An excerpt from "The Messi Effect"

Editor's note: This is an excerpt from Paul Tenorio's book "THE MESSI EFFECT: A Global Legends’s last Act and American Soccer’s New Beginning." It was slightly edited for space and first appeared in IV: The Sounder at Heart Magazine, which is now shipping and can be purchased here.

The book tells the story of how Inter Miami's signing of Leo Messi heralded the beginning of the next era of MLS and how owners grappled with how much change they were ready to undertake. The entire thing is definitely worth a read for any fan of American soccer. In IV, we excerpted a chapter that focused on some of the internal discussions inside the league and how structural changes could shape the league for decades to come.

CHAPTER 8

A Fading “North Star”

The day after the new face of the league walked out on that rain-slicked stage, Mas boarded his jet bound for Washington, DC, and an MLS board meeting at the league's All-Star Game. He hoped Messi's arrival would quickly usher in change for MLS. But it wouldn't just be about changing opinions in the boardroom.

The degree of evolution Mas wanted meant redefining what had been one of the core tenets of the league's identity—and the very structure that allowed it to grow over the past thirty years.

The turbulent history of North American soccer influenced MLS's construction when it was founded in 1993 as a condition from FIFA for the U.S. to host the 1994 World Cup. Former MLS deputy commissioner Mark Abbott, then a third-year associate at a law firm in Chicago, crafted a sixty-nine-page plan that laid out U.S. Soccer president Alan Rothenberg's unique take on a single-entity business structure he envisioned for MLS. Team owner/operators would be competitors on the field but partners off it, each owning a percentage of the business (MLS) rather than just their respective franchises. The league office would control player contracts and share costs and revenue.

That concept was a response to the profligate spending by the North American Soccer League in the 1970s and 1980s, when Pelé, Franz Beckenbauer, Johan Cruyff, and George Best graced sold-out stadiums before it all collapsed under the weight of the disparity between rich clubs and poor ones. The North American Soccer League inspired a generation of soccer fans, but its downfall created a lull that wasn't overcome until MLS was founded.

"We thought that was critical, given the fact that soccer had failed before, to be able to have that stability," Abbott said. "When you have an unstable league, even the strong teams go out of business if the weak teams ultimately go out of business. So it's the only business in the world where you don't want your competitor to go out of business, right?"

MLS undoubtedly achieved that stability. Three decades after its founding, the single-entity structure remained one of the league's strengths. The commercial side was stable, and the league was financially solid. On the sporting side, however, the single-entity concept was linked to the league's long-standing mandate to prioritize competitive balance over anything else.

That approach was buckling under modern pressures.

Competitive balance was a flashpoint in the debate about the future of MLS. It was a hallmark of the NFL, one championed by the late AFL founder and Kansas City Chiefs owner Lamar Hunt. The Hunt and the Kraft families, two of the NFL's most influential ownership groups, were also founding owners in MLS. Understandably, they preached the NFL gospel. But MLS operated in a far different environment than the NFL. It competed against soccer leagues around the world, as well as with the American sports market—not just for fans, but also for talent.

In 2014, the owners commissioned a study by the Boston Consulting Group (BCG). The release of the results to league owners in 2016 revealed that fans judged the league referentially against international competition. How MLS fared in regional tournaments against Liga MX, for example, was an important gauge of progress. The NFL had no such competition. While MLS's roster and salary rules fostered internal competitive balance, they also restrained MLS from asserting itself as a top league in Concacaf, the region of North and Central America and the Caribbean, let alone as a challenger on the global stage.

From its 1996 inception through 2014, MLS won just two of twenty-four home-and-home series against Mexican teams in official competition. Those numbers improved slightly beginning in 2015, when MLS introduced targeted allocation money (TAM) as a reaction to that BCG study. The TAM rule allowed teams to spend more to improve the top third of their rosters, beyond just the designated players. It was a Band-Aid. From 2015 through 2023, the league improved in the Concacaf Champions League, but still only won eleven of thirty-five series against Mexican teams—a 32.4% win percentage. On just one occasion in the previous 20 years did an MLS club (the Seattle Sounders in 2022) win the regional title.

Those results would get almost any coach fired—and yet the league stayed the course, an indication of how entrenched it was in its competitive balance doctrine. MLS executives liked to say that the fundamental principle of the league was that it could innovate and pivot based on the challenges of the day. The creation of SUM and the DP rule were prominent examples. Yet it was also clear there were certain non-negotiables.

It was increasingly difficult to watch MLS's consistent failures in Concacaf and its persistent self-imposed restraints and not see competitive balance as enforced mediocrity—or what Jorge Mas aptly called "a race to the bottom."

"Everybody sucks, so everybody bad has a chance to win," he lamented.

