MLS needs to start caring about the USMNT again

Discussion in 'USA Men' started by adam tash, Jun 9, 2019.

  1. gogorath

    gogorath Member+

    None
    United States
    May 12, 2019
    Yep -- I'm glad it worked out for Alex. I would still question why he didn't get paid for the first six months at Freiburg given his performances in international play, but overall, it has worked out.
     
  2. DHC1

    DHC1 Member+

    Jun 3, 2002
    NYC
    Of course, bsky22's question was whether posters would comment on whether it was "irresponsible" for Mendez to go overseas for a small monthly stipend.

    Is there any information that can say whether he is worse or better off than taking the alleged $80k/year for 3 years (usually plus two years of club options) that MLS was offering?
     
  3. 007Spartan

    007Spartan Member+

    Mar 1, 2006
    Scottsdale, AZ
    Club:
    Sporting Kansas City
    Nat'l Team:
    United States
    Again, you don't know what you are talking about. First of all, Bernie Madoff was flat out faking trades and producing completely falsified information, not just skimming off the top.

    Second, the MLS is not a Ponzi scheme. What likely happened early on was something akin to this:

    To simplify, lets go back to the early days of MLS when there were just 10 teams, 3 owners (Hunt, Kraft and Anschutz) and the league was losing money.

    Say in a particular year early on, MLS produced overall revenue of $55 mln, but incurred expenses of $100 mln (these numbers are for discussion purposes only). Thus, there is an operating shortfall of $45 mln that needs to be covered.

    To cover this shortfall, the three owners each inject $15 mln into the league. In return they receive a receivable that the league carries as a liability on its balance sheet going forward. That liability is to be repaid under certain terms as outlined in the league's operating agreement or under a separate agreement or some combination thereof.

    Over the years as the league expands and the ownership group changes the figures and terms for each owner would change. However, the terms for repaying these owners back for the investment they made would be understood by the entire ownership group and clearly outlined in the documents governing the league. Each new owner would certainly clearly understand the league's balance sheet.

    (Note: a note receivable isn't the only method for the owners injecting funds into the league to cover operating losses, but we're just having a discussion.)

    The league might, for example, dictate that loans from owners to cover losses are to be repaid in the order they are received once the league achieves certain performance benchmarks. So, it is highly likely that money that owners like Anshutz, Hunt and Kraft injected into the league to cover losses early on would be returned to them before subsequent owners' injections.

    It also wouldn't be uncommon for early owners to be repaid for these early capital injections from subsequent capital injections.

    Once all of those liabilities are cleared, the owners would move on as equals. Unless of course a particular owner has negotiated add'l equity in exchange for a previous working capital injection.

    That type of structure happens ALL the time with startup companies. Early investors in Facebook, for example, likely turned an early investment (either in the form of work or capital) into an equity stake that is worth thousands of times its original value. That doesn't make it a Ponzi scheme.
     
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  4. bsky22

    bsky22 Member+

    Dec 8, 2003
    He didnt have significant International or USL playing time when he announced he had signed with Freiburg in October of last year.

    I dont know what he got paid at Freiburg, but would guess it was similar to other 18 yos with limited experience. What is critical is that he got into a good training environment that was heavily scouted in Europe.

    They took a very small risk that has already put him ahead of where he would have been if he signed with the LAG. My math puts his 2019 comp at over $100k [€218k minimum * 1.11 usd/eur * 5/12 plus whatever he got from Freuburg], 2020 at approx $240k, and approx double that in 2021 after he turns 20 yo. Of course that could increase if his play warrants it. Not bad for a kid who has supposedly "stagnated" since signing with Freiburg.
     
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  5. a_new_fan

    a_new_fan Member+

    Jul 6, 2006
    interesting point about bernie fake transactions...that is a good take....oh wait thats how you take money off the top you use fake transactions to cover ur tracks lol. So basically thats a strange way for you to say you agree with me. He was running a ponzi scheme to take money off the top he was showing people things that weren't really happening and paying out clients with other peoples money not actual results because he was taking a chunk of the real money.

    as for the rest...ok...do you know how much they still have to pay the original owners? 5? 6? 7 hundred million? or more? or less? Any chance one of them files and just shuts the league down until they get paid? Could be really a bad situation lock the league down until they can get enough new owners to pool money together to pay off the huge debt they have. Really tough to hear the league is in such a hole 20 years in.
     
