Should MLS be Preaching their Financial Parity Model to the World?

Don Garber will address the "Leaders in Football" conference

Don Garber will address the "Leaders in Football" conference

Over the next two days, many of soccer’s most influential executives from around the world will meet in London, England for the annual “Leaders in Football” conference. Included in that group are three representatives from the United States: Don Garber, MLS Commissioner and CEO; Sunil Gulati, USSF President; and Tim Leiweke, President and CEO of AEG. Garber joins a panel discussion on managing the wealth gap in professional soccer leagues, while Gulati and Leiweke will be on hand to discuss strategies for weathering the current global economic crisis.

The MLS Commissioner has not released a full account of his speech to the conference, but he did take time to talk with The Associated Press about some of the subjects he plans to address. Garber specifically called attention to revenue sharing, the salary cap, and spending limits dictated by MLS policy that make certain the league’s economic stability. He goes on to conclude that the MLS model ensures “financial fair play” for all member teams.

“We believe to our core that every fan wants to believe that when the season starts they have the tools, the capability, the resources to compete so they can dream about their team winning a championship,” Garber said.

He went on to discuss how his single-entity economic model for MLS prevents runaway spending by individual team owners. “As a person who manages a sports league who is very focused on ensuring that we remain financially viable so we remain in business that’s not a system that could work here,” Garber said. “It would clearly create an arms race of spending that would clearly put MLS out of business as it did with the North American Soccer League in the early 80s.”

No one wants to see MLS follow the road of the NASL, but Garber will need to make changes to league policies that currently prevent the growth and limit the fortunes of individual teams. We don’t want to see financial parity in MLS result in mediocrity on the playing field. The “Designated Player” provision of the salary cap is a step in the right direction, as is allowing teams to build stadiums and collect their own revenue. However, there is more that needs to be done now to prevent stagnation of the product, and apathy among its supporters.

Most importantly, MLS needs to give teams more control over their rosters. One change would be to let teams compete for newly signed players to the league through the global transfer process. Let the team negotiate and pay the transfer fee on incoming players, not the MLS front office. Next, introduce free agency with the next MLS Collective Bargaining Agreement, a system that works in other professional sports leagues in the US. Also, mandate an immediate increase in the salary cap for next season and significantly raise – perhaps even double – the minimum player salary from its current $34,000 a year. Players with higher incomes and improved options in free agency become more accountable to the teams and their fans, resulting in an increase in their competitive play. Likewise, these changes in MLS policy will give each team the flexibility to build a roster they feel can best compete for the league championship.

Perhaps for a niche sport in an already crowded American sporting landscape, the conservative approach of MLS over the history of the league has proven acceptable. And in countries struggling to host a professional soccer league that can’t compete with the big leagues of Europe, the lessons learned in the US could translate successfully during economically difficult times. However, for the long term growth of soccer in the United States, MLS will need to loosen up their regulations and give the team owners more control over financial decisions.

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