promotion and relegation*

The ONLY way PRO/REG would work is if a D2 team could still "win the championship". I wrote up a big scerario in one of these forums a while back with the story being the NYRB's being relegated.

The way it would work is that say there were 8 playoff teams for the MLS Cup. 6 would come from D1 and 2 would come from D2 (as the 7 and 8 seed). So a team that is relegated can "win it all" and their fans can still support them.

 

1 team from D2. It gets promoted and advances to the 8th spot for MLS Cup.

Sort of like USOC, D2 teams can win USOC, advance to CCL, win it advance to CWC, can become the Champion of the World.

 

No it wouldn't. Overseas soccer fans with no interest in MLS wouldn't care in the slightest if it introduced pro/rel or went single table.

I don't think you quite grasp how unimportant the overwhelming majority of leagues are outside their own country. Yes you can watch the French league in england for example, but hardly anybody does. The crowd in the stadiums probably outnumbers overseas tv viewers in most cases.

 

What I meant by nations = USA + Canada.

Right now why would a soccer fan in St. Louis or Florida have any interest in MLS??

They would turn to Europe for high level of soocer or turn to their local team and league, USL/NASL.

 

I'm reticent to get involved in this slugfest particularly this late in the game, you end up making the same points someone else did 20 pages ago, but what the hell, I'm sick and have some time to burn.

No expert on the worldwide history of soccer but my basic understanding is that pro/reg began as an organic reaction to the fact the many countries had soccer as their national pastime and therefore had professional, semi professional, or at least organized and popular teams in every town and city. How do all these teams compete, do you have a league with 100 or more teams? No, you group them in divisions according to their level of competence and allow for the fact that these independent teams generations ago can change their competence level and become deserving of competing at a higher level.

Soccer's development in America and Canada was radically different therefore the organic structures we've developed, like pro/reg for much of the world, are the ones that suit our particular needs.

Soccer is not the national pastime here we don't have teams in every town and city in existence for a century and a significant part of the fabric of their communities. Soccer until the recreational boom in the 70's has been (with some exceptions) a marginal sport (still is). There was no need to group generations old teams into divisions with pro/reg because the teams didn't exist.

Soccer leagues here have been startups and as Don Garber likes to say these CBA days mostly unsuccessful. With all of the relative success of MLS it's important to remember that soccer is still a niche sport here, still developing with its final status in the American/Canadian sports pantheon still very much up in the air.

Our organic needs right now are for stability and predictability. The chagrin with David Beckham resolves around so many dates missed when teams would have garnered their biggest crowds of the season and most media exposure in their markets. Imagine LA/NY/Chi/HOU/Philly/actually virtually every team since virtually all play in significant markets, leaving the league some maybe for multiple seasons. The very survival of the league could be in jeopardy for all the financial reasons folks have spoken about.

Finally, you support a team not in MLS and want to get in? The way is clear, show you have the financial where-with-all and a fanbase that can put 15,000 fans a night on average into a stadium that holds at least that much and you're in. Multiple non-MLS teams have been "promoted", even small market Rochester was seen as a viable candidate a few years ago. So we've developed our own "promotion" system suitable for our own organic needs, as it should and must be.

 

they won't.

It is a dream in your mind backed by nothing but your dream.

Don't just quote mine about another country, a vague sentence about another league maybe being helped if they did something someday...banning the US/MLS from FIFA would be nearly impossible.

 

So as a resident of Wisconsin, I should stop paying attention to MLS and become a eurosnob? Good to know... I guess I'll stop paying attention and close up my blog and such. *shrug*

 

no, but the value of MLS clubs is about $40M the value of 2nd division clubs is valued at $500,000.

You bought a house and someone asks you to either play a game where you can loose all but 1% of the value of the house your bought...or simply not play and guarantee all the value. In your world the guy would do it because...heck there is risk in everything who cares how much I worked and spent or that playing this game add no more value...LETS PLAY!

You just don't get that this is a different legal/business structure than other leagues you are comparing it to. People bought in, leaving will lose them money.

 

YOU don't know. But your guess is that they will do something they have never done ever, to the biggest financial market in the world, because they said something about another country. You don't know, so why are you claiming that they are going to do something like that?

There will always be people in America who do not like soccer, and always be people who view international leagues as better because they simply have much more money to spend. But the handful of fans who are screaming loudest for pro/rel are already fans of the league. Casual fans don't care and eurosnobs are talking about the quality on the pitch not the fact that Charleston Battery can't make it up. It would loose the league incredible amounts of money and give almost no value. The 2nd division has no national footprint, they pay for media contracts, loose lots of money, and go bankrupt within a few years. And they are worth about 1% of what an MLS club is worth.

