Canuck Oranje Posted February 3, 2007 Share Posted February 3, 2007 Does the MLS have a policy on paying transfer fees for players? Has MLS ever paid a transfer fee? If so, what is the highest fee ever paid? Who pays, MLS or team? It would seem that under the centralized system that MLS has, this may be an issue when a team would like to get a young, upcoming international talent. Link to comment Share on other sites More sharing options...
Ryan Keay Posted February 3, 2007 Share Posted February 3, 2007 Yup, MLS does pay transfer fees. Transfer fees come through allocations, and each allocation is worth a set amount of money. If the fee is lower than the allocation, the left over money can be used either against the salary cap or as a seperate "partial allocation" which is worth the left over amount. If the fee is higher than the allocation, the remainder can be counted against the salary cap. Typically this is only done when the difference is reasonable small. In the case of DP's, the club pay the transfer fee straight out of their own pockets. Link to comment Share on other sites More sharing options...
Canuck Oranje Posted February 3, 2007 Author Share Posted February 3, 2007 So I assume then that transfer fees received get allocated to the club? And profits from sale of a DP go back to the owners of that club (since they pay the original fee and salary)? My reason for asking is and I will use a Brazilian example because I most familiar with the situation there. Suppose TFC was to pick up Lucas, a budding superstar, from Gremio as a designated player. Since a Russian club was prepared to pay a rumoured 6 million euros, it would be reasonable that he could be acquired for say 8 million euros (reasonable since Marcelo transferred to Real Madrid for 6.5 million euros). Also I suspect a young Brazilian would be far more interested in playing in North America than playing in Russia. After raising his profile, suppose TFC is able to sell the 19 year old (then 21) into Europe for 10 million euros two years later. It would not be unreasonable that this could happen. In this case, TFC gets a net profit before Salary paid and for a player that is likely better in 2007 than Beckham. Lucas was named(Marketing rights would not have to be sold off and he would be known to fans because he would likely be a starter (and one of the superstars) at the U-20 tournament this summer in Canada. Lucas may not play the position where TFC needs help and another player may be more suited to the team needs. The point is I wonder if anyone is thinking about grabbing a possible superstar at the U-20 tournament as a designated player and leveraging the media around that event to build fan support. It would definitely raise the profile of MLS. Forget players like Figo and Beckham. Find some young talent to list as a designated player is my point. quote:Originally posted by Ryan Keay Yup, MLS does pay transfer fees. Transfer fees come through allocations, and each allocation is worth a set amount of money. If the fee is lower than the allocation, the left over money can be used either against the salary cap or as a seperate "partial allocation" which is worth the left over amount. If the fee is higher than the allocation, the remainder can be counted against the salary cap. Typically this is only done when the difference is reasonable small. In the case of DP's, the club pay the transfer fee straight out of their own pockets. Link to comment Share on other sites More sharing options...
Free kick Posted February 3, 2007 Share Posted February 3, 2007 quote:Originally posted by Canuck Oranje Does the MLS have a policy on paying transfer fees for players? Has MLS ever paid a transfer fee? If so, what is the highest fee ever paid? Who pays, MLS or team? It would seem that under the centralized system that MLS has, this may be an issue when a team would like to get a young, upcoming international talent. Funny that you should ask that question. That was precisely what I had asked Mo on Thursday. Ryan ummed it up pretty well Link to comment Share on other sites More sharing options...
Free kick Posted February 3, 2007 Share Posted February 3, 2007 quote:Originally posted by Canuck Oranje Forget players like Figo and Beckham. Find some young talent to list as a designated player is my point. But soccer fans in North america are a fickle group unfortunately. Players like Beckham and Figo do sell tickets because they are better known. I many ways MLS is no different than the other North american sports. Players like Figo and Beckham do sell tickets and boost the profile of the league and that is very important for the league in the short term and long term. Link to comment Share on other sites More sharing options...
Guest Jeffery S. Posted February 3, 2007 Share Posted February 3, 2007 How would MLS pay a transfer fee for a young Brazilian but not pay something of the same to buy out Beckham's contract for the rest of the year and have him in the league from the start (which probably would be worth it in marketing terms)? In any case, the whole transfer system is a bit odd at MLS, only now can teams make money off the players they develop and transfer out, which is a key way of raising funds in general for a 2nd tier league like this. Link to comment Share on other sites More sharing options...