  6. 007Spartan

    007Spartan Member+

    Mar 1, 2006
    Scottsdale, AZ
    Club:
    Sporting Kansas City
    Nat'l Team:
    United States
    Two questions:

    1. Which pro/rel twitter account do you run?

    2. Who ties your shoes in the morning?
     
  7. Suyuntuy

    Suyuntuy Member+

    Jul 16, 2007
    Vancouver, Canada
    The whole "MLS is a Ponzi scheme" is a canard from the Mexican fans who hate the league. I'm surprised to find it here on our side of the boards.
     
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  8. Potowmack

    Potowmack Member+

    Apr 2, 2010
    Washington, DC
    Club:
    DC United
    Nat'l Team:
    United States
    Who cares? The old owners are mostly transitioning out of the league. If they’re getting paid back for their early support of the league, good for them. American soccer owes a debt to these guys who floated the league when it was on life support. The internal cash waterfall contained in the MLS operating agreement is of no relevance to any of us.
     
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  9. Sufjan Guzan

    Sufjan Guzan Member+

    Feb 13, 2016
    I find it very interesting that people don't understand how losing money in the short term was a big part of the upfront proposition for early investors.

    When and if early ownership groups sell, I would make a bet that all of them make a pretty nice profit over the whole deal. MLS was a high risk/reward investment. The league hasn't folded, expansion fees have smoothed the upfront losses that early owners had to take before they reached a mature place to sell, and ultimately it's going to be a very profitable investment for all of them.

    Ever wonder why New England hasn't ever gotten a new stadium? It's because Kraft isn't going to build them one before selling, or he builds them one and then sells.

    Don't worry about the early owners. They are going to do just fine. It's not a ponzi scheme. If it was a ponzi scheme, they would ONLY make money from new investors.

    MLS is rapidly increasing existing revenue streams (jersey sponsors, tv deals) while largely creating new ones (transfer deals, youth compensation).

    It's gonna be fine.
     
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  10. a_new_fan

    a_new_fan Member+

    Jul 6, 2006

    so how much is owed and since the last round of over 100 million wasn't enough how long will it take?
     
  11. a_new_fan

    a_new_fan Member+

    Jul 6, 2006
    its not I am just using it as an example to show how people don't have a clue how the league is being operated.
     
  12. 007Spartan

    007Spartan Member+

    Mar 1, 2006
    Scottsdale, AZ
    Club:
    Sporting Kansas City
    Nat'l Team:
    United States
    FIFY
     
  13. a_new_fan

    a_new_fan Member+

    Jul 6, 2006
    so this is you saying you didn't know about the skimming from the top? You thought bernie just woke up and said hey I'll do a bunch of fake transactions because it will be fun? he did so to cover up the fact he was taking money. For the record I've always been against pro-rel in us soccer and the mls expansion plan/single entity structure has eliminated it ever being a viable possibility. Its ok the whole change the subject and personal attack thing is a normal reaction to not being right and not being able to handle it.

    let me know when you come across those numbers though about how much they still have left to pay the original owners thats kind of important if you are telling the truth and for that to be true(which it isn't) there has to be a number.
     
  14. Potowmack

    Potowmack Member+

    Apr 2, 2010
    Washington, DC
    Club:
    DC United
    Nat'l Team:
    United States
    Again, who cares? Whatever the internal workings of MLS the limited liability company, has nothing to do with the operations of the individual MLS teams.

    I'm guessing that when the original 3 owners bailed out MLS, they re-wrote the MLS operating agreement so that they get a higher percentage of net cash flow until their contributions are repaid. With the expansion fees that have flowed into MLS over the last decade or so, a big part of their contributions were mostly paid back. And when the new owners came into the league, I'm sure they had the operating agreements ready by lawyers with a $1,000 per hour billable rate. Nobody pulled a fast one on them.

