38 Responses

  1. Rex
    Rex
    March 17, 2010 at 6:36 pm | | Reply


    “If a salary cap is not going to control costs, why even have it?” You have it to maintain competitive balance. In a league thats less than 20 years you cant have perennial losers because you are trying to build a fan base.

    The players union are like some loser who cant get his way in life so he brings down his company with him. The sad part is the owners will just move on to bigger, better, and more profitable things and the fans will be left out in the cold.

    Onstad and the player reps are all knocking on retirements door so they will just get their AARP card and move on… all the 20something year old players will be screwed and be getting a real job that also only plays the same 30k a year and then they will wish they didnt ‘stick to their guns’.

    1. Doorworker
      Doorworker
      March 17, 2010 at 10:31 pm | | Reply


      @Rex–
      sphinctersez “The players union are like some loser who cant get his way in life so he brings down his company with him.”

      Set aside that the analogy makes zero sense…the point yr trying to make is also dead wrong. The players union is like a collection of highly skilled tradesmen–not ‘world class’, we all know, but extraordinarily high caliber, dedicated, and improving–who’ve got the sense and collective dignity to ‘hang together’ for a pay structure THEY can live with as minimally fair and reasonable, rather than ‘hang separately,’ asses in the wind, for whatever shit terms the owners see fit to toss their way.

      Players standing up, showing a little dignity, insisting on a fair bargain is ‘part of the process’ of league-building too. you’d figure a fan to see that, but then there’s bound to be a bunch of bootlicking weasels in a 300-million strong country.

      I have yet to hear what part of the players’ demands are unreasonable. A less-than-elite league is demanding less-than-elite treatment, that includes fair wages (incredibly modest by US professional athlete standards), and the freedom to have their talents assessed on more open-market terms.

      Hey, you know, if the league is an unsustainable bullshit factory, supplying a product there’s no demand for, then it’s THE LEAGUE, and not the players’ sense of dignity, that should disappear.

      The issue is about what the PLAYERS themselves decide, collectively, is worth & not worth the hassles and opportunity costs of being an MLS performer. THAT’s the bottom line here. The idea that the system works if only the players would be willing to eat some open-ended platefuls of owner-shoveled shit is a deeply stupid premise.

      They know better than you the point beneath which it starts to make no sense to make the sacrifices of professional ballplaying, and they know better than the likes of you what ‘the market can bear’. And no one, bar none, has more to lose than the rank-and-file players themselves.

      You owner apologists are pathetic…crying for the poor abused management, pissing on what might well be the single lowest-paying ‘division 1? professional sports league in the world’s richest nation, and almost certainly the lowest-paying men’s soccer league in the industrialized world.

      Unless, again, someone wants to open my eyes as to what it is these people are asking for that’s so over the moon. I don’t see it:
      http://www.mlsplayers.org/files/september_15_2009_salary_information__by_club.pdf

      1. CoconutMonkey
        CoconutMonkey
        March 18, 2010 at 7:19 am | | Reply


        Unsustainable bullshit factory?

        ..
        .
        BWA HA HA HA! That’s awesome!

      2. Rex
        Rex
        March 18, 2010 at 1:40 pm | | Reply


        The league has met every demand from the players short of things like free agency and other things that undercut the foundations of the league. If the players were simply asking for more money, I would be cool with that. They want to change the fundamental structure of the league and that’s unreasonable.
        MLS has one advantage over almost every other sports league in the world… It’s new and had a 100 years of sports leagues to learn from. Look at the financial issues associated with the EPL. Even if you think the MLS structure is wrong, how naive are the players to think the MLS is going to be willing to change its fundamental foundations.
        I am not apologizing for the owners, I just think they’ve got a good thing going and i don’t want it screwed up. I am out there for all the fans because we are the ones that are going to be screwed in this whole deal.