Canuck Oranje Posted February 3, 2007 Author Share Posted February 3, 2007 I am confused too by the MLS system and suspect it limits what teams can do with up and coming talent. The system has to allow teams to acquire young players and resell them for the benefit of the team that had them. In order to do that, transfer fees will need to be paid because the best young players rarely are allowed to go on a free transfer. Besides grabbing a young player, and reselling them for profit is really where the money is for most teams outside of the high profile sides. To draw a parallel to the example I give in my previous post, Jose Mascherano was part of the Argentina team at the 2003 U-20 tournament while playing with River Plate. In 2005, he transferred to Corinthians of Sao Paulo for about 11,800,000 Euros. How much was he worth at the time of the 2003 tournament? We don't know for sure but likely some amount less. Yes, there is risk but I doubt it is any more risky than taking on an aging Beckham for 5 years. I think we grossly underestimate Toronto soccer fans. I believe credibility of the team will build its brand better than signing an aging star. With the high level of season tickets sold, TFC is now in a position to try this approach. I suspect if TFC has the best player in the league rather than the best known player in the league, knowledgeable Toronto fans will notice. If TFC can make money in the process, bonus. Link to comment Share on other sites More sharing options...
Grizzly Posted February 3, 2007 Share Posted February 3, 2007 quote:Originally posted by Canuck Oranje My reason for asking is and I will use a Brazilian example because I most familiar with the situation there. Suppose TFC was to pick up Lucas, a budding superstar, from Gremio as a designated player. Since a Russian club was prepared to pay a rumoured 6 million euros, it would be reasonable that he could be acquired for say 8 million euros (reasonable since Marcelo transferred to Real Madrid for 6.5 million euros). Also I suspect a young Brazilian would be far more interested in playing in North America than playing in Russia. After raising his profile, suppose TFC is able to sell the 19 year old (then 21) into Europe for 10 million euros two years later. It would not be unreasonable that this could happen. I think you are very wrong to think that a young Brazilian soccer player would rather play in North America than Russia (why are some of the top young Brazilian players playing in Russia while in North America we have only mediocre Brazilian players?). I think a regular Brazilian worker would rather work in North America than Russia but not a soccer player. A young soccer player wants to play in a good league/team where he can improve, get paid well, be exposed to other clubs through things like Champion's League and UEFA cup and receive a lot of media attention. In all of these areas things are far superior in Russia than in North America and MLS will have to improve the situation if they are to attract top young players. Incidentally, like MLS the Russian league is trying to improve rapidly and wants to challenge the big 4 leagues (I personally think they are currently the 6th best European league, behind France). Their strategy unlike many other leagues has not been to hire well known past their prime veterans but to scout extensively and find the best young talent just a bit earlier than the big 4 leagues would become interested. The Russian league is full of young talented South Americans and Africans which is one thing that makes it exciting to watch. While MLS does have to have a few stars to get in the North American media, I think they would be wise to follow a similar strategy themselves. Link to comment Share on other sites More sharing options...
Canuck Oranje Posted February 4, 2007 Author Share Posted February 4, 2007 If the development opportunity exists in North America and a route to the bigger leagues in Europe, it would be wrong to assume that agents would not place young players in North America on the way to marketing them in Europe. But the route to Europe must be complete. They may need to come to North America earlier and the financial opportunity also needs to be there. For that reason, I was talking about attracting young players as a designated player rather than older players and the potential to use higher salaries. That did not exist until now. I agree with your second paragraph that MLS needs to move to attracting young players. quote:Originally posted by Grizzly I think you are very wrong to think that a young Brazilian soccer player would rather play in North America than Russia (why are some of the top young Brazilian players playing in Russia while in North America we have only mediocre Brazilian players?). I think a regular Brazilian worker would rather work in North America than Russia but not a soccer player. A young soccer player wants to play in a good league/team where he can improve, get paid well, be exposed to other clubs through things like Champion's League and UEFA cup and receive a lot of media attention. In all of these areas things are far superior in Russia than in North America and MLS will have to improve the situation if they are to attract top young players. Incidentally, like MLS the Russian league is trying to improve rapidly and wants to challenge the big 4 leagues (I personally think they are currently the 6th best European league, behind France). Their strategy unlike many other leagues has not been to hire well known past their prime veterans but to scout extensively and find the best young talent just a bit earlier than the big 4 leagues would become interested. The Russian league is full of young talented South Americans and Africans which is one thing that makes it exciting to watch. While MLS does have to have a few stars to get in the North American media, I think they would be wise to follow a similar strategy themselves. Link to comment Share on other sites More sharing options...
