With all these expansion fees being dispersed to the league during the expansion era that we're currently in, it has occurred to me that when billionaires are giving you hundreds of millions of dollars with some regularity over a period of time, there are all sorts of things you could do with that money. And one of those things could involve using a pile of money, in one way or another, to generate even more money over the long term. Something along the lines of an endowment, or a living trust, that sort of thing. I don't know many of the details about what is happening, or of what could potentially happen, so I am curious to see what I can find out about this. There are of course a great many expenses for each MLS club that go beyond paying the salaries of players and coaches, there are development academies reserve sides and all that sort of thing. Are there already such things in place? Is some of that cost borne by interest that's accrued from a very large pile of money, and if so does the pile of money belong to a given team or would it belong to the single-entity league as a whole? Now as this relates to the expansion fees, here's the sort of possibility that I'm imagining....although I'm not sure if it's being done already or if it's even possible. Suppose MLS looks at all these candidates that are eager to join the league, and MLS says Glad you're interested, the fee for expansion just increased by 100 million dollars (or some other large number). Here's the deal though, a certain portion of the increase will simply go toward various teams as normal, but most of it will be earmarked for a specific type of endowment. It won't be spent, the whole thing won't ever be spent, but these piles of money (or single central extra-large pile of money?) will be used to generate more money and pay for certain things. Like the costs of academies, for example, and player development in general. It starts small and doesn't pay for much right away, but then the rest of the expansion teams also pay into it and you stay open to donations from very wealthy people and supporter's groups, and in the end you've really built a self-sustaining long-term means of financing the peripheral costs of making MLS work very well. That way, when the expansion era is over, you've planned ahead for a time when you're no longer getting enormous cash injections. Set aside some money now- and quite probably increase the expansion fee in order to make it work- and that way you've got a long-term situation where extra money is still coming in and everything's getting paid for. Is there any such plan in place that's remotely similar to this, if so what are the details? And if it's not really happening, to what extent would this sort of thing be possible, and have any important people talked about this?
There are not stock piles of cash. Owners are selling stock in a company. You and 4 friends find some land in the wilderness, decide to create a city block. You pay to have utilities put, build roads and 4 houses. You own 1/4 of this city block. Someone sees the work you did and wants in .The 4 friends decide to sell off a little bit of each of your land to the new guy. Some of that cash goes into new roads & utlities, but most of it goes into the pockets of the people who built that plot. And the same thing keeps happening. More people show up, they ask for a little more of your land and you keep selling it off. That is expansion. Its not just random piles of cash, owners are taking less shares and demanding the value of each share goes up (thus the increasing buy in prices). And further more, you wouldn't want to take a billion dollars worth of expansion fees and put it into some fund to get a slow return on your investment. These are franchise owners that may not own the team in a few years. If there is a windfall of cash, you want it NOW since it was your money that helped build the league. You don't want it in some fund that is going to pay off in 20 years when you probably won't own the club anymore.