New York Cosmos and NASL need to stop focusing on MLS competition

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This week, The Guardian newspaper was able to score a rare interview with New York Cosmos owner Seamus O’Brien regarding the future of the iconic soccer brand he leads in the United States. O’Brien purchased the Cosmos in 2012 soon after opting to join the second-tier North American Soccer League (NASL) rather than attempt to win an expansion franchise in Major League Soccer (MLS).

As we’ve noted several times at World Soccer Talk, the NASL is experiencing serious growing pains, and is dealing with the residual impact of its long-standing relationship with Traffic Sports, a company that is at the center of the FIFA/CONCACAF scandal. Meanwhile, MLS has seemingly not missed a beat with increased expansion with rights fees escalating over $100 million for each new team, as well as the addition of several high-profile global superstars.

Despite this backdrop, the Cosmos still appear bullish about NASL and their original decision to join the upstart league.

O’Brien told The Guardian:

“When I agreed to take over the managing part of this, I was of the same mindset as most people out there: that MLS is the only league and we would have to be in the MLS. Through the due diligence process that we undertook, we rapidly came to the conclusion that we did not think it was a very good investment.”

The Cosmos opted against Major League Soccer because they did not feel the entry fee justified the gains, O’Brien said. When looking at which league to invest in and their potential futures, O’Brien said that the Cosmos ownership came to a similar conclusion that Stefan Szymanski, author of Soccernomics and Money in Soccer, wrote about a few months ago.

While O’Brien feels MLS may not represent a “good investment,” the analysts over at Forbes seem to disagree. Just this week, they published a list of MLS franchise values (excluding the newest teams in Orlando and New York City) that painted a picture of a league whose investors are reaping the rewards of smart growth and a structure that benefits investors in the long-term.

O’Brien added:

“The business opportunity is the same: pick a city, run a professional soccer team. One will cost you $100m, and by every bit of advice I have seen, is a license to spend more money; this one, at the moment costs, around $3m, and if you do it well, you can make money.”

Some of the appeals of the decentralized NASL that O’Brien has mentioned in the past – lack of salary cap; low entry fees; the freedom to spend, should an owner wish – will continue to attract new investors, he thinks, not necessarily from the biggest cities in the United States. (“I am a believer that you don’t have to be in a big city to run a great soccer team, and to run a financially successful one that plays a key part in the league.”) With the number of teams and the quality on the field continuing to increase, O’Brien believes this will lead to a lucrative TV deal – or deals – down the line as are enjoyed by the major soccer leagues of the world. The league’s decentralized model, he added, will allow clubs to negotiate their own deals.

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  1. WSW August 20, 2015
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