by hooligans, it is boring and who wants to watch it anyway? That was the end of Dan Rather and CBS evening news for me. Maybe someone can correct me, but I'm not sure there has ever been soccer on CBS.