I lived through the North American Soccer League (NASL) years of glory and failure, and you are going to have to answer more than just the questions posted above to get any sort of traction for this kind of argument. Money into the league via expansion is easily lost in the setting up and building of the teams, especially on such a quick and wide basis. Then there is the raising of the salary cap while at the same time arguing that MLS matches are affordable entertainment. Sure they are, BEFORE a salary cap raising. What about after?
Finally, bringing in more teams does not guarantee better talent will come in, even with a cap raise. The owners currently lining up to plunk down $40 million are doing so in part because they see the controlled way MLS is moving towards profitability. They may well see the cap as a reason to join the league. Why would those same owners suddenly decide they want to raise it?

It doesn’t make any sense to abandon the planned growth that eyes the future to get ‘cash while the getting is good.’

I am not convinced we’ve got more than two really good ownership groups in the current batch, and that matters in the long run much more than markets.

How does money paid to the LEAGUE get eaten up by the expanding teams?

Then there is the raising of the salary cap while at the same time arguing that MLS matches are affordable entertainment. Sure they are, BEFORE a salary cap raising. What about after? Well, yes, since actually many several teams could afford an expanded cap right now. There is also the issue that greater attendance, greater TV ratings and greater jersey sponsorships funds the greater cap.

They may well see the cap as a reason to join the league. Why would those same owners suddenly decide they want to raise it? While this could be true, I feel that long term cost containment, as well as how the bar has been raised recently by TFC, SSFC, the Dynamo that most aspire to greatness, not mediocrity. Sports ownership groups tend to want 2 things. Profits and wins. Usually in that order.

There are several billion dollar owners in the current batch, in fact I think that ONLY St.Louis, the team with the strongest stadium plan, does not have a billion dollars of total worth.

Overall, I understand your concerns. Most are mine as well, but I feel that the NASL is a poor comparison, because there was NO cost certainity in that league whereas MLS will have that with its semi-hard cap for the forseeable future.

My main issue is that I can easily see a future of MLS where it is not a National league for either CAN or USA, and that will make it impossible to ever capture the fancy of people in a majority of the nation.

If MLSt ries too hard to ‘capture the fancy of the majority of the nation,’ it will be foolhardy.

Know your audience. Give them what they want. Expand your business as league income warrants, not as a way to get league income.

RE: money eaten up, when the league expands its player salaries and promotions budget does too. Your idea expands the player payroll at a rate beyond mere expansion. Living off of the expansion fees to pay this seems more like how America lived in the 80’s and 90’s. Look at us now.

Well played. This idea would entail risk under the assumption that higher quality play would lead to greater attendance in Seattle, DC, Houston, Chivas, New England, San Jose and KC. If that doesn’t happen than it would be defecit spending.

And I should adjust my “capture the fancy of the majority of the nation” to

Capture the fancy of the majority of the soccer lovers in both Canada and the USA.

Great post Dave. Although I’m not privy to all the details and makings of the current MLS structure, I have always been puzzled and even upset that we “let” players leave MLS for second-tier leagues in Europe. I can’t tell you how much I hate this. Why are Feilhaber, Johnson, Parkhurst, Davies, and others going to second-tier leagues/clubs? Or why are Edu, Adu, Beasley ridding the pine instead of playing here. MONEY! I know some guys need to go across the pond because they truly can play there (Altidore, Donovan, Gooch, the goalkeepers, and perhaps Edu as well) but most go for the money and or the chance of making it big. I understand the cautious mentality of Garber as well, but at some point he has to take a chance. Otherwise we’ll continue to be a league that launches and ends careers, but never one that competes with the other big leagues in the world. The bottom line is the bottom line. Great players demand big bucks and until the MLS can provide the money we’ll continue to be this kind of league. I’m not the most informed fan when it comes to this side of the sport, so take my comments as such. I just hate to see our really good players leave and I’d love to see some great ones come.

Dave, I respect the work you do, but you are way off the mark with this. You asked for my feedback, and I can’t guarantee you’ll like it…

As you probably know, overexpansion was exactly what killed the NASL, or at least one of the key factors. Most of the owners then were badly in need of cash to keep their clubs going, and the expansion fees were a temporary way to solve that problem. A rapid increase in salary cap would bring about the same problem, and your proposed plan would be the same temporary solution.
In order to work, the league would have to be in a place to support the extra salary by about 2015. About 3 million more per team, with a 5 mil salary cap, would be somewhere between 50 and 60 million dollars more for the league. How on earth would that happen? There wouldn’t be nearly enough fans brought in by the slightly better/more famous players to offset this cost. The way the ‘big 3’ support massive salaries is thru lucrative TV deals. The current deal with ESPN is about 8 million annually. There’s zero chance that when it is up in 2014, the new contract would be around 60 million – almost what the NHL’s tv rights are for twice as many games. Hell, today MLS isn’t even strong enough to hold down a regular primetime slot!
(Plus not all the owners would go right up to the limit of the new cap and use their 2 DP’s. Think Kraft and the Revs would? How about Vergara and Chivas pequeno?)
I want MLS to be better as much as anyone, but now is not the time for making hugely unnecessary gambles. The league is experiencing slow, steady growth, and is at a better place than it ever has been. There’s no reason to jeopardize all that and risk crippling – or folding – MLS.

