MLS CBA "Salary Cap could go up to 5 Million"

[DigzTFC!]

Mods please move as you see fit:

http://www.bigsoccer.com/forum/showthread.php?t=926792

1) "Work-stoppages are terrible in any sport, but I think both sides know that it would be devastating for us, and discussions so far about the CBA have reflected that. Both sides want this to work."

2) "This CBA will change the face of the league forever. Given the current economic conditions, a salary cap of $10 million is out of the question. But we're (meaning RBNY) part of a group that wants to push it close to $5 million. Others want less, but either way it'll be significantly higher than it is now."

[ensco]

Mods please move as you see fit:

http://www.bigsoccer.com/forum/showthread.php?t=926792

1) "Work-stoppages are terrible in any sport, but I think both sides know that it would be devastating for us, and discussions so far about the CBA have reflected that. Both sides want this to work."

2) "This CBA will change the face of the league forever. Given the current economic conditions, a salary cap of $10 million is out of the question. But we're (meaning RBNY) part of a group that wants to push it close to $5 million. Others want less, but either way it'll be significantly higher than it is now."

Nice find.

[DOMIN8R]

If true. This is great.

Of course, MLS will want a long agreement and in exchange the cap could rise 15% to 30% per year.

Fine by me. This can only help the league and improve the product and specifically help big market teams like Toronto, NY, LA, Chicago, etc.

[supernothingman]

Fantastic. If it's true.

[GeorgeB]

the cap at even 5 mill means we dont lose our best young and developed players to weaker leagues like norway and,it means we can attract better foreigners to play here.huge impact on the quality of the mls and a better chance to win at concacaf champions league too.

[flatpicker]

This would be great!
Hopefully when they work out the new agreement they can add conditions whereby if revenues grow then the new salary cap can continue to grow along with it.

And if they do indeed go up to 5mil... I hope they will keep the DP.
I would be ok if they dumped the DP once reaching 10mil or so... but 5mil is still not a lot so I think they should keep that rule in place.
In fact, it would wonderful if they had a 5mil cap and a DP slot that does not count against the cap at all!

[DigzTFC!]

The best thing now is Canadian road warrior youth can now really stay at home and develop. The higher competition will push them further and create better players

[Razcle]

But...If the salary cap significantly rises. Will ticket prices rise as well? Because MLSE is only making a 2.1 million profit (Forbes), so if their operating expences rise to 5 million, where does their profit come from?

[DigzTFC!]

Good point Razcle. Its all about expanding the TFC brand. Currently, you have TFC selling out in the stands but on TV the numbers a pretty embarrassing. That idea is that higher quality of play and players will sell the game moreso than growing slowly. To be honest, if I knew MLS would remain at 2.3 million for the rest of time, I wouldn't be so eager to buy in. But, the prospect of it becoming a top 10 league in the world is enough for me to watch "the hard years". I dream of the day when I can watch an international tournament and MLS and not be turned off by the quality of our league. Its a diamond in the rough

[RedRum]

But...If the salary cap significantly rises. Will ticket prices rise as well? Because MLSE is only making a 2.1 million profit (Forbes), so if their operating expences rise to 5 million, where does their profit come from?

Without question tickets will go up in price. However, attracting semi-big name players and putting a "watchable" product on the field will greatly increase TV numbers, or so the theory goes.

Bottom line at the present is if you want to grow the sport, the time has come to elevate the cap.

[denime]

But...If the salary cap significantly rises. Will ticket prices rise as well? Because MLSE is only making a 2.1 million profit (Forbes), so if their operating expences rise to 5 million, where does their profit come from?

But with additional 5-10K seat at BMO Field they will be making more money too.

[james]

But...If the salary cap significantly rises. Will ticket prices rise as well? Because MLSE is only making a 2.1 million profit (Forbes), so if their operating expences rise to 5 million, where does their profit come from?

they can also exspand the stadium to 25,000 - 30,000 that will increase profits alot. If the skill on the field gets better maybe more people will also watch on TV, increasing sponsors and TV deals!

[arbogast]

I doubt it'll go up that much. look at the numbers:
2009: 15 teams x $2.3 mil = $24.5 mil in salary paid out by the league
2010: 16 teams x $5 mil = $80 mil in salary paid out by the league

That means the league will have to find an extra $55.5 mil/year.
Where do you think MLS is going to get this revenue from in this economic climate? not from corporate sponsorships and definitely not from tv cuz their ratings are abysmal.

