MLS Salary Cap Poll

[Initial B]

Seeing as how MLS wants to be a wolrd-class league by 2022, I don't see how that could happen under the current Salary Cap. If you were the MLS Commissioner, how much would you raise the salary cap?

I think a lot will be dependent on the next ESPN TV contract deal which will be starting in 2015 - right in time for NYFC (and maybe Orlando?) to join the league. But for now, I think an increase to $4 million per team (with an increase of the lowest player pay to $50-60K) would allow for teams to attract better quality to the league. I'd love to see it eventually at 10 million, but that would depend on television revenue and growing the brand worldwide. What do you guys think?

[CommradePolski]

Its at like 2.9mil now?

[Richard]

Its a pipe dream to be honest. MLS right now is enamored with expansion fees and is one of the only reasons it is making money. A lot of people need to start watching the product on TV for the league to get a better TV deal and sponsorships, there is no way they are going to get the sponsors currently which could support a minimum salary floor of $25m for each team.

[mowe]

Its a pipe dream to be honest. MLS right now is enamored with expansion fees and is one of the only reasons it is making money. A lot of people need to start watching the product on TV for the league to get a better TV deal and sponsorships, there is no way they are going to get the sponsors currently which could support a minimum salary floor of $25m for each team.

Yeah the TV deal is where the real money is, and right now MLS' TV deal is pretty pathetic. Maybe they will get more money in the next deal because of NYCFC and 4 other expansion teams, who knows. Until then it's slow and steady with the salary cap. And hey, the product is still improving every year under this cap, why not stay the course until revenues increase significantly.

[Initial B]

I'm not expecting the next increase to be $25m, that's just crazy talk. But if MLS wants to be a world-class destination, then it eventually has to have a salary cap that is larger than what English Championship pays out, which averages about $350k/player. Isn't that about $7-10 million per team?

[Couchy81]

Double it and increase the DP contributions to the cap to $1mil

[Ultra & Proud]

Said this before but the cap should have raised proportionally with the TV deal and increased attendance/sponsorship. In 2007 when TFC started there was no TV deal and most team's attendances were sub 15,000 (or way lower). Lower attendances and viewership equaled less advertising dollars. That year the cap was $2.3M. It's gone up to $2.9M in the past seven seasons and the attendance has increased steadily and although the TV deal may be pathetic, at least they have one now. Now matter how they spin it, it'd be hard to justify that the $600,000 cap increase in the past 7 seasons as being reasonable in any way. Especially when Garber talks of being a big time world league by 2020.

[MartinUtd]

The league lost Sacha Kljestan to the Belgium league for something like $500k. I voted for $4-5m because we need to retain players like this. Not everyone is going to get the Omar Gonzalez treatment but at the same time we have to temper our expectations around the likes of struggling FC Dallas, Chivas USA, Columbus and whatever turd they lay in south Florida.

[djking2]

I assume you meant > (greater than) for option 7. Not that I would have made that choice

[Haddy]

I'd rather see a salary cap of $5-million, which is still nothing to most of these owners and equal to one Maple Leafs hockey player. I'm hoping an increase will see less strange rules like the mid-season creation of a 'retaining fund' that helped re-sign Zusi. Less magic invisible money, better cap.

[Abou Sky]

IMO $7-$10m is what we need by 2015 if there is any hope of being a big time league.

Get rid of DP and maximum etc. You can then have something that looks like 3 players at $2m total 7 players at $3m total and 10 players at another $2m total

After the top 20 you pay out of your own pocket.

[ag futbol]

I'd rather see a salary cap of $5-million, which is still nothing to most of these owners and equal to one Maple Leafs hockey player. I'm hoping an increase will see less strange rules like the mid-season creation of a 'retaining fund' that helped re-sign Zusi. Less magic invisible money, better cap.

Yes please, especially to more transparency.

Agreed on the $5 mil figure. Allows you to do something like this:

Salary * players =
100k * 13
150k * 8
250k * 4
300k * 2
333 * 3 (DPs)

= $5M (approximately)

Think about how much extra qualty that gets you... mind boggling, especially since a lot of teams are throwing stupid amounts of money on DPs that don't nearly have the same impact.

[Initial B]

I assume you meant > (greater than) for option 7. Not that I would have made that choice

Oops! Yes, I meant Greater than $10 Million. Does anyone know if any of the other world's leagues have a salary cap in place?

The problem with a $5m slaray cap is that would cost a 24-team league $120m/year I'm not sure they'll be able to get a TV deal and gate revenue worth that much. I think $4m is more sustainable in the short term and gives MLS some breathing space for future union negotiations.

[ag futbol]

Oops! Yes, I meant Greater than $10 Million. Does anyone know if any of the other world's leagues have a salary cap in place?

Germany has an indirect one that does something like tie spending to a % of revenue or prior year revenue or something like that.

[Initial B]

Just did a quick check, and I think these were the previous yearly MLS salary caps:

2006 - $1.9 million
2007 - $2.1 million
2008 - $2.3 million
2009 - $2.3 million
2010 - $2.55 million
2011 - $2.68 million
2012 - $2.81 million
2013 - $2.95 million
2014 - $3.1 million
2015 - ???

I think they'll probably increase the salary cap to $3.5-4 million for the 2015 season, with a 5% increase for every year after that for the remainder of the player union contract.

[MartinUtd]

IMO $7-$10m is what we need by 2015 if there is any hope of being a big time league

Not sustainable. You have to think of the bigger picture for the league and the reason why there is such a complicated salary structure to begin with. If we get a taste of success then go the full 1970's NASL we'll be left with NY, NY2, LA, Seattle and a few hold overs that are scraping to keep up. The other 12+ teams will be shit out of luck (and money) within a decade.

