Is the MLS one of the big leagues of the future?

Discussion in 'MLS: General' started by psveindhoven, May 21, 2007.

  1. BobyOne

    BobyOne Member

    Apr 22, 2004
    Houston, TX
    Club:
    Houston Dynamo
    Nat'l Team:
    United States
    What makes these revenue numbers even more amazing is that they do not include the size of college sports in the US. My own Tennessee Volunteers football team brings in $70-$80 mil. in revenue per year, which would probably put it #3 or #4 in La Liga (after you account for the big clubs, La Liga revenues drop quickly).

    Taking into account all the variables and all the sports (NASCAR vs. F1, PGA, etc), it could be that the sports market in the US is 2-3 times larger than in Europe. This bodes well for MLS.
     
  2. AndyMead

    AndyMead Homo Sapien

    Nov 2, 1999
    Seat 12A
    Club:
    Sporting Kansas City
    Why? Why is that comparison valid?
     
  3. TX Bill

    TX Bill Member+

    Apr 3, 2006
    Sugar Land TX
    Club:
    Everton FC
    Nat'l Team:
    United States
    Especially when you see the growth NASCAR has had over the past decade. To it's credit, it's been around longer than the MLS but in my mind, that is somewhat of a niche sport that has started to gather a larger following nationwide.
     
  4. Boloni86

    Boloni86 Member+

    Jun 7, 2000
    Baltimore
    Club:
    DC United
    Nat'l Team:
    Gibraltar
    It's just a straight up comparison between the economic clout two different sports in two different markets. I understand that the European soccer market is fractured and the US market is mostly united in one league per sport. But that's not particularly relevant if you're just simply looking at how much total wealth is in a particular sport in a certain area.

    So if you take Boby One's chart and look at it differently, you can see that the top 5 European leagues total about 8-9 billion. That's roughly the same population base as the USA, but it's still significantly ahead of the NFL's 6 billion. The difference is that wealth is distributed amongst 100 clubs, whereas the NFL wealth is distributed amongst 30 "clubs". So obviously that means more people get a piece of the pie in Europe, just smaller pieces.

    This isn't particularly meaningful on its own because it's obvious that the NFL and European soccer don't usually compete for the same dollar or the same players. It's just a different way of looking at things. I don't see how comparing the top 10 Euro clubs to the top 10 NFL clubs is any more relevant.
     
  5. aloisius

    aloisius Member

    Jul 5, 2003
    Croatia
    What you have to look at are the revenues of the top 20 European clubs, here.

    http://www.forbes.com/lists/2006/34/Revenues_1.html

    You’ll have to compete with them to bring in the stars. Outbidding Betis for Marko Babic isn’t gonna get you anywhere.

    Those 20 clubs with 100+ mil $ revenues are what make Europe the centre of the football world. Their money has attracted the world’s best players, created the champions league and now the concept that anyone who is any good has to play for those clubs. If he’s not good enough for them at the moment he’ll at least want to move to countries where those clubs are to compete against those clubs in their league, and maybe get a shot at moving to them.

    Even just being in the same continent gives a chance at being recognized. That’s why there are three brazilian nt players at CSKA Moscow, why Alex plays for fenerbachce and Elano for Donyetsk

    Just getting players ahead of such clubs will be almost impossible, simply because of the champions league.
     
  6. superdave

    superdave Member+

    Jul 14, 1999
    VB, VA
    Club:
    DC United
    Nat'l Team:
    United States
    Andy's question remains.

    Let's say MLS gets up to 24 teams and has per team revenues equal to the NHL. Who cares that MLS is "cheating" by only having 24 clubs? What matters is that MLS could then compete with clubs like Spurs for players, at least financially. (Prestige still an issue.) Look at Spurs' 4 man strike force. By MLS standards, it's awesome. It'd be awesome if it were split between two teams. Look at guys like Anelka at Bolton, or Friedel at Rovers, or Parker at Newcastle, or Distin at ManCity. MLS teams could pay those guys as much or more than they're getting, if MLS were to grow like this hypothetical.
     
  7. Hansadyret

    Hansadyret Member

    Feb 20, 2007
    Bergen, Norway
    Club:
    SK Brann Bergen
    Why do you compare all these sports with just one in europe? and there are several scandinavian teams that have a budget around and even over $25 mill (FCK,Rosenborg,Brann) and some russian teams have budgets around $50http://www.eufootball.biz/Finance/070507-CSKA-Moscow-books-the-best-balanced-in-Russia.html
    The overall fooballbusiness in Europe is worth around $15billion each yearhttp://uk.ibtimes.com/articles/20070131/financial-investors-european-football-clubs.htm

    It is not important what leagues take in as a whole but what single teams have in revenue and salarybudget. Many of the best players in the world plays in ex. Real Madrid and Barcelona even if the EPL take in much more in revenue then La liga.
     
