MLS Turning 17, Why Spending Must Still Be Heavily Controlled

| January 2, 2012

59e9e 133852806 extra large MLS Turning 17, Why Spending Must Still Be Heavily Controlled

A friend of mine passed along this article, and while it’s written from an NBC perspective, it has vital information if you’re interested in the business end of MLS. Judging by how frequently I get into twitter arguments over the lower end MLS clubs, there is a great deal of interest in MLS’ vitality going forward. Furthermore, LA Galaxy fans seem particularly interested in expansion of the Designated Player rule and the extension of the MLS salary cap.

MLS has just passed the 16 year mark, which is exactly how many years the NASL lasted. The original ASL only lasted 12 years, which means with First Kick next year MLS will become America’s longest lasting first tier soccer league. MLS had it’s dark years, as it transformed “soccer for Americans” to “soccer for people who enjoy soccer”.

However, what’s led MLS to the point it is now is a combination of Lamar Hunt and Philip Anschutz’ money with a relatively low cost of operations. As the article says, it takes about $15.4 billion dollars in available revenue to run an MLS franchise. That’s bargain basement as compared to the other leagues, and much of that is due to MLS’s salary cap.

It’s no surprise that the league without a salary cap (MLB) requires twice as much income as any other league. MLS stadiums are also smaller, or are maintained by another entity, which reduces the cost of maintenance. It’s the difference in staffing four stories of restaurants six days a week at Dodger Stadium versus one plaza one day a week at the Home Depot Center.

Which is why MLS is reluctant to open the floodgates on spending. Not only does it make it more difficult to attract investors, but there’s the fear the owners will spend well beyond the available income, bankrupting the franchise (a la the New York Cosmos).

Now, the chart shows that Los Angeles would have no problem paying for a more expensive roster. The right signings would pay for themselves easily. Same goes for Seattle and New York. Look at the all the cities which could potentially support MLS franchises, but could not support an NBA (next most expensive) franchise:

Akron (great college program); Anchorage; Augusta; Bakersfield; Boise; Calgary; Chattanooga; Colorado Springs; Columbia; Corpus Christi; Daytona Beach; Des Moines; Edmonton; El Paso; Grand Rapids; Greensboro; Huntsville; Jacksonville; Knoxville; Madison; Memphis; Reno; San Diego; Santa Barbara; Spokane; Syracuse

That’s just a sampling, but you see in there a bunch of college towns and state capitals. There’s also a fair number of potential Chivas USA destinations in there. MLS 20 is

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Category: Sports

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