Despite those continued poor results, even as American consumers had greater access to the top leagues in the world and were watching those leagues in greater numbers, MLS clung to competitive balance as its North Star. This was in part because many of the people who designed MLS were still leading the business and believed deeply in its founding principles. Abbott, the league's first employee in 1993, stepped down as deputy commissioner at the end of 2022, but remained on as an advisor. Commissioner Don Garber and executive vice president Todd Durbin were at the top of the league's hierarchy. Founding owners Robert Kraft, Phil Anschutz, and Clark Hunt were regarded as some of the most influential people in the league. To overhaul the league's design would be to dismantle the very thing they spent thirty years building and protecting.

Competitive balance also protected a league model built on local revenue. Every team having a chance to win, or at least to make the playoffs, was the best way to keep butts in seats in thirty markets. To really grow, however, MLS needed to move from a turnstile operation into a league that could command a national (and potentially global) audience—and secure the revenue that came with it.

Changing that mindset among the more conservative faction of owners would be a real challenge. There were concerns about what would happen if MLS opened up spending, even in a salary-capped environment. Increasing costs without a guarantee that it would boost revenue could be existential for some clubs—or at least force some owners to sell.

"We have been careful to not get seduced by the idea that the solution is to scrap all roster rules and have unlimited spending on players, because we don't believe that will be justified by new revenues," Garber said. "I imagine that at some point we'll have the luxury of being able to not have to continually look through that lens, but that certainly is the lens that we've had to look through over the last number of decades."

For many, however, it was difficult to see how one could possibly argue against change. If the league couldn't draw wider audiences, its pathway to growth got narrower. And so many fans turning to other soccer products like the Premier League, Liga MX, and the UEFA Champions League as their "leagues of choice" was also potentially existential for MLS.

MLS didn't measure up to what fans could get elsewhere: It needed to improve the product on the field. Stakeholders also had to change the wider perception of their league. While MLS was not on the level of the top European leagues, casual fans thought it was worse than it was.

The solutions to those problems were linked, but they were very different.

Improving the product mostly came down to how the league invested in its rosters. The soccer consulting firm Twenty First Group ranked MLS outside the top thirty best leagues in the world in its 2023 World Super League Model, which ranks four thousand teams globally based on match results, margin of victory, strength of opposition, and other data points. MLS sat alongside the Turkish second division and Ukraine's first division in terms of quality. By comparison, Mexico's Liga MX was ranked twenty-fifth, Germany's second division was fourteenth, and Argentina's top division was thirteenth.

Twenty First Group's models also rated MLS as one of the least efficient leagues in terms of how money spent turns into performance. Per the data, even MLS's most effective spending clubs were still materially inefficient when compared to global norms.

League rules funneled spending to a narrow band at the very top of rosters: DPs and u-22 players (star players under the age of 22 acquired under a specific roster designation). The middle quadrants of rosters sagged well behind not just because there wasn't enough money to spend but more significantly because the rules siloed and restricted exactly how its teams spent.

Data show that spending better and smarter, perhaps by allowing high-payroll clubs to more easily spread their money across their entire rosters instead of spending such large chunks of it on three players, would vastly improve the product.

The problem wasn't limited to the top of rosters and the risks associated with focusing a large percentage of spending on one, two, or three players.

League executives rightly posited that growing the domestic player pool was critical to MLS's growth and invested heavily in youth development. After two decades, MLS was producing more pro players, but it still wasn't developing enough high-end talent. In 2022, MLS announced it was launching a third-division developmental league, MLS Next Pro, and ending its partnership with the second- and third-division USL (United Soccer League). The decision came with huge risk. The upside of Next Pro—control over more markets in the country, access to more "homegrown players," and stronger connections through the entire player development pathway—would, realistically, be borne out over a multi-decade timeline. In the interim, as it tried to build out a competitive environment, it could both stagnate player development and pull funding out of the first-team product at a critical moment when more investment was needed. Owners dumped millions into Next Pro, and while MLS heralded players who had come through the reserve teams, those prospects weren't improving the overall quality of the league.

The investment in youth academies was worthwhile, but it failed to recognize the biggest contributor to what had long been called the black hole of player development in the U.S.: those 17 to 21 years old. Creating pro players good enough for MLS was no longer a problem. Producing world-class players, however, remained decidedly out of reach. Improved first teams were critical to that aim. The youth academies were producing solid prospects at younger age groups, but progress was slowing at the most critical age in development. The level of play in MLS set too low of a ceiling.

German giants Bayern Munich targeted American youth prospects under age 19 because they believed there was still time for younger players to adapt to the speed of play in Europe. After that age, it was hard for most players to reach the highest levels.

"If you watch an MLS game, or even a youth game, it's technically on a very good level, it's athletically on a very good level, but the ball goes a little slower," Bayern Munich academy campus director Jochen Sauer told me in 2019. "They are playing on the whole pitch and you do not have the pressure like you have in Europe and that, I think, is the main factor that the young players have to learn when they start here. Athletically they are on the same level as our youth players, and they have all the basics that they learned in the youth teams, but if it comes to the speed of play, how the ball circulates, that's always a bit different."