[james]

Without question tickets will go up in price. However, attracting semi-big name players and putting a "watchable" product on the field will greatly increase TV numbers, or so the theory goes.

Bottom line at the present is if you want to grow the sport, the time has come to elevate the cap.

i think having better players isnt the only thing the league needs to do tho to attract more fans to watch MLS. There is many things i think the League can inprove on, but one of the major things that sometimes turns me off of watching MLS games is seeing these NFL gridline fields. Im glad most teams either have new stadiums or are moving into bran new stadiums soon, like NY in fall of 2009 and Philly in 2010. But teams like Houston and New England, when the hell are they ever gonna stop playing on gridline fields? To inprove the league and convince new fans that MLS is a serious pro league, then they got to look like one, not like some amature league!

[DigzTFC!]

Razcle brings up a point though, what does the $2.1 million profit represent. MLS pays for salaries. So would the 2.1 million be over and above the salary expense for TFC as it may not be part of their operating budget. Also, with two franchises being introduced at $40 million a piece. It might be a good time for those 16 teams to go to $5 Million. They could pay the first year without anyone showing up in the stands or TV coverage. Its an oversimplification of course.

[tfc]

I doubt it'll go up that much. look at the numbers:
2009: 15 teams x $2.3 mil = $24.5 mil in salary paid out by the league
2010: 16 teams x $5 mil = $80 mil in salary paid out by the league

That means the league will have to find an extra $55.5 mil/year.
Where do you think MLS is going to get this revenue from in this economic climate? not from corporate sponsorships and definitely not from tv cuz their ratings are abysmal.

... ummmm, the $40mm expansion fees? x2! And then they will probably boost the price to $50mm for the next round of expansion, and so on...

I do agree though, that is a massive sum and they will have to find some alternative means of producing this cash ... Wasn't the league in an agreement to sell television rights in Europe for $100mm as well?

MLS will find some way of doing it. Maybe they will allow teams to control their own players and pay their own salaries! that would be nice

[ccopela]

I doubt it'll go up that much. look at the numbers:
2009: 15 teams x $2.3 mil = $24.5 mil in salary paid out by the league
2010: 16 teams x $5 mil = $80 mil in salary paid out by the league

That means the league will have to find an extra $55.5 mil/year.
Where do you think MLS is going to get this revenue from in this economic climate? not from corporate sponsorships and definitely not from tv cuz their ratings are abysmal.

I'm sure the $40 mil from each expansion team will help in that regard.

[Broadview]

Five million buckeroos? That's Big League money. Like, CFL big. No foolin'.

[Beach_Red]

... ummmm, the $40mm expansion fees? x2! And then they will probably boost the price to $50mm for the next round of expansion, and so on...


Pretty much the NHL model - how many owners lived off other teams' expansion fees for years? But it may be a better gamble for MLS because there's still the chance that in five or six years, with a solid 20 team league they could get a real TV deal.

It's still a gamble, of course, but it would be great if they tried it.

[jwfm1985]

I doubt it'll go up that much. look at the numbers:
2009: 15 teams x $2.3 mil = $24.5 mil in salary paid out by the league
2010: 16 teams x $5 mil = $80 mil in salary paid out by the league

That means the league will have to find an extra $55.5 mil/year.
Where do you think MLS is going to get this revenue from in this economic climate? not from corporate sponsorships and definitely not from tv cuz their ratings are abysmal.

55MM is a lot of money, but 2.3 to 5 is over a 100% jump. My guess is the next step will be closer to 3.3MM, meaning 16MM extra per year. Still a lot, but definitely doable. It would get really interesting if it increased to 3-4MM, but also had the 2 tier salary system that was talked about to death before...

[flatpicker]

It would get really interesting if it increased to 3-4MM, but also had the 2 tier salary system that was talked about to death before...


I think if they used the two-tier salary system then we could see a 5mil cap.
Make 3mil the soft cap that is covered by the league, and the rest is paid straight from the teams pockets.
It may create some stronger clubs, but it would sure make things more interesting in MLS.

[T_Mizz]

Couple of "when"s for whoever knows the answers:
1) When are they deciding this?
2) When does it go into effect?
3) When will they review it next?

[werewolf]

I have read that the new Womens league salary cap will be $5 mil. I would hope the MLS could approach that.