  2. Yorkie
    Yorkie
    March 17, 2010 at 7:34 pm | | Reply


    I feel that the Owners are using a bit of stagecraft, this is the typical book cooking that takes place in any business that makes them reflect whatever they feel is in their best interests (ie. keep the cheap labor as long as possible). As many players have mentioned the MLS won’t open their books and show anyone their finances. Sure not every team is making money but I feel the majority are, and those that are not, are probably within shouting distance. This doesn’t mean I feel the players need to be given the sky, but there is nothing wrong with perhaps a 2.75 million cap, with some sort of restricted free agency, maybe do as many have suggested a scaled level free agency.

  3. Bill
    Bill
    March 17, 2010 at 8:35 pm | | Reply


    Actually, the way the MLS will lose money through free agency is in the loss of the so-called single entity status that keeps them insulated from sherman act anti-trust litigation. Look into it. There is a reason they want to retain all the fittings of single entity, and it is about avoiding anti-trust.

    If the author is as bright as he portrays, maybe he can take a look at American Aperal V. NFL currently being reviewed by the US supreme court. The lawsuit is not about free agency per se, but it is about single entity. You can bet your bippy that the Don is watching bc the factors of single entity status may hinge on free agency. Oh, BTW, did you see what the NFL just did regarding free agency. Doesn’t anyone else see something similar going on?

    1. Bobby
      Bobby
      March 17, 2010 at 9:13 pm | | Reply


      You mean American Needle.

      http://sportsillustrated.cnn.com/2010/writers/michael_mccann/01/12/americanneedlev.nfl/index.html Here’s an SI article on the case for those interested. The potential impacts are pretty huge.

    2. Clayton
      Clayton
      March 17, 2010 at 9:23 pm | | Reply


      That’s exactly what I think the owners are trying to do. If I understand correctly, the players tried to sue the MLS in the early 2000s saying that the single entity status was invalid because the teams were operating as if they were separate entities. MLS won the lawsuit back then, but if they give the players anything resembling free agency, the players could take them back to court and have a better case this time. Therefore, any form of free agency really could destroy the single entity system and that seems to be the owners’ worst nightmare.

      That being said, I think they should put an end to single entity because it would take the perennially mediocre teams off welfare and force them to actually try to run a first-class organization. Also, I think there are finally enough good owners that the league could thrive without single entity even if it meant that the poorly run teams failed. Would the MLS really be a worse league if you got rid of the Hunt Sports Group and their half-empty stadiums, especially if you replace them with packed houses in Portland, Vancouver, Philly and Montreal?

      1. doorworker
        doorworker
        March 18, 2010 at 10:56 am | | Reply


        “they should put an end to single entity because it would take the perennially mediocre teams off welfare and force them to actually try to run a first-class organization…”

        Footage I saw last season of a number of some Kansas City and Dallas home games–really alarmingly sparse crowds–sure supports that take.

        Hard to figure how long, recurring stretches of anemic, depressing home games do anybody any real favors.

        Sort of a question pointing to that incredibly annoying phrase “economic gardening”…which cases are best for patiently ‘cultivating,’ which are best treated with pruning shears.

        1. Stephen
          Stephen
          March 18, 2010 at 11:40 am | | Reply


          The problem with taking underperforming teams off the single-entity system is that those teams are in some of the larger US markets.

          As a Canadian, as much as I’d love to see a league centred around Toronto, Montreal, the three PNW teams and a few other cities that actually give a damn about the sport, we all know that would drive ESPN away from the table as fast as lightning. They can get more viewers for a Siena / Gonzaga preseason basketball game than Toronto / Portland.

          And TV dollars are going to make or break the league outside of, again, the aforementioned markets.

          [Although I question how much ESPN is going to care about the next TV contract anyway with their golden boy injured and likely headed into retirement, and their focus on the Champions' League as one of their featured properties, as well as the billions they're investing in Europe.]

    3. Bob
      Bob
      March 17, 2010 at 11:26 pm | | Reply


      You can have a salary cap without single entity.

      MLS isn’t single entity. If it is, why do some team make money and others don’t? A true single entity (with all team being equal or part of one large “team”, as MLS wants us to believe) would mean all teams should have the same profit and loss. They don’t. It isn’t.

      1. Mark
        Mark
        March 18, 2010 at 3:06 am | | Reply


        Plenty businesses are at the point where different departments/regions/stores etc. have separate profit/loss figures (sorry, I don’t know the accounting world’s terminology here) even though ultimately all the numbers are totalled for the company.

