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Are more Designated Players en route to MLS?

Dec 3, 2012, 1:15 PM EDT

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It didn’t gain much attention, but Major League Soccer’s board of governors held their usual meetings around MLS Cup. Nothing substantive in an immediate-news way apparently rose from the talks, which marked a contrast to the last two similar set of talks.

(In 2010, owners dropped a whopper by unexpectedly adding two playoff sides. And last year, owners adopted the new format that awarded host rights to the MLS Cup finalist of better record, another biggie.)

But there was a “start” to something semi-significant, at least. The deciders of Major League Soccer began foraging for intelligent ways to add more marquee men and to generally add a little more salary cap operating space.

This is significant because the salary cap’s incremental increases have already been negotiated within the most recent Collective Bargaining Agreement. So, essentially, the owners are saying here, “We don’t have to spend more money on salary … but let’s find a way to do it, anyway.”

(MORE: Heard and overheard during MLS Cup week)

How would it work? That’s what they were throwing around the table in Los Angeles, according to one person familiar with the discussions. How to add more DPs was a major element of the talks. That does not necessarily mean adding a fourth potential DP per team; more likely it’s about how to get more teams into the DP game, probably through additional mid-level types.

For instance, rather than adding the next Robbie Keane or Thierry Henry, they’d like to add more Fredy Monteros or David Ferreiras. Those are talented fellows who cannot check the box on “household name,” but who surely elevate the overall standard of play and tend to become regional fan favs.

Or, can salary be goosed to help keep more of the home-grown up-and-comers, guys like Roger Espinoza, Austin Berry or Matt Besler (pictured). The idea, of course, is assisting clubs who want to keep these guys from being Euro-plucked.

Either way, consider this a “heads up,” because an unexpected little bump in clubs’ collective salary structure may be on the way.

  1. The AMT - Dec 3, 2012 at 1:43 PM

    As a D.C. fan, I think this potential move couldn’t have come at a better time. Not only do we have new owners who have expressed a willingness to splash the cash for the right people, but there’s also a strong likelihood that United will have one of the lowest salary caps in the league next year due to receiving a low annual allocation for a deep playoff run without any extra allocation money that goes along with winning MLS Cup or making the CCL. So, basically, United could do with some extra cap flexibility, and we now have owners who would be willing to use it. Perfect timing, MLS.

  2. wesbadia - Dec 3, 2012 at 1:49 PM

    Steve, do you think this is something that would be in effect for the 2013 season, or be pushed back to 2014?

    The reason I ask is because of the flurry of roster moves that have occurred out of the gate for so many teams (CLB, RSL, etc). How much would these changes effect the already-made choices by some of these clubs to let go of certain players because of roster space? No doubt some players would still be on the move because of their performances, but others may have been saved a transfer for 2013 if more salary room was freed up.

    • Steve Davis - Dec 3, 2012 at 2:29 PM

      That’s a great question, one that can hopefully be fleshed out as more on this comes out now. I think it’s safe to say that anybody counting on such a thing is gambling … because nothing is done til it’s done. Things like this have a way of taking more time than some of the more aggressive movers would like.

  3. cincysporting - Dec 3, 2012 at 2:44 PM

    Steve, you happened to mention two Sporting KC players in your list of home-grown up-and-comers. Is this effort for more salary cap operating space being spurred by Sporting Club or is it just a coincidence?

  4. danielofthedale - Dec 3, 2012 at 3:17 PM

    This is great news. I have long felt that whats best for long term growth is be able to keep more young talent in the league whether it home grown or brought in by good scouting in Latin America, the Caribbean or other regions and not in a parade of over 30 year old big names that will only be around a few years and whos level of play is only going to go down or stay level at best.

    A Frank Lampard is great for a short term boost and might get someone to a game once or twice but he will not be as good the next season as he was the previous (or at least that is a safe assumption to make of a 35 year old). Or with that money if you could get or keep three guys the age and quality of a Roger Espinoza who get better and better each year and that drive up the quality of play year on year you get more people to the game because the game is just a better product.

  5. olegunnarsolskjaer20 - Dec 3, 2012 at 3:21 PM

    after the 2010 season the average revenue for an MLS team was $15.5M per a report on SportsMoney program in early 2011. since then there have been 3 above average revenue expansion teams (Portland, Vancouver, Montreal) added and attendance has increased by 13%. so adjusting for 2012 it is safe to assume that the team revenue average is up to at least $17M. that is $323M for just the team revenues plus at least $30M for national TV deals ($10M NBC, $8M ESPN, $8M Spanish) plus whatever for national sponsorships. let’s call it $360M in total team and MLS-HQ revenues.

    per the MLSPA 2012 salary list the total guaranteed salary compensation for ALL MLS players (including DPs, GA, HG, and other non-cap players, plus MLS Pool GKs) was $92M … let’s add 25% for cost of benefits (health insurance, 401K, etc) and that takes total player compensation costs for 2012 to $115M.