[T_Mizz]

I have read that the new Womens league salary cap will be $5 mil. I would hope the MLS could approach that.
Are you joking me?
Nothing against women's sports and from what I understand this is going to be THE premier women's league in the world but it is still women's soccer in a country that can't support the men's game

[Razcle]

Are you joking me?
Nothing against women's sports and from what I understand this is going to be THE premier women's league in the world but it is still women's soccer in a country that can't support the men's game

I understand what you are saying. But its not like womens soccer will be viewed any higher in any other part of the world. England, Italy, France, Spain, Germany, Brazil...The womans game would attract less than they likely will here.

[T_Mizz]

True the game is less polarized here I suppose but come on 5 mil?
If the MLS isn't sure they can do 5 mil then why should WPS be?
PS I've decided to cheer for either FC Gold Pride because of Christine Sinclair or LA Sol because of Marta

[denime]

Five million buckeroos? That's Big League money. Like, CFL big. No foolin'.

:smilielol5: CFL big indeed

[T_Mizz]

So anyone know when this is getting voted on or instituted?

[Razcle]

2010 Cba

[T_Mizz]

cool so in 2009 we still have to endure the 2.2 or something

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[BakaGaijin]

cool so in 2009 we still have to endure the 2.2 or something

I don't believe this amount is even in the CBA.....it's just an amount that the owner's agreed upon. MLS has a minimum compensation agreement with the union, but it appears much to be much lower than 2.2 million.

Here is the current CBA:

http://www.mlsplayers.org/files/collective_bargaining_agreement__final.pdf

[oxygenatedbrain]

Warning...any further resort to facts will damage the flow of this thread...

[T_Mizz]

when is this being voted on again?

[tlear]

5 mil and roster size should be raised by atleast 2-3 players..

Playing in CONCACAF CL against good teams is $$ more games in general = more $$, to get those games need a better side and more depth. TV rights, branding etc tickets will go up somewhat but stadium will also probably be expanded.

[Yohan]

5 mil and roster size should be raised by atleast 2-3 players..
I'm going to guess a raise of 1 mil and small increase in roster size.
The recession thing is going to scare a lot of head honchos to risk expanding the salary cap too much


Playing in CONCACAF CL against good teams is $$ more games in general = more $$, to get those games need a better side and more depth. TV rights, branding etc tickets will go up somewhat but stadium will also probably be expanded.
Other than some of the big Mexican teams, how many other teams in CCL would actually draw?

[S_D]

Yohan, I think you are being much more realistic. Watch out or you are going to depress everyone lol.

If anyone has been watching the news on the U.S. economy, there is a bunch of more bad news coming and I can't help wonder if even a million is realistic. Apparently a bunch of the financial institutions have been hiding the true number of home foreclosures and we will see another big hit.

Yeah sure there are expansion fees coming in but:
a) there are clubs that can't increase their attendance more unless they expand their stadiums (TFC, Galaxy)
b) you can't keep raising salaries as expansion can't continue forever
c) with an economy in a potential tailspin entertainment $$$ are the first thing that get chopped from family budgets

Heck with the economy as it is I'd be happy to see a 200K a year increase over and above existing player salary inflation.

[kodiakTFC]

I really wish the cap was 10 million, the skill in this league would triple.

[TFCREDNWHITE]

I doubt it'll go up that much. look at the numbers:
2009: 15 teams x $2.3 mil = $24.5 mil in salary paid out by the league
2010: 16 teams x $5 mil = $80 mil in salary paid out by the league

That means the league will have to find an extra $55.5 mil/year.
Where do you think MLS is going to get this revenue from in this economic climate? not from corporate sponsorships and definitely not from tv cuz their ratings are abysmal.

Umm correct me if i'm wrong, but even though the league is a operated like a single entity, the league only "controls" the players contracts, the league doesn't actually pay for the salaries the teams actually pay for the salaries.

Whereby, the teams have to pay for every single dime payed to the players...

[Fort York Redcoat]

True the game is less polarized here I suppose but come on 5 mil?
If the MLS isn't sure they can do 5 mil then why should WPS be?
PS I've decided to cheer for either FC Gold Pride because of Christine Sinclair or LA Sol because of Marta

SYL- Support your local.

(Not that I know what that team is...)

[Lucky Strike]

A 5 million cap would be awesome, but probably too much of a big step. Even without the economic trouble, it'd probably be a bit too much. I hope it gets increased to 3 million at least, but ideally, I'd like to see around 3.5 million.

[Fort York Redcoat]

I'm hoping they use a higher cap to bring in better players but try not to overpay/estimate domestic players.

[I_AM_CANADIAN]

5 million would be great. Hopefully with the raised cap the roster sizes are expanded also so we don't have this dilemma of having to get rid of a couple very good players because of the ridiculously low roster limit. 18 men isn't even two per position.