        I don’t know how analogous MLS’s structure is with these other businesses, but it’s not difficult to see how one can talk of teams being profitable or not while still being part of a single entity.

      2. Charles
        Charles
        March 18, 2010 at 9:24 am | | Reply


        Bob,
        Well, you just summed up the American Needle arguement as the sue the NFL saying it isn’t a single entity.

        1. Stephen
          Stephen
          March 18, 2010 at 11:43 am | | Reply


          I’ve been saying for a while that the NFL needs to re-focus its argument around franchise-based arguments, rather than the one they’re using.

          That said, they’re going to win the case simply because of the way the current USSC is structured. There’s a reason they brought the case forward after winning at the appeals court level; they want a strong precedent, and they’re confident that they’ve pretty much won the case even without arguing it.

    4. Richard Farley
      Richard Farley
      March 18, 2010 at 6:55 am | | Reply


      Bill:

      We’ve covered American Needle before, and given the length and scope of this piece, it’s more germane to this discussion than the actual piece. Perhaps I should have expanded the article to 1,800 words, but I couldn’t see the keyboard for my brightness.

  4. Michael
    Michael
    March 17, 2010 at 9:27 pm | | Reply


    Richard, I think you’ll find that MLST’s own Kartik previously ran numbers himself and came to the conclusion that MLS may have actually overstated its health.

    But in one sense you’re right – with things like SSS dollars off the team books, we don’t know how much owners make from soccer, even if we can be relatively sure how much they make from their teams.

    1. Richard Farley
      Richard Farley
      March 18, 2010 at 6:57 am | | Reply


      Michael:

      I do seem to remember that. I suppose there are a number of points to discuss when comparing Kartik’s conclusions with Dave’s.

      1. Kartik Krishnaiyer
        March 18, 2010 at 9:37 am | | Reply


        My numbers were based on eliminating SUM funds and simply looking at concerts and other extra events held at MLS club owned Stadiums, in addition to MLS/US Open Cup matches itself. When you apply put SUM finances and Expansion fees, the picture changes and Dave has done an excellent job of breaking that down.

        1. Stephen
          Stephen
          March 18, 2010 at 12:02 pm | | Reply


          Of course, relying on expansion fees as a way to prop up teams is dangerous in and of itself – that business model nearly crippled the NHL at the turn of the century and led directly to the season-cancelling lockout.

          Best to keep them out of any profit / loss discussion.

  5. Don
    Don
    March 17, 2010 at 9:54 pm | | Reply


    Richard, thank you for the interesting and analytical essay on MLS finances. We need more attempts to understand and fewer focusing on choosing sides. Which side you support, labor or ownership, will inevitably reflect our own political, ideological and social views. Let us, at least, try to get our facts correct, even if we choose to disagree about who we support.

  6. blah
    blah
    March 18, 2010 at 12:03 am | | Reply


    I love how the players union people suddenly are experts on MLS finances based on imaginative theorizing. Why can’t I use these kinds of arguments with my boss? “Give me a raise and allow me to refuse any kind of job reassignment without losing my job because I think you are making money even though I have no evidence to support my claims, just wishful thinking”. Yeah, that will go over well.

    You really think a couple of clubs making a small profit plus a few more breaking even is going to make up for the clubs that are still losing money? How about the hundreds of millions of dollars that have already been lost? How about the hundreds of millions being invested in new infrastructure: new SSS being built, new youth academies, etc? Even if every single MLS club were to turn profitable this year, it would take a long time to pay off that kind of investment. Who is going to make this investment, if not the owners? The players union? Please.

    And the SUM argument is idiotic. Even if SUM somehow made MLS profitable, it is beside the point: what MLS players are paid to do, has nothing to do with SUM. It would be like you going to your boss and saying “yeah, I know my department loses you guys a ton of cash, but you’ve got this side business over here, in another department, doing something else, which I have absolutely nothing to do with, that makes you money; so maybe you are making money in spite of the fact that my department is a disaster; so give me a raise, and oh by the way, I want you to change your business plan, on my say so, just because I’m an employee and I have rights so I get to stay wherever I want in the company and you can’t fire me if I refuse to move”. Huh? You really think that’s logical? That’s what the SUM argument boils down to: SUM is subsidizing the money losing MLS operations that the players are paid for, so the players should get what they want because SUM subsides their money losing operations in MLS. WTF?

