clock menu more-arrow no yes

Filed under:

Freddie talks CBA (a bit) at ESPN

New, 15 comments

Here's his opening paragraph (read the rest here):

Imagine you work at Burger King and you get sacked. Now, you want to get another job at McDonald's, but you're not allowed to unless McDonald's compensates Burger King. It seems absurd, but that's the way certain things work in MLS at the moment. If your team terminates your contract, it still can demand a trade from another club before you can go and play for that other club.

This, of course, would be absurd in a lot of situations, but there are such things as non-compete clauses, so it's not completely unheard of for an employer to attempt to restrict a former employee's employment options. What is unheard of, though, is for that to last into perpetuity. What this paragraph highlights more than anything, however, is the difference between how sports teams operate here in the US versus the rest of the world.

Here in the US, we talk about owners being awarded franchises, but let's think a bit about what that means. A franchise is privately owned and operated, but licensed by a parent company to use its brands, marketing, and other business tools. The owner of the franchise doesn't have as much freedom as he would have if he were operating a stand-alone business, and the parent company can impose various requirements on the way the business is operated. So Freddie's choice of McDonald's and Burger King is apt, except that in the case of a player for an American sports team, it's like being fired from one McDonald's and trying to get hired by another one. (McDonald's may or may not be able to impose the same kind of rules MLS does on its teams; if there are any labor/employment lawyers who'd like to chime in, please do.)

In contrast, teams in most of the world are independent, stand-alone businesses. Man U and Arsenal are not like McDonald's and Burger King, but more like Alex's Pie Shoppe and Arsene's House of Eclairs (yes, I know Ferguson and Wenger are not the owners). While they are regulated, as all businesses are, they have a lot more freedom than the franchisees.

So what are the implications of this difference? The primary one, and the one that drives all the rest, is the fact that because teams elsewhere are independent businesses, it means that anyone can get into the soccer business if they feel like it. If I wanted to start Carlos FC, I'd just have to go and register my team with my FA and take my spot at the bottom of the hierarchy. That allows a proliferation of teams: basically any place with the mildest interest in a team will have one. I did a count the other day of the professional teams in the state of São Paulo, the most populous in Brazil with about 42 million people (about 13.5% more than California's approximately 37 million). The final tally was 105 professional soccer teams over four levels of competition, or 2.5 teams for every million residents. For perspective, there are 276 baseball clubs for the whole US, with a population of over 308 million, or just about 0.9 teams per million people. If the US had baseball teams at the same rate that São Paulo has soccer teams, it would have 770. Rio de Janeiro's rate is even more impressive: 87 teams for about 16 million residents, for a rate of about 5.4 per million. At the carioca rate, the US would have about 1675 baseball teams.

I know that this isn't a hugely significant comparison, but the underlying point is this plethora of teams allows soccer leagues around the world to operate the way they do. That favorite dream of soccer fans, a promotion and relegation system, is as likely in the US as a unicorn-based taxi service, but it's an obvious step in an environment where there are teams everywhere. Likewise, the impact of a club failing is much reduced. One team out of sixteen going under is a huge blow, but when there are dozens and dozens ready to take its place, it's shrug-worthy, if you're not a fan of that team. Finally, the owners of any given team have no formal connection to any other, and in fact, as independent businesses, the teams have to be careful to avoid improper levels of cooperation, lest they run into problems with anti-collusion regulations.

A situation like what's happening with the CBA is literally impossible in most soccer leagues, so it's understandable that Freddie would be perplexed. Obviously, there's no way that sports leagues in the US will abandon their cartel-like ways for a free enterprise system, but it's useful to think about what it means for us fans that the system works the way it does.