[ensco]

Having slept on it, this makes little sense to me.

Ticket revenues for MLS league-wide have to be down. Just because of what's going on out there.

I hope they raise it, but I'll be very, very surprised if it's by more than a bit.

[I_AM_CANADIAN]

The thing is, in my opinion, that some markets like Kansas City will always be unprofitable. KC should be packed up and moved to St. Louis. They have no fans and they're playing at a baseball field FFS. No amount of big-name signings is going to bring in fans there.

Ticket sales aren't the only thing, though. A better league in terms of quality will hopefully get the league better TV deals, worth more money and with more games shown. Hopefully ratings increase as well. Merch sales will probably go up, and the league will be taken more seriously here and around the world.

[S_D]

Umm correct me if i'm wrong, but even though the league is a operated like a single entity, the league only "controls" the players contracts, the league doesn't actually pay for the salaries the teams actually pay for the salaries.

Whereby, the teams have to pay for every single dime payed to the players...

Nope,

MLS pays for the salaries. The MLS gets a cut of the ticket revenues from the teams to cover operating expenses. That's why it is so important for teams like KC to get their acts together and move into stadiums to sell their tickets or move to a market that will support the team. I don't want to see the bigger market teams propping up non viable franchises like what is happening in the NHL.

[I_AM_CANADIAN]

Nope,

MLS pays for the salaries. The MLS gets a cut of the ticket revenues from the teams to cover operating expenses. That's why it is so important for teams like KC to get their acts together and move into stadiums to sell their tickets or move to a market that will support the team. I don't want to see the bigger market teams propping up non viable franchises like what is happening in the NHL.
My thoughts exactly. Of course, in the NHL, the whole idea of having a revenue-sharing system in the first place was to save those never-to-be-successful teams in North Carolina, Atlanta, Nashville, etc...

[Steve]

Umm correct me if i'm wrong, but even though the league is a operated like a single entity, the league only "controls" the players contracts, the league doesn't actually pay for the salaries the teams actually pay for the salaries.

Whereby, the teams have to pay for every single dime payed to the players...

You're wrong. The league actually pays for the players' salaries as well, but collects a percentage of revenue.


I really wish the cap was 10 million, the skill in this league would triple.

Yeah! And I wish the cap were 100 billion dollars! That way we would have like, 30,000 times the player skill! Seriously though, I read your post as "I wish MLS would crash and burn so we can go back to watching soccer from Europe on TV".

[Fort York Redcoat]

The thing is, in my opinion, that some markets like Kansas City will always be unprofitable. KC should be packed up and moved to St. Louis. They have no fans and they're playing at a baseball field FFS. No amount of big-name signings is going to bring in fans there.

Ticket sales aren't the only thing, though. A better league in terms of quality will hopefully get the league better TV deals, worth more money and with more games shown. Hopefully ratings increase as well. Merch sales will probably go up, and the league will be taken more seriously here and around the world.

KC doesn't look good but it has happened in the past that unexpected franchises can turn it around with one star and some winning ways.

Washington Capitals for one.

KC was one of those choices more for geography than hunger for the sport I imagine.

[I_AM_CANADIAN]

Well, apparently Lamar Hunt, who was one of the key players in getting MLS off the ground, was from KC and really wanted one of the teams to play in his hometown. Just another one of the many mistakes made by the original ownership group. You'd have thought St. Louis would be a no-brainer, it being, historically, the biggest soccer city in the US.

[Cashcleaner]

A salary cap of 5 million is really quite fair when you make a comparison to other sports organizations in North America and more importantly, other soccer leagues around the world. While we're at it, simplify the DP rule and make it cost nothing towards the cap (as opposed to the current $400,000 that is counted against the cap).

While we're at it, increase the league minimum salary and increase the roster size.

[Beach_Red]

Raising tha cap now would be just admitting what's going on - the DP rule means teams are already spending more than the $2.3 million (or whatever the cap is). Sometimes they're doing it with allocation or whatever Columbus used, but almost all the teams are already doing it.

Just admit it and allow teams to spend the extra however they want - one big star or spread it out over three or four players.

[arbogast]

... ummmm, the $40mm expansion fees? x2! And then they will probably boost the price to $50mm for the next round of expansion, and so on...

I do agree though, that is a massive sum and they will have to find some alternative means of producing this cash ... Wasn't the league in an agreement to sell television rights in Europe for $100mm as well?

