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Financial Impact of the DP

With MLS having very closed finances, and Forbes only doing a report on the 2007 revenue streams, judging financial impact is rather difficult.  The sole set of numbers that can be looked at are attendance.  Those that think the DP has an impact might be surprised, as the Beckham effect was big, but everything else is tiny.

Certainly there are media impression issues, certainly there is a level of merchandising; but those numbers are closed.

The impact for attendance though has varied through the years.

In 2007 the impact of the DP was a 13% increase in attendance for the clubs that added one during that first season.  Yes, the clubs that added DPs were generally better attended than the rest of the league (7% over league average for '06, and 11% over in 2007).  Yes, the rich teams got richer for 2007.

Star-divide

For 2008 a few more teams tried the magic beans, and the impact went down.  For their own attendance they stayed stable with a 0% movement.  They did build on league average by 2% from the years, but it was still down.  KC had their tiny stadium and a DP that year, and the Beckham effect was minimized.

Recession hit 2009, and muddies the waters even more than the British model does.  Teams that went the DP route in 2009 lost 11% of attendance from 2008, they lose 3% in relation to league average (Seattle was adjusted out, as they had only a single season).  Maybe the DP teams held their own a bit more versus the league during the recession (2008 DP teams at 13% over MLS v 2009 same teams at 10% over MLS).

When we have already seen that the on-pitch impact of a DP is minimal, and now we find out that the attendance increase is marginal; does the DP as a system really make sense? In the NBA the "Bird Exception" really helps a club as it increases the talent on the floor dramatically. In MLB one great player can make a huge impact (see the Twins, Blue Jays, Padres) as so much of the battle is 1-on-1. In the NFL, unless it is a QB the impact of a single extraordinary player is nearly nothing (see Terrell Owens).

In soccer a single great player just doesn't get the touches, and they don't have a similar player to hit with a dynamic pass.  Having a single player, or two, or even three isn't going to make an impact.  Think of the great goals from build-up that you have seen.  Do they not involve at least 4 players?  That's what MLS needs, at least four world class players on a team at a time.  That's how they go from the 15-25 range in league strength to the 8-15.  It wouldn't get them to Big Four territory, nor Brazil, nor Argentina, but it would come close to Mexico, Japan, and the middle of that 2nd Tier in Europe (France, Russia, Belgium, Netherlands, Portugal).  The only way to do that at this time is to let the 4-8 money making teams to spend that money rather than pocket it, but to only dent parity rather than destroy it would be through a luxury tax style system.

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"on-pitch impact of a DP is minimal"?

I don’t think you can take that as a given. Looking at the 2009 season, LA clearly performed much better once Beckam came back in the second half. Ljungberg for the Sounders — while not the leading scorer — was one of the most impactful playmakers on the team. There were numerous inteviews with other Sounders this year in which they commented on his impact to the team as a guy who made an impact as a mentor and as a playmaker. Chicago certainly benefited on the filed from Blanco’s performance.

Of course, those may be just subjective observations on my part, and other observers may see things very differently. How should we measure the impact of the DPs on the field? I would say you can’t make a faie argument against the DP rule wit a base assumtion that they aren’t adding much on the field becaue whie that may be a valid opinion, it’s certainly not a given. Designated Players are one way to improve the quality of play on the field, abetter question than the one asked here is "Are there smarter ways to get the same level of quality improvement we’re loking for with the DP rule. In the end, as a “consumer” of soccer and a paying fan of the Sounders, I’m counting on the League to find ways to keep improving the quality of play. The DP rule seems to be working to my eyes, but there could be a better way.

by BangersandMash on Jan 2, 2010 2:21 PM PST reply actions  

on pitch impact

I’m posting from my phone but look back just a few posts and you can see the impact. There have been enough bad DP signings that meaning is lost. A player should only be signed if they are the right fit not because they are a “name.”

