Philadelphia, Expansion and the Future of MLS
Sons of Ben rejoice. Philadelphia was officially announced today as MLS’ sixteenth team (sorry, franchise), with a new 20,000 seater soccer-specific-stadium to be built in Chester, Pa., as part of a “$500 million waterfront development project that will also feature townhomes, apartments, office space, a convention and exposition center, retail space, new streets, greenways and a riverside promenade that will include boat slips.” Boat slips! How far MLS has come.
Good on Philadelphia, and well done to the supporters who helped make it happen. The question is where this expansion takes the league.
Commissioner Don Garber threw St Louis, who had vied for the sixteenth spot, a bone in the press release.
With the announcement of the 16th team, MLS added its sixth team since the start of the 2005 season. Expansion conversations continue with approximately 10 markets throughout the United States and Canada. MLS officials will continue those discussions as the League could feature as many as 18 clubs by 2011.
“As evidenced by our patience in the case of Philadelphia, we will only expand when we believe the circumstances are right,” Garber said. “We continue to seek the essential combination of strong ownership, an appropriate facility controlled by that ownership, and a market with a tradition of supporting the sport. St. Louis is one of the leading candidates we are considering and we are hopeful that all elements will come together soon for the city to join the League.”
Despite Garber’s words, MLS is expanding at a serious pace, raising issues on and off the field.
One question is whether the quality of the players can keep up with this pace of expansion: as the league expands, dozens more roster spots need to be filled, and the quality of the “filler” players in MLS is already low as it stands. Building a league that can appeal to the millions of soccer fans who already exist in the States depends to a degree on the quality of the play.
Raising the salary cap?
The answer, of course, is to raise the salary cap and attract more and better players from abroad. We will surely see less Americans per team in the coming years, though fortunately for the national team, this ought to be of little concern as the total number of Americans in the league won’t necessarily decline. But there certainly aren’t enough good ones sitting in a cupboard somewhere to fill four new teams by 2011 (Seattle, Philadelphia, +2).
Will the salary cap be raised substantially by then? I think so. The collective bargaining agreement between the players’ union and MLS expires next year, giving a window for this to happen. Though the salary cap isn’t directly determined by these negotiations, it would seem to be the right moment to move on it (and while they’re at it, stop paying developmental players a wage that would shame Montgomery Burns).
Given MLS has many new owners now — it welcomed Oscar de la Hoya to Houston just this week — the burden of an increased cap doesn’t fall as hard on one entity, as it would have before on AEG when they owned half the league.
Moreover, expansion itself should help pay for higher salaries. Philadelphia’s “entrance fee” to the league is likely around $30 million, and that seems sure to rise further for the seventeenth and eighteenth teams. The league and all its owners have also started making money out of their commercially successful SUM venture, selling broadcasting rights in the U.S. to events like the World Cup and InterLiga. MLS has been cautious to ensure that the new owners have seriously deep pockets, one reason St Louis haven’t won over the league yet, so new owners like Andell Holdings in Chicago can certainly afford a rise. Unlike football in England, ownership is seriously vetted.
But compared to England, salaries are an amazingly low proportion of the turnover in MLS, especially for those like Toronto who sell-out regularly. Whilst the fetters on finance should be kept on to some degree in order to avoid an NASL-meltdown, to compete with the ever richer European leagues (even England’s second division is now able to poach MLS players financially), the reins will have to be loosened somewhat to avoid stagnation on the field in the coming years.
The question of expansion also brings up all those old chestnuts like whether there will be promotion/relegation (I don’t see owners investing $30 million to buy into a league that it could get stuck in the second tier of), whether there will be a single table and balanced schedule, and so on. My guess is no to all of that, as MLS seems to work on the principle of copying the other major leagues structurally, even as on the field we’re seeing a purer game than originally (no shootouts, for example).
We might even see the conferences broken into divisions at some point. The distances in America also make sense for a geographically carved set-up: with Philadelphia joining, the North-east ought to be a hotbed for rivalries that’ll get fans travelling and adding to the atmosphere. Lets see what the Sons of Ben can do now they finally have an actual team to support.
