On one hand, people expect players to give up "real" careers and education to pursue soccer.
Yet there is nitpicking over what domestic players earn. Some of these guys may never earn over $100k/year again in their lifetimes. It's not a life changing annual sum.
If anything this league should have more Bendik salaries.
good chance that Jordan Hamilton was signed to one of those HGP GA deals
Raise your hand if you didn't know Gilberto's surname before seeing this list.
“What the world needs is more geniuses with humility; there are so few of us left.”
We should keep in mind, that the new CBA is next year. Who know what a reasonable salary will be then.
^ That's what I'm thinking. The league may be crying poor, but I think they know they have to step things up. I can't see them not raising the cap to at least $4.5 million.
If they do that then expect a significantly larger portion of DP's salaries to count against the cap.
I'd like to see transfer fees not counted towards the cap. I think it will allow teams to bring in quality foreign players and allow the teams that have a bit more $ not get penalized for taking the chance on owning players.
I agree if the cap goes up then more of the homegrown stars will be getting pay increases, the amount counting against cap for DPs will go up (probably up to $500,000 even based on a 4.5 - 5 million cap, and some of the lower professionals in Europe that haven't gotten a chance to move up may work their way over for comparable salaries).
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Hold on though, why does anyone expect wages to change if the "cap" goes up?
This isn't the NHL. Outside of DPs, the teams aren't spending their own money. This isn't a "free market" buyers and sellers setting wages based on demand and supply.
This is the MLS. MLS pays the salaries and signs the contracts. It does so out of its own revenues. It is the only buyer in this market.
This "Cap" could be $10M and it wouldn't matter if MLS didn't have the revenue to sign the players. Salaries will go up if revenues go up.
Sure but that would be the decision of the league. They could raise the minimum salary without really altering their pay scale for the players with 3+ years experience.
They will ultimately sign players at wages they can afford. "Raising the cap" is essentially inconsequential to what MLS can afford to pay.
MLS pays the salaries of all but 3 TFC players.
Don't forget too that the league actually does have a cap. It's not the salary one which is actually a budget but it is a cap on the number of International players a team can have. Unless that changes, the bulk of MLS players will continue to come from the US and to a much smaller extent, Canadian, talent pool. There is no supply shortage there which means it is essentially a buyer's market. MLS will pay what it wants to. There is not much competition for the typical MLS player on the international market.
Raising the league minimum is a good thing though. It should encourage people to not give up on soccer and think of it as a viable "career" or at least a way to earn a living through the first decade of one's work life.
I expect wages to go up because the Players Union will demand it for their lower-tier players. I expect revenue is going up gecause the new TV deal is 7 times the size of the old one.
I did a comparison of all the clubs' 2014 Salaries and this is what I come up with ranked highest to lowest:
Club 2014 Guaranteed Compensation Average Annual Attendance per game TOR Total $16,648,858 19,912 LA Total $13,054,244 22,094 SEA Total $11,787,587 37,254 NY Total $11,245,784 17,228 VAN Total $6,272,750 19,444 MTL Total $6,067,139 21,678 DAL Total $4,645,279 12,157 SJ Total $4,327,176 12,546 PHI Total $4,231,924 18,522 DC Total $4,098,050 17,039 POR Total $3,922,328 19,633 RSL Total $3,831,635 17,269 KC Total $3,731,612 11,745 CLB Total $3,687,508 15,234 HOU Total $3,660,715 17,914 CHI Total $3,631,411 15,641 COL Total $3,488,901 14,741 NE Total $3,432,422 15,461 CHV Total $3,292,674 15,566 Grand Total $115,057,996 341,078 Club Average $6,055,684 17,951 Club Median $4,098,050 17,228
Now Lieweke says they're loosing money this year, so assume that a $16 million payroll is too high. However, Seattle is profitable and TFC was still profitable back in 2012 when they had a team salary of $9.3 million. To me, that indicates that if you have a full 20,000-seat stadium every home game and a good jersey sponsor, you can afford a $10 million payroll. But the majority of these teams say they're losing money even though the majority are spending under $4 million on salaries. The clubs generating the least revenue are only about 3000 spectators lower than the average. Are margins really that tight? Something isn't adding up here.
Trying to figure out whether sports teams are in fact losing money is a pretty tough exercise. Since they aren't public entities, lots of factors can go into a balance sheet.
You do have to remember something about MLS though, the teams don't pay the salaries. The league does.
So, if each team is assigned a max budget of $2.9M, MLS is paying that. There are 19 teams. That means MLS is probably paying $55M in salaries + whatever it floats via allocation.
Anything above the assigned budget and allocation, ie. DPs, is the responsibility of the teams.
It gets really complex if you look into the actual structure of the single entity league. I am paraphrasing from this document:
http://www.niu.edu/law/organizations...%20131-174.pdf
but the gist of it is as follows:
Each franchise doesn't actually own the team but rather stock in the league. They get a seat on the Board of Governors and manage the day to day operations of the team. The Board, the collective of operators and league designates, assigns profit and loss to each team and controls operations. In addition to owning the teams, the league also owns all equipment, broadcast rights, ticket rights and intellectual property.
Teams let the operators hire local staff. As of 2010, the league gives each team a management fee that was equal to 50% of local ticket sales and concessions, the first $1.125M of local TV revenues, 100% of overseas tours (Friendlies anyone), and 50% of revenues from the MLS Championship game.
The article is a fascinating, though sometimes heady look at how the league was structured and the challenges it will face as it gradually loses its grip on the single entity structure.
In response to your original question, yeah it doesn't add up because the formula is very unique to professional sport.