MLS losing $$$

[msilverstein47]

http://www.philly.com/philly/sports/soccer/Garber_MLS_teams_losing_100m_combined.html

[Yohan]

http://www.philly.com/philly/sports/soccer/Garber_MLS_teams_losing_100m_combined.html

http://www.forbes.com/sites/prishe/2014/12/03/why-100-million-in-combined-losses-should-not-deter-further-expansion-of-major-league-soccer/

[tmcmurph]

I wonder how much was due to Chivas? Drawing only 8k a game has got to hurt bad.

[An Observer]

I wonder how much this is due to the opening salvo in the collective bargaining negotiations...

[Cheeta]

^ Odd.  I don't wonder at all.

[Gordon]

I dont doubt that MLS is losing this kind of money on overall Soccer/League Operations - maybe with a few accounting tricks to maximize losses for the sake of contract negotiations, but soccer operations doesn't tell the real tale of MLS's financial health. When the profits from SUM marketing, which MLS owns are factored in, the league goes from only a small number of teams making money (TFC being one of them) to most teams making money. Chivas though undoubtedly amongst those still losing money even with the SUM profits.

 

From the standpoint of contract negotiations, the SUM profits really dont belong in the equation IMO, because effectively they already do subsidize player salaries (and allowing for 18+ years of consecutive loses on league operations overall). While I do think realtively low salary rates is one of the biggest obstacles MLS faces, I dont think MLS is being unreasonable in how revenues are calculated (its not like SUM is generating 10s of millions of dollars in profits for each the team owners).

[gigi riva]

MLS   Is  only  20  years  old   so  I guess  you  have  too   expect  Highs   and  lows   The  Chivas  episode  must  have  been   a  maor  pain  in  the  ass.  But  at  the  same  time  that  could  have  been   avoided  if they   quickly  relocated  when  they  saw   it  was  turning  bad.  At  the  same  time   I  am  not  a  fan  of  the  recent  expansion   I   believe  they  are  moving  to  quick.  Having  two   teams  in  N.Y.  I  do  not  like.  and  having  a  franchise   coming  to  Atlanta   which  is  maybe  the  worst  sports  town in  America    puzzles  me. I  am  keeping  my  fingers  crossed   for   our  3  Canadian  teams   to  do  well   Maybe  Vancouver  can  get  to  that  next   level   hopefully .  The  Impact    will  get  better.  and  some  of  there  young   Canadian  Prospects    can  play  first  team  minutes,  and  Here  is  Hoping  my  beloved  TFC   can   turn  some  of  there  recent  bad  luck   to  good  fortune  because  if  they do   You  will  see  a   similar  reaction  to  what  you  are  seeing  with  the  Raptors  right  now.  

[Keegan]

I don't believe that for a second.  Does the league even pay a combined $100 million for salaries?  Not that salaries are the only cost of business but they would undoubtedly be the highest costs for pro sports franchises.

 

Transparency MLS.  Please tell us where these losses are coming from, we're dying to hear.

[shermanator]

I don't believe anything that comes out of MLS' mouths in general. This is simply a negotiating tactic to try and keep player salaries down

[JimmyJames]

Never trust the owners in any sport. 

[Ivan]

In fairness, Garber did say.  He included stadium and infrastructure costs in the calculation.  Having said that, should they really count?  Does anyone really think TFC or MLSE would pump 150 million (counting the stadium reno and training centre) into infrastructure for the team if the team and league were bleeding that much money?

[-Hammer-]

In fairness, Garber did say.  He included stadium and infrastructure costs in the calculation.  Having said that, should they really count?  Does anyone really think TFC or MLSE would pump 150 million (counting the stadium reno and training centre) into infrastructure for the team if the team and league were bleeding that much money?

 

I think MLSE doesn't have a choice with BMO and TFC. They need to create something to re-energize the fanbase. 18,000 attendance

 

When you've gone from a packed house, to this (picture from 2012)

 

http://upload.wikimedia.org/wikipedia/commons/c/c8/Toronto_FC_Anthems_BMO.jpg

 

There's a problem, say what you will about sold attendance (of which TFC is apparently gettin 18,000), if you aren't putting bodies in the seats, you kill the atmosphere and that tunes people out. I think the coach firing at the start of the season, and missing the playoffs again didn't do the team any favors. What's pretty much happening now is MLSE is trying to throw money at the problem.

 

I suspect that the talk of the Argos moving to BMO is either going to be a dagger MLSE dangles over the fans head saying "Oh well, if we don't get the support for soccer, we need to find other revenue streams" lie, or the fallback plan if this reno doesn't bring in the positive numbers and energy they want.

[Keegan]

The potential is there for TFC to be a team that gets 40,000 every weekend, MLSE just needs to put together a winner and they know that.  If they don't get the "reaction" they want with their expansion it will be because they aren't a playoff team.

[-Hammer-]

The potential is there for TFC to be a team that gets 40,000 every weekend, MLSE just needs to put together a winner and they know that.  If they don't get the "reaction" they want with their expansion it will be because they aren't a playoff team.

 

I think any sports team has that potential in the GTA save the Leafs and Raptors who can't due to arena constraints inherent to the sport. I highly doubt they will be realized, and the reason is the only franchise in Toronto that have ever managed to do that consistently was the Toronto Blue Jays for six years, at the peak of the sport itself in this country (before the Steroid Scandals hit), fielding an elite product, where it was making or close to making the playoffs consistently and benefited from a not only a new venue, but a venue that was the first of it's kind. BMO's reno will neither be the first of it's kind, nor is the on field product making the playoffs, yet alone securing home games in the playoffs, nor has soccer even remotely peaked in this country (although when that was, is up for debte).

