CPL/L1C - Division II - Pro/Rel discussion

[ReedOnTheGrand]

10 minutes ago, mpg_29 said:

Among other things I think expansion fees act as a barrier of entry to prospective teams joining. I mean you don't want anyone just starting a team.

There's other ways of making sure a team is willing to invest that doesn't put millions of dollars in current millionaires pockets. 

[mpg_29]

Just now, ReedOnTheGrand said:

There's other ways of making sure a team is willing to invest that doesn't put millions of dollars in current millionaires pockets. 

It's a pretty surefire way of weeding out the non-serious/non-capable people...lots of people can say things but not everyone is willing to put their money where their mouth is...especially when it's a significant amount.

 

[ReedOnTheGrand]

Just now, mpg_29 said:

It's a pretty surefire way of weeding out the non-serious/non-capable people...lots of people can say things but not everyone is willing to put their money where their mouth is...especially when it's a significant amount.

 

I think it's fine if the league wants proof of investment but I'm against the investment being sunk into rich man's hands. 

[BenFisk'sBiggestFan]

This dream of having more than 20 teams in a league has some limits because of the population of Canada. There are several different ways it could play out. These two are the most likely in my opinion:

#1. The league does not use Pro/Rel
      The league has multiple teams in the large centres
      The league uses a salary cap
      The league does not reach a high level because the small cities are holding the big cities back
      The young talent can start in local clubs but will need to be sold to get to CMNT level

#2. The league does use Pro/Rel
      The league still has multiple teams in the large centres with some being stronger than others
      The league does not use a salary cap
      The league can prosper in the large clubs with a lesser level in the smaller cities
      The young talent can start in local clubs and move up the large clubs to get to CMNT level

In my opinion the second is a much better option. It comes down to the smaller clubs not being able to compete with the bigger clubs financially. As long as they are still running they can run small academies and play in a Div 2 league. If we hold back the bigger clubs than the CPL can only do so much... If we use Pro/Rel than we can not only reach all of Canada with academies and small clubs but we can also develop them further at the big clubs (assuming they are transferred there).

 

[Complete Homer]

^ You can have revenue sharing, a cap floor and ceiling for each level, and pro/rel all within the same system. Not really mutually exclusive

[mpg_29]

6 minutes ago, BenFisk'sBiggestFan said:

This dream of having more than 20 teams in a league has some limits because of the population of Canada. There are several different ways it could play out. These two are the most likely in my opinion:

#1. The league does not use Pro/Rel
      The league has multiple teams in the large centres
      The league uses a salary cap
      The league does not reach a high level because the small cities are holding the big cities back
      The young talent can start in local clubs but will need to be sold to get to CMNT level

#2. The league does use Pro/Rel
      The league still has multiple teams in the large centres with some being stronger than others
      The league does not use a salary cap
      The league can prosper in the large clubs with a lesser level in the smaller cities
      The young talent can start in local clubs and move up the large clubs to get to CMNT level

In my opinion the second is a much better option. It comes down to the smaller clubs not being able to compete with the bigger clubs financially. As long as they are still running they can run small academies and play in a Div 2 league. If we hold back the bigger clubs than the CPL can only do so much... If we use Pro/Rel than we can not only reach all of Canada with academies and small clubs but we can also develop them further at the big clubs (assuming they are transferred there).

 

This should be a goal regardless. The economics get a lot better if you can manage to cluster teams in the major cities.

[harrycoyster]

27 minutes ago, Complete Homer said:

Expansion fees aren't (just) about repaying owners who have run a loss in setting up the league

To be clear, in terms of American sports (NFL, MLS, NBA, etc.), this isn't exactly why expansion fees are paid. The expansion fee is basically a price to "buy shares" in the league. I'll use MLS as an example.

The owners in MLS split (to an extent) MLS profits. MLS is basically an organisation co-owned by 22 different ownership groups. If MLS was collectively worth $22 billion dollars, each owner would have a $1 billion dollar stake in the league. Adding a new, 23rd owner would dilute the existing owners' piece of the pie so that they all now had a $950 million dollar stake in the league. In this case the owner would be expected to pay around $50 million to the 22 owners for a $1.1 billion dollar expansion fee.

Obviously I massively inflated the numbers to make the math easier, but expansion fees are on paper for this reason. It works differently in leagues like the NASL where there is no revenue sharing and teams are actually owned by owners and not the league. It's still pretty unclear which structure the CPL will end up having.

[harrycoyster]

21 minutes ago, BenFisk'sBiggestFan said:

This dream of having more than 20 teams in a league has some limits because of the population of Canada.

No. The dream of having more than 20 teams is limited by the level of interest in soccer. We have three times the population of Portugal who have 40 professional teams and close to that number of semi-professional teams.

[ReedOnTheGrand]

3 minutes ago, harrycoyster said:

To be clear, in terms of American sports (NFL, MLS, NBA, etc.), this isn't exactly why expansion fees are paid. The expansion fee is basically a price to "buy shares" in the league. I'll use MLS as an example.