  8. Boloni86

    Boloni86 Member+

    Jun 7, 2000
    Baltimore
    Club:
    DC United
    Nat'l Team:
    Gibraltar

    The problem, as Hansadyret pointed out, is that the combined European soccer business is valued at $12 - 15 billion depending on who you believe. Before MLS even has a chance to catch up, that market is likely to evolve over time to integrate and consolidate that wealth. MLS will have a very tough time competing against an integrated European soccer market.

    Surpassing the NHL in the long run will probably make the US a relevant and respectable league. But we'll be struggling to compete against teams like Spartak Moscow and Galatasaray ... not exactly Chelsea and Barca.

    I think that in order for MLS to compete directly with the top European clubs, we would need to become the third sport in the US just slightly behind baseball.
     
  9. BobyOne

    BobyOne Member

    Apr 22, 2004
    Houston, TX
    Club:
    Houston Dynamo
    Nat'l Team:
    United States
    The argument so far has been how "big" would MLS be in world football if it had NHL-style revenues. Comparing the amount of sport $$$ available on each continent is important. Granted, F1, European basketball and hockey leagues are not included, but neither is NASCAR, college sports, minor league baseball, WNBA, AFL. Considering the gargantuan amounts of money involved in college sports and NASCAR here, I think US would win that money battle as well.

    What do the rest of the scandinavian and russian teams make? The league as a whole must average $25 mil per team. Then you need 14 such leagues to even out the numbers between US and Europe that I posted above.

    "Football business" doesn't necessarily means all the revenue going to the clubs. Part of the football business are things like the shoes and equipment adidas sells to youth teams (this is not replica jersey sales!) or amount of money TV stations pay their analysts. Many more people make money off of football than just professional teams. You cannot compare that number to the team revenue information I posted above.
     
  10. superdave

    superdave Member+

    Jul 14, 1999
    VB, VA
    Club:
    DC United
    Nat'l Team:
    United States
    No, that's irrelevant. Europe doesn't sign players, European CLUBS do.
    Why are you saying this? The CL has already dropped the 2nd group stage. Platini had as part of his platform shrinking the CL.

    They'd also have a tough time competing against cyborgs. Both are equally likely in the medium term.

    But that's not really on the table as an option. I just cannot conceive of how the sport could develop in the next 50 years such that the best MLS teams would be as good as the best Euro clubs. Because Europe has the opposite of parity.

    But I CAN conceive of how the sport might develop such that if you randomly picked 20 MLS teams and had them match up against the 20 Prem teams or the 20 La Liga teams, that MLS would break even.

    My God, did you watch the Prem this year?!?! Even now, the worst half dozen clubs would be the best team in MLS but it wouldn't be a yawning chasm. I doubt any of those teams could go the whole year at the pace DC was playing at last year before Nowak wore out the players.

    For some reason, you're changing the subject from best vs. best, when the subject was league vs. league.

    Just to reiterate, I don't think it's likely that MLS could be as good overall as the Prem, even in 30 years. But that IS what we're talking about...not just the Supporter's Shield winner vs. Real Madrid or ManU, but also the St. Louis Steamers vs. Wigan, and the Rapids vs. Newcastle.
     
  11. lawrenceterp

    lawrenceterp Moderator
    Staff Member

    Sep 2, 2006
    Virginia
    One other thing you guys need to consider when looking at those franchise values..... The European soccer teams values are current. That was put out about a month ago. However, the US teams page is at least 3 years old. They still list one of the MLB teams as the Montreal Expos. I'm sure you all know that the team moved to DC after the 2004 season. So you can bump everything accordingly. I'm not sure how much, but I'm sure it's enough to make a difference.

    Just did some research. Mario Lemieux was offered 175 million for the Pittsburgh Penguins in 2006. According to that older article the Penguins were worth only 137 million. Pretty significant change in a couple years. Montreal went up around 50-60 million as well according to a loan taken out against the team's value as compared to that older article. Looks to me like the NHL compares very well against any of the European soccer leagues. The Euro soccer league would have the top 2-4 teams by a massive margin, but then the US league would crush just about everything below that top flight of teams.

    http://www.forbes.com/business/2006/11/09/nhl-teams-owners-biz_06nhl_cz_mo_kb_1109nhlintro.html
     
  12. sidefootsitter

    sidefootsitter Member+

    Oct 14, 2004
    FWIW,

    http://www.eufootball.biz/Finance/160507-Bundesliga-debts-continue-rising.html

    Under the current exchange rate, Bundesliga is a $2B proposition (though it is for the 36 - e.g., including BL2 - teams)
     
  13. NebraskaAddick

    Aug 26, 2005
    Omaha, NE
    Club:
    New York Red Bulls
    Nat'l Team:
    United States
    Funny, but I hear a lot of Americans say "I think most people just might find soccer boring" because yada yada yada. What reasons they have doesn't matter. It's just an endless diatribe I have to endure.