    Nice fantasyland logic, no? Why does this kind of “logic” only apply in the world of sports union negotiations?

    SUM is beside the point. MLS players have nothing to do with SUM. In the real world, departments that lose money are shut down or sold off, while departments that make money get the raises and the bonuses. MLS loses money for the owners – the players union can’t point to SUM and somehow claim that SUM gives them the right to make more demands. Let MLS players start making money for MLS before we talk about profitability; right now SUM is carrying MLS; without SUM, MLS would have probably been shut down in 2002 as a hopeless cause.

    But no, the “I want a pony” crowd know business better than people who actually have hundreds of millions of dollars to blow away on American pro soccer. They are ferreting out those hidden cash cows they just know MLS is hiding! Never mind the poor TV ratings, never mind the small crowds and unsold tickets, MLS is a financial dynamo! Some poster on a soccer forum said so. Thus it is so. Hand over the cash!

    So what if MLS is nearly invisible in the US sports media, and is decades away from becoming a serious major league in the USA – let’s pretend that this is the 1890′s and the working classes are fighting the robber barons! Yes! Who cares what damage this does to pro soccer in the USA. All that matter’s are some pimply teenager’s fantasies about “how soccer should be run in the USA according to how it’s run in Europe” or some such fantasy.

    Are there any grownups in the MLS Union camp? It’s time for a reality check.

    1. Flex Buffchest
      Flex Buffchest
      March 18, 2010 at 12:46 am | | Reply


      That was a really good read blah. I have to agree. I don’t think many people know what really goes on behind the scenes. I’m not going to pretend to. I hope more than anything that this league does not go on strike, and that they figure something out that will really help the future of MLS grow. I think choosing sides doesn’t solve anything. We need the correct facts and base decisions of off that. Instead of basing it off of accusations and false information.

    2. Peter C
      Peter C
      March 18, 2010 at 1:03 am | | Reply


      blah,

      Where to begin. To say that the players have nothing to do with any of SUM’s activities ignores the facts.

      SuperLiga, like it or not, was a SUM product. Any monies generated over the prize money(only the winner got money) and productions costs were kept by SUM. Money to the three losing MLS teams and players…zip.

      SUM is the marketing agent for the CONCACAF Champions League. As every MLS investor/operator also has a piece of SUM, fees received for services rendered are shared by MLS investor/operators and not shared with club revenues.

      MLS investor/operators know that when they obtain their franchise operator status, they will share in SUM revenues from all of its ventures. So, no MLS team means no interest in SUM, and although there are several non operator investors, that doesn’t change the fact that the MLS i/o’s have revenue coming in that owe its existence to the MLS team and since there is no team without players. Well, you get the point.

      As to the massive investment that’s been made by the owners, that was their choice, and they recouped some by the sale of the TV rights to the 02-06 World Cups(the beginning of SUM) in addition to the over $185m in new franchise fees since 2005 and all of the intervening activities of SUM.

      That includes the double digit matches MLS teams participated in during last year’s ‘Summer of Soccer’, some of which were SUM productions.

      Now I completely understand the huge investments being made by MLS operator/investors and would be the last to say that MLS players should give in to all of the players’ demands in the current labor dispute. But to say the the owners are the only voice in these discussions worth listening to is, well, ridiculous. And to believe the ‘oh woe is us’ cry of smart business executives who have mastered the art of the ‘money shell game’ is naive at best.

  7. Jammer
    Jammer
    March 18, 2010 at 2:28 am | | Reply


    It seems you’ve misinterpreted Dave’s data. How do you interpret, for example, Houston’s “-3M to 0″ to mean that it’s within the margin for error of turning a profit? I would interpret it to mean that they certainly lost money. The non-range estimates DO include SUM money, according to the post.