The owners in MLS split (to an extent) MLS profits. MLS is basically an organisation co-owned by 22 different ownership groups. If MLS was collectively worth $22 billion dollars, each owner would have a $1 billion dollar stake in the league. Adding a new, 23rd owner would dilute the existing owners' piece of the pie so that they all now had a $950 million dollar stake in the league. In this case the owner would be expected to pay around $50 million to the 22 owners for a $1.1 billion dollar expansion fee.

Obviously I massively inflated the numbers to make the math easier, but expansion fees are on paper for this reason. It works differently in leagues like the NASL where there is no revenue sharing and teams are actually owned by owners and not the league. It's still pretty unclear which structure the CPL will end up having.

I think we'll see a structure somewhere in between. 

[ReedOnTheGrand]

2 minutes ago, harrycoyster said:

No. The dream of having more than 20 teams is limited by the level of interest in soccer. We have three times the population of Portugal who have 40 professional teams and close to that number of semi-professional teams.

For a nation in a similar economic status the netherlands has ~35 pro clubs with with just short of half our population. 

[Complete Homer]

14 minutes ago, harrycoyster said:

To be clear, in terms of American sports (NFL, MLS, NBA, etc.), this isn't exactly why expansion fees are paid. The expansion fee is basically a price to "buy shares" in the league. I'll use MLS as an example.

The owners in MLS split (to an extent) MLS profits. MLS is basically an organisation co-owned by 22 different ownership groups. If MLS was collectively worth $22 billion dollars, each owner would have a $1 billion dollar stake in the league. Adding a new, 23rd owner would dilute the existing owners' piece of the pie so that they all now had a $950 million dollar stake in the league. In this case the owner would be expected to pay around $50 million to the 22 owners for a $1.1 billion dollar expansion fee.

Obviously I massively inflated the numbers to make the math easier, but expansion fees are on paper for this reason. It works differently in leagues like the NASL where there is no revenue sharing and teams are actually owned by owners and not the league. It's still pretty unclear which structure the CPL will end up having.

I'm aware, I was just simplifying the idea for the sake of getting to the more pertinent point for CPL startup, that expansion fees serve as a gatekeeper for serious owners

Though some leagues (NHL I believe) has no formal distribution of shares in the "league," and it still collects expansion fees

Edited July 28, 2017 by Complete Homer

[harrycoyster]

6 minutes ago, Complete Homer said:

I'm aware, I was just simplifying the idea for the sake of getting to the more pertinent point, that expansion fees serve as a gatekeeper for serious owners

Though some leagues (NHL I believe) has no formal distribution of shares in the "league," and it still collects expansion fees

I knew you understood, I just thought it was an important thing to mention. 

The NHL doesn't have a share distribution system but they still split resources like national TV deals, sponsorship cash, and league surplus evenly. On top of that all teams submit 6% of their total revenue into a pot that is then distributed evenly. It's just a more centralized system than MLS or MLB.

Edited July 28, 2017 by harrycoyster

[ReedOnTheGrand]

37 minutes ago, BenFisk'sBiggestFan said:

This dream of having more than 20 teams in a league has some limits because of the population of Canada. There are several different ways it could play out. These two are the most likely in my opinion:

#1. The league does not use Pro/Rel
      The league has multiple teams in the large centres
      The league uses a salary cap
      The league does not reach a high level because the small cities are holding the big cities back
      The young talent can start in local clubs but will need to be sold to get to CMNT level

#2. The league does use Pro/Rel
      The league still has multiple teams in the large centres with some being stronger than others
      The league does not use a salary cap
      The league can prosper in the large clubs with a lesser level in the smaller cities
      The young talent can start in local clubs and move up the large clubs to get to CMNT level

In my opinion the second is a much better option. It comes down to the smaller clubs not being able to compete with the bigger clubs financially. As long as they are still running they can run small academies and play in a Div 2 league. If we hold back the bigger clubs than the CPL can only do so much... If we use Pro/Rel than we can not only reach all of Canada with academies and small clubs but we can also develop them further at the big clubs (assuming they are transferred there).

 

Being a big city does not immediately mean your team will do better financially and attendance wise. You only need to look at CFL to see that.   

[Complete Homer]

Just now, harrycoyster said:

NHL doesn't have a share distribution system but still split resources like national TV deals, sponsorship cash, and league surplus evenly. On top of that all teams submit 6% of their total revenue into a pot that is then distributed evenly. It's just a more centralized system than MLS or MLB.

Yeah exactly, that's what I'm saying, that expansion fees and central decision making exist can exist outside of true centralized ownership

But that's a tangent from the topic, all I was trying to say that expansion fees serve a purpose besides compensating for diluting existing owners' shares/compensating for past creation and support the league/just making money because they can

[harrycoyster]

39 minutes ago, Complete Homer said:

You can have revenue sharing, a cap floor and ceiling for each level, and pro/rel all within the same system. Not really mutually exclusive

As long as you have a very stable league that won't fold if the most popular teams get relegated for tying up their cash in a couple of the wrong players. If the LA Galaxy got relegated in the 2002-2005 MLS era the league would have been finished.