ESPN isn’t the only TV deal though, there’s the international deal, and FSC. Total TV contracts are over 12M$ right now, with a league where a majority of the nation does not have a local team. That MLS gets the ratings it does with the low talent and non-national footprint is a miracle.

Jersey sponsorships help, and a lot. It should be noted that the last two cover more than roster costs at the current cap. Currently half the league is unsponsored. If the 7 non-sponsored and the expansion teams just get 2 M$ that would be 30M$

An increase of 20% in attendance, large yes, but with SSS and more local derbies might be in reach, would bring in more than 10M$ than currently. Not counting the expansion attendance.

Oddly, by keeping prices low MLS is more likely to make money.

And I do like your feedback. I don’t agree, but I like feedback. I can’t improve without it.

Dave,

I like the idea and you make some good arguments. I question whether there is a sufficient mindset and capabilities at MLS central office to manage such a rapid expansion. I think that part of the reason that NASL failed was an ineffective central office.

But leaving that aside, I think one of the failings of MLS is in is relatively poor, but improving, relationship with U.S. Soccer. I don’t think enough is being done between U.S. Soccer, MLS and even the USL leagues (USL-1, USL-2, PDL, Super 20, etc.) to develop cross branding, relationships and marketing.

First, U.S. Soccer has the massive grassroots support of thousands of leagues in MLS cities and expansion candidates, but not enough is done. If soccer as a professional support is going to succeed, MLS needs to tap that U.S. Soccer strength. The MLS needs to grow fans from a young age, not try to convert them later in life. How? Simple, for every full price paying youth soccer player, you get to bring an adult for half-price or quarter price. Sometimes you can make more money with cheaper prices.

Second, on match days, particularly at soccer specific stadiums, the goal should be to get fans in the seats and better to get them with a $4 or $5 dollar ticket (less than the cost of a movie) than to have the seat empty. In a 20,000 seat SSS, you shouldn’t have empty seats.

I do agree that if MLS is going to get players to play, they need to get them playing here, which means paying them a living wage. It might also mean getting players at a younger age. Right now, most of the players coming into the league are coming from college (including Generation Addidas contracts). I love GA, and I think MLS could offer GA contracts to high schoolers as well. Prime development time for players in other parts of the world are 15, 16, 17, 18 years old. I am not saying a player should leave high school without graduating, you could make graduation from high school a condition of their GA contract, but we need to be working with these young players sooner in their careers. Even paying these kids a developmental salary (i.e. $30,000 to $50,000 per year) while attending the academy is important. Not having those salaries counting against the cap is also important.

If you expand the league, we have to expand the marketing and the player development programs (not to mention coaching and refereeing programs). Is MLS prepared to do that? I am not sure, but it is worth the discussion.

Dave I like your ideas, unfortunately MLS will take a more cautious road, which is smart and safe. Don Garber knows he has to expand so the league can finally establish itself and grow to what we want it to be. Haters critize the 40 million entry fee, I know is high but they don’t realize that the money is going to be used for growth and not to get rich like many teams in Europe and Mexico, where it has become a mafia. The ratings are low because we don’t have the stars and the quality to attract fans that watch European and Latin American soccer. When we improve on that we will have a bigger following and respect around the world. It’s not crazy to believe that we can have 24 teams in the future, the Mexican league has that amount and they are a smaller country.
I firmly believe that when we can afford them we will attract good players when they are young . For now we have to compete and gain respect in Latin America so they know MLS is for real.
By the way Dave, what do you think of the ridiculous 77th place that the IFFHS ranked MLS?

Enrique,

One of weekend stats explorations will expose the fallacy of the IFFHS ratings. The study was even less statisically sound than the UEFA coeffecients and the FIFA rankings.

It is notable that a recent goal.com story mentions that revenue at RSL in 2008 and a shared stadium (college football) was 8M$ while in 2009 they expect 21M$.

Kansas City broke ground on their 18,500 seat stadium, or more properly broke up the ground that will eventually be the stadium.

Red Bull arena is confirmed to be finished for opening 2010.

Expansion would not kill sustainable revenue growth, even if expansion is matched with an increased salary cap.