Don’t Know Much About CBA, But I Know This….

Take a moment to acknowledge the clip below…..as a plea from the fans to the MLS braintrust….on both sides.

Matt Damon’s Will Hunting? MLS Owners & Players. Ben Affleck’s Chuckie Sullivan? The Fans.

First, let’s put a big juicy disclaimer on this piece. TSG tends to do a ton of research on pieces. We love it; it’s fun for us.

That being said, we’re going to skim the the cream of the MLS labor discussion and offer some very simple comments:

♦ Primarily, MLS owners are taking a risk on a product that historical data suggests is very challenged to succeed.

♦ Second, the bulk of MLS players are categorically underpaid.

♦ Third, FIFA is not getting involved saying that MLS owners are in compliance with FIFA guidelines.

♦ Fourth, there is too much rhetoric flying around to believe what anyone saying. Kasey Keller says this, the owners did this. Who knows what is true…..

A request from TSG

MLS, don’t waste your opportunity like Will Hunting almost did. The positivity of the World Cup is coming…the US is putting together a bid for WC 2018…..Landon just got a Gatorade ad….Thiery Henry may or may not come stateside, but the notion that it is a real possibility is progress.

Don’t sully the next month with rhetoric flying around and end up stymieing the growth of the league even for a second.

Keep your qualms out of the public so the overall product, the MLS, doesn’t suffer. It doesn’t make sense to slow the momentum that the MLS brand has garnered over the past 24 months. Honestly, there are really not enough fans–there is not enough “value” in the fans–in this tug-of-war to seek public opinion on either side of this tussle, so just don’t do it.

Not every 1st, 2nd, 3rd, 10th season return is picture perfect or predictable.

For our part, we know it is extremely difficult to make money from sports franchises. As I understand only two, or maybe three MLS franchises are profitable, Seattle, maybe Toronto? I’m not sure of others, but is not the majority–that is clear.

Beyond profit, owning a sports team in general comes down to two things: the stadium and cache.

Either the owner can create some cash flow through a stadium (through both the team and other events staged there) or their standing as the owner of the team opens doors to partnership or other power players by creating positive brand impact for the owner. TSG has some understanding of this space as this writer’s tech start-up provides a lot of technology to ticketing companies that support the arenas.

Let’s take Mark Cuban…does anyone know him for his sale of Broadcast.com to Yahoo in the early 2000(s)…nope. They know him as the owner of the Mavericks. Owning a sports franchise gives an owner a pulpit and a pass to entertain high level players or curry favorite with the city they operate in.

Most owners, like the Malcom Glazer purchasing Man U a few years ago, realize the annual returns from opertaions are inconsequential, but hope to make it upon building the value of the franchise and resale.

Owning an MLS team really doesn’t offer that cache yet. Nor does it, at this point, offer an “easy route” to making money through purchase and a resale premium.

For the players, they would not have a league to hock their wares if the MLS wasn’t so maniacally focused on sustainable growth. And that is the unfortunate truth.

The biggest risk from too low of a salary threshold is that the mid-tier players will join leagues overseas at a slightly higher premium and the league will be left with an 80-20 rule, with the 80% being lower-skilled low wage players and the 20% of less being high salaried talented players. That would compromise the product.

Coming back to today, TSG believes that this is all just rhetoric–neither side really thinks they can afford a strike in an industry where things aren’t profitable…you’re creating deeper losses where no profit exists. Doesn’t make sense.

We don’t know much…but we do know there is a golden and free marketing opportunity with the World Cup coming. There is positive momentum…don’t waste the fans time…focus on hammering out a solution not driving rhetoric in the press….twenty years from now if we still see a struggling league that has waste opporunties….

….you owe it to the fans.

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11 responses to this post.

  1. Posted by Milad on 2010/01/08 at 11:23 AM

    Great points, and I agree on all fronts.