The fact that you said MLS would 'buy out' MLS 2 shows how far from reality you are. You don't understand even the very basic concepts of business and yet you want to make demands over a billion dollar professional sports market.

MLS is a CORPORATE FRANCHISE....mls doesnt buy it the 2nd Division needs to buy IN to MLS. All the owners have a slice of the pie, why would they take smaller slices to let in clubs that are at best 1/100th of their value? They bring almost nothing! Expansion is making them so much money absorbing a 2nd division would loose money, I can't explain it more clearly.

 

I don't think that's quite fair. It's not that anyone 'ought to' give up on the league because there's no team in their area, it's that in practice, they often will. The claim being made is that with lower-division teams that actually have a shot to play in the top flight, there's a chance to capture some of the people who barely even know that there is an MLS, let alone what's going on in the league.

 

I just don't understand how not having pro/rel is a stumbling block to people being interested in soccer. There's four huge examples that show pro/rel isn't needed to generate nationwide interest in a sport/league: the NFL, NBA, NHL and Major League Baseball. If this was a necessity then there would be no NFL fans in Iowa, or NBA fans between Minnesota and the West coast.

 

Look at it a different way: on the one hand, you've got a team in the minors, that will always be in the minors. On the other, you've got one that, if it wins the championship of the minors, goes up to the Majors. Is the latter a better product? I suggest that it is.

Now multiply that by a few dozen. Now you've got a bunch of midsized markets where the second division is more viable, and more people pay attention. This means soccer is getting just that much more press across the country than before.

I'm not going to try to argue that pro/rel is 'needed' (I don't even know what that term means in a debate like this), I would just say it has some practical advantages that are worth discussing in a debate like this one.

 

There is certainly a need to address the fact that MLS is not reaching all potential markets and are loosing fans to international leagues. I will agree 100% that it is an issue. It doesn't change the fact that people make claims and then come out and flat out admit that they dont' understand how the league ownerships works and how to adapt it. They only compare it to leagues that are structured completely different than us, and thus show their ignorance about the topic. But it doesn't change the fact that there is an issue and it needs addressing. But there will never be a moment in the life of this league in 1 year or 50 years where ownerships groups would EVER sign onto a complete rule change where in the next year they could be playing in a different league with less fan appeal and less sponsorship appeal. IT WOULD LOOSE THEM MONEY, someone every year would loose money, they would never vote for it, these are the same owners willing to lock players out over free agency. But this legal/financial reality doesn't change the fact that the US/Canada has about 350M people and it will take a long time to reach all the cities via traditional expansion.

that is why I had proposed this
https://www.bigsoccer.com/forum/showthread.php?t=1255436

leaves all MLS franchises exempt from relegation and thus protects them indefinitely, but it allows the league to start to market around the country to untapped markets. The idea is this, instead of selling the #20 slot to another billionare and get 1 more SSS for a franchise fee of 40M, what if MLS instead found 10 owners willing to pay 4M (or 20 owners willing to pay 2M) and they all get 1 combined slice of the SUM pie. They play in their own MLS2 league, SUM helps them get sponsorships and media contracts and that league plays and the winner gets to move up to MLS as the #20 team for a year. At the end of the year they play the winner of MLS2 again and see who gets to stay up. The 1-19 teams never drop, but the league can get some fan interest in new markets. Eventually if you see a club get really popular a big money investor comes in and can simply buy a full MLS franchise slot and they stay up permantly, MLS can then sell another 2M MLS2 slot to a new city and keep going.

This breaks adds ZERO risk to our current clubs, it adds ZERO risk to our sponsorships, and it actually increases the footprint while not dropping the value of MLS franchises. This could in theory work. Don't think it will happen, but it at least acknowledges the business structure that MLS operates with and tries to make the system work with pro/rel instead of these fantasy scenarios where owners would ever sign up to loose money.

 

It's very easy to draw parrallels with the early baseball leagues, set up at around roughly the same time that England was setting up pro leagues. England had a large number of existing, established clubs to draw from, where clubs had built up a following over a number of years before turning pro.

Baseball clubs had to start as pro clubs from day one, with no chance to build up, or even estimate, support. It made for very volatile leagues, with a turnover rate of clubs that would embarrass the USL.

Eventually the decision was made to have a league of just the strongest clubs, not out of greed from owners with $$$$ in their eyes, but just to keep the league as a viable product.