    So, don't worry your pretty little head about it. Everyone who has an ownership interest in MLS knows exactly how the net income waterfall works, and they're cool with it. Whatever net income MLS distributes every year is a totally separate income stream from what DC United or LAFC make from game day income, sponsorship deals, local TV deals, etc.

    Look, there's a lot of information out there on how the single entity system works. If you're going to discuss it on here, you'd be well served to do a little research.
     
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  15. a_new_fan

    a_new_fan Member+

    Jul 6, 2006
    its simple...if the league has a credit due of say a billion dollar they can talk all they want about making money...they aren't...if they are using expansion fees to pay it off(like you have said) then this is a problem. I realize you just made it up and thats why you are bouncing around on the topic now. If you did a little research you'd understand that teams local tv deals are a disaster dc united doesn't even have one they have a streaming deal haha. If mls is losing money every year or is making money because of expansion fees its a problem. We do know the league has added teams beyond what they wanted to for really no reason. They've also used their single entity status to crush competition which is strange you'd think that they wouldn't have anything to worry about.
     
  16. 007Spartan

    007Spartan Member+

    Mar 1, 2006
    Scottsdale, AZ
    Club:
    Sporting Kansas City
    Nat'l Team:
    United States
    Unless you think Don Garber has a cadre of shady accountants on the 6th floor of 420 5th Ave cooking the books, I'm not sure why you keep bringing up Bernie Madoff.
     
  17. 007Spartan

    007Spartan Member+

    Mar 1, 2006
    Scottsdale, AZ
    Club:
    Sporting Kansas City
    Nat'l Team:
    United States
    As Potowmack said, don't worry your pretty little head. Considering that, after supporting the league through the early lean years, Anshutz, Hunt and Kraft were subsequently able to attract investors to purchase 7 of the 10 teams they owned back in 2002, the league has been able to attract 14 new ownership groups on top of that to form new teams (soon to be 20), and the league central office and the league as a whole is now cash flow positive, I think those guys are doing just fine.

    I know you'd love it if the league were sitting on a billion dollar liability, if it were losing money every year hand over fist, and if it were reliant on expansion fees to survive. Unfortunately that isn't the case. I've posted plenty of information to refute this, including an independent study from a reputable industry source that directly refutes you. I'd also note that, unless you believe that the league is engaged a massive conspiracy to engage in accounting fraud, they'd never be able to attract new owners willing to spend $200 mln on expansion fees and a couple hundred million more on stadiums and infrastructure to join the league if that were true.

    Finally, I'm not sure where you are getting that the league is expanding beyond where they wanted to. I'm also not sure why you can't understand the benefit of expanding into markets where there is demand for MLS and where you have owners willing to invest in the league. I could point to LAFC and Atlanta United and the tremendous value they have added to the league or run down some common sense business reasons why you'd want to have teams in markets like Miami and Nashville, but I'm 100% certain that would be lost on you.
     
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  18. Potowmack

    Potowmack Member+

    Apr 2, 2010
    Washington, DC
    Club:
    DC United
    Nat'l Team:
    United States
    I'm not sure if you're being deliberately obtuse or what.

    Any amounts "owed" to the three original owners who kept the league afloat is not like a debt owed to a third party. It is an internal bookkeeping mechanism that says if (and only if) the entity known as MLS (and not the individual teams) is profitable in a given year, those original owners get a bigger cut of those profits.

    You seem completely confused how MLS works. There is the LLC that is the league itself. In the past, that LLC has had to make capital calls to its members (i.e., the owners of the individual teams) to make up for LLC shortfalls. That's apparently not the case anymore, and the LLC is currently distributing net income to those owners.

    There are also individual companies that own and run the various MLS franchises around the country. Some of those are profitable, some aren't. DC United's bad local television deal makes no difference to anyone other than DC United. The owner of Atlanta United doesn't owe any money to Robert Kraft for the money Kraft sank into the league early on.

    Neither of these statements are true.
     
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  19. bsky22

    bsky22 Member+

    Dec 8, 2003
    Gullible kid is still being fooled by these people that are trying to exploit him.

     
  20. adam tash

    adam tash Member+

    Jul 12, 2013
    Barcelona, Spain
    Nat'l Team:
    United States
    https://www.espn.com/nba/story/_/id/27251903/warriors-strength-numbers-gives-way-faith-youngsters

    I realize this article is about the NBA...but I couldn't help draw parallels to MLS and the development of MLS players while reading.

