Ruud Gullit comments with MLS

[Luis_Rancagua]

This story come directly from MLS Rumors. I found it very interesting.

------------------------------

REPORT: Ruud Gullit Says MLS On Par with Dutch Top Flight But Must Change To Progress

Saturday, September 20, 2008

It seems one of the things that may have prompted MLS to consider major changes to the schedule might have been the words of ex-LA Galaxy boss, Ruud Gullit. In this interview with Britain's Daily Mail he give MLS some constructive criticism that many readers here likely agree with.

Here is an excerpt:

Courtesy of our friends at Tribal Football:

Former LA Galaxy coach Ruud Gullit says there's a lot that needs to change in MLS.

The Dutchman told the Daily Mail: "For a start, they play in the summer and that means it can be 90 degrees and 80 per cent humidity. You just can't play high-tempo football. Certainly nothing like the Barclays Premier League, which is all about long ball and pace.

"Then there's the travelling. If you're in LA and you've got a game in New York you're talking about a six-or-seven-hour flight.

"I'd liken it more to the leagues in Holland, Belgium and Norway. The players can play. I watched the All Stars against West Ham in the summer and the All Stars outplayed them. And I think Beckham has already proved he can do it. His crossing and dead ball delivery is still important to England. Sometimes decisive."

Certain aspects of U.S. soccer frustrate him: the failure to arrange fixtures around the international calendar; the draft system that prevents clubs from building a youth development structure; the salary cap that denied him the chance to lure European players to America.

"We could have a game the day after a round of international matches, that was ridiculous and so was the draft system. I could have players I wanted to promote from the under 21s but they were no use to me because they weren't actually mine, they could go into the draft system and end up elsewhere. It all became very frustrating and it has to change."

http://www.mls-rumors.net/2008/09/report-ruud-gullit-say-mls-on-par-with.html

[CanadianSoccerFan]

I guess Gullit's never been to the northeast in the winter.

[snake]

i watched the interview on the bbc the other day,you might find a link to it.

from what i saw of the interview he was dismayed at the salary cap and single entity mo of the mls

[Luis_Rancagua]

quote:Originally posted by snake

i watched the interview on the bbc the other day,you might find a link to it.

from what i saw of the interview he was dismayed at the salary cap and single entity mo of the mls

But isn't the purpose of the single entity to prevent the league from shooting-off huge deficits out of control and to curb high wages from bringing the league into bankruptcy???? Let's NOT forget that it was financial mismanagement that killed the NASL. Now that the US is going into a recession, the single entity will certainly be needed even more.

[snake]

quote:Originally posted by Luis_Rancagua

But isn't the purpose of the single entity to prevent the league from shooting-off huge deficits out of control and to curb high wages from bringing the league into bankruptcy???? Let's NOT forget that it was financial mismanagement that killed the NASL. Now that the US is going into a recession, the single entity will certainly be needed even more.

dont shoot the messenger please

[squid2]

Gullit obviously didn't do his due diligence after AEG made their offer to him.

He had no idea about Lalas, the salary cap or the limited rosters.

He's bang on about the MLS though, too bad for the league that he's gone.

full article here:

http://www.dailymail.co.uk/sport/football/article-1058535/Gullit-I-saw-Zola-boss-I-hope-succeeds-West-Ham.html

[RJB]

I agree with all that Gullit has to say in this article. The salary cap and the draft have to go!

[CanadianSoccerFan]

The salary cap should be raised but not eliminated. That would be NASL all over again.

[Luis_Rancagua]

quote:Originally posted by RJB

I agree with all that Gullit has to say in this article. The salary cap and the draft have to go!

RJB, be very careful when you preach the elimination of the single entity. It was established for the sole purpose of avoiding the financial mismanagement of the NASL where high wages were out of control, thus resulting in many of the deficit crisis of which clubs such as the Cosmos folded into bankruptcy. The planners of MLS were dedicated of avoiding these mistakes. For this reason they decided to establish the single entity system. Like CanadianSoccerFan, I'm in favor of raising the cap, but not getting rid-off it.

[Canuck Oranje]

Luis

The world of soccer is completely different today from the 1970s and the North American market for soccer is entirely different too.

The single entity concept is more likely to kill the league than to save it in today's world. The sooner they rid themselves of this strait jacket, the better. Also, such a small salary cap also ensures that the league will always be second rate. I don't have a problem with a salary cap but it needs to be raised to at least three times its current level.