MLS will find some way of doing it. Maybe they will allow teams to control their own players and pay their own salaries! that would be nice


Expansion fees are one time only payments that have to go towards the massive debt the league has raked up. They can't count on those expansion fees to cover salary 4-5 years from now can they? The only prudent way to move forward is to match salaries to annual revenue.

[trane]

^ I am hoping that it would be 5 million plus a DP, I think that then you could start developong some quality sides. Atleast by CONCAF standards.

[tlear]

What I am hoping for is that MLS and clubs will start getting more money from international competitions. Overall those are very under promoted and have a large potential. Obviously CCL is not going to become like CL anytime soon but I think that TV rights, ads etc if properly marketed could be huge $$ in Mexico, some parts of US etc. So I think that the cap and roster space needs to be expanded to where MLS teams have a consistent chance to advance and do well.

They could even introduce something like a salary cap credit based on placement in CL. Perhaps apply certain % of the money won from CL to the cap of the team?

[brad]

Raising tha cap now would be just admitting what's going on - the DP rule means teams are already spending more than the $2.3 million (or whatever the cap is). Sometimes they're doing it with allocation or whatever Columbus used, but almost all the teams are already doing it.

It could be admitting that the whole DP concept is actually broken within the context of the existing cap.

Looking at this from purely a business perspective - Beckham has been a good bit of business for the league, but not having there most marketable player (actually, two most marketable if you consider Ladycakes) and team in the playoffs two years running has to considered a failure. That's in no small part to the constrictive cap made them field a bunch of part time calibre players.

Beckham in a playoff run and the MLS cup would have been a ratings dream for the league.

[I_AM_CANADIAN]

Expansion fees are one time only payments that have to go towards the massive debt the league has raked up. They can't count on those expansion fees to cover salary 4-5 years from now can they? The only prudent way to move forward is to match salaries to annual revenue.
Massive debt? Do you have a source for this? I didn't realize the league was in debt.

[BakaGaijin]

By increasing the cap the league will be able to sign more good, young talent, particularily the American talent. It will then be able to turn around and sell that talent to bigger clubs and the cap increase will therefore partially pay for itself. The key is to keep the cap realistic, and to ensure that good, young players are signed and not over-the-hill bums.

[brad]

Increasing the cap also increases the quality on the field, which should do wonders to increase the viewer ship of the league.

There is a large, and growing market for this sport on this continent, but the quality of the product just doesn't measure up against the competition.

[TFCREDNWHITE]

Nope,

MLS pays for the salaries. The MLS gets a cut of the ticket revenues from the teams to cover operating expenses. That's why it is so important for teams like KC to get their acts together and move into stadiums to sell their tickets or move to a market that will support the team. I don't want to see the bigger market teams propping up non viable franchises like what is happening in the NHL.

That doesn't make any sense what so ever....

Toronto has to get MLSE Board approval for budgets, which include DP approvals.

The MLSE board control the amount of money being sent to MLS coffers.

Also, DeRo had to renegotiate his contract in Canadian Dollars, which means he is paid in Canadian Dollars.

I think MLS just "contols" the outwardly flow of money and monitors money levels and "holds" onto the players contracts.

I guess what i'm saying is MLS does pay the players, but they receive the money and contract directives from the team.

[BakaGaijin]

That doesn't make any sense what so ever....

Toronto has to get MLSE Board approval for budgets, which include DP approvals.

The MLSE board control the amount of money being sent to MLS coffers.

Also, DeRo had to renegotiate his contract in Canadian Dollars, which means he is paid in Canadian Dollars.

I think MLS just "contols" the outwardly flow of money and monitors money levels and "holds" onto the players contracts.

I guess what i'm saying is MLS does pay the players, but they receive the money and contract directives from the team.

Wrong. MLS pays all player salaries, with the exception of the DP salary after the threshold of around $450 000.

So, if TFC did sign a DP they would have to pay for the salary above $450 000 and would therefore need approval for that..........but the board does not need to approve the rest of the salaries for players.

[TFCREDNWHITE]

Wrong. MLS pays all player salaries, with the exception of the DP salary after the threshold of around $450 000.

So, if TFC did sign a DP they would have to pay for the salary above $450 000 and would therefore need approval for that..........but the board does not need to approve the rest of the salaries for players.


Hmmm O/k thanks for clarifying. :)

[I_AM_CANADIAN]

We could definitely afford to pay a total of 2.3 million in salary. Pavel Kubina alone makes nearly three times that...