    Warriors GM Lacob:

    "The draft is tricky because it's not just about how talented the player is -- it's about where are they going, what life cycle is that team on," Lacob said.

    RE MLS: ....if teams are just "plugging roster holes" when they look at the domestic market - as I beleive they are - NO WONDER MLS teams are not developing any domestic "stars"!

    Blaming the domestic talent pool for not becoming stars in MLS would be like blaming the kid working in the mail room for not winning any cases at a law firm.....doesn't matter how smart anyone is if they arent given an OPPORTUNITY.

    Lacob cited Bell and McCaw in particular as players who excelled in limited roles as rookies but struggled in their second seasons when they failed to receive an expanded role. When a team's goal is winning titles, there's little margin for the kinds of errors that young players make.

    the salary structure in the NBA...and MLS...basically pre-determines the roles unproven players have AND the roles that they can have in the future.

    "I had a conversation with Draymond about this right after our season. He said, 'I would not be the player I was today if I had come onto this Warriors team three years ago,'" Lacob said. "He's like 'When I got here, we were a completely different team. I was given a chance, and I failed a lot.' And he's like, 'I sucked my first year. My second year I was OK. My third year I got an opportunity. That's hard for young guys who aren't being given that opportunity because we got guys who have been here a long time and have established roles. There's just no opportunity for growth.'"

    He could be talking about 99% of all domestic MLS players, IMO.

    "Before, we wouldn't put a player into a new role, like a Jacob Evans," Lacob said. "Maybe he becomes a point guard, maybe he doesn't, but the ability to go every single day and work on that and then [have] the freedom to try that in a game gives you a chance to grow."

    "There just wasn't time, and for a lot of those players it didn't make sense," Lacob added. "Now we have an opportunity. ... It's really about spreading these guys' wings and letting them fly a little bit and not being as worried about the day-to-day results. You kind of got to fail to succeed in the NBA. Trial by fire. And we finally have a chance to do that."

    thing is the stakes in MLS are much lower than the NBA!

    MLS should be giving way more chances to younger players than the NBA does....PLUS MLS can sell the ones that do succeed for profits...and the NBA can't.....

    MLS is still not giving enough of an opportunity to younger players (despite a very recent shift in their favor)......
     
  21. jaykoz3

    jaykoz3 Member+

    Dec 25, 2010
    Conshohocken, PA
    Club:
    Philadelphia Union
    Nat'l Team:
    United States
    [​IMG]

    .....always ignoring the present and future trajectory, and facts the OP is.....
    [​IMG]
     
  22. a_new_fan

    a_new_fan Member+

    Jul 6, 2006
    good call on aaron long....west ham has paid the buyout and are desperately trying to get him a work visa
     
  23. bsky22

    bsky22 Member+

    Dec 8, 2003
    Oh my! MLS at its best. Underpay and overvalue! It isnt just about the USMNT. It is just bad business.

    https://www.espn.com/soccer/soccer-.../agent-frustrated-by-red-bulls-long-valuation

    "They told Aaron yesterday that he was worth $15m, which is ridiculous," Higgins told ESPN via telephone. "[The Red Bulls] say they're not going to sell Aaron unless they get $15m. They don't think Aaron is good enough for Red Bull Leipzig or Red Bull Salzburg. But the Red Bulls are saying even though he'll be 27 years old [in October], if a team really wants Aaron, they'll come in for him and that his value is similar to defenders in the Premier League."

    Long was making just $73,125 in 2018, a season in which he was named MLS Defender of the Year. Long signed a new deal in February that now pays him $800,000, and Higgins said that during negotiations MLS held a tight line and compared Long to defenders already in the league. Now the comparisons are being made to Premier League prices.
     
  24. a_new_fan

    a_new_fan Member+

    Jul 6, 2006
    if people think this won't scare players/agents away from the red bulls they are crazy.
     
  25. gogorath

    gogorath Member+

    None
    United States
    May 12, 2019
    People need to stop taking comments from agents and teams at face value.
     
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