I am not a Supporter
I am not a Fan
I am a Sounder
Sounder At Heart

by Dave Clark on Jan 2, 2010 7:08 PM PST via mobile up reply actions  

I am not sure of the statistical evidence, but what comes to mind is that if a team is

mediocre in acquiring players, then they will be mediocre in acquiring a DP as well.

In other words, the better the front office (ie, the Sounders, Columbus with Sigi) the better the DP.

by Coug1990 on Jan 3, 2010 10:14 PM PST up reply actions  

Pushing it too far?

Interesting stuff. Clearly you have it in for the DP rules and I do think that your luxury tax idea is intriguing but you seem to keep distracting from your own case. To its detriment, I think.

This isn’t a financial analysis, you know it isn’t a financial analysis, but you call it one anyway. Seems like the bold, extra huge font size title should be attendance analysis. Unless you are trying to make it seem like a larger indictment that it is.

The lack of impact on the pitch isn’t due to the DP rule, it is due to bad player decisions. Switching to a luxury tax isn’t going to make scouting departments better or lessen the allure of signing a “name” to make the front office/marketing department happy over the protests of your coaching staff.

Your big advantages over the DP rule are that profit sharing through a luxury tax would provide money for small market teams to sign higher $ players. The money could be spread out to get several solid players rather than one “gee whiz” player and careful provisioning would keep teams from being overly punished by bad (Vin Baker like) signings.

Just seems to me that these are lost in a manufactured “DP BAD” smokescreen.

by Wiesel on Jan 2, 2010 9:10 PM PST reply actions  

Missing the point

I think you are missing the point. The DP rule is flawed, because of the fact that you can only have one or two. The idea that they don’t make a difference is short sited. You didn’t use the impact of Ljundberg on an expansion team that made the playoffs, and you don’t take into account value of the player toward a slightly interested soccer public. How many fans of soccer are looking at the MLS for something they can be proud of? The DP player gives them something they can recognize. It gives them the prospect that the league is heading in the right direction. I believe the league should allow three or four DP’s and if the teams want to spend, then they can. If they want to build a team through good scouting, then they can. Still, I think the DP is a step in the right direction. Why it is a step that takes getting the Dictators to give up a little control and not a no-brainer, I cannot get!

by Camnehem on Jan 2, 2010 10:30 PM PST reply actions  

The point is that the DP is not a magic bean

It is just a rule that allows rich teams to have a shiny toy. Whether said shiny toy is helpful has nothing to do with the DP Rule and everything to do with the General Manager and the rest of the organization. While fans spend hours speculating over the next DP they should be looking at the MLS Draft, the International Frees. While most of those won’t be bright and shiny, they are the players upon which the league is built.

You can learn more about the General Managers in this league not from the singular and rare DP signing, but instead who they find through the other league rules.

Also it is key to note in discussions about the DP that it isn’t the league and its web of rules that determine the quality of a team on, nor off, the pitch, but the organization of the team itself.

No baseball fan took the Atlantic League more seriously because it had Rickey Henderson for a year or two before he finally quit the sport, and it is a rare soccer fan that takes MLS more seriously because it has Beckham during his decline.

I am not a Supporter
I am not a Fan
I am a Sounder
Sounder At Heart

by Dave Clark on Jan 3, 2010 9:12 AM PST reply actions  

attracting good players

Requires having a high quality game here. I think the best way of doing this is what Garber has been saying in interviews, we have to work at keeping American players MLS develop from heading overseas.

What if instead of additional DPs, MLS did something like if a player was in MLS at least 3 seasons when his contract ends, then only 25% of any additional salary counts against the cap. Eg, player’s last salary was 40k, team increases it to $840k, then only $240k counts against the cap. Give each team a limit of $1million total they can save against the cap this way. It would give teams some leverage to try and keep players who are eyeing Europe.

by PeterJH on Jan 4, 2010 12:16 AM PST via mobile up reply actions  

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Sounder at Heart is a blog about the Seattle Sounders FC, with occasional forays into Democracy in Sports, Roster Management, Soccer Statistics and Life in Puget Sound.
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