[Steve]

A salary cap of 5 million is really quite fair when you make a comparison to other sports organizations in North America and more importantly, other soccer leagues around the world. While we're at it, simplify the DP rule and make it cost nothing towards the cap (as opposed to the current $400,000 that is counted against the cap).

While we're at it, increase the league minimum salary and increase the roster size.

Wait, what? Fair? Are you trying to bring up fair in a business? How does fair come into this argument at all? You're right, considering how much some hockey players are paid, I should have been paid a million dollars to play hockey, that seems only fair.

Look, MLS is an organisation built to make money. Yes, its secondary goal is promotion of soccer in the USA, but make no mistake, it, like everything else, is designed for profit. You make profit by having less money going out than coming in. Sure, arguments might be made to support a higher GP potential should the salary caps increase, but "fair" never comes into the equation. Also, I doubt many people on this message board (full of soccer fanatics) is really in any position to make an unbiased point about profitability.

[rocker]

I have read that the new Womens league salary cap will be $5 mil. I would hope the MLS could approach that.

where did you read this? please provide a source, because the only source i could find is this:

http://www.signonsandiego.com/sports/soccer/20080618-9999-1s18soccer.html

and it says the total budget for each team in the women's league will be 2.1 and 2.5 million. So salaries must fit into that after costs are taken into account.

There's no way the salary budget for each women's league team is $5 million. The whole league budget for salary might total $5 million. That makes much more sense. Each team would have a cap of $714,000 to divide among 18.

[brad]

We could definitely afford to pay a total of 2.3 million in salary. Pavel Kubina alone makes nearly three times that...

And what is the Leafs revenue stream compared to TFC's?

[T_Mizz]

SYL- Support your local.

(Not that I know what that team is...)
You know I would and I've said before we should've been in on this but the closest teams geographically are Chicago, Boston, New Jersey
so I figure even though they're the farthest geographically those two teams I mentioned before are closer to my heart:canada:

[NF-FC]

But...If the salary cap significantly rises. Will ticket prices rise as well? Because MLSE is only making a 2.1 million profit (Forbes), so if their operating expences rise to 5 million, where does their profit come from?

MLSE's profit margin would be far more than 2.1 million if it were not for single entity. Right now the league takes 60-66% (not sure which) of ticket revenue to pay salaries. So teams like us and LA with high attendance and even higher ticket prices have essentially been paying the salaries of 2-3 teams each.

Now I can't see the owners agreeing to hand over more than 66% for any reason. The money for the cap increase has to be coming from somewhere else, so in theory tickets prices shouldn't be affected.

[flatpicker]

I really think it would be best to not raise the league salary cap to more than 3mil... but as we have discussed, implement a 5mil soft cap with the money coming out of teams pockets. Then the teams that are earning more, and having to dish out cash in order to support the weak teams, can get a little bonus wiggle room which they deserve. And don't count the DP against the cap!!!! Teams like TFC and LA etc. support this league and keep money coming in. They deserve the chance to improve their clubs beyond some of the others.

[NF-FC]

What i'd like to see:

1. no DP!
2. base salary of 2.5 million paid by the league
3. max salary of 5 million, every dollar above the base paid by owners
4. 26 man roster
5. no allocation, it'd be outdated and useless
6. allow teams to spend money on transfers, but only for "discovery" players coming into the league.
7. remove all restriction on signing academy players, use the college draft as a "supplementary draft"

I really don't believe in the DP rule. Think of how good LA could have been if they bought six $1,000,000 players rather than one $6,000,000 man

[arbogast]

Massive debt? Do you have a source for this? I didn't realize the league was in debt.

None of the teams according to Fobes are profitable

http://www.soccerticketsonline.com/mls-team-valuations/

League lost 20 million in 2007:

http://latimesblogs.latimes.com/sports_blog/2008/09/forbes-offers-i.html

[Beach_Red]

What i'd like to see:

1. no DP!
2. base salary of 2.5 million paid by the league
3. max salary of 5 million, every dollar above the base paid by owners
4. 26 man roster
5. no allocation, it'd be outdated and useless
6. allow teams to spend money on transfers, but only for "discovery" players coming into the league.
7. remove all restriction on signing academy players, use the college draft as a "supplementary draft"

I really don't believe in the DP rule. Think of how good LA could have been if they bought six $1,000,000 players rather than one $6,000,000 man


This is an excellent plan.

[NF-FC]

None of the teams according to Fobes are profitable

http://www.soccerticketsonline.com/mls-team-valuations/

League lost 20 million in 2007:

http://latimesblogs.latimes.com/sports_blog/2008/09/forbes-offers-i.html

That doesn't mean they are in debt, it just means they have lost money.

