Which type of salary cap structure is best for MLS (to move forward)?

[Dust2]

Assume that in 2010 the salary cap will be $2.5 mil and the league will pay for this $2.5 mil. Anything over will be paid by the individual ownership. It would look like this under the various sport leagues salary structure:

Current MLS structure: hard salary cap $2.5 mil
NFL: league floor at $2.5 mil; hard cap at ~$2.9; incentive bonuses will not count toward the cap
NHL: lower limit $2.5 mil; upper limit $3.5 mil
NBA: $2.5 mil soft cap; luxury tax threshold starting at $3 mil
Snowden's two tier cap $2.5 mil soft cap; $7.5 mil hard cap (3:1 ratio)
MLB: no salary cap; luxury tax starting at around $5-6 mil
EPL, La Liga, Mexican FMF, J-league, Serie A, USL etc... no salary cap

http://www.bigsoccer.com/forum/showthread.php?t=1100492
Click on that link if you want to see how the NFL, NHL, NBA, MLB, EPL, and J-league institute their salary structure as well as the payroll for every single teams in those leagues. Too long and tedious to copy and paste into this thread. Here's the payroll ratio between the big revenue teams and small revenue teams in those leagues:

Ratio of top payroll / bottom payroll for NBA 2008-09=1.703
Ratio of top payroll / bottom payroll for NFL 2008 = 1.822
Ratio of top payroll / bottom payroll for NHL 2007-2008 = 2.03
Ratio of top payroll / bottom payroll for J-league 2009 = 5
Ratio of top payroll / bottom payroll for MLB 09 = 5.47
Ratio of top payroll / bottom payroll for EPL 07/08 = 24.94

Currently, MLS have the strictest salary cap in all of sports. Because the league pays the $2.3 mil hard cap and no team can exceed this, MLS has basically institute a level playing field for all clubs. Even the NFL (the next strictest) allow a floor of 87.6% and a ceiling cap at 100%. In addition, incentive bonuses are not counted in the NFL cap which mean the Raiders spent $152 mil on payroll while Kansas City spent $83 mil payroll.

[Dust2]

Found this interesting stats:

Does winning a title really help attendance-wise?



1996/97 DC United......15,262......16,704......YES
1997/98 DC United......16,704......16,008.......NO
1998/99 CHICAGO........17,887......16,016.......NO
1999/00 DC United......17,419......18,580......YES
2000/01 Kansas City....09,112......10,954......YES
2001/02 San Jose.......09,635......11,150......YES
2002/03 Los Angeles....18,976......21,983......YES (HDC opened)
2003/04 San Jose.......10,465......13,001......YES
2004/05 DC United......17,232......16,664......NO
2005/06 Los Angeles....24,204......20,814......NO
2006/07 Houston........18,935......15,883.......NO
2007/08 Houston........15,883......16,939......YES
2008/09 Columbus.......14,622.....*13,114.......NO*-10 games so far in 2009

MLS is obsessed with parity and yet many ticket buyers just don't care if the team is winning or not. They just want an inexpensive day out with family and friends at a sporting event. On the other hand, if the like of Seattle, Toronto, Philadelphia, Vancouver, Portland (the new breed of expansion teams) win the championship, I am willing to bet that their attendance will increase.

MLS should keep the salary cap but be more flexible about it. The only other men professional soccer league that has salary cap is the A-league. However, their DP salary is fully exempted from the salary cap whereas MLS, it costs $415,000. Which mean teams with DP in the A-league has a $415,000 flexibility in their salary structure. Even a $415,000 flexibility in MLS would be nice.

[Cashcleaner]

I, for one, am glad that this thread has been created.

It's been far too long since Dust2 has put together a thread about the subject of the MLS Salary Cap.

[Dust2]

For those unfamiliar with Snowden's two tier cap system:

http://soccer365.com/us_news/story_81208190400.php


This being the case, the league's main mission – having achieved long-term stability – must now be improving the quality of its on-field product, a goal that can only be met by investing substantially greater sums in attracting outstanding talent.

