DP Rule to be Reviewed

[Pookie]

While we debate the merits of De Guzman or lament the fact that we don't have a DP, an interesting development is on the horizon.

The Designated Player Rule was a 3 year initiative that will be reviewed after the 2009 season.

From MLSnet:

The Designated Player Rule allows the League to sign players (under the League's single entity system) whose salary will fall outside of the team salary budget and whose cost above the salary budget charge will be the financial responsibility of the club for which they play.

A Designated Player's salary budget charge will be capped at $415,000 per annum in 2009, but his actual compensation is higher. Each team initially received one Designated Player slot, and clubs are allowed to trade Designated Player slots. However, no team can have more than two Designated Players.

The Designated Player Rule is a three-year initiative that will conclude after the 2009 MLS season when its future will be reviewed.

So, if you were reviewing this rule, would you say it has been effective?

Has it improved the performance on the field? Have teams faired better (Columbus) or worse (NY) with a DP?

Has it contributed to increased attendance (LA) or has it had a negative effect (Chicago)? Has there been any measureable impact on a TV deal?

When UEFA is looking at a cap system, is it necessary? Will it help the league grow by potential stars playing a season or two? Or will it hurt the league with rising ticket prices necessary to pay the salaries?

Would the league grow and attract players by spending money at the top end on big names or increasing the minimum salary so that guys could make a living?

It will be an interesting time for the league as this rule is reviewed. At a time when expansion is looming, decisions reached may well have a significant impact on the health of the league going forward.

[DichioTFC]

oh wow... a lot of questions from Pookie!!

The idea of a DP is good in theory (get stars and high-talented footballers, pay them what they're worth without completely skewing the league) but in practice it just doesn't work (Beckham, case and point).

MLS should probably keep it, its a way to keep fans in smaller markets engaged with the team and convinces them to buy a ticket (with the hope that they will buy future tickets based on the whole team)

[Cashcleaner]

I think there are a few changes they can make. First off, I don't think clubs should be able to trade DP slots. Secondly, get rid of the 400K of the DP salary that's paid under the cap. Have the entirety paid by the club and not subject to the salary cap.

And maybe in a few years, add another DP slot. My preference is to have one allowed for FW/MF and another for DF/GK.

[Billy the kid]

I agree the DP salary has to either count for less against the cap or the cap needs to increase. Remember New York with Reyna and Angel. Those two go down and 35% of their cap room is injured.

[Kevvv]

I think there are a few changes they can make. First off, I don't think clubs should be able to trade DP slots. Secondly, get rid of the 400K of the DP salary that's paid under the cap. Have the entirety paid by the club and not subject to the salary cap.


In effect, that just raises the salary cap for teams with a DP by 400K. That then gives tham an advantage over teams without a DP, so the resolution is a higher cap...which is a separate discussion.

[Cashcleaner]

^ But isn't that a good thing? All the more encouragement for the club to...hmmmmm. I think I see what you mean. If it's off the cap, technically you could just sign anyone at all and you're just freeing up your cap space for them. They wouldn't even need to be making any substantial amount of money.

Hmmmmm, good point.

[TorontoBlades]

Add another 2 DPs to each club - making 3 aggregate. That ways DPs wouldn't be singled out...also make none of the DP salary count against the cap.

Therefore, a team could have three players with no cap hit...even if they are being paid less than the 400k.

[Hitcho]

I think Cash's idea is a good one but the big problem with it is that it will create a PL scenario of a big few who have the fan base to afford a DP and the rest, who don't. The have it clubs will then utterly dominate as they have a double advantage - one kick ass player better than anything the don't have cubs can muster and capable of winning games on his own and, secondly, a bigger squad since they can have everyting the have-not clubs have on their roster PLUS a DP. These are also likely to be the cubs with a bigger home advantage through their crowd sizes, which will get even bigger if they are the only DP clubs. The circle then becomes viscious and the have it clubs will demand a second DP slot, etc.

No way is the league ever going to go for that. They also won't scrap the DP trades since it allows "smaller" clubs to milk something out of the richer cubs who can aford a second DP (or just one if they have already traded away their DP spot).

I can see them lowering the cap space hit though, because that saves the league money and passes it on to the clubs. Won't be by much, however, because otherwise you're giving the clubs who can afford it too big of an advantage (see above).

