Salary Cap

[K1nG]

Greetings Red Patch Boys:

I have joined you all today to discuss the MLS Salary Cap. Although I do agree that a Salary Cap is beneficial to lower revenue clubs due to the fact that it allows them to put a competitive team on the field and not lose Phoenix Coyotes money – I feel that it is inhibiting the growth of the MLS into a major worldwide Football League. I understand what the MLS is trying to do. It is trying to ensure the long term sustainability of the league. It is trying to create a balanced distribution of talent. Not good, in my opinion. I elaborate.

Every European league has its golden boys. Since I am Portuguese I will use the Super Liga as an example. FC Porto, SL Benfica and Sporting CP. These clubs have economical advantages over the rest of the league and naturally use that in their favour. Without the league preventing them from spending more than their competition, the Super Liga`s big three are free to spend whatever they desire. In doing so they have consistently been involved in European competitions and for the most part done fairly well. Potential signings take all of this into consideration (wages, stature of the league, Champions League). Porto, Benfica and Sporting are the foundation on which the Super Liga was built. I digress.

The MLS needs a foundation. I believe that Toronto FC, LA Galaxy, CD Chivas and Sounders FC can be that foundation. (eventually include Montreal for the MLS big 5) I am not saying that these clubs will go out and pay tens of millions for player transfers but a few million might not be out of the question. In addition to purchasing world class talent these clubs will be able to hold on to the Freddy and Maurice Edu`s, the Sam Cronins, the Stefan Freis, the Freddy Monteros, and the Osvaldo Alonsos. Maybe this would make the Fabio Cappellos of the world say ``Hey even though the MLS season ended a few weeks back, Beckham was in great form for LA, I`ll give him the cap v Estonia.” That way Beckham wouldn`t miss half the season in order to play in Italy - ``where Internationals earn their caps.`` (sarcasm)

Yes I know this would create an unbalanced playing field in which small market teams like Kansas City and Columbus would not be able to compete for the league title every year. To bad for them, at least they don`t have to worry about relegation. Look at Southampton`s fortunes.

I bid you adieu,

K1nG

The views and opinions expressed in this thread do not necessarily reflect those of the Tribal Rhythm Supporters Club or my mentor.

[tfc007]

yeah,okay!

[K1nG]

yeah, okay! in what way tfc007? If you disagree tell me why.

[David]

Greetings Red Patch Boys:
I bid you adieu,

K1nG

The views and opinions expressed in this thread do not necessarily reflect those of the Tribal Rhythm Supporters Club or my mentor.

You do realize that you come off very very odd? Your well written but with this mentor crap, and disclaimer, it probably makes people avoid your posts, and not fully get into the point you are trying to make. At least it does to me...

In regards to your actual point, a salary cap would do wonders for this league...but only for the teams that can afford it like you said. With teams like the crew who still can't get numbers in their stadium when they're the defending champions, how would keeping teams like that at the level they are not eventually lead them to dropping from the league? Salary cap, although it is very inconvenient, among with the rest of the shady rules of this league definitely-for lack of a better word- suck, but for now I think it's something we're going to have to live with. At least until teams like the crew can get their attendances/merchandise sales (profit) up consistently.

[Beach_Red]

The MLS needs a foundation. I believe that Toronto FC, LA Galaxy, CD Chivas and Sounders FC can be that foundation. (eventually include Montreal for the MLS big 5)

You may be right, but always remember the model for MLS is the NFL - a parity league in which any team has the chance to win the Championship.

If there are a "big 5" in MLS then it will likely be a 5 team league.

[jayeden]

The views and opinions expressed in this thread do not necessarily reflect those of the Tribal Rhythm Supporters Club or my mentor.

Iiiiiiiiiii don't wanna work, i just wanna bang on my drum all day

[K1nG]

^
Interesting, I did not know that the model for the MLS was the NFL. It does make sense. They are trying to fabricate parity. Perhaps that has been successfull thus far, however; I predict that in the future it may hold back MLS franchises such as the potential (Big 5) from accomplishing great things both domestically and internationally. And as such, hold back the league with respect to the respect given to it.

It is hard to compare my native Portuguese Super Liga to the MLS but in some respects it is quite simple. When the big three (Porto, Benfica and Sporting) come to town, the attendance always increases drastically. When Juventus was playing in Serie B - attendance skyrocketed. Perhaps this is something that can correlate to the MLS with respect to cities like KC seeing increased attendance whenever any of the big clubs come to town.

