The All-Encompassing Pro/Rel Thread on Soccer in the USA

They don't have to double anything just make simple changes to what they already have. For example by simply eliminating the transfer fees from the salary cap would give them more flexibility. It would stretch the current salary budget for them.

 

Yes that makes sense but I would like to know from @owian what the point of suddenly increasing the budget would be.

 

I agree that MLS teams have increased their salary cap over time.
One thing I don't understand is that we are talking about billionaires. Why do people give them an excuse? Also, MLS is making more money and a lot of that money is not going back to the product.

 

MLS has a lot of dumb rules.

 

MLS isn't making money according to Forbes.
They estimate the teams lost $30M in operating income between them.

 

No way MLS is losing money. It can be reported by them that they are losing money but it doesn't make sense. Franchise fees are at an all time high and if moved up to 32 teams no doubt fees will be closer to $1B for #31 and #32. I just don't see anyone paying $500M for a franchise fee for only to lose money year after year.

 

The teams still appear to be making a modest operating loss overall. That operating loss doesn't appear to include any debt payments or investment in infrastructure, or any shared league wide revenue.

I don't believe anyone is making a fortune from operating a MLS team. As Garber said they're still in investment mode. They will make big money if they sell equity.

 

For how many more years are they going to be in invest mode?

We can't say MLS/closed league system is more profitable than the typical Pro/Rel system if MLS is operating at constant loss for years. Either it is profitable or it isn't. We can't change the narrative from saying MLS is profitable when it comes to not having Pro/Rel to MLS is constantly losing money when it comes to the salary cap/budget.

 

The Premier League's DOMESTIC TV contract is worth $103M per team per year.

MLS's GLOBAL TV contract is worth $9M per team per year.

That's the big difference.

 

Why does MLS always get compared to EPL? Even if we had Pro/Rel (as some want) and even if we had a league with no salary cap (as some want) we still wouldn't come close to EPL. I really don't understand the obsession thinking MLS can be like EPL or even compare to EPL. No league in the world compares to EPL.

 

I picked EPL at random. As you know the other US major leagues and top 4 soccer leagues have much bigger TV contacts than MLS. The point is that this is why MLS isn't making money.

 

Pick any other league outside of EPL. Leagues like Eredivisie, Brasileirao Serie A, Saudi Pro League, Argentine Primera División. Those leagues have close to the TV deal that MLS or worse. Yet, they have a better quality league.

 

MLS will always be in investment mode..... the owners are reinvesting in the league every year..... Do you want MLS teams to be in a Manchester United Situation?? Meaning that they don't invest in their clubs and let the infrastructure go to hell?

 

LOL the mind bending is ridiculous.

But sure, let's have a go eh? Within 300 Miles of Carson (where the LA Galaxy play):
17+ Major League/Top tier level sports teams
50+ minor league/not top tier teams
13+ division 1 college athletic departments

We're at well over 92 with just this (yes, that's 80 but the D1 college athletic departments have multiple sports) and we've not even gotten into the Lacrosse/Aussie rules/etc type of sports in the 300 mile radius.

See ...

Partially true ... there's a guaranteed minimum, but the upside is there based on performance.

Source?

Saudi pro league ... better quality? LOL

The Dutch, Brazilians, and Argentines have what in common in regard to their league history in comparison to the US? Though, looking at the middle to bottom of those leagues the "better quality" becomes seriously questionable if not out right worse. The top finishing Dutch clubs get what MLS clubs get however. It's based off table finish though. Brazilian clubs get more per team than MLS clubs, and play in the most prestigious competition not named UEFA Champions League (as do Argentine clubs) and just Group Stage home matches bring in 1M per.

 

The local teams in Europe developed when these were independent towns, people worked 5.5 days a week, and there was no easy or cheap way of traveling between them.

If someone started the Premier League from scratch today, with no football history, they'd plonk teams in the major cities and people would happily travel into them.

If you look at A-League or Chinese Super League it's the same thing. The Football League developed along transit lines in the north of England. As transit improved the league expanded.

Small countries had national leagues because they were small. Bigger countries like Brazil, Germany, the USA and Russia didn't have national leagues until the 1960s (1971 in the USSR).

You can't take a ecological system that evolved from the bottom up over 100 years and implement it from the top down. It just wouldn't work.

 

Rochdale look like they're headed the same way as their neighbors Bury unless they can find £2 million.

 

And when the announcer finds that piece of trivia he calls it ironic rather than coincidental because British people don’t know what irony is.

Seriously next time a Brit is doing a game, listen for coincidences being described as irony.

 

Baseball doesn’t have pro/rel and it has the highest total attendance.

 

Yes but I don't think it has 92 clubs all within a 500 mile radius of each other? It also has something like 330 million punters to sell itself to?

Like I said........apples to oranges.

 

Its their own fault!! They shouldn't have paid poor players far more money than they're worth. Things might have been different then.

 

So about $1M per team.

One thing to keep in mind…it used to be true, and may still be, that Kroenke owned 5 entities related to the Rapids. One was the team, then a company that ran the stadium, one that handled broadcasts, etc.

If the Rapids lose a million but the associated entities made 3 million, then Kroenke made two million.

And then there are the shares of SUM (that may have been one of the five.)

This is very very standard in US sports because of how common public funding is. A team creates companies to do the profitable stuff and then can tell the media that the actual team lost money so if you taxpayers don’t buy a stadium for us we’re leaving.

My local pro sports team, an NHL team, is always claiming losses, and they probably are technically right. But Gale Force Holdings runs the place where the Carolina Hurricanes play, and they make money.

To me, the best single argument for pro/rel is that it gets taxpayers out of the business if subsidizing billionaires so they can undercharge the upper middle class and corporations that buy all the tickets. Each city would find its own level.

 

Yeah at this specific moment, when it comes to money, the EPL is in a category of one.

 

My point is that in England, Spain and Italy the TV contract is equivalent to about 90% of the combined payrolls.

MLS's TV contract covers less than 70% of payrolls.

The average Serie A team receives $50 million a year in TV revenue. MLS receives $8 million per team.

So when you ask why MLS isn't making money yet, this is why.

 

Which MLS teams are being subsidized by taxpayers?

 

The teams aren’t, but the stadia are.