 

I also think saying MLSE just needs to put together a winner, is like saying they just need to fit this square peg into this round hole, given the organization hasn't produced a single championship in any of it's sports teams throughout it's 16 year existence. I also think if they don't get the reaction they want (IE: Packing the place again) they will try to find new ways to make money off the venue so they don't lose out on their investment to upgrade it. This isn't an organization with an owner who loves the sports they have like Joey Saputo or Bob Young and the Ti-Cats. We are talking about an organization that buys sports teams to make money and in turn is owned by 2 heartless national telecom providers who also want to make money and treat sports as content and championships as ratings and Larry Tanenbaum, a well off construction Billionaire whose sports loyalties lean in every direction.

[An Observer]

Personally, I think the MLS needs to increase the salary cap quite significantly if they wish to make a big jump over the next 5yr CBA.  And despite what Garber says, they can afford it.  Take a look at this article:  http://www.theglobeandmail.com/sports/soccer/mls-faces-big-questions-in-tricky-union-talks/article21992065/

 

If they took that additional $72million they are getting just from the TV deal (ie. $90m less 1/5th of that amount or $18m) and added at least $40million of it to salaries, that would mean each of the 20 sides could increase their salary budgets by $2million (ie. the cap from $3.1 m to $5.1m) or $100k on average to their top 20 players.  That would boost the average salary for MLS players to over $300,000, and the median being to about $170,000 (based on 2014 statistics).  That means that they can at least start competing with the second tier of English football the Championship, ($343,861 average in 2011)^[97] or the Dutch Eredivise ($445,000).  Frankly, if they have serious ambitions they need to at least start competing with the Dutch by end of the next 5 year CBA period so they should be looking at a mechanism to increase the cap over that 5 year period based on some agreed metrics to around $500k on average.

 

And the owners could still pocket $32 million from the TV money or $1.6 million per team to offset "losses" they are supposedly currently experiencing. 

 

Moreover, they should allow at least one more DP for those teams that have the budget to do it and possibly moving to 5 or 6 over the 5 year contract which would boost the average salaries even more.  Certainly, attendance will likely rise well over the 20k average next year (it was 19,149 this year) as Chivas is no more, there are 2 expansion sides, TFC has 8,000 more seats and San Jose moves into a new 18,000 seat stadium (which means the 2 lowest teams in terms of attendance will be "fixed' next year).  So therefore, there should be more teams that can decide to spend more of their new earned cash on DPs.

 

Finally, this is not even taking into account the increase sponsorship deals like the $50 million Heineken contract over the next 5 years (worth $500k per team each year).  And the overall bump to the league of having more teams including in another in NYC which generates more interest across the continent with Atlanta and another team in LA joining in 2017.

 

If they go cheap on salaries, they risk undermining the development of the product and certainly any possibility of rivalling the big 4 of England, Spain, Italy or Germany in the next 10 or 15 years.  They at least need to be where the Dutch are at the end of this 5 year CBA to have any chance of getting there and frankly, they are in good position to be able to do that if they use a big chunk of their additional TV cash to do it.

 

And I agree with the view espoused above that if they were bleeding that kinda of money, owners would not be paying $100m to own a team or investing in their infrastructure so significantly.

[SCF08]

 

 

[Moldy9]

Meh.  How many of those leagues actually do pay their players the salaries that have been factored into this statistic?  You hear of many teams not paying their players (Turkey being one).  That would be an interesting side stat.

 

As for MLS... meh... I think by them expanding over 20 teams is a big mistake.  They're focused on revenues and that's just greedy.  In the end the product on the field will be of lesser quality and for the amount they're asking for their tickets, I see is unreasonable. This could backfire on them.

 

That said, just to tie in the graphic above with the leagues and salaries - is there also a spreadsheet on ticket prices??? Just curious 

[baulderdash77]

The new sponsorships, TV deal and better teams will push league revenues into the top 10 of world leagues; but player salaries will remain down a fair bit.  That's the kind of disparity that will hurt the league more than anything.

 

I think they're going to be close to the Mexican league in terms of revenue.  I think that's a good goal to get to in terms of players.  When MLS consistently pays it's players about the same level then the quality level will start to equalize.  Right now that's about $400k USD as an average per player in Mexico.  So maybe the median is something around $275k or so.  I think that will attract the kinds of players to bring up the level.  We're a long way off.

[jpg75]

Agree, Liga MX is a good goal to set their eyes on. Right now revenues are approx. 36M to 26M ($USD) and avg. Salary is 425K to 215K. If the league is bringing in an additional 82M a year with the TV and Heineken deals then that brings club revenues to 30M. Definitely time to boost the salaries and attract better top-end talent.

[Cheeta]

No idea how that data was arrived at but it does feel like there is some truth in the numbers.

 

All the league averages are skewed by the stars at one end and the plumbers at the other but I think you'll find one constant.  Almost every top league in the world has seem players wages rise substantially (average, median take you pick) over the last decade, economy be damned.  Even MLS.  However, I don't think MLS is even CLOSE to keeping up with inflation. 

 

I'm a-feard MLS is MLS and will for the forseeable future be the MLS everyone should be used to by now.  A league in the high 20s of world rankings going for a bit of flash by buying a few aging stars for marketability. 

 

P.S.  For UEFA members at least trust that the players are getting paid (all disputes aside) at the end of the day.  Contract responsibilities are pretty standardized for both the players and the club as per UEFA rules and regulations.

[An Observer]

If MLS really wants to compete and improve their product, they have to boost the salary cap massively. Of course, you want a sustainable model but if you take into consideration air travel for the year (eg. 25 matches x 30 staff/players x $2500 per person), you are still looking at only about an additional 1.875m per year per team. If you look at the difference of revenue per year per team per league, there is a $5 to 8m difference for those leagues paying similar salaries to MLS so all of that is not taken up in air travel.