[K1nG]

You do realize that you come off very very odd? Your well written but with this mentor crap, and disclaimer, it probably makes people avoid your posts, and not fully get into the point you are trying to make. At least it does to me...

If you think I am odd, you should see me in real life. I am even odder. Thank you however, for the compliment on being well written. I have been considering posting in poetry from here on out.

[Beach_Red]

^ Maybe, but it's unlikely. Maybe attendance goes up a little when the Yankees come to town, but I'm not sure.

The NFL is the model because they took on baseball at a time when baseball was so far ahead no one thought it could ever be caught. So, the NFL realized very early on (well, when the AFL and NFL merged) that the only way to have a successful league, coast to coast, was for every team to have the same chance of winning. They share the TV revenue, which is by far most of the revenue and they have a salary cap.

There would have to be some very major changes to the sports landscape in North America for a European style "big team" league to work, I think. The closest we have is baseball and most moves being made there are to try and even things out so that small market teams have an equal chance of winning or they will lose too many fans to other sports.

And soccer in North America is no baseball, you just have to accept that.

But I think the NFL model will work very well. Americans don't care about competing internationally yet. Maybe someday they will, but none of their other sports are concened with international play, so it's a new concept and will take some time to become accepted.

Until then, MLS needs to establish as many teams in as many markets across the US as possible and get the TV ratings up.

[rocker]

look at it this way: the cap KEEPS US from being out of the running financially.

Everyone who talks about removing the cap and creating a Big 4 or whatever always lumps TFC into that discussion. But what if TFC is NOT one of the Big 4 spenders. I see a lot of "MLSE SUCKS!" talk on this board, but then in this conversation it's assumed MLSE would just go out and spend more than the rest. Maybe they would, but look at what happened with the Jays: when they were owned by Labatt they spent and spent, and did well. Then they got sold and became cheap.
Watch MLSE get sold by the teachers pension plan and suddenly we're being run by cheapskates. Then we get outspent by the LA Galaxy. ugh.

If you want to increase MLS's stature in world soccer, just raise the cap to a point that you can draw some of the better Euro talents away to North America.
Imagine if MLS ever gets to a point where the cap is 50-80 million per team (NHL and NBA levels). May take 25 years, but if that ever happens, you can be sure every team in MLS would be on par with some of the best in Europe.

[troy1982]

Since the poster is Portuguese, lets look at attendance of the Portuguese league with it's big clubs

For this season

1 SL Benfica 38.561
2 FC Porto 37.301
3 Sporting CP 27.881
4 Vitória SC Guimarães 17.009
5 SC de Braga 10.585
6 CF Os Belenenses 5.243
7 A Académica de Coimbra 5.022
8 CS Marítimo Madeira 4.532
9 Leixöes SC 4.199
10 CD Trofense 3.407
11 Rio Ave FC 3.096
12 A Naval 1º Maio 2.604
13 Vitória FC Setúbal 2.540
14 FC Paços de Ferreira 1.842
15 CD Nacional Madeira 1.686
16 CF Estrela Amadora 1.317

Overall 10.380
without the big 3 it is 4.852

http://www.european-football-statist...ent/avepor.htm

As you can see almost 10 clubs have attendance below 5K.
If this happened in MLS the 10 clubs below 5K would fold and no more MLS or TFC.
The only reason it works in Portugal is because the teams don't have to fly 4,000 Km every other week.

[EAsoccer]

look at it this way: the cap KEEPS US from being out of the running financially.

Everyone who talks about removing the cap and creating a Big 4 or whatever always lumps TFC into that discussion. But what if TFC is NOT one of the Big 4 spenders. I see a lot of "MLSE SUCKS!" talk on this board, but then in this conversation it's assumed MLSE would just go out and spend more than the rest. Maybe they would, but look at what happened with the Jays: when they were owned by Labatt they spent and spent, and did well. Then they got sold and became cheap.
Watch MLSE get sold by the teachers pension plan and suddenly we're being run by cheapskates. Then we get outspent by the LA Galaxy. ugh.

If you want to increase MLS's stature in world soccer, just raise the cap to a point that you can draw some of the better Euro talents away to North America.
Imagine if MLS ever gets to a point where the cap is 50-80 million per team (NHL and NBA levels). May take 25 years, but if that ever happens, you can be sure every team in MLS would be on par with some of the best in Europe.

Yea unfortunately I dont see the salary cap being totally removed or even be on par with the the best leagues in Europe.