The single entity concept protects bad managers and penalizes good managers. The league is governing itself through a toxic mix of arrogance and naivety. The fact that prospective owners are prepared to pay a $50 million franchise fee for this league is itself mind boggling.

To assume that North America's sports management will make the same mistakes again and again seems to imply soccer management is worse than that in any other sport. If TFC fails down the road, it will not be because of a lack of business management nor the marketplace, it will be because of the centralized football management system that the MLS saddled them with. From the times that I have heard Garber interviewed, it seems that he acknowledges that MLSE actually taught him a few things about sports management. That would seem to support the view that MLS management is holding some teams back.

quote:Originally posted by Luis_Rancagua

RJB, be very careful when you preach the elimination of the single entity. It was established for the sole purpose of avoiding the financial mismanagement of the NASL where high wages were out of control, thus resulting in many of the deficit crisis of which clubs such as the Cosmos folded into bankruptcy. The planners of MLS were dedicated of avoiding these mistakes. For this reason they decided to establish the single entity system. Like CanadianSoccerFan, I'm in favor of raising the cap, but not getting rid-off it.

[squid2]

Canuck Oranje, I was right along side with you. I'd love to see the actuals, and that won't happen.

But I've been told the contrary, that the single entity isn't going anywhere and neither is the salary cap.

The cap will be increased, as will the size of rosters for the next collective agreement and it will include a more detailed and complex formula for future adjustments. The MLSPU will be just a bystander, again. As long as the owners can pay ridiculously low wages to a third of the league, life is good for a franchise.

Notwithstanding the Forbes article, which the reporters did not have access to any formal B&Rs, it was pieced with many bits of information over a period of time.

MLS makes money.

For example TFC ...

BMO is a separate entity/expensed, TFCA is a separate entity/expensed.

Revenue streams are where they need it to be, as are the expenses.

How GAAP is applied varies as they are the only Cdn franchise so the B&Rs will be set up a little differently. The Am franchises are Earnings before interest, taxes, depreciation and amortization (EBITDA) the non GAAP.

And don't forget about “Official SUM Properties”, which is a different monster in itself. SUM properties includes the MLS, U.S. Soccer, the Gold Cup, Superliga, Interliga, Mexican National Team, Club Deportivo Guadalajara, and the Pan-Pacific Championship. The SUM dividends are payable to the owners, separate and apart from whatever the actual franchise earns" as profit, last year, IIRC = $2.1 million + the SUM dividend of approx 1 million each, plus whatever weighted additional payment from each additional property.

Bottom line is that MLS/SUM financials are a very closely guarded "secret". Only the chosen know - which is sort why Melynk (and others of his ilk) might be late to the dance but certainly don't want to miss the music.

So the single entity is starting to be very profitable, i.e. $50 million in a new francise fee - which is essentially just a seat at the MLS table.

yes, mind boggling it is....

[Richard]

^ Welcome to American style capitalism in the professional sports entertainment business.

[jimmynow]

quote:Originally posted by Canuck Oranje

The single entity concept is more likely to kill the league than to save it in today's world.

The single entity concept protects bad managers and penalizes good managers.

explain to me how single identity will "kill" the league when it has survived as single entity for 12 years?

explain to me how single entity protects bad managers and penalizes good managers?

personally i'd rather they keep the cap and do away with league-owned contracts, but in no way do I believe that single entity will promote, or does promote, these two extreme statements above.

My one problem with single entity has been the lack of flexibility to get contracts done and signed, because it takes time to go through the league. But that will never "kill" MLS. The reason the league still exists is due to single entity. It's been amazing to ensure cost certainty and avoid excessive spending by wealthy clubs -- which would kill the league just like it killed the NASL.

Now, I believe the cap and revenue sharing are great things. We've seen how good managers (Steve Nicol, for example) can still thrive in this environment, creating pretty good teams every year.

We've also seen a team like Columbus come back from the dead to lead the league with an entertaining club.

When these threads come up, other people tend to always cite Europe (england in particular) as some great example of survival of the fittest.. no caps, no single entity, none of it.

But one could say that the Premiership is a competition of dollars. They should just dump the dollars on the field before the game and the highest pile wins. Spending correlates very highly with success. That "competition" that people cite in the premiership isn't really pure competition. When Man U beats a bottom feeder, it's not that Man U is some great example of the "cream of the crop" theory but that they have the wherewithal to buy the best.