 

4door,

Or what you could do is have every team pay both the entry fee to get into MLS2 (which would be lower than MLS charges today, but charged to more teams), and then pay a fee to play in MLS1 if they are eligible for promotion, and you keep collecting that latter fee until the established owners are adequately compensated for their franchise values, at which point you open promotion and relegation to everyone in the two divisions.

On the 'franchise value' point in general, one thing I would want to point out is that if the franchises in both tiers are making money, it probably isn't valid anymore, because second division teams still become worth pretty decent coin if they're profitable, and first division teams don't lose much value if their punishment for sucking is the still-profitable second division.

--

But MLS is not 'ready' for pro/rel in a lot of ways:

First, a strict cap with pro/rel would be 'unfair' in a lot of ways. If you can't spend to fight it off, then you're the victim of something basically beyond your control. Contrast to Major League Baseball--if there was a vote on promotion and relegation in MLB, Steinbrenner's interests would suggest he favor it. Why? Because he currently cuts a big fat revenue sharing check to the league's smallest markets, and he would know that if pro/rel was instituted, it wouldn't be his Yankees spending most of their time in the second division, but rather those small market teams. It would save him money.

In MLS, the truth is similar, it's just that Single-Entity kind of hides it. If you dropped the lower-earning teams, then the amount of money the league would have available to spend for the bigger ones would be higher--except that, if the cap is 100% strict, there's no reason to believe that it would be the lower-earning teams going down. If they had a baseball/basketball-type luxury tax instead, the calculations would be more obvious: the Lakers love the Clippers going down, because they don't have to share as much revenue with them, and it won't be the Lakers spending time in the second tier, as long as they're allowed to spend to avoid it.

Second reason MLS 'isn't ready' is sheer number of stable teams in either MLS or the second-division. Jimmy Conrad's humor column on the subject suggested MLS split into two divisions. . . of 10 teams each, which shows you the problem right there. MLS isn't going to make much nationwide impression when the top flight only has 10 teams in it. Call me back when we can swing two divisions of 16 teams each.

Third reason is that pro/rel's main beneficial function other than raising the profile of minor league soccer is to save teams money on salaries. But right now, salaries are not a high enough proportion of overall expenses to be worth it.

Say, for instance, that you had a first division where the cap was 2.5 million, and the second division's was 1 million. Going down to the second division saves you $1.5 million in player expenses. . . but ~1.5 million isn't that much. If you play 15 games, it's only 100,000 in revenue per game, or at a ticket price of $20, it's 5,000 tickets. That's not a lot of savings if your attendance is going to decrease in any serious way, and it probably is.

Now, contrast with a league where there's a luxury tax, and the prevailing salaries $10 million for the first division versus $4 million for the second, and the savings are all multiplied by four. In that scenario, player expenses are the main expenditure, which they aren't today. A lot of teams that are priced out of the market might be perfectly viable in the second tier under those kinds of terms, especially because there's always reason to hope that they can build their finances to compete at the higher level.

So. . . call me in 5 or 10 years.

 

I'm not sure if I agree with this one, or at least my understanding of your explanation. If MLS's lower earning teams were to drop down, it's more than likely that the second division team that replaces them will also be a lower earning team. The main reason for this being that the infrastructure (stadiums) for most of the current second division teams are capped at 5k-10k, or their owners won't have enough time to get the local fan base excited about moving up to first division, so more than likely they'll come into the league with low attendance rates.

 

Yeah, bad explanation. I am assuming a smaller league with pro/rel than without it, part of the point being to have fewer of the marginal markets in the top flight. In baseball, I'm comparing a league with 30+ teams and no pro/rel to a league with 20+ teams in the top flight and pro/rel.

I get later to the part where MLS is not really ready for this.

 

Ah. Okay. I saw the "MLS is not really ready for this" point, just clipped it because it wasn't part of my concern. I actually kind of like the MLS splitting into 2 idea, just don't agree with the humor column that it should happen now. Probably down the road when the league is at 30 or so.

 

the reason why anyone wants into MLS is because of SUM not the gate. Do the math having a club like Montreal with 12k at the gate or a club like FCD with 12k at the gate should mean they are valued about the same...but they are not, not even close. It is not about the gate, part of it is but SUM is the key to MLS and explaining how that will work with a 2nd division is the difference between realistic and fantasy scenarios.