    The low-end MLS players have a rough time making marginal salaries, but they wouldn’t have even those meager salaries if the MLS were to go out of business. The American system has failed when attempting to copy the European system of individual team entities, and free contracts of players, so the MLS took the route of extreme control in order to guarantee the continuity of the league. If this weren’t the case, big markets with richer owners would dominate the league, and teams like Columbus Crew could never get the success (and fan support that comes with it) that they have. Its a double-edged sword, but things arent so bad as it is.

    As fans of global soccer, it may seem to be an improvement if teams were able to control contracts and if players have freedom to choose. Indeed, a relegation-promotion system seems great too. But I, for one, believe that the league needs to grow more in the US before this can happen. If a couple of more MLS teams start to actually make money (Vancouver will be one of these), and ESPN’s continued support of soccer escalates national interest, then such moves can happen. I just think its still too early

    Reply

  2. Posted by Charles on 2010/01/08 at 1:32 PM

    So wait. The MLS and the players are sitting on the winning lottery ticket? Or do you want to wake up one morning and find that they are gone? Not sure I understand how this clip relates to the situation.

    Reply

  3. Posted by matthewsf on 2010/01/08 at 1:40 PM

    The main gist of the clip is that Will “MLS Players & Fans” Hunting owes it to Chuckie “The Fans’ Sullivan to not fumble around with the opportunity that they are being given through World Cup promotion chiefly of marketing the product by bickering in public about that product and missing that opportunity.

    Perhaps, in retrospect, it’s more directed at the players who will get exposure and actually have a league to play in. It’s not really a winning lottery ticket, but it surely beats, what?…pulling a Jay DeMerit and just traveling overseas with a hope, $6K and a prayer.

    Playing where to get their name out.

    Perhaps I stretched it a bit…I’ll work harder on the next clip analogy.

    Reply

  4. Posted by Kevin on 2010/01/08 at 2:52 PM

    while we’re on the topic of MLS I’m a little curious about the division 2 thing you had posted on the sidebar. Is the division 2 going to have promotion and relegation into MLS? Is New York going to get relegated? (don’t answer that) I’d love to see a team like the Islanders in MLS rather than New York, so, in a way, if there is relegation, this is the free ticket for teams to play in MLS.

    Reply

    • Posted by Mark T on 2010/01/08 at 6:21 PM

      I don’t believe the structure of MLS or tenuous nature of Division 2 (the arrangement is for 2010 only) will allow for relegation (in our lifetime).

      Reply

  5. CBA expires on January 31. To MLS or not to MLS, that is the question. I predict that too much money has been invested for shutting the league down to be an option for ownership/management. This because I believe that MLS can’t survive a work stoppage. Therefore a compromise must be struck, as ownership/management is unlikely to accede to all the demands of the player’s union. I am very curious to know what sort of bargain both sides will agree to in order to avoid, what I believe will be, the end of MLS. Of course if the owners aren’t bluffing about a lockout, and are taking a hard-line stance…it’s over unless the union agrees to a CBA not much better than the one they have, and sign off on it for five years.

    Reply

    • Posted by matthewsf on 2010/01/26 at 4:19 PM

      I wrote this column January 8th and I’m still quite certain that something gets hammered out.

      The players are in a very unfortunate situation on another front — less than $10M in transfers have been agreed upon in the EPL’s annual January window.

      That’s astounding.

      If EPL teams are not spending on players than the demand for MLS players even sinks lower comparatively.

      Reply

  6. [...] • Freddie Ljundberg hears no strike, the NewYork Red Bulls have paid to and sent their team to Spain, it’s a TSG I-told-you-so-moment. [...]

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  7. [...] • Freddie Ljundberg hears no strike, the NewYork Red Bulls have paid to and sent their team to Spain, it’s a TSG we-are-pretty-sure-we-told-you-so-moment. [...]

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  8. [...] TSG is sticking to our proclamation that a work stoppage is not going to go down between MLS owners and players. TSG may very well go [...]

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  9. [...] by matthewsf in MLS, Uncategorized. Leave a Comment As we mentioned way back in December, TSG didn’t want to give a lot of air time to the potential work stoppage by MLS, both from [...]

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