[CoachGT]

So, if you were reviewing this rule, would you say it has been effective?
Yes and no. It has helped put fans in the stands (Beckham experiment) whenever LA plays against most other MLS clubs (Toronto being an exception). It has created more interest in the game and publicity. But not all DPs are created equal – hard to argue that many people would come out to see Angel, Blanco or Schelotto – they are recognizable names but to a smaller segment of the population, mostly in their home country and to ex-pats. Beckham is at a different level and has broader appeal.

Has it improved the performance on the field? Have teams faired better (Columbus) or worse (NY) with a DP?
Again, yes and no. Columbus is improved with GBS on the field. Does he make everyone around him better? Can’t really say for sure. Same for Blanco, Huckerby and Angel. Same could be said about Ljundberg. I’d argue that with one player taking up a higher proportion of salary, it means that there are players that have to live at lower salary level, limiting options for some teams. Comparison: look at the Impact in last year’s CL run. No cap, but with no DP, they have a solid lineup of mid-level players that can be successful against teams where there are a few players at the high end and a few at lower levels. Makes for better team balance.

Has it contributed to increased attendance (LA) or has it had a negative effect (Chicago)? Has there been any measureable impact on a TV deal?
Increased attendance for LA, less impact in other places. Ljundberg looks to have tried to give credibility to the Seattle team and give something to their loyal fans – something that helps strengthen the foundation for future success. TV deal? Maybe not (see the weeknight games being dropped in the US) but Becks got a lot of airtime when he first appeared.

When UEFA is looking at a cap system, is it necessary? Will it help the league grow by potential stars playing a season or two? Or will it hurt the league with rising ticket prices necessary to pay the salaries?
Necessary? If the need to control costs is necessary, then yes. But caps protect owners against themselves. Grow potential stars? Not sure what the question is here – true “rising stars” will find the money elsewhere if they can (Adu, Edu, etc) unless a cap is applied globally. The NHL model was supposed to do this, but the K-League is a viable option (to some). Ticket prices are an issue in a lot of places. IMO supply and demand will win out. People might ante up for TFC/Real Madrid, but if that was the per game price for SSH, I suspect there would be a lot more empty seats. See new Yankee Stadium.

Would the league grow and attract players by spending money at the top end on big names or increasing the minimum salary so that guys could make a living?
Personally I’d rather see quality football using more middle of the grade players, expanding/improving skill levels as revenues increase. Makes for a better game, better foundation. I think more $150k players would have a bigger impact on the quality of play than one $2 million player.

Keep the DP? Yes, I think it is okay, but I agree with many comments here already – no trading the spot, limit (not eliminate) the amount that gets applied to the cap further than today (perhaps only apply the average salary of the rest of the team?).

Great questions Pookie!

[jabbronies]

Get rid of the cap hit (doesn't make sense to spend that much on 1 player, no matter who it is, this is a team game.)

Get rid being being able to trade a DP slot.

Allow 2 DPs per team (good players need good players to feed off of and connect with)

[flatpicker]

I would definitely like to see changes to the rule that allow for more spending by clubs with deeper wallets.

Perhaps what they could do is have 2 DP's per team (with no trades allowed), and neither DP's count against the cap.
But... to avoid some outrageous signings, they could put a spending cap on one of the DP's.

Maybe one DP salary cannot exceed $1.5 mil
- that would encourage picking up some decent talent rather than simply big star power, which would help elevate league quality.

Then the other DP salary could either be cap-less or at least very lucrative to player X.



In this situation, many teams who might not necessarily afford a STAR DP, could at least ad one higher calibre player to the roster.

One might say, "Why not just add $1mil to the salary cap instead?".
Well, I'm not sure that all teams could spend much more than they are now, so I think allowing this to be optional is more appropriate.

I also think that having one salary capped DP slot would help encourage that MLS objective of maintaining some parity in the league.
Rather than only a select few clubs getting big money players on their rosters.

[Hitcho]

^ Interesting idea Flats, a capped DP slot instead of a limitless DP slot with a cap hit. That could work.

not sure about the second limitless DP slot though, for the reasons I set out above.

[flatpicker]

^ well, perhaps 2 capped DP slots would be good.

This would encourage spreading the talent out... generating more depth.