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Another factor to consider here is the continued weakness of the dollar. The increase in footballers’ wages in euro/sterling/Swiss Franc terms in Europe over the last few years has certainly outpaced inflation in the relevant countries, but when you plot those increases against a plumeting dollar, the effective cost to MLS franchises in the US of matching those salaries becomes even more prohibitive.
The relative increase in the value of the euro currencies also makes it more difficult for MLS to take advantage of its traditional source of overseas talent in Central and South America, as players from those countries are increasingly looking to Europe, given the difference in buying power.
MLS is going to face some definite challenges over the next few years, and how it addresses those challenges will play a big role in determining its longer-term health.
Reliance on the overseas talent and quality home talent leaks are two very big issues for MLS, let’s hope all new soccer academies, that are popping up this days, can contribute to the growth of domestic players.
USL/MLS partnership issue was already addressed here in the past, but is it possible in the near future for all pro and semi pro leagues in Canada and US to come under the same umbrella? Or we have just too many egos and different business cultures.
I know it is not the story for every USL team, but Saputo family have slowly nurtured soccer team and culture without breaking the bank and now can comfortably enter MLS.
One thing I found interesting about the Houston sale is that AEG sold only 50%. Or I’m guessing it was more like 49.999%, because AEG retains operating control.
AEG is rumored to be one of the ones pushing hard for a higher salary cap and other things that would make the league more financially competitive worldwide. My guess is that this is giving up not quite 50% of the team fits both with the league’s goal of less concentration of ownership and with AEG’s desire to have control as the more contentious issues are negotiated in the next few years, especially the new contract with the player’s union. Having developmental players making less that $13,000 a year is a big black eye for those who want to develop that “global brand.” It makes the league look Mickey Mouse.
If the salary cap can be raised substantially, the free market will take care of a lot of the player talent issues.
Ursus, good point. Still, good news for Toronto FC….
Davyd, I don’t see them coming together, though it would make some sense. Ultimately, if not promotion/relegation, it would be good if the winner of USL-1 was at least considered for “election” to MLS if they have the right structure in place and the finance. That would make it easier for a team to grow from a more grassroots level initially and have a goal to strive for.
Laurie, yeah, that was interesting. You could be right about AEG’s motives. On the other hand, it could be they just want to retain control in Houston until they have a stadium in place as they did in Chicago, for example. But one never really knows with the mysterious entity that is AEG…
I would say give St. Louis a club and then throw in one more to even out the table. Then call it quits for awhile. Perhaps smaller metro areas should look to form USL clubs to help spread soccer in states where there is no MLS side. One day I’d love to see a viable promotion/relegation system working in the States.
Also, raise the damn cap!
Micah it sounds simple enough, but you are forgetting the greed factor. With expansion fees already at $30 million and i assume going up, owners of the existing team would love to expand even more and make some money.
And I agree two more teams; to make it an 18 team top league would be great. Montreal should be one of thus two, as it makes sense from the geographic point of view.
I think MLS has more problems with the salary floor than the salary cap. On average MLS pays about what 4th tier League Two players (aprox. $98K) make in England and significantly less than 2nd tier Serie B in Italy (aprox. $275K per Reppublica.it) or 2nd tier Championship in England ($387K per BBC). Major League Soccer pays minor league wages. A higher cap might lead to 3 David Beckhams per team and a backline filled with players making $40,000 per year.
I read somewhere that League Two has a voluntary salary cap that limits wages to 60% of turnover. Does anyone know what percentage MLS pays in wages?
This is, in all honesty, the smartest discussion I’ve seen regarding MLS’s expansion on all the major US soccer blogs. Good job, guys.
I’ve never had such a huge problem with the conferences, so really, whether they go towards a single table or divisions, it’s good either way. I can see the benefit of going single table (which MLS has tepidly moved towards with their new, somewhat confusing playoff structure), but the division idea has been proposed by people as famous as Alex Ferguson, so the idea is at least out there, and it could be a decent one.