[C.Ronaldo]

That is the man with the plan........

me likes

[arbogast]

That doesn't mean they are in debt, it just means they have lost money.

Oh sorry. Either way they've lost a reprted $350 million from 1996 - 2004 ( read the last paragraph: http://www.ajc.com/services/content/printedition/2008/06/20/mlsatlantaspt.html?cxntlid=inform_artr )and continue to lose money every year. Do you really think they are in a position to double the cap?

[flatpicker]

^ but if any extra salary comes out of teams pockets then it could be alright.
Individual teams could put forward some sort of budget report that shows the league they are financially capable of spending more on their roster, and then the league would give them the green light to do so. That way teams don't just spend money that will put them in financial jeopardy. Basically it's a bonus to the wealthier teams... and why not... they are the ones that are keeping the league afloat, so they should be allowed a few perks. Besides, if some teams spend the extra money then it will improve the quality of play in many of the games. That will boost interest and then generate more income for all.

You gotta spend money to make money!

[Beach_Red]

Oh sorry. Either way they've lost a reprted $350 million from 1996 - 2004 ( read the last paragraph: http://www.ajc.com/services/content/printedition/2008/06/20/mlsatlantaspt.html?cxntlid=inform_artr )and continue to lose money every year. Do you really think they are in a position to double the cap?

I don't think I've ever heard of a sports team in the world that's not in debt. Makes me a little suspicious of their accounting methods....

[jwfm1985]

I don't think I've ever heard of a sports team in the world that's not in debt. Makes me a little suspicious of their accounting methods....

Why would that make you suspicious? Nobody said they were or were not in debt. The fact is 99.9% of companies have debt on them. The most successful teams in the world have MASSIVE debt - to the point where it is becoming dangerous. Debt within reason can be good, it increases your returns.

The reality is we dont know anything about the league's finances. The forbes article says some teams have negative earnings - but those could very well be non-cash losses.

I think having a cap of around 3-3.5MM with teams allowed to spend up to 5 out of their own pocket is a phenomenal idea, and should be easily affordable to the league - especially if 2 expansions teams actually pay $40MM to join.

[Yohan]

I don't think I've ever heard of a sports team in the world that's not in debt. Makes me a little suspicious of their accounting methods....
so. when are sports teams going to get a bailout package too?

[Beach_Red]

so. when are sports teams going to get a bailout package too?

Shut up! Don't even say that out loud.

Although, if you want to count investment in stadiums, tax breaks, free land, etc., they've been getting bailouts forever.

[Beach_Red]

Why would that make you suspicious? Nobody said they were or were not in debt. The fact is 99.9% of companies have debt on them. The most successful teams in the world have MASSIVE debt - to the point where it is becoming dangerous. Debt within reason can be good, it increases your returns.

The reality is we dont know anything about the league's finances. The forbes article says some teams have negative earnings - but those could very well be non-cash losses.

I think having a cap of around 3-3.5MM with teams allowed to spend up to 5 out of their own pocket is a phenomenal idea, and should be easily affordable to the league - especially if 2 expansions teams actually pay $40MM to join.


I should have put this :rolleyes: on there. You're right, we don't know anything about their finances. I do feel, though, that we've often been fed a load of bullshit by team owners to get better deals from governments - tax breaks, new lease deals, zoning changes, etc., and yet most teams keep right on doing what they're doing.

Maybe it's, "becoming dangerous," but that's really up to them. Toronto has proven there's money to be made from pro soccer, so that demand will be met by someone. Some teams' prfits will increase if they invest more and it'll be hard to stop them. The Board of Governors will soon be dominated by owners like Seattle and the next expansion teams who've all paid many millions to get into the league and others with the potential to make more money if the product on the field is better.

[jwfm1985]

I should have put this :rolleyes: on there. You're right, we don't know anything about their finances. I do feel, though, that we've often been fed a load of bullshit by team owners to get better deals from governments - tax breaks, new lease deals, zoning changes, etc., and yet most teams keep right on doing what they're doing.

Maybe it's, "becoming dangerous," but that's really up to them. Toronto has proven there's money to be made from pro soccer, so that demand will be met by someone. Some teams' prfits will increase if they invest more and it'll be hard to stop them. The Board of Governors will soon be dominated by owners like Seattle and the next expansion teams who've all paid many millions to get into the league and others with the potential to make more money if the product on the field is better.




I agree, it is up to them - all I met by "becoming dangerous" is that teams like Real Madrid (and others in Spain) are actually on the verge of bankruptcy with their current levels of debt.



