MLS Salaries: Spending more doesn’t necessarily create winning teams

Seattle has gotten off to a slower start than their fans would like, but overall the team looks to be in a good position for the season. Any quality DP would, in theory, catapult the Rave Green up the standings and also the salary-spending table. In most leagues, the theory is that spending more on players wages leads to winning. And while the idea of smart spending paying off (see the San Diego Padres’ attempt of a spending influx failing) correlates well enough in most leagues, does spending in general lead to results in MLS?

Total Salary

In short, no. While it seems like teams with Designated Players and top-level talent do well — the LA Galaxy have historically been very good in this regard — regular-season success and salaries have zero correlation.

From 2014-2016 the Supporters’ Shield was won once by the team with the lowest salary and once by a team with the second lowest. FC Dallas has finished with the lowest total salary in 2015 and 2016. In 2015, they finished tied with the Red Bulls for the Shield, losing on a tie-breaker, and then won it in 2016. The Red Bulls, after the retirement of Thierry Henry, dropped their spending considerably, going from fourth highest in 2014 to 19th and 18th highest in 2015 and 2016, respectively.

Seattle and LA do break the trend a bit. In 2014, when the Sounders won the Shield, they spent the third most and LA finished three points behind with the second highest payroll. Meanwhile, Toronto FC has spent the most in all three seasons (2017 as well) and only once landed in the top five in points, in 2016. Also the only time they finished in the top half of the league.

If the trend was as expected — that spending more works — you would see the top right clustered and the bottom left clustered with a diagonal line connecting them. Instead you see that most teams spend around the same amount, between $4m and $8m total, and that it doesn’t really impact the results. Compare this to the Premier League, where the wage bill versus total points is exactly as you’d predict. While there are underdogs who win, including Leicester City who won outside the window of the data points in the graph, it is clear that wages equal points in the Premier League.

ESPN FC

The lack of a pattern between MLS and the Premier League can be tied to things like the salary cap and player acquisition mechanisms, though it is likely a case of that plus roster construction. The top sides in the Premier League are able to have their pick of effectively anyone in the world, while MLS sides don’t have the luxury to construct their roster with anyone they want, leading to more parity.

Median Salary

Another salary related theory is a higher median salary leads to wins. Again, in theory, this would mean that the starters and bench are all making above league veteran minimum but below the DP threshold, putting most at $100k-$200k. The theory relies on a modification of the “moneyball” theory in baseball. Spend less than others (usually) but by getting everyone around the same salary. This should get good players and a balanced roster but not vast fluctuations in talent. (This also can be the result of just not spending at all on anyone.) Well, that doesn’t seem to matter either. The idea is that you don’t use up the cap by having DPs and then minimum salary guys. Teams like FC Dallas using youth DPs usually see a benefit because they have less of a cap hit, allowing more “threshold-level” guys.

While this graph isn’t perfect because some teams simply spend less overall, it would then reflect that building a roster of low-salary players would yield poor results. Yet 2014’s Columbus Crew and Real Salt Lake sides—who spent in the bottom two of salary, bottom four of median—both made the top seven in points versus high-spending sides like the Shield-winning Sounders from that same season. Of the eight teams that spent less than $90k for median salary, six have made the playoffs. Of those six, two won MLS Cup and two lost in the conference finals.

The best thing to glean from this graph is that 2015 and 2016 data points are significantly higher than most for 2014, meaning salaries are going up in the league across almost all teams and not just those at the top. While this graph definitely doesn’t disprove that equalizing spending across the roster could help, it lacks any pattern with which to prove it. What it does show is that Seattle is good at winning with a roster that has a significant amount of minimum or near-minimum salary players compared to the rest of the league.

What about the MLS Playoffs? Does spending matter for Cups?

This is where it starts to get interesting, because of the last three MLS Cup finals, one has been the highest spender in the season (TFC in 2016), one was the second highest spender (LAG in 2014), but otherwise it is murky. New England in 2014 and Seattle in 2016 both spent fifth most on the season, while the 2015 MLS Cup final was an outlier as Portland and Columbus spent 10th and 12th, respectively.