Altogether, I also agree that the cap needs to go up, but its become interesting to see how the teams are trying to expand their academies and scouting operations. DC United, much as I hate them, have done a great job mining the South American market, and seeing other teams branching out to try to repeat their success is a welcome sign that teams are serious about bringing (and hopefully being able to pay for) better talent. An increase in the cap will mean an increase in scouting/signing for those Juan Tojas, who have skill and are willing to come to the States for a decent wage, and to keep those mid-level MLS players here instead of plying their trade in lower European leagues.
Thank you, thank you, thank you. I’m so sick of everyone else in the American soccer media saying that expansion is so great — is it really? It feels very “nasl” all-of-a-sudden, to me. They have done (for the most part) everything right so far; very slow expansion, growing the sport in the cities that actually have teams, etc. And I don’t even have a problem with Seattle and Philly coming into the league. But please, please stop there. Why is there an insistence on adding franchises? It’s hard enough to get the soccer fans in this country to like the MLS, let alone trying to force anything on anyone. And will someone please explain to me why on earth MLS is thinking about St. Louis? Missouri already has a football club and they have by far the worst attendance in the league. It makes me sick to watch Wizards games on television. The stadium looks like an orange vacuum. How about one more U.S. side (Philly, since we already have Seattle and S.J.) and one more Canadian side (Vancouver or Montreal)? As much as I don’t care for Canadian sports fans (I played hockey my entire life (in Michigan) and I’ve played in some brutal, albeit great, games over the years with the Canadian teams), I think they have proven themselves as worthy MLS supporters (if TFC are any indication). My point is…why Don Garber? You’ve done a great job, all things considered, to this point…let’s continue to use the path of success. To me it’s just like learning how to properly change the oil on your car, but doing something entirely different (without knowing if it will work as well) to get the desired effect. I understand the saying “the greatest risk is not taking one” but I’ve also grown to learn from my mistakes. The NASL was American soccer’s mistake. I hope-to-god it is the only one.
“And will someone please explain to me why on earth MLS is thinking about St. Louis? Missouri already has a football club and they have by far the worst attendance in the league.”
Some points:
1) The difference in soccer culture between St. Louis and Kansas City is night and day. There is every reason to believe that St. Louis will support an MLS team very well. MLS understands this, as do the dozens of national soccer figures who endorse the St. Louis effort. Some examples:
“When the MLS started I can recall thinking why isn’t there a team in St. Louis?”
- Tab Ramos
“A knowledgeable and passionate fan base, high-quality youth soccer programs, supportive local businesses and political leaders, and robust ethnic communities are what will enable an MLS team to succeed in St. Louis.”
- Alexi Lalas
“I am so happy St. Louis is pursuing this and I would welcome them with open arms into the league.”
- John Harkes
“Back in the early 1990’s St. Louis was the place to be if you wanted to see soccer…I can think of no better place than St. Louis for the next MLS franchise.”
- Marcelo Balboa
“It would be a travesty if this league did not figure out how to put a franchise in the great city of St. Louis…If Major League Soccer is going to do this right, St. Louis must have a team.”
- Eric Wynalda
2) Kansas City is further away from St. Louis than New York is from Philadelphia. I could just as easily cite the fact that NYRB’s attendance is poor to argue against any further expansion teams in that region. But that would make as much sense as your “Missouri” argument: none.
I don’t know if St. Louis will be the next MLS team, as Don Garber has said MLS wants it to be. But there’s a strong case to be made, and the decision-makers are listening. Just because you don’t know anything about the situation doesn’t make it a bad idea.
Forgot to cite a source for those quotes:
http://www.stlouissoccerunited.com/content/view/62/85/
Know who has a ton of fans in the USL and could be a pretty cool side?
Puerto Rico
Very good written. I’ m loving reading these articles , it is such a rich topic, and a great chance for fans to share their knowledge & passion!
R.Vinello