[Haddy]

Oops! Yes, I meant Greater than $10 Million. Does anyone know if any of the other world's leagues have a salary cap in place?

The problem with a $5m slaray cap is that would cost a 24-team league $120m/year I'm not sure they'll be able to get a TV deal and gate revenue worth that much. I think $4m is more sustainable in the short term and gives MLS some breathing space for future union negotiations.

20,000 tickets x average cost of $35 x 15 home matches = $10,500,000

Granted those values aren't accurate for every team, but I believe it's still a good example for many including TFC without confirming actual average ticket price. Just selling half of those 20,000 tickets still means the gate revenue alone can cover the team salary.

Flip side of the coin, outside of the DP rule MLS continues to be very conservative on cap increases. So I hope for $5-mil but don't expect it.

[habstfc]

Let's separate the contenders form the pretenders and raise it to 6 million with the same dp rules we have now. They won't do it because only about 6 or 7 teams could handle it though. They have to shut up about the top league by 2020. MLS would realistically need a 15 million dollar cap at minimum to be in that class, don't see it happening.

[Haddy]

Here is a list of current MLS franchise owners via wiki: http://en.wikipedia.org/wiki/List_of..._Soccer_owners

Also willing to bet, any jump in the cap may also mean raising the DP threshold as well. i.e. 333k(?) to 500k.

[prizby]

the current CBA is a 5% increase in the cap every year; now the current CBA does expire at the end of 2014, but if things were to hold steady, it'd be about a 3.25 million cap in 2015

[prizby]

20,000 tickets x average cost of $35 x 15 home matches = $10,500,000

Granted those values aren't accurate for every team, but I believe it's still a good example for many including TFC without confirming actual average ticket price. Just selling half of those 20,000 tickets still means the gate revenue alone can cover the team salary.

Flip side of the coin, outside of the DP rule MLS continues to be very conservative on cap increases. So I hope for $5-mil but don't expect it.

add on the 2.7 million a year (down to 1.7 million right now due to deal to buy the naming rights) a year for stadium naming rights and the estimated $4mil for kit sponsorship (MLS gets the first $500k); also believe ticket revenue is a shared revenue among the teams in the league; so just because we are doing well, doesn't mean we get it all

[Pint]

you may as well add in on average $20 conservatively on concessions/merch per ticket.

[Initial B]

20,000 tickets x average cost of $35 x 15 home matches = $10,500,000

To be conservative, I did the following calculation:
10,000 tickets x average cost of $35 x 17 home matches = $5,950,000.
It's a little less to work with. And Budesliga was saying that 70% revenue spent on player salaries is unsustainable. The NHL runs about a 53/47 Owner/Player revenue split, so that should be what they MLS are working from for a salary cap.

[prizby]

you may as well add in on average $20 conservatively on concessions/merch per ticket.

who owns the concessions rights though? Many teams don't get a big % of concessions if they don't own the stadium

[Pint]

who owns the concessions rights though? Many teams don't get a big % of concessions if they don't own the stadium

hmm hadn't thought about that... i remember it was a revenue sharing point between NHL and NHLPA so i assumed it was around the same concept in the MLS

[prizby]

hmm hadn't thought about that... i remember it was a revenue sharing point between NHL and NHLPA so i assumed it was around the same concept in the MLS

nhl is cut throat though; they demand a lot of the cities they are in; Kansas City said no thank you having the NHL...NHL wanted money, wanted arena control of the city owned arena; etc...

[Haddy]

who owns the concessions rights though? Many teams don't get a big % of concessions if they don't own the stadium

I'll try and find the document later to confirm, but I believe it was something like 25% goes to the city and the rest goes to the operator, MLSE. I have no idea if MLS gets a piece of that.

[Super]

I voted no salary cap. I think it's laughable that it's perfectly okay to shell out unlimited cash on one guy (Dempsey is an example) but are limited on how much they can spend on the rest of the squad. It's a complete joke and makes the MLS look silly. I understand that we're limited as far as home grown talent, but you can still protect them by demanding that each team have x amount of Americans/Canadians (ON the field, not just on the bench. Not having a cap just means you can field much better foreigners. We're already benching most of our home grown talent. Result: the overall quality of the play and league would immediately improve and send the MLS to the next level. That means more respect, more fans, better quality of play, more TV viewers, etc.

[Beach_Red]

I voted no salary cap. I think it's laughable that it's perfectly okay to shell out unlimited cash on one guy (Dempsey is an example) but are limited on how much they can spend on the rest of the squad. It's a complete joke and makes the MLS look silly. I understand that we're limited as far as home grown talent, but you can still protect them by demanding that each team have x amount of Americans/Canadians (ON the field, not just on the bench. Not having a cap just means you can field much better foreigners. We're already benching most of our home grown talent. Result: the overall quality of the play and league would immediately improve and send the MLS to the next level. That means more respect, more fans, better quality of play, more TV viewers, etc.

It's true, the DP spending makes the salary cap into a joke. But the team owners have to protect themselves from each other as much as they can. The last thing they want is a couple of foreign billionaires dominating the league. The league would disappear in an instant if that happened.

Are the TV ratings getting much better each year?

[Yohan]

Are the TV ratings getting much better each year?

Not really. Soccer is still more of a live experience thing than watch it on TV thing. (EPL games apparently do get good numbers though)

Only reason why TV networks are even bothering to put MLS on their networks is hoping that the potential that soccer and MLS has really explodes eventually.