It reinforced a most basic notion for MLS: To improve its standing in the short term and to optimize youth development for long-term viability, MLS had to increase its on-field quality.

With much of the spending focused on those two extremes of the spectrum—the highest earners, few of which actually moved the commercial needle, and in youth development, where not enough players and not enough good players were being produced—MLS rosters were out of balance and lacking in depth. If MLS allowed teams to spread out that spending on the first team roster, putting $20 million into eight or nine players rather than the top two or three, its rosters would be more well-rounded and boast more overall depth.

Most teams in Liga MX were built that way, and the Mexican league's dominance in the Concacaf Champions Cup was proof of the strategy's superiority. There might be short-term pain to the domestic player pool as MLS leaned into the global market toward those aims, but the payoff—both short term in driving quality and long term in raising the developmental ceiling—would be worth it.

Advocates for change insisted that it could be done without completely sacrificing the idea that any team could win in any given year. Spending more and spending better weren't mutually exclusive from competitive balance. And there were added benefits beyond just the level of play. Giving teams more freedom in how to spend would also foster different roster-building strategies, widen the pool of front-office talent, and enhance storylines that would make the league more compelling. It would likely also make MLS a greater player in the global soccer economy, which in turn could help drive more revenue.

It was such an obvious issue, but league decision-makers were so stuck in their ways that they kept adding more buckets to address shortfalls. They couldn't see that the overall structure of the rules was the problem.

The question was less about what a new rule book would look like. There were plenty of alternatives to consider: a cap ceiling and floor with some carve-outs, a luxury tax model, or systems that mirrored those found in other American sports leagues. The question was really why MLS insisted that its model was still the best way forward. The league changed significantly in the previous decade of expansion, yet the roster-building model and all the modifications stacked on top of it mostly avoided scrutiny. It was overdue for an assessment.

Slapping on Band-Aids wouldn't work for a rule book that required reconstructive surgery.

In MLS, there was increasing frustration that so many of the league's rules were designed to do exactly the opposite. Rather than push for the best players and teams possible, its structure was built to rein in the most ambitious teams—the ones that helped fuel the league's increased relevance and enhanced reputation—while rivals that spent less could coast and still benefit.

It's why there was growing disagreement at the board level about how to move the league forward.

"In the past, we had 100% unanimity on every vote. We don't anymore. Now, there's lots more debate," Garber said. "And that's okay. It requires us to do a little more work on ensuring everybody understands the decisions they're making and what impact that's going to have on the enterprise.

"That's the reality of a maturing sports league. It happens in every other league. You're going to have big markets and small markets. You're going to have legacy owners and new owners ... I need to be focused and the league office needs to be focused on enterprise success on behalf of all. That's a very, very, very different job than it was ten years ago."

What it required was a strong hand to guide the consensus one way or another, because as the board sat down for its meeting in Washington, DC, in the days after Messi was introduced, even despite the differing opinions, there was an increased understanding on both sides that the model as it stood was no longer working. Change had to happen.

What that evolution looked like would be determined by the league's aspirations. If MLS wanted to be one of the best leagues in the world, as Garber liked to say, the current model could not support that. MLS would need to spend more and spend more efficiently. It needed a better and more competitive on-field product that could entice bigger audiences, increase relevance, and eventually earn a bigger media deal.

If the league was happy with its current standing—a strong, entertaining local business that brought fans through the gates in its thirty markets—then it probably had to decrease spending to make it sustainable. For the owners who paid expansion fees north of $250 million—and as high as $500 million in the case of San Diego—that seemed like a nonstarter.

That it felt so up in the air was frustrating in itself. MLS spent years organizing its local, national, and international media rights to be ready to go to market when its deal was up in 2022. Yet despite knowing since 2018 that the World Cup was coming to the U.S. in 2026, the league had done little to ramp up or prepare for sporting change around that massive moment.

Mas believed Messi swung the debate in only one direction. He had not yet kicked a ball in MLS, but the reaction to his arrival had been so enormous and unprecedented, and was already driving so much commercial interest, that it started to recalibrate some of the more conservative thinking in the boardroom. Mas walked out of the meeting that afternoon in Washington, DC, beaming.

"I think that all of us collectively understand the opportunity ahead of us, the opportunity to continue growing the league," he said. "Hopefully this is a catalyst for the hyper growth that that I—and all of us—aspire to. . . . There was a significant amount of focus on how we move forward.

"I do think that evolution is inevitable."

In the moment, with the excitement building around Messi's debut, Mas felt the way we all did: There was no way MLS would fail to embrace this once-in-a-league's-lifetime opportunity.