The MLS will stick to their original plan, as being a league where American players can develop their skills and move on to Europe at a later stages in their career while helping the USMNT improve and eventually win the World Cup. Until this happens, the best we can hope for is the MLS slightly increasing the cap every so often. But, higher salary cap essentially means less American players.

I think the biggest myth is that if the MLS raised their cap to 50-80 million that MLS teams will be on par with the best in Europe. Removing the cap, doesnt mean equality with Europe. Europe still has the history, the better clubs and the $$$. Good example is Arshavin taking a pay cut, and moving from Zenit to Arsenal, why? Because the EPL is arguably the best league in the world.

I see only a few teams LA, Chivas, and New York being able to spend in that range regardless. No salary cap, will lead to smaller markets with lower attendances not being able to compete in the MLS due to not being attracting top players and owners possibly pulling out or folding due to loss of revenue. NASL all over again. The last thing MLS needs is a 5 team league. I think the MLS would rather have a league full of American players helping the USMNT grow and succeed than one of the world's top and wealthiest leagues.

[Pookie]

Absolutely not. Here's why:

"Forbes estimates that MLS is not yet profitable, with its 13 teams posting an operating loss (in the sense of earnings before interest, taxes and depreciation) of $20 million on revenue of $165 million. In 2007, the three teams that were in the black–Los Angeles Galaxy, Toronto FC and FC Dallas–had a combined operating profit of $6.7 million."

- Forbes Magazine - MLS Team Valuations

Now, in order to compete in an open salary world $6.7M in profit is not going to do it. Players you will attract are not going to improve the quality of play to be on par or comparable to any of the top leagues.

Further, in order to pay for those players you are going to need to increase revenues.

MLS has been around for years and they do not have a national TV contract. Clubs have to generate income off of gate receipts, merchandise and local TV. Toronto FC for example has revenue totaling $17M (Forbes) and a profit of $2.1M (Forbes).

Without a TV deal, where do you think that revenue is going to come from?

Look to the NHL for your answer. It too is a gate driven league and to pay the outrageous salaries, it needs to sell tickets to a corporate audience.

It has built a false economy. Corporations buy the seats because their customers want to go.

However, as more and more fans are alienated from the sport, they stop wanting to go.

The NHL can't turn to a national TV contract because it can't get one. They can't expand as teams are going bankrupt. They can't re-sell that corporate seat to the average fan because $16,000 plus a personal seat license fee isn't really in the budget.

Let's also look at the level of competition in leagues without a cap. With the odd exception, MLB's World Series is likely to come down to the team with the highest payroll.

Does anyone doubt that Man United will challenge once again for the EPL?

Contrast that with the NFL where a city like Green Bay can experience a championship or a city like Buffalo can at least get to the dance 4 years in a row.

I like the structure the MLS has. It is parity. It is solid competition. I don't go looking for celebrities and superstars. I go to see the game.

So, no thanks.

[rocker]

Yea unfortunately I dont see the salary cap being totally removed or even be on par with the the best leagues in Europe.

The MLS will stick to their original plan, as being a league where American players can develop their skills and move on to Europe at a later stages in their career while helping the USMNT improve and eventually win the World Cup. Until this happens, the best we can hope for is the MLS slightly increasing the cap every so often. But, higher salary cap essentially means less American players.

I think the biggest myth is that if the MLS raised their cap to 50-80 million that MLS teams will be on par with the best in Europe. Removing the cap, doesnt mean equality with Europe. Europe still has the history, the better clubs and the $$$. Good example is Arshavin taking a pay cut, and moving from Zenit to Arsenal, why? Because the EPL is arguably the best league in the world.

I see only a few teams LA, Chivas, and New York being able to spend in that range regardless. No salary cap, will lead to smaller markets with lower attendances not being able to compete in the MLS due to not being attracting top players and owners possibly pulling out or folding due to loss of revenue. NASL all over again. The last thing MLS needs is a 5 team league. I think the MLS would rather have a league full of American players helping the USMNT grow and succeed than one of the world's top and wealthiest leagues.

I agree with what yer sayin... but on a few points:

25 years is a long time. I'm just postulating a sort of "what if?" thing. The EPL wasn't the EPL 25 years ago either. Much can change in 25 years.

The fact is, if you look at salaries today, 50-80 million per team is more than most teams in the world pay their squads. Only the greatest of the great pay their teams more than 80 million. there are teams in the EPL who don't spend 80 million on salaries.

I don't think we should shoot to be the greatest league in the world. that's too expensive and the market won't handle it.
but I don't see the Greeks complaining that their league isn't the best quality. I don't see the Norwegians complaining. Yes I'd like to see quality improve but that'll come as soccer gets more popular, revenue increases, caps go up.. this takes time. But having a big 4 won't help.