[Richard]

^ I agree. The EPL is a superb example of rampant, unrestrained capitalism in sport where the super-clubs with the most money rule. I think MLS's 'socialist' approach is the primary reason why the league has survived as long as it has. The clubs have almost quadrupled in asset value according to Forbes and the league has a waiting list of owners competing to get a piece of the action. What is it, nine serious bidders for two expansion slots in 2011? A pretty healthy state of affairs by anybody's standards. The NASL burned through a lot of dollars and finally flamed out after 18 years, WUSA was little more than a flash in the pan. The cautious approach taken by MLS will ensure the league not only survives but thrives for many more years, even if growth is slower than some might like. This is not to say there is no room for improvement but overall the MLS is on the right track.

[Canuck Oranje]

First off, I don't see the EPL as a model. In fact it may actually be on its way to seeing some high profile failures down the road. When and who is anyone's guess but Newcastle doesn't look too strong at the moment.

I don't believe I ever once said do away with a salary cap. The salary cap and even some form of revenue sharing can remain if so desired. But the salary cap needs to be increased to accommodate a larger roster of quality players.

How does it protect poor management?

The single entity concept may have been necessary in the 1990s when it was created and it may still be valid if the league's goal was to remain a second rate domestic league. Now you have teams with different local conditions being faced with centralized decision making that often does not see individual differences. Secondly, if you have a number of teams in locations that are managed by average sports administrators that do not perform well financially, the teams that have good sports administrators and good financial results still needing to conform to the centralist betterment of the whole rather than be allowed to do what's best for their own franchise and their financial statements. For this reason, MLS continues to have a low salary cap and very small roster sizes.

On a player management level, individual teams need to receive full benefit from their own player development. The most successful teams outside of the largest European leagues generate a very large part of their revenue from player development (Santos FC is a good example). By forcing a sharing of talent with the league in the MLS, the incentive to invest in player development is weakened and a source of better-value quality talent is reduced.

In terms of managing the existing roster, I have been known to post in the past about how I thought TFC management had it all wrong in their roster strategy. I have no doubts that some teams do a far better job of roster management than others. Still unlike most other North American sports leagues, the best-value MLS-level talent still lies outside of the MLS. The ability of team managers to access this talent is limited by centralized player contracts and the need for the league to manage its centralized wage bill. Why MLS signs aging stars to long-term contracts is beyond my comprehension? It seems to have the potential to create problems down the road.

Why does single entity itself pose a threat to the league?

Right now, it is my view that MLS exists after 12 years by virtue of the deep pockets of its initial group of owners which in many ways is not that different from NASL (NASL existed for more than 12 years). The question is how long will they support a Kansas City and Salt Lake Franchise. And will San Jose survive? Or will it fail and be moved again? There have been other franchises that have come and gone. If years of existence is the measure, then USL is more successful than MLS and even I am not prepared to say that.

Currently, I do give credit to MLSE in how they have been able to build a successful franchise (business-wise) in Toronto. Their roster management is horrible and I won't get into their current coaching.

Another of the problems of centralized management in MLS is that they fail to give any credit to the soccer knowledge of North American fans. They do this by continually focusing on newcomers to the sport rather than consolidating the soccer support in a city. That part MLSE and TFC has done well. In many ways, even MLSE has not given enough credit to the soccer-knowledge of Toronto-area fans and could develop a much stronger fan base with a quality team. If the quality of the MLS game does not improve more quickly, I fully expect, fans to eventually become bored with it and move on. I think knowledgeable fans will tend to watch the best or at least, a league that is developing some of the best talent. MLS is not either now. I fully expect talented young North Americans to avoid MLS as much as possible if they see opportunities for themselves in the higher paying European leagues because of the leagues restrictive practices.

Don't get me wrong. The opportunity to build a strong North American league is there to be had. The MLS is best positioned right now to grab it. But it needs to change to grow. My view is that the Single Entity concept needs to go and the salary cap needs to be raised. I would even go as far as to say that the DP should be dropped and incorporated into the Salary Cap (DPs distort the real wage bill but I guess it suits some markets). Remember that teams do not have to spend to the Cap and can spend something less.

[Sébastien]

Question: Is there a salary floor in the MLS?

[Guest Ed]

^ Ontario's minimum wage apparently.

[Sébastien]

^ lol, point taken!

I personally don't have a problem with the idea of a salary cap, but if you have one, wouldn't it be logical to have a salary floor as well?

[AvroArrow]

quote:Originally posted by Sébastien

I personally don't have a problem with the idea of a salary cap, but if you have one, wouldn't it be logical to have a salary floor as well?