Grizzly Posted February 4, 2007 Share Posted February 4, 2007 quote:Originally posted by Canuck Oranje If the development opportunity exists in North America and a route to the bigger leagues in Europe, it would be wrong to assume that agents would not place young players in North America on the way to marketing them in Europe. But the route to Europe must be complete. I am sure Brazilians have nothing in principal against playing in North America but the development opportunities you are talking about are not even near to existing in MLS at the present. If things develop in a best case scenario MLS is still probably at least 10 years away from becoming attractive to top Brazilian players like Lucas. 10 years ago the top Brazilians were not interested in playing in Russia either and the Russians were scouting the second rate Brazilians and lesser soccer nations. Now there are many top young Brazilian players in Russia but this required effective scouting, a lot of money and building a league that offered a top playing level none of which are things the MLS currently possesses. Even if you offer a prospect a lot of money they know that if they play in a lesser league this will hurt their development and future earning potential. Until the MLS can offer a more attractive environment for top prospects they should try to attract some of the less prominent prospects as Russia did earlier but to be successful they will have to have a good scouting system. Incidentally, you could probably form a top 20 national team from just the Brazilians currently playing in Moscow. CSKA alone has five of the top Brazilian under 25 players in Daniel Carvalho, Vagner Love, Dudu, Jo and Ramon. The first three already have senior caps while Jo is probably near to one. We should see both Ramon and Jo at the U-20 WC. Whether Russia is successful in entering the top echelon of UEFA leagues will probably be determined by whether they can manage to keep this type of player when they are in their prime age of 25-30 or whether they end up selling them to EPL or Spain. Link to comment Share on other sites More sharing options...
Canuck Oranje Posted February 4, 2007 Author Share Posted February 4, 2007 Well we have differences of opinion on this issue. I used Lucas simply for example purposes because I suspect he will go highest bidder after Gremio exits the Copa Libertadores and the U-20 World Cup. If that is from Russia, he will be in Russia. My idea was to target the best young players with the designated player funds rather than aging superstars. Some key points on Brazilians and Brazilian soccer First, don't underestimate the pull of money in the Brazilian development system. It is ingrained in the Brazilian culture to take the cash available now. As a player, glamour does not feed your family and for many, the national team is a distant dream. According to a consultants report a few years ago, only one team (Sao Paulo FC) in Brazil could survive without continuous selling players. Second, player development in Brazil is a profit-oriented business. Many of the best development systems in Brazil are not connected to top level teams (Pao de Acucar/CA Juventus, Desportivo Brasil/Sao Bento, Primeira Camisa/Sao Jose dos Campos, Nacional, Gremio Recreativo Barueri, etc.) and each of these teams would probably be a top U-20 national team. There are more in the works and some have the backing of investment banks. Many of these also provide player representation (Pao de Acucar, Desportivo Brasil and Primeira Camisa). Third, I think the player development opportunity in the MLS is also underestimated. I am talking about playing and starting in the MLS for a year or two and then moving to Europe. The fact is that some MLS players have moved into better European leagues directly. We really don't know whether its possible to attract high quality young players because no team in the MLS has tried to attract them from outside North America because the facility did not exist to do so. With the new designated player funding opportunity, that option may be possible. And I emphasize "may". Fourth, 10 years to put a full development system is extremely pessimistic. It took Pao de Acucar just five years to create one of the best development systems in Brazil and they pick up their players at 13/14 years of age. I don't think it will take longer for a TFC to set up something similar in Canada. As for top young players come to play in North America, the development system isn't as important as the development opportunity related to playing in the MLS and eventually moving to Europe. Playing in the MLS in itself would be showcasing for Europe. Fifth, the Beckham signing has had an impact in ways not really understood in North America at this time. From my time in Brazil over the past few months, people in the professional soccer business in Brazil have taken notice. There are opportunities to exploit this new profile and it is up to the creative teams in the MLS to do that. quote:Originally posted by Grizzly I am sure Brazilians have nothing in principal against playing in North America but the development opportunities you are talking about are not even near to existing in MLS at the present. If things develop in a best case scenario MLS is still probably at least 10 years away from becoming attractive to top Brazilian players like Lucas. 10 years ago the top Brazilians were not interested in playing in Russia either and the Russians were scouting the second rate Brazilians and lesser soccer nations. Now there are many top young Brazilian players in Russia but this required effective scouting, a lot of money and building a league that offered a top playing level none of which are things the MLS currently possesses. Even if you offer a prospect a lot of money they know that if they play in a lesser league this will hurt their development and future earning potential. Until the MLS can offer a more attractive environment for top prospects they should try to attract some of the less prominent prospects as Russia did earlier but to be successful they will have to have a good scouting system. Incidentally, you could probably form a top 20 national team from just the Brazilians currently playing in Moscow. CSKA alone has five of the top Brazilian under 25 players in Daniel Carvalho, Vagner Love, Dudu, Jo and Ramon. The first three already have senior caps while Jo is probably near to one. We should see both Ramon and Jo at the U-20 WC. Whether Russia is successful in entering the top echelon of UEFA leagues will probably be determined by whether they can manage to keep this type of player when they are in their prime age of 25-30 or whether they end up selling them to EPL or Spain. Link to comment Share on other sites More sharing options...
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