Perhaps instead of having a system in which only one or two players can receive unlimited wages, MLS could create a new system in which owners could invest extra money up to a specified maximum if they wish in order to sign as many players as they want, so long as these players could be accommodated by the available number of roster spots, which will increase to 20 beginning next season.

This new system would feature not one salary cap, but two – a "soft" cap and a "hard" cap. The soft cap could be set at, say, $3 million, to be drawn from the league's coffers under MLS's single-entity structure. The hard cap, in which the balance would be funded solely by each team's owner, could be set at $10 million, allowing each team to beef up its roster by spending up to $7 million extra on players at each owner's discretion.

To see one clear advantage of such a cap system over the DP Rule, one need look no further than the Los Angeles Galaxy. Despite boasting Beckham and Landon Donovan, the Galaxy has missed the playoffs three years running, often playing poor soccer due to being forced to surround their two outstanding players with a cast composed largely of poorly paid players whose performances too often matched their paychecks.

With a two-tier cap system like that described above, teams would have far more leeway to build their rosters than under the DP Rule. If Galaxy chief Tim Leiweke wants to keep Beckham and his $6.5 million salary, for example, he can still do so, but he could also choose to offload Becks and instead use the $7 million of extra cap space to sign seven players at $1 million each, a move that would surely make his club far stronger.

Some would likely argue that such a two-tier cap system would introduce competitive imbalance into MLS, giving the wealthiest owners an unfair advantage. While this could indeed prove to be the case, there are a couple of counterpoints to consider as well.

First, given the cost of signing truly elite players, the competitive imbalance would not be excessive. It certainly would not be a situation like that of the old North American Soccer League, where the New York Cosmos outspent other teams by overwhelming margins, or of European football, where massive wealth routinely buys trophies while lesser teams are left to play the role of hapless victim.

Given that many top players earn $7 million or more, MLS teams would be left with the choice described above: sign one player like Becks or Thierry Henry, or raid strong South American clubs and snag several high-quality non-megastars. The latter team might be a bit more likely to defeat a less well-stocked team on a given day, but given the relatively minor wage discrepancies, the less pricey team would never be easy meat.
This being the case, owners of lesser means would not need to fear that their teams would be left with little chance; as such, they would not be overly tempted to spend foolishly in an attempt to keep up with the wealthier Joneses. Clubs with more modest rosters would still be able to make the playoffs, and they would therefore continue to have a legitimate shot at the title every season.

Second, we encounter yet another valid question: Would having a bit of competitive imbalance in MLS be such a bad thing? For years, many have complained about the excessive parity engendered by the league's single-entity structure, which has spread the wealth so thoroughly that MLS has been left with a full stable of comparably mediocre teams.

To be sure, having a handful of teams willing to splash more cash on much better talent (within reasonable limits, as noted above) would undermine the trend toward mediocrity. Modest players with potential would be better able to maximize that potential by facing superior opponents every week, and the prospect of beating the richer clubs would help fuel rivalries and make each game matter more, a perennial problem for MLS.

All of this in turn would boost MLS's chances of drawing and keeping more of the nation's core of soccer-savvy fans, possibly the most valuable outcome of all. These fans, attracted by MLS's much-improved standard of play, would likely show up through thick and thin and add a new element of passionate support, growing the league's fan base and putting MLS on track to evolve into one of the world's top circuits.I revised it to a more realistic $2.5 mil soft cap (league paying); $7.5 mil hard cap (individual owner pays) for this thread. $3 mil and $10 mil might not be realistic in the current climate. Maybe a mixture of Snowden's two tier caps and luxury tax could work well by providing low revenue teams with an additional revenue stream in the luxury tax.

$2.5 mil soft cap (the league pays this)
luxury tax threshold at $3 mil ($1 for $1 over)--teams under luxury tax threshold receive luxury tax revenue
$7.5 mil hard cap (no team can exceed this amount)

So in order to spend $7.5 mil, that said team will have to pay $4.5 mil luxury tax.

[Jack]

Third thread on the same subject...