And trust me; I look forward to the days where the board is dominated by owners like Seattle who have open wallets! MLSE has the ability to be a big spender and hopefully they follow the philosophy of “putting a better product on the field will eventually = more $$$$$!
I hope so - I would love for the expansion teams to come in with open wallets and put upward pressure on spending!

[Yohan]

I agree, it is up to them - all I met by "becoming dangerous" is that teams like Real Madrid (and others in Spain) are actually on the verge of bankruptcy with their current levels of debt.
And trust me; I look forward to the days where the board is dominated by owners like Seattle who have open wallets! MLSE has the ability to be a big spender and hopefully they follow the philosophy of “putting a better product on the field will eventually = more $$$$$!

I hope so - I would love for the expansion teams to come in with open wallets and put upward pressure on spending!
right

spend spend spend! no profit! good way of doing business

[Oldtimer]

The thing is, sophisticated investors don't pony up $40 million to lose money.
In real terms, probably most MLS clubs are making money.
However, they have created paper losses in order to:

(1) Cry "poor" to the players.
(2) get government money for stadium deals.

How do you do that? It's easy, because no MLS club is a public company, there is a lot of latitude to do it. There are two ways:

(1) Under-report income. The figures leaked to Forbes by MLS exclude television royalties paid to Soccer United Marketing (SUM) that haven't been sent as dividends to the clubs (i.e. most of it). Even the NFL would seem to be losing money if television royalties were excluded. Now MLS royalties aren't anywhere approaching NFL levels, but they are enough to make the difference between profit and loss. The figures also exclude money from new franchises. $80 million divided between 15 clubs? You do the math.

(2) Overstate expenses. There are a lot of non-cash expenses that you have a lot of latitude to choose the period over which to write off. For example, say you build a SSS for $80 million. Now you could write off that stadium over 40 years, and your depreciation would be $2 million per year. If you write it off instead over 10 years, then it's $8 million per year. $6 million in "losses" created just like that! You can do similar gymnastics with the franchise fee, etc.

http://ecx.images-amazon.com/images/I/51RTMpjEKeL._SL500_.jpg

[jwfm1985]

right

spend spend spend! no profit! good way of doing business


If you took the time to read my previous posts, you would see I am in favor of a cap at $3.3MM range, and argued that by "spend spend spending" you will see profit from customers appreciating the improved on-field product

[S_D]

The thing is, sophisticated investors don't pony up $40 million to lose money.

yeah you are right there. Most of them set up a company and borrow other people's money. If they default, the company goes tits up and their personal wealth isn't put at risk :)

[jwfm1985]

right

spend spend spend! no profit! good way of doing business

but you are right... it is probably best to reduce the cap to 1.2MM... that would be the REAL good way of doing business :skep:

[Luanda]

Perhaps a stupid question for the more enlightened.

The so-called investors who pony up 40 mil to lose money, if they do lose it don't they get a tax break on their other, even more impressive investments?

[Cashcleaner]

Wait, what? Fair? Are you trying to bring up fair in a business? How does fair come into this argument at all? You're right, considering how much some hockey players are paid, I should have been paid a million dollars to play hockey, that seems only fair.

Look, MLS is an organisation built to make money. Yes, its secondary goal is promotion of soccer in the USA, but make no mistake, it, like everything else, is designed for profit. You make profit by having less money going out than coming in. Sure, arguments might be made to support a higher GP potential should the salary caps increase, but "fair" never comes into the equation. Also, I doubt many people on this message board (full of soccer fanatics) is really in any position to make an unbiased point about profitability.

Haha! You're right, of course. In a perfect world we wouldn't have soccer/hockey/baseball players getting paid up to ten times as much as, let's say...a doctor, a teacher, a firefighter...

[Yohan]

If you took the time to read my previous posts, you would see I am in favor of a cap at $3.3MM range, and argued that by "spend spend spending" you will see profit from customers appreciating the improved on-field product
if I was an investor, I cannot with good conscience see a good potential return for any investment, considering the numbers MLS put up in profitability so far, crappy attendance in a lot of teams, and general feeling brought on by recession.

[flatpicker]

if I was an investor, I cannot with good conscience see a good potential return for any investment, considering the numbers MLS put up in profitability so far, crappy attendance in a lot of teams, and general feeling brought on by recession.


but sport usually suffers far less than other businesses during a recession.
And perhaps the recession will make people seek out the more affordable sports to attend (soccer perhaps?)