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Goal.com Special: Influx Of Designated Players Shows MLS Is Growing
A look at how far the league has come.
Jul 21, 2010 6:55:00 PM
By Kevin McCauley
Major League Soccer is a league that was founded on principles of slow, but steady growth and fiscal responsibility. The single-entity structure that was largely the brainchild of Sunil Gulati and others has allowed the league to achieve that goal and avoid the quick explosion followed by a free fall experienced by one of its predecessors, the old North American Soccer League. Fourteen years after opening its doors, MLS has 16 active franchises, plus another three joining shortly for a cool $40m entry fee each, and markets where people come out because they love soccer, not just because they want to see a big name.
Because of some numbers released through the Portland Timbers’ stadium proposal last year, it's known that at least the Los Angeles Galaxy, Seattle Sounders, and Toronto FC are profitable right now, with a number of other MLS teams being right on the edge of getting into the black. As almost any good business mogul will tell you, a business should re-invest profits, and these three teams are doing just that by spending money on designated players each. The New York Red Bulls aren’t in the profitable category right now, but with big-time financial backing and a shiny new stadium, they hope to be shortly. They’re showing off their financial clout by paying for two Designated Players of their own, with a third rumored to be on the way.
The Designated Player rule is part of the slow, but steady transition away from the extremely strict system that MLS had in its early days to a system that is much closer to a free market. MLS teams now have sponsors who are in it for the long haul and not just a quick buck, thousands of fans who would support their teams, and some legitimate bricks and mortar infrastructure. ESPN and other television outlets are committed to promoting the game of soccer like never before. Unless some kind of major crisis comes up, MLS is here to stay.
That major crisis almost came this last spring, as collective bargaining agreement negotiations stalled, the players threatened to strike, and a delay to the season seemed imminent. The owners and players struck an eleventh hour deal, and part of that new CBA was a change in Designated Player rules, an aspect to the influx of DPs that has been lost in much of the excitement of new player rumors and arrivals.
The new rules allow each team to sign two Designated Players with the option to purchase a third Designated Player slot for a $250,000 luxury tax that is re-distributed to the other teams in the league. Under the old rules, each team had one Designated Player slot with the option to negotiate a trade with another team for a vacant Designated Player slot. No team was allowed to acquire more than two Designated Players, and teams would have to part with another player or a draft pick to obtain a second one. With the new rules, anyone can sign two DPs with no penalty and anyone can sign a third without giving up a valuable player or draft pick.
This change in rules has spurred an influx in signings of quality players by teams across MLS. At the end of last season, the Los Angeles Galaxy signed Landon Donovan to a new Designated Player contract, meaning that America’s biggest star will either stay at home for the salary he deserves or MLS will make a killing off of his sale to a European team.
Seattle Sounders signed Swiss striker Blaise Nkufo who is merely months removed from a Eredivisie championship and a solid World Cup performance. Toronto FC signed Spanish veteran Mista, a striker with a wealth of La Liga experience, having enjoyed periods of significant playing time with Valencia and Atletico Madrid. D.C. United signed playmaker and Montenegran international Branko Boskovic, a former player for Red Star Belgrade, Paris St. Germain, and Rapid Vienna. The Chicago Fire have signed Mexican international Nery Castillo. Another Mexican international, Omar Bravo, is expected to play for Kansas City once Chivas de Guadalajara’s Copa Libertadores campaign is over. And of course, the big news is that the New York Red Bulls have signed Thierry Henry.
So, what do these signings mean? Obviously, first of all, they mean that the level of play in MLS has a chance to get a lot better. When Major League Soccer’s absolute best players leave to play in top European leagues, they usually play roles similar to what Mista, Boskovic, Henry, and Castillo have played in their most recent stints in those top leagues. It might take a while for them to get used to their teammates and the way officials call games, but these players should establish themselves as amongst the best in the league shortly.
Second of all, it shows that the league is growing from a financial standpoint. MLS owners, as a whole, are stingy. There are exceptions to every rule, but it’s true for the most part. Toronto FC and Seattle Sounders have had great ticket sales from day one, so they might be counted among those ranks despite their spending. If a bunch of cheapskates in a league founded on OCD levels of cost control are willing to spend money on international quality players, they’re getting some serious cash in from multiple revenue sources.