    how on earth does MLS expect to compete and overtake LigaMX much less be a “top 5 league in the world” over the next 10 years if they spend less than 33% of revenues on player costs?

    there is a simple solution … right now MLS teams all give a flat $3.1M capital call plus 33% of regular ticket revenue to a central MLS pot (per 2007 HSV Portland Stadium Study) out of which each team’s $2.88M salary cap salaries are paid (DPs are paid by the club).

    so what happens is a team like Seattle with its high attendance and high ticket prices (deservedly) ends up contributing nearly 7x what a club like Chivas USA (with poor attendance and dirt cheap tickets) does with that 33%. but in terms of cap space they get nothing more … there is no way to substantially translate their off-field success into on-field squad building power (beyond DPs).

    right now the major issue with MLS squads is lack of quality depth from 1-20. so why not have a salary cap that is flexible? every team gets a minimum salary cap of $3M for their 3.1M + 33% contribution. but a team could ahve up to a $5M cap as long as thier 3.1M+33% covered it … and if it did not they could kick in the extra to get up to the $5M.

    with a $5M cap max you would set the max non-DP salary at 500K, DP cap hit is 500K, you could give every team 3 full DPs (@ 500K) and 1 Young DP (under 24, $250K) and you’d still have $3.25M to spread over the remaining 14-16 spots (an average salary of $200-225K). you’d also need to raise the International Spots to 10 for the Senior Roster (1-20) so you aren’t just paying the same american journeyman more, but rather better players more (every team has 2-5 americans who have no business in an LigaMX calibre MLS … guys like Tim Ward, Tom Heinemann, etc; MLS is not an American Soccer Player Employment Charity).

    even with that small bump you could create rosters with both high end DP quality and quality depth that could compete with LigaMX even on 1/3rd the salary.

    • danielofthedale - Dec 3, 2012 at 3:51 PM

      That is a great post, lots of really good info that I did not know!

      I think the “Top 5 league in the world” talk is just hyperbole, it just can’t happen in that short of a time frame. I think a realistic goal is to be as good as the top leagues in Mexico, Brazil and Argentina in 15-20. Slow steady growth is better than rapid growth at the expense of the stable business model that can lead to to much financial exposure and lead to contraction or worse.

      That said, I think your salary cap growth plan is very sound. Its a not a massive increase by absolute value and I don’t think it would saw competitive advantages in and of itself. I mean the Red Bulls can have the cap they want but have shown time and time again that their poor managment will negate any positive they get from extra cap space.

      So I think the league is on good enough ground financially to raise the cap to $5M and increasing the non-DP salary to $500K. It always the league to grow the talent pool which the most important thing the league needs to do now.

      Very well said and a very smart post olegunnarsolskjaer20.

    • mvktr2 - Dec 3, 2012 at 8:38 PM

      I agree with danielofthedale, thanks for the post.

      The league should be in line for a good size bump in TV revenue following the 2014 WC, hopefully close to doubling current TV income, I anticipate till then we won’t see ‘real’ change in salary structure. Fwiw I totally agree with several people here who’ve exerted the same point about depth of rosters. 1-11 there are a handful of teams that can sort of hang with the elite teams of the world a bit, and can beat average teams in the best leagues in the world. However put MLS’s best teams even in the English Championship or Scandinavian leagues and it wouldn’t turn out so well just based off of the bench as the season went along and players got knocks and injuries.

      The focus has to be 2 pronged in both player development and bringing in more talent. The academy system needs more resources, focus, and increased importance. I certainly hope Toronto and other teams that are taking it seriously are SUPER successful and lay the example for the rest of the league to follow… I know it’s Toronto but…

      I like the idea of allowing financially successful teams to spend more, reward their success not so much as to create haves-have nots. I don’t know what the percent should be, but perhaps an approach of allowing each team to spend a certain % of their combined media, gate, etc income above the league salary cap structure. For instance if Seattle is generating 10 mil at the gate and Dallas is generating 2 mil they both get to put 15% of that toward salaries.

      I’ve got an idea I’ve shared here about adding a 2nd tier DP slot, allowing 3 per each team, capping the max DPs at 5 or 6. In essence it’d be for players making between 250-750K or so and only players below say 27 would be eligible. In this way it would allow teams such as LA that would like to add another 2-3 do so without going out and spending others into oblivion. What the league needs, and i like olegunnars plan as good as any, are more Montero-Ferrera-Hassli type talents. 20-30 of those type players brought into the league would really escalate play and allow for trimming some of the ‘fat’ from the bottom of rosters.

      It’s hard being patient, but MLS & US Soccer is VERY MUCH in ascendency mode!

    • joeyt360 - Dec 4, 2012 at 6:01 PM

      Isn’t it easier to increase your expenditure when you actually have the revenue than when you don’t?

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