I don't know about all that. It sounds like there are many investors looking to get into MLS. Roth just said at the press conference yesterday that 12 other ownership groups/cities are looking to get in. It doesnt seem all that unrealistic to me that an MLS franchise could go for 75-80 million or more 10 years down the road. Aren't they already talking the next round expansion fee will be 50 million? Also, most businesses lose money operationally in the beginning. Venture capitalists invest in start ups/young companies if they think the future prospects will return their investment and make a profit on top down the line. A 30 million franchise fee could be viewed as a small risk/bargain at this point in MLS as the trajectory seems to point upwards by all accounts.
On one level, you are correct. No doubt the surge in new investors for MLS is being fueled in part by the prospect of getting in on the ground floor for a team that may one day be worth much, much more. But unless owners are willing to dig into their pockets to buy and pay players, balance sheets are important. At some point the prospect of future riches appears illusory if you are constantly funding a losing enterprise -- even for the super rich.
True. The point I was trying to make was if the end game for the league is keep salaries low and increase the cap by 5% forever and control revenues in SSS that you own in front of modest crowds at modest prices then it seems the results of that model are already known. Owners can make a small profit in that scenario but have a safe,smaller future upside. If the goal is to eventually have large crowds at premium prices the only way it seems to accomplish that would be to invest more heavily in the on field product unless you believe in the future that people who currently ignore the league because of its level of play are going to suddenly start filling MLS stadiums with the same low salary product. I'd be willing to bet this is THE philosophical issue the owners are probably debating right now. Invest more money now for more potential gain or curb costs and have a nice slow,safe investment.
Ok computers right, but i feel they already amde up their mind. They arent going to adjust the salary cap much until every team is settled with their own stadium and has a good amount of revenue. They learned already from the NASL and will take it slow and build up little by little from the fans we have now.
Garber is a lawyer, not an economist. And he does speaketh with a forked tongue. PS. As a side note, the uS is already in a recession and it's likely to get worse and not better. Euros are also losing some money on the whole Ponzi debt scheme but they're not exposed to the same extent and the Euro economies aren't likely to take as big a hit from all the debt write-downs. (According to IMF, it may be as much as $1 trillion and that's before one gets to the car loans, credit cards, student loans and the derivatives/insurers). In a recession, the discretionary income dries up very fast. MLS should watch its expenses carefully.
I think what he meant was that what a player is worth in MLS is gonna be different from what the exact same player is worth in even Norway. I mean, a baseball player who makes $10M a year now isn't 10 times better than some guy who made $1M 20 years ago. There's alot more money in the game now, so a given talent level is worth more money. There's more money in Norway, or the BL.2, than in MLS, so a given talent level is worth more there than here. I see what you're saying, on its face the statement seems absurd, but I'm pretty sure this is what he was driving at.
I'd be willing to bet this discussion is still going on. You can be sure certain groups(LA,Red Bull, sounds like Seattle) are pushing for a more aggressive approach while you still have the slow,steady side represented by the Hunts and Krafts.
I understand your point about how to spur future growth and it is going to require spending much more on talent, but the other side of the coin could be the reason there is so much investor interest is because the model they have in place now has low fixed costs which makes for a safe investment with low risk. Its sort of a double edged sword.
I see what your saying, and I agree, but Garber's comments have a grumpy old owner sound to them, IMO. After the courts knocked out baseball's reserve clause, old time owners like Calvin Griffith used to say stuff like this all the time -- that players weren't "worth" the money they now commanded -- because they were looking through the prism of a time when they couldn't make anything more. The world is changing. Even average MLS players are now coveted abroad. If mid-level Euro leagues are willing to pay a player more, MLS either has to match that wage, or replace that player with another who will accept a lower wage -- whatever the player's relative "worth."
Based on the figures provided by Steve, when you remove Beckham, Blanco and Donovan from the equation, the average pay of starting players in MLS is $110,865.
But you can't remove players and still have an average. Steve needs to learn what the term "median" means.
Actually, you can. You're just removing an outlier which is a statistical aberration. If there's 333 people in the league and 5 make 10-15 times more than everyone else, it's actually more of an apples to apples comparison to back out the designated players. What you can't do is average averages, which is what I think Pablo did.
If you're only removing the 'aberrations' on one side, you can be accused of cherry picking. And in addition you can debate what exactly counts as an aberration--I would say Beckham does, but Blanco, Angel, Lopez, Donovan, Reyna, Gallardo? That case is tougher. One last note, given the way the cap is structured, not having those players would at least mean spending most of the 400k of their cap value elsewhere, which would tend to raise the average. What you'll probably find is that the difference between those players' salaries and 400k doesn't distort the mean much, or the median at all. Given a large enough sample size, the median is a fairer way to do this.
If you want the average salary in a league i think every salary has to be included even if Beckhams is very high comperd to the rest of the players. But i also agree that a median could be a more useful tool. hmm maybe i can convince the university to give me a median grade and not an average one...
Robert Wagman's take on Garber, MLS salaries, etc. ... http://www.soccertimes.com/wagman/2008/apr10 .... If Garber were at all serious about making MLS clubs more competitive in the international arena, there are a few things he could in fact do. But alas, at least some of those things would cost money, probably a sizeable investment, though well within the reach of the league's owners. .... So, some suggestions if MLS teams are to be competitive with the best in the hemisphere: Increase the salary cap about $1 million per team. ... .... Playing this many games requires depth -- and not illusory depth. In MLS competition, players making $33,000 or $17,000 players can hold their own because they are playing against other MLS team with players of similar experience and compensation. But the stark fact is professional teams usually get what they pay for (in relation to the pay scale of a particular league). So if MLS clubs aspire to compete on a regional level, they need a payroll where they can afford to pay reserves with skill sets good enough to at least compete for starting jobs. ... Furthermore, to make MLS teams more competitive internationally, the senior roster size should be increased from the current 18 to at least 21 players, if not 23 or 24. With an increased salary cap, teams could add depth on the bench and maybe even gamble with some players who might need time to develop. .... ********** One of life's great pleasures is telling others how they should spend their money, so I agree with Wagman that (on balance) you get what you pay for and that a salary cap (and roster size) increase would greatly benefit MLS. I don't see that happening for a while, however.
MLSR has listed the two more salaries that I had not seen before: Claudio Lopez (Kansas City Wizards) $820,000 Laurent Robert (Toronto FC) $337,000 Paul.
As much as I would like to see raises in the salary cap, everyone has to remember that the owners are the ones who will ultimately make those decisions, and at the moment their seems to be a standoff between the cheapo's (Hunt, and what's his name from NE) and the big spenders (AEG and Red Bull) with the rest of the owners somewhere in the middle. Player salaries are the largest expense of the league, and you have to be able to justify raising that cost by 33% (if the cap were raised to 3 mil) with a proportional rise in income. I'd personally like to see a soft cap implemented which lets the big spenders spend but forces them to pay a 30% premium on all the money they spend over the cap.
Here are the other salaries that were not in the original group: Andre Rocha, Dallas: 135,000/135,000 Gino Padula, Columbus: 120,000/145,000 Alvaro Pires, L.A.: 100,000/110,775 Jamison Olave, RSL: 80,000/80,000 Oscar Echeverry, N.Y.: 80,000/80,000 Ivan Trujillo, K.C.: 70,000/70,000 Marco Velez, Toronto: 60,000/60,500 Guilherme So, Columbus: 59,000/73,250 Chase Hilgenbrinck, N.E.: 36,000/36,000 http://blog.washingtonpost.com/soccerinsider/2008/04/fire_search_and_more_salaries.html Paul.