    You can conjure up any number of reasons to find a sport boring, but you can just as well have any number of reasons to find it exciting, too. It just depends on how much you understand it.

    I had never watched a cricket match before, until I went to a Pakistani restaurant and they were showing the world cup. A guy there explained it to me, and before long I was hooked. I don't find cricket boring anymore now. I used to think it was!
     
  14. Wangy

    Wangy New Member

    Feb 3, 2007
    Toronto
    I completely agree with your entire post dude. I hate it when people try to start a debate as to which sport is boring and which sport is tougher etc. It is an endless debate that really does not need to be debated. It all depends on your taste. Personally, I find hockey boring and thats just the way it is. You can't say "WHAT! Hockey isn't boring. Its the fastest game in the world, blah blah blah". On the other hand, I like baseball, cricket, soccer, basketball and football, even though those sports are all very different.
     
  15. USMNT

    USMNT New Member

    Oct 28, 2006
    ...and that is the real key, my friend. When the already large soccer playing youth base of America realizes they can make $5-10mm/year playing professionally, you will see futsal fields all over the inner city.

    The US is the size of all of Europe combined with an extraordinary athletic infrastructure and pool of athletes. Even if MLS captures only 25% of the athletic pool with the rest going to football, basketball and baseball, that pool would be about the size of any two of the following Argentina, England, Spain, France or Italy. At that level of maturity, we will have our fair share of the world's best 100 players.

    The thing is that we don't have much of a development structure now to churn out professional soccer players the way we do for our other major sports. Money and time will change that enormously.

    Furthermore, imagine that you are a budding Brazilian or Argentine superstar who can command $10-15 mm/year. Assuming that American and European teams can pay equally, would you rather live in Manchester/Turin/Lyon/Munich or Los Angeles/Miami/New York? You're a much shorter flight away from home, and by then, much of the US will be Spanish speaking.

    Imagine that you are a budding African superstar like Samuel Eto'o. Do you want to play in front of people where they are chanting monkey noises, or would you prefer to be in a more racially tolerant and pluralistic society?

    As long as the talent pool is coming from Europe, the Americas and Africa, it will be very difficult to attract the best players even if a Chinese or Japanese League is on equal financial footing.

    Ultimately, all of this might force the Euros to form a real continental league with pro/rel into the existing respective leagues. That's the theory, anyway.

    40 years is a long time. While the tradition of Europe does hold sway, arguably the greatest player in the world, Pele, never played for a European team.
     
  16. USMNT

    USMNT New Member

    Oct 28, 2006
    Good point, but it depends on your perspective. If we're looking 30-40 years out, everything can change. Who knew of the internet just 15 years ago?

    It is a very realistic possibility that transportation will have advanced so far that you can get from New York to London in a couple of hours. LA to Paris could be done in 8 hours.

    Some basic technology is there in terms of Concordes already. Then, a Pan-Atlantic MLS vs. European Continental League in the mother of all Champions Leagues could be created. :)
     
  17. USMNT

    USMNT New Member

    Oct 28, 2006
    That's true today, but that is also why very smart people like the Glazers, Kroenke and Hicks/Gillet have invested in the Premier League. The EPL's growth potential far surpasses the NHL's. That's why there is tremendous value there to be realized.

    These current valuations do not use a discounted set of future income streams but rather current economics, I believe.
     
  18. USMNT

    USMNT New Member

    Oct 28, 2006
    I don't believe that's why they play for those teams. It's money...especially CSKA. Players of that caliber could play at PSG, Ajax, Sevilla, etc. and be in greater sights of the biggest clubs.

    Why on earth would a Rio-born Brazilian star who could make the same $ in either place, choose to live in Moscow rather than Miami? It makes no sense.
     
  19. CrossThis

    CrossThis New Member

    Apr 8, 2007
    I'm not sure if anyone else have brought this up but i really think in order for US to become a power they need improvment in the world cup. Yes getting "High Rollers" would help but not in all cases. We might get the tag--Retirment soccer. Soccer is growing in the US but i would say majority of the Media wont take much consideration untill us does better in the world cup. Ever watch espn? how many times do you see soccer highlights? The Market is there and can become great. Yes we could become a premier type league. But i think its all mute if US soccer doesnt improve.