That entirely depends on how strong the players' union is.

[Richard]

^ The union position is much weaker when it is forced into a position of negotiating with what is effectively a monolithic monopoly rather than group of indepent operations each with their own concerns and self interests. The latter leaves some opportunity to divide and conquer, the former tends towards a take it or leave it situation.

[bettermirror]

The draft does not need to go. A lot of top college players would never find their way into an MLS youth academy. They need to be discovered somehow. However, the onus should always be on the clubs with their own youth development. Add the draft as supplementary.

Salary cap MUST go up - I'd say 10 million per club?

MLS must match international calendar. It really isn't that difficult! Does Don Garber not hear this from people? Why does he not care that TFC has to call up guys like Rick Titus and loan Kambere???

[Canuck Oranje]

On Player Development with MLS Teams, this article is good and says more or less the same thing.

http://soccernet.espn.go.com/columns/story?id=578695&sec=mls&root=mls&cc=5901

[VPjr]

quote:Originally posted by Canuck Oranje

First off, I don't see the EPL as a model. In fact it may actually be on its way to seeing some high profile failures down the road. When and who is anyone's guess but Newcastle doesn't look too strong at the moment.

I don't believe I ever once said do away with a salary cap. The salary cap and even some form of revenue sharing can remain if so desired. But the salary cap needs to be increased to accommodate a larger roster of quality players.

How does it protect poor management?

The single entity concept may have been necessary in the 1990s when it was created and it may still be valid if the league's goal was to remain a second rate domestic league. Now you have teams with different local conditions being faced with centralized decision making that often does not see individual differences. Secondly, if you have a number of teams in locations that are managed by average sports administrators that do not perform well financially, the teams that have good sports administrators and good financial results still needing to conform to the centralist betterment of the whole rather than be allowed to do what's best for their own franchise and their financial statements. For this reason, MLS continues to have a low salary cap and very small roster sizes.

On a player management level, individual teams need to receive full benefit from their own player development. The most successful teams outside of the largest European leagues generate a very large part of their revenue from player development (Santos FC is a good example). By forcing a sharing of talent with the league in the MLS, the incentive to invest in player development is weakened and a source of better-value quality talent is reduced.

In terms of managing the existing roster, I have been known to post in the past about how I thought TFC management had it all wrong in their roster strategy. I have no doubts that some teams do a far better job of roster management than others. Still unlike most other North American sports leagues, the best-value MLS-level talent still lies outside of the MLS. The ability of team managers to access this talent is limited by centralized player contracts and the need for the league to manage its centralized wage bill. Why MLS signs aging stars to long-term contracts is beyond my comprehension? It seems to have the potential to create problems down the road.

Why does single entity itself pose a threat to the league?

Right now, it is my view that MLS exists after 12 years by virtue of the deep pockets of its initial group of owners which in many ways is not that different from NASL (NASL existed for more than 12 years). The question is how long will they support a Kansas City and Salt Lake Franchise. And will San Jose survive? Or will it fail and be moved again? There have been other franchises that have come and gone. If years of existence is the measure, then USL is more successful than MLS and even I am not prepared to say that.

Currently, I do give credit to MLSE in how they have been able to build a successful franchise (business-wise) in Toronto. Their roster management is horrible and I won't get into their current coaching.

Another of the problems of centralized management in MLS is that they fail to give any credit to the soccer knowledge of North American fans. They do this by continually focusing on newcomers to the sport rather than consolidating the soccer support in a city. That part MLSE and TFC has done well. In many ways, even MLSE has not given enough credit to the soccer-knowledge of Toronto-area fans and could develop a much stronger fan base with a quality team. If the quality of the MLS game does not improve more quickly, I fully expect, fans to eventually become bored with it and move on. I think knowledgeable fans will tend to watch the best or at least, a league that is developing some of the best talent. MLS is not either now. I fully expect talented young North Americans to avoid MLS as much as possible if they see opportunities for themselves in the higher paying European leagues because of the leagues restrictive practices.

Don't get me wrong. The opportunity to build a strong North American league is there to be had. The MLS is best positioned right now to grab it. But it needs to change to grow. My view is that the Single Entity concept needs to go and the salary cap needs to be raised. I would even go as far as to say that the DP should be dropped and incorporated into the Salary Cap (DPs distort the real wage bill but I guess it suits some markets). Remember that teams do not have to spend to the Cap and can spend something less.

Outstanding post. great read