Only two of those sides, Portland and New England, ranked in the top half of the league for median salary (sixth and third respectively). That lends credence to stars win championships and that without a few highly paid DPs (and TAM) teams crash out of the playoffs. Dallas—a double-winning team last year—not making an MLS Cup final is a real thorn in the side of disproving the “stars win cups” theory. They may have been in the final with a treble chance had Mauro Diaz been healthy, without him they fell in the playoffs and we won’t know how the last place spending side would’ve fared against the first place side.

Dive into who those teams knocked out to get to the final and it only contributes to the idea that spending may help in the playoffs. In 2014, the four conference finalists ranked second through fifth in total spending. In 2015, the two sides that tied for the Shield and spent the least in the league both made it and lost to sides that spent more. Red Bulls had one of the lowest median salaries while FC Dallas had the highest and it didn’t matter. Both lost to teams that spent almost $2m in total salary and it went to top-end talent. 2016 was a repeat roughly of 2015, with two more top half spending sides and low median sides falling to teams that spent more overall but at the high-end. This included a Sounders side that ranked last in median salary as it won the MLS Cup while spending fifth most total in the league.

What throws off the model is when Clint Dempsey is removed from the Sounders’ calculation for salary purposes. If Seattle’s third DP was not part of the calculation—because he didn’t play down the stretch—they become only the seventh highest spending side, falling behind the Rapids and Whitecaps. The Sounders still rank higher than where Portland was when they won in 2015 by a few spots and roughly $1.6m, but that non-Dempsey calculation has Seattle spending roughly half of what the LA Galaxy did to win 2014. With Dempsey included, Seattle spent less than Toronto FC by $9.5m, but without Dempsey it skyrockets to $14m, the equivalent of the entire cup-winning 2014 LA Galaxy roster, showing money doesn’t guarantee victory.

What does it mean for roster construction?

After everything above, salaries should mean nothing. A team like FC Dallas can under spend everyone and still win the league. But it likely crashes out in the playoffs again — especially without their star, Mauro Diaz. Though of the 12 teams in the conference finals, only four have ranked in the top half of the league for median salary and only three have spent in the bottom half of total salary.

While teams that spend more money predominately make the playoffs, 14 of 59 or roughly one-quarter of teams that spent in the top half finished in the bottom half of points. At the same time, effectively half of all playoff sides during the three-year period were in the bottom half for salaries. With half the teams making the playoffs, it realistically should be 100% of teams that made it were top half spenders. What it shows is that spending does NOT matter, in contrast to the Premier League. Who you sign matters and how you construct a roster matters.

How about Homegrown Rosters?

Teams that have stayed near the bottom of spending in recent years have gone heavily into homegrown signings and while Seattle has gotten arguably more production from their homegrowns (mainly Jordan Morris and DeAndre Yedlin), they are not spending on HGPs. SKC is the only team that spends on “buy your core” and yet ranks in the bottom half of the league.

The group of teams in build your core includes perennial playoff contenders NYRB and FCD and then a list of yo-yo clubs that live around the red-line. It can work, but at this moment unless you hit on a lot of HGPs (FCD), then playoffs are no guarantee.

What does it mean for 2017?

It means the salary release is fun and a great way to learn about who makes what, but it doesn’t mean anything for projecting results. The Sounders rank seventh in total spend right now, $500k behind Portland. With Chicago, thanks to Bastian Schweinsteiger, wrapping up a top four that is all from the Eastern Conference. To go along with our typical top third total salary ranking, we rank near the bottom in median salary. So what does it all mean? Seattle’s got a formula, they are sticking with it, and that we can’t project the table because this is not the Premier League. New TAM money may becoming, but with points not dependent on spending, it’ll be about plugging roster holes and getting players to the next level not just raising the salaries of players 12-18.