[Beach_Red]

I don't think we should shoot to be the greatest league in the world. that's too expensive and the market won't handle it.
but I don't see the Greeks complaining that their league isn't the best quality. I don't see the Norwegians complaining. Yes I'd like to see quality improve but that'll come as soccer gets more popular, revenue increases, caps go up.. this takes time. But having a big 4 won't help.

The American market can handle it. For all the talk of recession, the American market is still huge. Americans just don't think of themselves as second-rate. If they get behind soccer, they won't want to be Norway or Greece, they'll want to be the best in the world.

Of course right now that's a big if.

Awhile ago I read an article (I can't find it now, sorry) that said if the US does really well at the World Cup that will go a long way to increasing interest in soccer in the US and I think that's true. Americans just aren't that interested in watching the best in the world if it isn't them. However you feel about it, that's just the way it is.

Maybe it's changing, maybe the international aspect of baseball (and basketball) is changing Americans' view but right now you could bring in the best soccer players in the world and American fans won't be as interested as they are in watching Americans play American football.

For soccer to be really big in America, Americans will have to lead the way. And it's not impossible, but it will take some time.

(and the world will be pissed off that they ever got the Americans interested ).

[K1nG]

As you can see almost 10 clubs have attendance below 5K.
If this happened in MLS the 10 clubs below 5K would fold and no more MLS or TFC.
The only reason it works in Portugal is because the teams don't have to fly 4,000 Km every other week.

I am not sure what you are saying here. My point is that if a salary cap is lifted - teams such as Chivas, LA, Toronto and to my suprise Dallas could purchase better players or at the very least have the ability to keep their players when Europe comes knocking. I don't see the smaller clubs that don't spend as much as the biggest folding. Look at the Portuguese League, you just cited their attendances, horrid for some of the lower teams. Yet they survive, why because their expenditures do not surpass their net profits. If Nacional can survive with under 2000/ game, I think MLS clubs could with 8000/game.

As for flying 4000 km every other week. Santa Clara, Nacional and Maritimo fly from the Azores and Madeira Islands to mainland Portugal every other week. Nacional does this on the revenues from less than 2000/game. So I don't quite see the logic behind your arguement.

The views and opinions expressed in this post do not necessarily reflect those of my mentor.

[Pookie]

I am not sure what you are saying here. My point is that if a salary cap is lifted - teams such as Chivas, LA, Toronto and to my suprise Dallas could purchase better players or at the very least have the ability to keep their players when Europe comes knocking.

TFC made a profit of just $2.1M

Which group of better players are you going to purchase and still make a profit WITHOUT raising ticket prices to NHL levels?

[Beach_Red]

I am not sure what you are saying here. My point is that if a salary cap is lifted - teams such as Chivas, LA, Toronto and to my suprise Dallas could purchase better players or at the very least have the ability to keep their players when Europe comes knocking. I don't see the smaller clubs that don't spend as much as the biggest folding. Look at the Portuguese League, you just cited their attendances, horrid for some of the lower teams. Yet they survive, why because their expenditures do not surpass their net profits. If Nacional can survive with under 2000/ game, I think MLS clubs could with 8000/game.

They are barely holding on now. If their roster is made up of inferior players they will fold. Soccer has not gotten very deep into the culture in America yet. If the whole MLS folded tomorrow it would barely be mentioned in most American media.

A sports league in the USA needs to be national to survive because it needs a national TV contract and it can only get that if all the teams have very close to an equal chance winning championships.

You're just going to have to make allowances for American culture and traditions and history. You cannot compare anything about soccer in Portugal with soccer in the USA (or Canada).

[Inswingingwingman]

Ah, a celery cap. Does it come with veggie dip?

Goes good with beers.

[K1nG]

I am suprised that they only made $2.1 M in their inaugural season. I assume it would have been higher last season due to the exclusion of start up/mobilization costs. Toronto also had the highest average concession stands ticket at $15/fan and a $2 M television deal. Between the $2 M in television rights, $15 in avg consessions and being sold out almost every night - I am positive that Toronto made more than 2.1 M last year.

Anyhow, for the sake of arguement lets say they netted 2.1 M last year, add the fraction of Edu's sale to the mix and they can easily afford to invest a cool million on a transfer payment or a higher salary. If it means Toronto get a striker who can take them deep into the Champions League or the MLS Playoffs that can add a half dozen games or more of ticket sales, TV revenue and consession sales. A wise investment.