    Blah makes a good point — if you count the disbursements from the new owners (for selling stakes in MLS and SUM), then you should also count, say, the $100M that the Wizards are spending on a stadium.

    In response to Peter C, if MLS disappeared, and the teams were gone, all the investors would still be making the same money from SUM. Champions League is not listed in the SUM contracts, and Superliga is over.

    The last point of the article is correct, that the increase in value of the asset may offset operating losses. That is where the new franchise payments should count, as selling part of the league (and SUM). But for the great majority of franchises, I don’t think they are in a position to sell for enough to cover their operating losses from the last decade. I would also bet most of the team sales up to now have been for losses.

    So Lieweke’s point stands, that the owners’ investments are still very much at risk. So they are not in a comfortable position to make that risk greater with changes to the CBA.

    And they are resisting the changes for reasons, even if they are not directly raising the salary cap. For instance, guaranteed contracts would prevent teams from cutting the fat, and make it harder for them to field a quality team for the same price. It is something the players will get some day, for sure, but this may not be the year.

    1. Richard Farley
      Richard Farley
      March 18, 2010 at 6:33 am | | Reply


      Jammer:

      In Dave’s first table, he has Houston with a $258,397 profit that he then rounds down in the second table.

    2. Peter C
      Peter C
      March 18, 2010 at 10:38 am | | Reply


      Jammer,

      just to clarify, SUM was(and i believe still is) the marketing agent for CONCACAF in the US, hence the connection to the CCL.
      And yes Superliga is over, but it wasn’t during the expired CBA and there’s nothing to prevent SUM from concocting something similar that would involve MLS teams(nee: players).

    3. Stephen
      Stephen
      March 18, 2010 at 11:47 am | | Reply


      \if you count the disbursements from the new owners (for selling stakes in MLS and SUM), then you should also count, say, the $100M that the Wizards are spending on a stadium. ‘

      Generally, these type of expenses would be amortized over the operating life of the infrastructure investment. It probably wouldn’t tweak the figures much if at all as a result.

  8. Matthew N
    Matthew N
    March 18, 2010 at 9:28 am | | Reply


    I couldn’t care less if MLS makes money or not. Single entity is bullshit. It is bad for our league and bad for American players. The more I hear about the drama surrounding MLS and the strong desire of the owners to do exactly opposite of what every other league in the world does, the less I want to like it.

  9. Charles
    Charles
    March 18, 2010 at 9:35 am | | Reply


    First of all Sounder at Heart rocks. Read him all the time. He just seems like a great guy in his posts.

    The problem with the arguements of going to a free enterprise is this.
    Keep in mind I am a open market/free trade economist, not usually for MLS type of structures.
    IT WON’T WORK.
    Maybe is sort of works in Europe, where they don’t care that the same team wins it every year.
    Maybe you can argue Americans will learn that part of soccer too…I doubt it, but maybe.

    But you can’t argue that a majority of the people think that 3-7 teams out of 15 are profitable.
    They should have broken it down more because I was closer to 3 and I am sure many others were too. So now you have Seattle, LA and Toronto duking it out in the 3 team MLS, with a bunch of hopefuls like Philly and Portland. They are only building stadiums for 18-20k fans, but yeah they are going to be the next Seattle. Just doesn’t add up in my book.

    I am not chosing sides in the debate.
    More money/freedom for players means better quality for my season tickets,
    no league means no season tickets….

    BUT, and there is always a big but, I think many are being unrealistic when they think the solution is just do what they do in Europe, it works there.

    1. Richard Farley
      Richard Farley
      March 18, 2010 at 10:01 am | | Reply


      Charles: Good point re: breaking the poll down more.

    2. Stephen
      Stephen
      March 18, 2010 at 12:48 pm | | Reply


      ‘So now you have Seattle, LA and Toronto duking it out in the 3 team MLS,’

      TFC would find a way to finish 4th in a 3-team MLS.