    I know it might seem weird but right now MLS isnt a house held name, but world cup is something everyone knows alittle about. So we do well there more people will look at the MLS and say "hey they are doing something right"
     
  20. Hansadyret

    Hansadyret Member

    Feb 20, 2007
    Bergen, Norway
    Club:
    SK Brann Bergen
    What the teams are worth is irrelevant when it comes to signing the best players in the world. The important thing is the revenue and the salarybudget of each team. The value of the football(soccer) teams are low because there is no salary cap and it is allmost impossible to have a big profit and in the same time compete, most clubs use every penny they make in an effort to catch the big clubs at the top. If a salary cap where introduced you would see the value of the clubs go up considerably because it would be much easier to turn a profit. If you have a salarycap i the EPL the best players would simply go to spain or italy.
     
  21. triplet1

    triplet1 BigSoccer Supporter

    Jul 25, 2006
    I think you hit on some great points, and I think we are living in the middle of the sea change. I can't give you a link, but aside from their common love of soccer, I think MLS was saved from extinction by two organizations with very different philosophies, AEG and HSG. Hunt's philosophy always reflected Lamar Hunt's NFL roots and his early days as AFL commissioner -- a salary cap, parity driven league where revenue was evenly distributed to allow small markets to compete. In other words, the opposite of "super club." AEG, I think, has always been at heart more free wheeling, reflecting their concert promotion background, where "larger than life" is part of the merchandising imperative.

    MLS' financial position was so dire that the two co-existed with the common goal of simply surviving. The DP rule potentially signals a philosophical shift. Everything coming out of the front office suggests that the Galaxy has made a conscious decision to spend money to raise not only the team's profile and value. AEG applied the same philosophy with the Fire -- using the DP to get a bigger name player to drive marketing. So the process of "dumping money into the league" has begun. But not enough teams buy into the philosophy, at least totally. Yes there are other DPs, but they are by comparison far more modest, at least in terms of impact for marketing the league.

    I think AEG would love to answer that hypothetical question posed above -- what could MLS do with payrolls that are $15, $20 or $25 million? My guess is there may be some others who would likewise take the risk if pressed because they are owned by the super rich (RBNY, KSE, TFCE). It's a huge risk though, because it could either elevate MLS into a real force, or trigger a huge financial contraction and the "fizzle" you note. Most of the I/Os won't financially take the chance, I suspect, but I bet it is an issue MLS is struggling with right now -- how fast can they push.

    Still, it will be enormously difficult to pull up a 24+ team league to a one of the major sports league in this country if parity (and a tight cap) are the goals IMO. Really only the NFL has done it, and even they imported the concept later from the AFL (at Hunt's suggestion). If MLS grows into a major US league with revenue sharing (essentially achieved through the single entity paying the players) and a salary cap, it will be the first league in this country to do so.

    For now, MLS walks the tightrope, one DP at a time, with some I/Os trying to hit the accelerator, the others insisting on a speed governor. When MLS' history is written, it will probably be regarded as the critical period in the development of the league, and whatever view finally prevails among the I/Os will dictate what kind of league you see in 20 or 30 years.
     
  22. Wangy

    Wangy New Member

    Feb 3, 2007
    Toronto
    I think when the team's net value is calculated, the values of all its assets are taken into consideration rather than the net profit/loss that it might be experiencing. In that case, the salary cap example is irrelevant.
     
  23. Hansadyret

    Hansadyret Member

    Feb 20, 2007
    Bergen, Norway
    Club:
    SK Brann Bergen
    So you dont think wether a club looses or makes money has anything to do with the value? The reason Man utd are worth $1.5 billion is because they have been turning a big profit for many years. Chelsea has a huge salarybudget and looses tons of money i dont think buying Chelsea would be an interesting buy for an investor. The salary cap example is relevant.
     
  24. triplet1

    triplet1 BigSoccer Supporter

    Jul 25, 2006
    The Forbes article noted in the first post explains how a cap can impact the value:

     
  25. BobyOne

    BobyOne Member

    Apr 22, 2004
    Houston, TX
    Club:
    Houston Dynamo
    Nat'l Team:
    United States
    Honestly, we should be looking at revenues instead of team valuation. In a salary cap league, payrolls are usually tied to revenues, not worth. Even in a non-salary cap league, revenues tend to determine how much teams can spend on players (obvious examples with a rich backer like Chelsea excluded).

    We can argue all day long about details and semantics here, but it is fairly obvious that there is a large amount of money available for MLS if it ever breaks into a big time US sport. Large revenues may not guarantee a status as one of top 3 or 4 leagues in the world, but it sure as hell helps.
     

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