Maintaining Parity In MLS: Don Garber and the Wisdom of Branch Rickey

branch-rickeyAny rule or regulation that removes or tends to remove the power of money to make the difference in playing strength is a good rule.

So spoke Branch Rickey, Baseball’s Ferocious Gentleman and a leading executive/owner in Major League Baseball at four clubs from the 1910s to the 1950s. He spoke the words above in May 1960 at a hearing in Congress as he looked to lead a loosening on Major League Baseball’s monopoly on talent, with the aim of launching a new entity, the Continental League. Rickey was concerned about the future of baseball, with the gap between rich and poor growing year-on-year: Trouble ahead, Trouble ahead, he warned. Rickey’s solution was to provide the poorer teams with more revenue, based on the premise that it takes two to tango: rich clubs needed to play poor clubs, and those clubs going out of existence or perennially feeding at the bottom of the tank did no-one any good in the long-run. As Rickey put it:

It has been reported that the American League club in New York City in 1959 realized a gross income of one million four hundred thousand dollars from radio and television. The Washington club in the same league took in approximately $125,000, yet the Washington club plays eleven games at Yankee Stadium. How can Washington ever expect to compete in the competitive market for player contracts where money is king?

Rickey’s solution was simple: the Continental League would pool two thirds of the television and radio revenue from every club and distribute it evenly amongst its clubs. Rickey aimed to set it up within the existing structure of Major League Baseball, at a time when each league had far more autonomy than today.

The Continental League never happened. Rickey’s ideas actually ended up having a huge influence on American sports, but not in baseball: his fundamental concern for the need for parity was adopted by the far-sighted leadership of first the American Football League under Lamar Hunt’s guidance, and then by the National Football League. In the coming decades, after the AFL had merged with it, the NFL eclipsed Major League Baseball as America’s game, whilst the latter continued to squabble over how to manage the gap between rich and poor.

The NFL was brought to this supremacy by Commissioner Pete Rozelle, who shortly after Branch Rickey’s congressional comments, led the league to a television deal that ensured a certain level of parity in income:  at the NFL’s annual owners’ meetings in 1961, Rozelle convinced the final holdout on his plan, the New York Giants owner Wellington Mara, to let the NFL sell the league’s television rights collectively and share the revenue. According to Michael MacCambridge’s outstanding history of the NFL America’s Game, Mara conceded that “We should all share, I guess. Or we’re going to lose some of the smaller teams down the line, and we’ve all stuck together.”

Rozelle later admired this acceptance by the bigger clubs’ owners of the need for a collective vision: “The big-city people — Halas, Reeves, the Maras — went along. If Green Bay lost its television money, they wouldn’t have a balanced league. It was an altruistic decision on their part.”

It was altruistic, but also pragmatic. In 1962, Rozelle negotiated the NFL’s first national television contract with CBS, $4,650,000 for two seasons. Rozelle and the NFL were accused of socialism: but this was smart business, and a smart way of viewing sport. “The whole thing was equalizing the competition on the field,” Rozelle said. “The sharing of income gave everyone the tools, the money, to compete equally. Now, some don’t. But management and coaching and so forth being the big difference — and players — they had the opportunity, at least, to compete equally.”

As MacCambridge puts it in America’s Game, this was a vision that would transform the future of American sports:

Much bluster would come later about owners as selfless or devoted to the good of the whole. But in this single case, the decision to share revenue equally — echoing the one that the AFL made at the behest of Hunt, and the one that the world of baseball ignored despite the entreaties of Veeck and Rickey — would become a model for American sports that would allow the game to rise from the Darwinian business model in which each club struggled for the last dollar, toward a system that made the primary competition the one on the field of play.

At heart, the NFL’s decision to approve a joint TV contract, whatever the intent, served to place a higher priority on an equality of opportunity for all competitors than on maximizing the revenue of any individual franchise.

Forty years later, soccer had learned this lesson from the NFL: the NASL collapsed amidst wild spending, the Cosmos’ fame not enough to keep the league alive, and Major League Soccer, guided by Lamar Hunt (with his experience in the AFL/NFL and NASL) had adopted the ultimate collective model by operating as a single-entity. All investors would be directly impacted by the financial success or failure of all other teams.

Still, in 1999, Major League Soccer was struggling. Attendance had declined for four straight years following the league’s 1996 inaugural season. Commissioner Doug Logan resigned before the playoffs. MLS’ key ownership groups, the Krafts and the Hunts, turned to a man who knew little about soccer to save the league, plucking from the NFL a 42 year-old executive called Don Garber. In the New York Times, Alan Rothenburg said upon his appointment that “I believe he has the potential to be the second coming of Pete Rozelle.”

Eleven years on, and Major League Soccer is convinced Garber is fulfilling that role, yesterday announcing his contract had been renewed for four more years at the princely sum of $3 million a year. Franchise values have soared, attendance is rising, television deals are improving, and different teams keep winning MLS Cup each year while a tight salary cap keeps a lid on spending.

Garber is a believer in Roselle’s focus on parity, and — in the lingo of his business — marketing the product of the league as a whole. Last week, in a Q&A with the Houston Chronicle, he reaffirmed this commitment:

Q: What kind of commissioner would you like your legacy to be? Would MLS commissioners like to be like former NFL Commissioner Pete Rozelle, who created a structure where everybody shares equally and there is more parity or like Major League Baseball with little parity.

A: I was fortunate enough in my early career in the NFL to work for Pete Rozelle and then to continue working for over a decade for Paul Tagliabue. And I believe the NFL is the most popular league in the world for a reason. And that’s that every fan knows at the beginning of the season that their team has a chance to go to the Super Bowl. And I believe that belief is an important quality for any league to be successful. Therefore I certainly subscribe more to the NFL’s approach to parity than I do perhaps to the structure of the English Premier League, where for the most part only a handful of clubs really have a chance of winning the league each year.

The question is, can MLS keep to that vision while revenues rise and the richer clubs itch to sign the world’s best players?

This Sunday at Toyota Park, we will see the latest star player to join MLS, Rafa Marquez. And we may well see, for the first time, five Designated Players (stars paid beyond the constraints of the salary cap) on the pitch at the same time: Nery Castillo and Freddie Llunjberg for the Fire, and Marquez, Thierry Henry and Juan Pablo Angel for the Red Bulls. As Steve Davis puts it: “the arms race is on. . .This could easily create a rich vs. not-so-rich divide – and I’m not sure that’s a great thing for the sport.”

Balancing MLS’ need for global stars to improve the quality of play and the league’s marketing efforts whilst maintaining the Rozelle mantra that every team’s fans must believe it has a chance to go to MLS Cup at the start of each season is Don Garber’s great challenge over the next four years. The introduction of the Designated Player rule, and its significant loosening this season (allowing the Red Bulls to acquire three multi-million dollar players, something only a handful of other teams could even conceive of doing), is not easy to square with Rickey’s maxim that guided Rozelle:

Any rule or regulation that removes or tends to remove the power of money to make the difference in playing strength is a good rule.

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