April 13, 2021

MLS and the money league

By J Hutcherson (Apr 13, 2021) US Soccer Players – The idea of a league constantly changing is still relatively new, but it quickly became the hallmark for Major League Soccer. Whether or not you wanted to buy into the league of the future, league of choice, or whatever else officials pushed, there was no doubting change. MLS moves forward with the idea that nothing is off the table, at least in theory. In practice, the labor unrest and complaints about single-entity limiting quality remain.

Pushing against this is that same idea of what passes for success in professional soccer. The shorthand for that is whatever the elite teams in Europe happen to be doing. Right now, that’s making sure that they remain in that lofty position. The fight over the future of the Champions League, the threat of a super league, and how the top clubs continue to grow their revenue resonate all over the world. It’s the dividing line between the small number of inarguably elite clubs and everyone else. MLS is firmly in that second category, still looking to establish itself and its clubs in that big league conversation.

Forbes’ latest money ranking makes the difference clear. While MLS expansion team fees rose north of $300m for Charlotte’s team, FC Barcelona is top of the money table with a value of $4.76b, revenue of $792m, and operating income of $62.2m. It’s not lost on anyone that Barcelona has also spent plenty of time this season downplaying the club’s economic issues.

You have to get to #14 in the Forbes list to find the first club worth less than a billion dollars. That line divides the very rich from everyone else. For MLS, it’s worth pointing out that the NFL’s Dallas Cowboys are worth more than Barcelona, according to Forbes, and all of its 32 teams have valuations of at least $2b dollars. The NBA’s Knicks are in ahead of Barca and the rest of the European elite as well. The 30th-ranked NBA team would slot in at 13th in the soccer rankings. Major League Baseball’s Yankees are also worth more than Barcelona, with only one team worth less than a billion dollars.

Since MLS is in competition with those North American sports, that compounds its issues. There’s no quick path to out-earning and out-spending most of Europe’s elite, and that may just be step one. The North American sports market has always been about being the top places for the best athletes to play. It’s easy to laugh at calling the winners of those closed leagues world champions, but it stresses that very basic point. Spend as much as those leagues do on talent, and you’re the best in the world.

Historically, that model has never been kind to professional soccer. Even in the era where promoters brought foreign clubs in wholesale, it was never the world’s top clubs. The old International Soccer League in the 1960s turned the likes of Everton and Dukla Prague into champions of America. The United Soccer Association did one better in 1967, renaming foreign clubs for North American cities. Still, it was Cagliari and not Juventus becoming the Chicago Mustangs and exactly zero representatives from Spain, Germany, or France.

Not even a decade later, the established North American Soccer League decided to go after some of the biggest names in the sport. Forget about the teams making up the numbers, and for a brief moment there’s an argument that the NASL had more of those name players than any league in the world.

Even then, when free agency in other sports was just beginning to redefine athlete compensation and years before Europe’s Bosman ruling, the NASL had trouble holding onto the momentum. That’s the polite way of looking at the league’s rapid decline.

It’s easy enough to dismiss a league that last played a season in 1984. Still, what the NASL demonstrated was the difference between existing and pushing into the spotlight in its era of American pro sports. Then and now, that’s fully dependent on a willingness to continue to spend.

Speaking to media on Monday, MLS commissioner Don Garber referred to Orlando’s Daryl Dike as “a $20m player.” His point was clear, that there’s an escalating value for MLS talent.

What’s also clear is that the record transfer fee for an American soccer player is the $73m Chelsea paid Borussia Dortmund for Christian Pulisic. Barcelona paid Ajax over $23m for Sergino Dest. Both of them had no connection to MLS. Weston McKennie did, but he never signed professionally with FC Dallas. His move from Schalke to Juventus may end up being more than the just over $20m price the Serie A giants paid to make a loan move permanent.

All of those teams spending on American talent are on Forbes’ rich list, and all have valuations of at least $1.95b. That’s Juventus in 11th-place. Chelsea is 7th at $3.2b, and we already know about Barcelona. None of those are record transfers for those clubs. There are three players ahead of Pulisic on Chelsea’s record transfer list. Barcelona has broken the $100m mark three times. Juventus has bought a squad’s worth of players over the years with each costing more than $25m. Cristiano Ronaldo leads that list at over $128m.

Meanwhile, Garber spoke about MLS having, “a balance between buying and selling. We were mostly a buying league, I think that mostly spoke to where MLS was in the lifespan of player development. But now every team has an academy and facilities, which creates a structure and programming…. It’s helped create the dynamic we’ve had now. It’s one of the most important developments of men’s professional soccer. I think we’re still in the first phase of it. You’re going to see more in the years to come.”

That focus on the academy model comes in the era of Atlanta United. One club changed how MLS operates in the market. Atlanta United spends more on players but also holds the two top spots for selling them as well. Atlanta spent just over $8m for Miguel Almiron, selling him to Newcastle for over $26m. Gonzalo Martinez’s move to Al-Nassr for $18m is the second-highest in league history, but Atlanta paid right at $16m to sign him. Alphonso Davies leads the list of MLS-developed players that signed with the league, moving from Vancouver to Bayern Munich for $10m. That now looks like a bargain for an established Bundesliga talent, but it’s worth the reminder that Davies played his way onto the Bayern roster.

Then again, we don’t see a lot of MLS clubs taking flyers on unproven players that cost them $10m. That may change through MLS’s new roster rules that favor bringing in young talent. We’re already seeing Atlanta’s entry point for South American players wanting to go to Europe working for other clubs, but it’s still MLS as a temporary step. The focus is now clearly on eventually selling. MLS stressed that in the announcement of the 2021 roster rules, writing “With the top-tier professional environments throughout MLS, clubs will have the opportunity to develop these young domestic and international players into impact players on their MLS teams and highly valued players on the international transfer market.”

It’s certainly not the league of choice idea with MLS as the destination league ready and willing to spend to develop, buy, and retain talent in competition with the European elite. Barring the collapse of the European club soccer economy as we know it, that’s going to remain the difference between MLS and the teams that slot in on Forbes’ money list. There’s no clever workaround, no shock run through a future Club World Cup to push past that economic advantage.

J Hutcherson started covering soccer in 1999 and has worked as the general manager of the US National Soccer Team Players Association since 2002. Contact him at jhutcherson@usnstpa.com.