The capped DP's would not be Beckham type players...
But quality players nonetheless.

[Lucky Strike]

I think there are a few changes they can make. First off, I don't think clubs should be able to trade DP slots. Secondly, get rid of the 400K of the DP salary that's paid under the cap. Have the entirety paid by the club and not subject to the salary cap.

And maybe in a few years, add another DP slot. My preference is to have one allowed for FW/MF and another for DF/GK.

I remember reading something by Don Garber (or maybe someone else but it was someone very familiar with rule-making in MLS) saying that the 400K of a DP's salary wasn't simply an arbitrary number. It was set like this so that teams didn't necessarily have to field a DP (i.e. to spend more money) in order to be competitive with DP-owning teams. And it wasn't a higher number (such as I don't know 750K for instance) so that having a DP wouldn't be crippling to the rest of the cap space.

Being rid of the 400K of a DP under the cap would help attract better players (obviously by virtue of having more cap space) but it would force teams to spend money they might not be able to afford lest they become glued to the league's basement in the standings.

I agree that teams shouldn't be able to trade their DP slots, which in turn would mean that no team can have two DPs, a team-building formula that arguably hasn't worked at all.

[Pookie]

A note on the unlimited spending model. At what point does TFC become a middle of the pack spender?

I think we always assume that we'd be in the top spending groups... perhaps based on the Leafs as an example.

But in the NHL, US teams, in general do not draw the way Canadian teams do. When the exchange rate is in our favour, Canada is the place to be if you own a franchise.

When the dollar is down though, it's a different story. Around 7 years ago, we had a dollar that was .65-70 cents. Ottawa was on the verge of bankruptcy. Calgary and Edmonton talked openly about using provincial lotteries to stay afloat. That was after Edmonton "stars" like Curtis Joseph were reaching free agency and leaving for the big spenders.

If revenue grows substantially in the US and the exchange rate declines, Toronto generally cannot compete.

For example, in 1993, the Jays led MLB in spending with a $51M payroll. The Yankees were somewhere in the $48M range. We could compete.

Now, the Jays sit 16th overall with a payroll of $80M and have to sit back and watch the Yankees write cheques for over $210M.

In the NBA, which has a cap, the Raptors are 14th overall. The NY Knicks lead the pack with about a $37M gap between the two teams.

I know that some question Forbes numbers but taken at its face value, LA had almost double the revenue that TFC did ($30M to $17M) in 2007. The Red Bulls are supposedly going after Thierry Henry as a nice way to fill seats in their new stadium. I think it's fair to say that LA and NY represent the 2 cities that would be at the top in spending in an unlimited spending model.

Could TFC really compete if gaps in revenue increase, either by market forces or simply a drop in the exchange rate?

Would that change your view of the DP?

[Cashcleaner]

I remember reading something by Don Garber (or maybe someone else but it was someone very familiar with rule-making in MLS) saying that the 400K of a DP's salary wasn't simply an arbitrary number. It was set like this so that teams didn't necessarily have to field a DP (i.e. to spend more money) in order to be competitive with DP-owning teams. And it wasn't a higher number (such as I don't know 750K for instance) so that having a DP wouldn't be crippling to the rest of the cap space.

Yeah, I think you're right. If I'm not mistaken, I believe LA wanted the league to amend the DP rules so that the 400K isn't counted towards the cap either.

[rocker]

they could leave it the way it is, but increase the cap for all teams equally.

then the cap hit of a DP becomes less burdensome on the cap, but teams still have to deal with some risk against the cap (makes them think twice of signing a guy).

and I'd add a second DP to every team with a much lower cap hit. This would mean that the risk of a DP getting injured and fucking your team is reduced, because you have another DP. Or you could use the second DP for a lesser player -- maybe someone who isn't Top 10 in the world, but who is better than what you can find at the top of MLS right now.

That gives options to teams, but still pulls them back a bit from going crazy, while reducing the risk to the makeup/salary of the rest of the team when a team signs a DP. Teams with less money could them jump into DP signings themselves, since the cap hit is less in proportion. And they don't have to sign the biggest names -- lesser revenue teams could target good, but not star, players and perhaps even get more of a bang for the buck than spending $6 mil on a prettyboy (Becks).

[Yohan]

Am I the only guy who thinks the current DP rule is ok?

