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How Léo Chú’s signing heralds Sounders’ entry into ‘Great Game’ of talent evaluation

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In spending $2.5M on a relatively unproven talent, Sounders are taking a significant risk that comes with even bigger upside.

FBL-SUDAMERICANA-ARAGUA-GREMIO Photo by MANAURE QUINTERO/AFP via Getty Images

To hear Garth Lagerwey tell it, MLS has mostly existed in a world parallel to the rest of global soccer. While plenty of notable players have and do play here, the vast majority of MLS teams are in the business of buying finished products and have rarely invested real money on players who could eventually be sold.

There have been examples of teams bucking that trend over the years, but this year we’ve seen MLS not only selling players with more regularity but also paying seven- or eight-figure transfer fees on potential.

Shortly after announcing that they’d completed the transfer for 21-year-old Brazilian attacker Léo Chú, the Sounders GM seemed almost giddy to be joining the fray.

“We’re in the great game now and there’s no turning back,” Lagerwey said, borrowing a line from Tyrion Lannister in Game of Thrones. “We’re joining the rest of the world. Buying and selling young players is part of global soccer. For a long time MLS existed apart from the rest of the world. That is inevitably changing. We’ve really flipped to embrace that.”

Although the Sounders have paid plenty of transfer fees over the years, they’ve almost exclusively spent that money on proven commodities with lengthy track records. They were World Cup veterans, league-leading scorers or team captains, and sometimes all three. Chú is none of those things.

Chú enjoyed a bit of a breakout year in 2020 while on loan, but had been mostly coming off the bench at Gremio this year. He has less than 40 professional appearances and is someone the Sounders have never met face-to-face or seen play in person.

None of that stopped Lagerwey from spending $2.5 million on a transfer fee to Gremio for 80% of Chú’s rights. The Sounders then signed Chú to a 3.5-year guaranteed contract with an additional option year that keeps him under the Sounders control through his age 25 season.

Combined, it’s a move that carries a bit more risk — and potential reward — than any other deal the Sounders have made.

“From an investment perspective, young players on longer contracts is a good idea,” Lagerwey said. “We’re going to miss on some. Young players carry more risk, they’re less proven. There may come a day when we have to sell a young player at a loss. Hopefully, our arbitrage overall will be to the benefit of the club. This is a space where we endeavor to break even at least and we can make some money over time.”

Risky or not, Lagerwey clearly feels moves like this one are necessary if the Sounders are to remain among the elite MLS teams. That he was willing to pull the trigger on such a significant investment while relying exclusively on video and data analysis speaks to his eagerness to get in on the action. Lagerwey said the Sounders had also considered spending even more money — effectively adding a fourth DP who would have required a transfer fee in the eight-figure range — but the change to a three-back formation and not yet knowing how Jordan Morris fits into the roster caused them to take a more measured approach.

“This is the way forward,” Lagerwey said. “This is the sustainable path to success and maintaining championship teams year after year after year, and we need to make strategic investments in players like Léo Chú to keep that up.”

That these moves are suddenly happening with greater frequency is no accident. The Covid-19 pandemic created a marketplace in which fewer teams around the world are willing to spend money. While MLS has suffered significant financial losses, the league’s relative financial stability created an opportunity.

The rule used to sign Chú was designed to entice MLS owners to open their wallets and effectively fill that void.

Beyond believing that Chú was a relatively good bargain, the U22 player initiative that MLS implemented at the start of the year further lowers the risk factor associated with the signing. That rule dictates that Chú will only count $200,000 against the salary cap, less than a quarter of what he’d have counted at under the old rules. The so-called “Young Money” rule also allows the Sounders to potentially collect more than $1 million in General Allocation Money if they can eventually sell Chú at a profit.

“We want to raise our level to compete with the best players in the world,” Lagerwey said. “It’s a game we have to be in, we can’t ignore that, we can’t not develop our young players as assets. That’s the exciting part of what’s happened this year.”