  10. Stephen
    Stephen
    March 18, 2010 at 11:55 am | | Reply


    ‘Maybe is sort of works in Europe, where they don’t care that the same team wins it every year. Maybe you can argue Americans will learn that part of soccer too…I doubt it, but maybe.’

    it’ll never happen. Not with four other leagues out there selling ‘maybe this will be that magical season [Twins 91, Pens 91, Knicks 99, Pats 01-02, Saints this year] where your franchise shakes off the doldrums and wins it all.’ Even Yankee fans will agree – once you get a few beers in them – that this year’s WS, after a decade of failure, was more special than when they were winning 125 games in a season and not being challenged. Soccer fans in Europe buy into that insanity, but that’s something that doesn’t translate at all over here.

    And since TFC would find a way to finish third every year in a three-team league… I don’t want to see that, either.

  11. david
    david
    March 18, 2010 at 6:12 pm | | Reply


    How do you know the owners are full of it? Because they won’t open up their books. If they were really losing money, they’d be happy to allow the players union or a third party representative review their finances.

    Some folks on here are really, really gullible.

  12. f4denz
    March 18, 2010 at 11:52 pm | | Reply


    I can tell you one thing based on an interview with RSL president Bill Manning, RSL didn’t make a profit in 2009, they don’t expect to in 2010 (they hope to break even), they do expect to start making money in 2011. It will be nice, then they can start paying off the $65 million dollars in debt for their stadium.

    David, the mediator has access to those records, or at least he is supposed to. So do you also think the players should open their personal finances to the owners? How much do they get from Nike, or other people they do advertisements for? They wouldn’t make that money if they weren’t playing in MLS now would they. Full open transparency it you make one side do it, both sides should

    1. David
      David
      March 19, 2010 at 1:05 am | | Reply


      The mediator does not have access to MLS owners’ books. Mediation is non binding.

      Players’ endorsements, etc. are not collectively bargained for and are thus irrelevant to CBA negotiations.

      The heart of the owners’ position is that they are not making profits and thus are not in a position to change work rules under the CBA. But they won’t let anyone verify this by actually reviewing their books. Weird huh?

      Under MLS rules, they hold an out-of-contract player’s registration, thus preventing him from going to another MLS team or any other team in the entire world, despite the fact that he has been released by his MLS team. This is obviously contrary to the established FIFA player rights.

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  14. James Taylor
    James Taylor
    July 22, 2010 at 5:04 am | | Reply


    I never got a response to this registered letter I sent to Don Garber, on May 20, 2010:

    Mr. Don Garber
    Commissioner, Major League Soccer
    420 Fifth Avenue, Seventh Floor
    New York, NY 10018

    Commissioner Garber,

    I have been a fan of the MLS from day one: I attended the inaugural MLS game in San Jose. I had season tickets with the San Jose Clash/Earthquakes for many years. As soon as it became available, I subscribed to MLS DirectKick on DirecTV; and I maintained that subscription until I moved to Japan in 2006. I have attended an MLS cup game. I own more MLS gear than I like to think about.

    As soon as your Internet on-line MLS TV service became available (two years ago), I subscribed and maintained a subscription. In March 2010, as the new season was approaching, I asked about the annual renewal. As directed, I went to the new MSLsoccer.com website.

    As a decade-plus MLS fan, I ask you to imagine my disappointment when I discovered that your new, “improved” Internet on-line TV service is available only within the U.S. and Canada!

    There are no TV stations here in Japan which are licensed to carry any MLS telecasts.

    I emailed your MLS web site, asking — why — after two years of getting it here in Japan — suddenly, I can’t get a subscription for Internet MLS TV. The answer I got from my email inquiry was that your new “license agreements” prohibited offering your TV streaming outside the U.S. and Canada.

    It seems inconceivable to me that you made a conscious decision to reduce your fan base!

    In Japan, I can get internet TV subscriptions to the NFL (the “other” football), Major League Baseball; and to the CBS and several alternative NCAA (U.S. collegiate) sports packages.

    What’s the “new” problem with providing internet MLS TV to overseas fans who are ready and willing to pay for it?

    All I can say to you after all these years is, “thanks” for turning your back on me and all your other overseas fans.

    James F. Taylor
    Inzai, Japan

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