[JonO]

^^ I agree - I don't have a problem with the rule, just the salary cap...

[Northern Soul]

I'd make none of the DP's salary count towards the cap, and not allow trading a DP slot. Other than that, I'm ok with the way it is.

[London]

WSD is saying that the salary cap might be doubled soon

[troy1982]

WSD is saying that the salary cap might be doubled soon

^^ where is extra 40 million/year (the current expenditure on salaries) in revenue coming from?

[Cashcleaner]

Am I the only guy who thinks the current DP rule is ok?

Oh, I think its fine as it is. Could be better, but like others have mentioned, the salary cap in itself is the real issue.

[Yohan]

can't remember where I read this, but MLS has lost 350 million dollars ever since it started in 96.

just saying

[GeorgeB]

^^ where is extra 40 million/year (the current expenditure on salaries) in revenue coming from?it was always there,just good mls accountants hiding it .

[Gazza_55]

I think Cash's idea is a good one but the big problem with it is that it will create a PL scenario of a big few who have the fan base to afford a DP and the rest, who don't. The have it clubs will then utterly dominate as they have a double advantage - one kick ass player better than anything the don't have cubs can muster and capable of winning games on his own and, secondly, a bigger squad since they can have everyting the have-not clubs have on their roster PLUS a DP. These are also likely to be the cubs with a bigger home advantage through their crowd sizes, which will get even bigger if they are the only DP clubs. The circle then becomes viscious and the have it clubs will demand a second DP slot, etc.

No way is the league ever going to go for that. They also won't scrap the DP trades since it allows "smaller" clubs to milk something out of the richer cubs who can afford a second DP (or just one if they have already traded away their DP spot).

I can see them lowering the cap space hit though, because that saves the league money and passes it on to the clubs. Won't be by much, however, because otherwise you're giving the clubs who can afford it too big of an advantage (see above).

I think all the teams can afford it but some are to cheap to pay the money. Kronke in Colorado has hundreds of millions of dollars (if not a billion) but will not spend more than $30k on marketing nevermind a substantial amount on players. Same with the Hunts and Krafts.

Also when a club signs a DP like Beckham or Blanco the entire league benefits as 30% of all team revenue goes into the pot for all clubs.

[Gazza_55]

^^ where is extra 40 million/year (the current expenditure on salaries) in revenue coming from?

Seattle, Philly, Portland, Vancouver, Montreal expansion fees $170 million
League share of merchandising from Galaxy alone $15m in past 2 years
Soccer United Marketing $10m to $20m annually
League share of Sounders FC revenue (30% of $35m in year 1)

[Beach_Red]

I think all the teams can afford it but some are to cheap to pay the money. Kronke in Colorado has hundreds of millions of dollars (if not a billion) but will not spend more than $30k on marketing nevermind a substantial amount on players. Same with the Hunts and Krafts.


There's a difference between the teams being able to afford it and the owners being able to afford it. If the expenses come from team revenue, fine, that rewards the fans but if it's just some billionaire playing with his hobby that doesn't do any long term good at all it just drives up debt.

[Gazza_55]

There's a difference between the teams being able to afford it and the owners being able to afford it. If the expenses come from team revenue, fine, that rewards the fans but if it's just some billionaire playing with his hobby that doesn't do any long term good at all it just drives up debt.

The teams won't go into massive debt. The league approves all the contracts and they decide if any DP contract actually helps the league from a revenue standpoint AND if MLS can afford it.

[Beach_Red]

The teams won't go into massive debt. The league approves all the contracts and they decide if any DP contract actually helps the league from a revenue standpoint AND if MLS can afford it.


Yes, that's what I meant. It doesn't matter how much money Kronke or Kraft or Hunt have personally, if their teams don't have enough revenue the contracts won't be approved.

[Fort York Redcoat]

DP + the CBA. Change is coming.

Thank the gods

[prizby]

wasn't the DP rule stolen from the Aussies???

[Yohan]

wasn't the DP rule stolen from the Aussies???
something like that

http://en.wikipedia.org/wiki/A-League#Marquee_player

Interesting analysis on A league marquee (DP) players

http://soccerlens.com/australia-a-league-intro-part-2/6425/

http://soccerlens.com/australia-a-league-intro-part-3/6432/