[Juanito]

IN THEORY, it would benefit us. However, the average North American won't stand for a domination of teams. It happens in sports, like baseball. However, the system is designed so that you can fall off your perch in a few years.

If the league turns into a league like in most other countries, I'm not sure we will have enough interest to sustain the league. I can see franchises folding, and that is also different, we have franchises, not clubs.

[Kaz]

I see a few issues with a Salary Cap being removed.
First these leagues are fairly old, or have a fair bit of tradition in nations where Football is the top sport.
In North America we need to grow the sport, and the best way to do that, is wait for the expansion period to end and raise the cap slowly. Also the goal of the league right now should be to help develop domestic talent.

Hockey and Baseball are systems to strive to emulate, the minor league development system for both sports have worked to bring about quality players, and coach's to both sports. We can build that domestic talent in North America and slowly raise the salary cap over 10-20 years to bring about a stronger league and to keep domestic players here.

There are several good decent Canadian players in Europe right now getting several million dollar deals, like Iain Hume for example, or Ali Gerba that choose to stay in England to play in League One over play in San Jose.

The key is allowing a salary cap to get high enough so not to bankrupt smaller clubs, but entice players to choose MLS over second or third tier leagues in Europe, once the league isn't in yearly expansion.

[Pookie]

I am suprised that they only made $2.1 M in their inaugural season. I assume it would have been higher last season due to the exclusion of start up/mobilization costs. Toronto also had the highest average concession stands ticket at $15/fan and a $2 M television deal. Between the $2 M in television rights, $15 in avg consessions and being sold out almost every night - I am positive that Toronto made more than 2.1 M last year.

Anyhow, for the sake of arguement lets say they netted 2.1 M last year, add the fraction of Edu's sale to the mix and they can easily afford to invest a cool million on a transfer payment or a higher salary. If it means Toronto get a striker who can take them deep into the Champions League or the MLS Playoffs that can add a half dozen games or more of ticket sales, TV revenue and consession sales. A wise investment.

See my post above. The numbers come from Forbes magazine.

You assume that the other franchises could afford to operate in a "free market" system. Forbes indicated that 13 teams lost money. Would there still be playoffs?

I'm not going to re-type my entire first post on the economic impact of that strategy on ticket prices and competition. If you want to debate further, please have a read and get back to me

[S_D]

The one thing that Forbes didn't take into account was that the stadiums make money by holding events such as concerts . They aren't owned by the clubs, but by the club owners so the revenue from that isn't accounted for, so we really don't know how much cash they make or don't.

[Pookie]

The one thing that Forbes didn't take into account was that the stadiums make money by holding events such as concerts . They aren't owned by the clubs, but by the club owners so the revenue from that isn't accounted for, so we really don't know how much cash they make or don't.

I think the City of Toronto claimed $900k in revenue from BMO (read that in the Globe but can't find the reference). It owns that 50/50 with MLSE but I'm unsure if that $900k figure was for events outside of TFC games or if that included it.

[billyfly]

IN THEORY, it would benefit us. However, the average North American won't stand for a domination of teams. It happens in sports, like baseball. However, the system is designed so that you can fall off your perch in a few years.

If the league turns into a league like in most other countries, I'm not sure we will have enough interest to sustain the league. I can see franchises folding, and that is also different, we have franchises, not clubs.

Very good point my Iberian brother.

[Mojo]

In a perfect world there would be no salary cap, every team would sell out their 50,000 seat stadiums for every game, and North America would have a 3-tier relegation system filled with successful clubs.

And there'd be grass at BMO.



But it isn't.

[Gazza_55]

TFC made a profit of just $2.1M

Which group of better players are you going to purchase and still make a profit WITHOUT raising ticket prices to NHL levels?

MLSE SAID they made $2.1m but that's only because they have to give a portion to the City of Toronto. Judging by the gameday revenue and merchandise I think they made over $8m. And that's not including the money from SUM.

[mclaren]

Call me a traditionalist, but I hate the cap and this rubbish parity mentality. It just fosters mediocrity and means there are no storylines of the underdog defeating the big clubs or a big club showdown. In short, it makes things very dull.

[K1nG]

Call me a traditionalist, but I hate the cap and this rubbish parity mentality. It just fosters mediocrity and means there are no storylines of the underdog defeating the big clubs or a big club showdown. In short, it makes things very dull.

Spoken like a poet!
____________________
The views and opinions expressed in this post do not necessarily reflect those of poets.