The money is in sponsorships and TV revenue. For MLS sponsorships come first and TV revenue is 2nd, but their hope is to follow in the footsteps of the big 3 sports and increase TV revenue. But the ESPN deal the 150M Adidas deal that is all SUM, that is where the teams are getting their money. And they damn well won't want to split the pie up more unless adding new teams creates a bigger pie (more viewers/better for advertisers/more attendance/big franchise fee). This is a fundamental misunderstanding with people who think MLS should just go and buy some 2nd division. My suggestion is that some smaller owners get together and share a slice and show stability until a big owner steps up and buys a separate piece outright. Creating sponsorship/media contracts to have a stable/profitable 2nd division has never happened. USL has had the vast majority of its teams either collapse or self relegate. This show just how far financially they are from MLS and SUM. No owner will ever vote for a system where they might be sent down, we can all agree on that. And the reality of building the economy of the 2nd division looks very difficult. Comparing to even minor league american sports are difficult because for instance baseball isn't directly competing with baseball leagues around the world that are in fact much bigger than MLB, it is a unique experience and minor league soccer is simply a very tough sell when even our first division is looked at as 'minor league' by not only fans but sponsors, simply look at the enormous amount of US companies investing/sponsoring Euro teams. But giving the leadership and brand of MLS is a good first step. But the only way it will ever happen is if those owners get together and buy in and eliminate any risk of other franchises from ever relegating. MLS will not abandon their franchise model and certainly not decide anything that will lower the values of their current franchises.

 

Except Montreal and Portland are the exception, not the rule with D2 teams.You are correct that replacing 12k FCD with 12k Montreal is not going to affect things, but when you look at replacing 12k FCD with the more typical 3-4k D2 team, that's when you run into problems. Even worse, for many of the D2 teams, they can't benefit from the MLS attendance bump because their stadiums are capped at a lower capacity than the MLS teams are.

Actually, that's not true. For the more established pro sports, sponsorships and TV revenue make up a large portion of their income, but for MLS teams something like 80% of a teams income is from gate receipts and other game day purchases. Most MLS teams make only a few million from TV and sponsorship deals.

 

If we're talking about total revenue, TV is in all likelihood third, as MLS almost certainly takes in more at the gate than from its TV deals, which only take in the neighborhood of $20M/yr.

At an attendance of 3,608,359 last year, at $20 a ticket, that would be $72M. Even with comps and such, still a lot more than TV. My guess is that sponsorships are in that same ballpark.

I'm not sure the SUM point makes any difference. SUM event revenues have little inherently to do with MLS. You can just price them at whatever they're worth. Or make a stake in SUM a separate thing, which I'm sure it is technically already.

No, we can't. The point of the Yankees example was not to say that baseball should have pro/rel, it's that the money the Yankees might lose by going down is hypothetical, but the money they'd save by not subsidizing relative under-performers is quite real and predictable. The 90% of the time they're not relegated, they're profiting by the existence of pro/rel.

 

what makes you think they wouldn't be subsidizing the new team? it is a risk that they would rather not take. if this scenario ever played out (which it won't but lets just say) where a 2nd division like the NASL/USL thingy can get sent up the winner would almost certainly bring in less revenue than the demoted club. There is no way that the shirt sponsorships or stadium deals will be anywhere near as profitable if say Austin gets moved up.

The problem with your comparison is that we have a system that almost guarantees that a Yankees will never happen. We have 1 big salary pool with equal amounts going to each team you can't just buy success. Yes if we had no limits on spending and the 'big boys' thought they could make more by kicking out the 'little guys' like in the MLB example then maybe you could get a few to agree, but we don't have that system and because of that even the owners who would like to spend more would never agree to a system like that. In the end teams like RBNY would look at the 200M they just spent to get their club off the ground and see a proposal where their investment might be in the 2nd division someday and it would do everything it can to stop it and my guess is that every single owner would do the same.

 

This is even more true with the NFL and NHL, both leagues went through terrible shocks and instability in their first two decades. There's even a joke about hockey's instability in an old Disney cartoon ("Hockey Homicide," I believe) where the announcer essentially says that all of the players and even the teams are entirely different than those printed on the program.

 

Current revenue is bigger with gate than TV + sponsorship, but I predict in the future TV + sponsorship will get bigger than gate.

At the same time I predict TV + sponsorship will get bigger in the future even with pro/rel than present without pro/rel.

 

If Chicago is the closest local professional soccer team from where you are in Wisconsin, I got nothing more to say.

If not, you are a MLSsnob the strangest soccer fan of all.

I would first support my local team, and pay attention to the highest level of soccer in the world.