[Complete Homer]

6 minutes ago, harrycoyster said:

As long as you have a very stable league that won't fold if the most popular teams get relegated for tying up their cash in a couple of the wrong players. If the LA Galaxy got relegated in the 2002-2005 MLS era the league would have been finished.

Yeah, this is completely true. It would have to be a cautious decision if they ever did it, with assurance that the league could survive if multiple "flagship" clubs ended up relegated for a time, no reason to destabalize a 16-20 team league if there's no immediate pressure to make the change. The perfect is the enemy of the good

Edited July 28, 2017 by Complete Homer

[mpg_29]

30 minutes ago, harrycoyster said:

As long as you have a very stable league that won't fold if the most popular teams get relegated for tying up their cash in a couple of the wrong players. If the LA Galaxy got relegated in the 2002-2005 MLS era the league would have been finished.

Not having a salary cap would reduce the chances of the popular teams from being relegated...

[Complete Homer]

19 minutes ago, mpg_29 said:

Not having a salary cap would reduce the chances of the popular teams from being relegated...

And/or revenue sharing that allows promoted small markets to hit the cap floor, but still permits big markets to spend to a significant ceiling

I just don't think going without spending constraints of some kind is a good idea

[ReedOnTheGrand]

1 minute ago, Complete Homer said:

And/or revenue sharing that allows promoted small markets to hit the cap floor, but still permits big markets to spend to a significant ceiling

I just don't think going without spending constraints of some kind is a good idea

I think pretty much everybody wants it from the get go but it holds you down once you're a good league. 

[DannyFromToronto23]

It would be amazing if CanPL could have promotion and relegation but how would it be ? Bottom 2 from each conference go down ? 

[Symp_Res]

8 minutes ago, mpg_29 said:

Not having a salary cap would reduce the chances of the popular teams from being relegated...

If the CPL ever chose to go the Pro/Rel route, I would like to see them model it after the Bundesliga/DFB. They grant teams licences based on their financial stability and infrastructure to play in higher leagues. If they don't meet the criteria, they don't get a licence.

This would at least allow teams from smaller centres to play in Div 1 if they win Div 2 and have the ability to recruit players and pay their salaries without putting themselves into financial distress. It would give the teams something to play for, and give their fans hope that they can move up in the pyramid.  This can be done with a salary cap in place.

Having said that, I believe they are a long way away from even entertaining that idea.  We need a strong, stable league with a passionate following before Pro/Rel is viable.

[ReedOnTheGrand]

19 minutes ago, DannyFromToronto23 said:

It would be amazing if CanPL could have promotion and relegation but how would it be ? Bottom 2 from each conference go down ? 

If you mean 4 teams a season then no, way too much.

[grasshopper1917]

Why are we even talking about promotion and relegation? Is there any league in North America who has ever done this? Why would a soccer league in Canada who is struggling to rustle up half a dozen ownership groups to get going move in such a 'radical' direction. If 20 years down the road the CPL had 8-10 teams on solid footing drawing 5000-7000 fans I would say that would be a major accomplishment and a total success.

People talking about 20-30 franchises and an elaborate pro/rel system are living in a fantasy land.

[mpg_29]

6 minutes ago, grasshopper1917 said:

Why are we even talking about promotion and relegation? Is there any league in North America who has ever done this? Why would a soccer league in Canada who is struggling to rustle up half a dozen ownership groups to get going move in such a 'radical' direction. If 20 years down the road the CPL had 8-10 teams on solid footing drawing 5000-7000 fans I would say that would be a major accomplishment and a total success.

People talking about 20-30 franchises and an elaborate pro/rel system are living in a fantasy land.

It's a totally valid topic.

You still need to talk about how to structure the league with the possibility of pro/rel right from the start even if it might not happen many years down the road....otherwise you'll end up in a situation like MLS where it would be very difficult to implement.

[grasshopper1917]

11 minutes ago, mpg_29 said:

It's a totally valid topic.

You still need to talk about how to structure the league with the possibility of pro/rel right from the start even if it might not happen many years down the road....otherwise you'll end up in a situation like MLS where it would be very difficult to implement.

Why would we want to implement it? North American sport doesn't work this way. 

You can't implement it in MLS cause people pay 100 million dollars for a franchise. This is how North American sport/business works. You buy into the league at the start and hope the franchise value grows. In North America there is a top league and lower leagues. MLS has established itself as the top North American league if CPL can find  solid niche  (similar to the CFL) with a 8 maybe 10 even dream scenario 12 team quality club league I think that would be best case over the moon scenario. Talking about 30 clubs - pro/rel is wayyyyyyy out there stuff -- similar to the NASL challenging MLS. Both about the same odds