Third of all, and most importantly, these signings show that the league is growing out of the humble beginnings. Major League Soccer is not going to be the English Premier League or La Liga within the next ten years, but it can become as well respected as the Mexican Primera Division, Argentine Primera Division, and the Brasileiro Serie A. It can become a league that is thought of in the same category as the Russian Premier League, the Eredivisie, and Liga Sagres. Fourteen years ago, this would have been inconceivable. Even when David Beckham signed for the Los Angeles Galaxy in 2007, most people thought MLS was nowhere near that kind of status.
The next step MLS has to make to become a professional outfit on the level of the aforementioned leagues is to consistently bring professional quality players through its youth academies, and players such as D.C. United’s Andy Najar and Bill Hamid seem to be a great start. Los Angeles and Houston have also signed players directly from their youth academy to their senior team. A team that’s had a legitimate European-style youth academy for years, Vancouver Whitecaps, is joining the league next year. That phase of the long project that is Major League Soccer seems to be well underway.
Major League Soccer started as a league with a model of fiscal responsibility. Despite still operating within that model, it has been able to attract international quality players from around the world and pay them top dollar for their services. There isn’t a much better indicator of maturing and stabilizing revenue streams than when a company is able to hire more people, better people, and pay them more money without going into a financial hole or sacrificing any other part of their business. Thanks to its fans, its sponsors, a new CBA, and a growing reputation, MLS has been able to increase the quality of the league without deviating from its financial model, and that is the most important thing that the public can take away from the influx of Designated Player signings.
For more on Major League Soccer, visit Goal.com's MLS page and join Goal.com USA's Facebook fan page!
Because of some numbers released through the Portland Timbers’ stadium proposal last year, it's known that at least the Los Angeles Galaxy, Seattle Sounders, and Toronto FC are profitable right now, with a number of other MLS teams being right on the edge of getting into the black. As almost any good business mogul will tell you, a business should re-invest profits, and these three teams are doing just that by spending money on designated players each. The New York Red Bulls aren’t in the profitable category right now, but with big-time financial backing and a shiny new stadium, they hope to be shortly. They’re showing off their financial clout by paying for two Designated Players of their own, with a third rumored to be on the way.
The Designated Player rule is part of the slow, but steady transition away from the extremely strict system that MLS had in its early days to a system that is much closer to a free market. MLS teams now have sponsors who are in it for the long haul and not just a quick buck, thousands of fans who would support their teams, and some legitimate bricks and mortar infrastructure. ESPN and other television outlets are committed to promoting the game of soccer like never before. Unless some kind of major crisis comes up, MLS is here to stay.
That major crisis almost came this last spring, as collective bargaining agreement negotiations stalled, the players threatened to strike, and a delay to the season seemed imminent. The owners and players struck an eleventh hour deal, and part of that new CBA was a change in Designated Player rules, an aspect to the influx of DPs that has been lost in much of the excitement of new player rumors and arrivals.
The new rules allow each team to sign two Designated Players with the option to purchase a third Designated Player slot for a $250,000 luxury tax that is re-distributed to the other teams in the league. Under the old rules, each team had one Designated Player slot with the option to negotiate a trade with another team for a vacant Designated Player slot. No team was allowed to acquire more than two Designated Players, and teams would have to part with another player or a draft pick to obtain a second one. With the new rules, anyone can sign two DPs with no penalty and anyone can sign a third without giving up a valuable player or draft pick.
This change in rules has spurred an influx in signings of quality players by teams across MLS. At the end of last season, the Los Angeles Galaxy signed Landon Donovan to a new Designated Player contract, meaning that America’s biggest star will either stay at home for the salary he deserves or MLS will make a killing off of his sale to a European team.
Seattle Sounders signed Swiss striker Blaise Nkufo who is merely months removed from a Eredivisie championship and a solid World Cup performance. Toronto FC signed Spanish veteran Mista, a striker with a wealth of La Liga experience, having enjoyed periods of significant playing time with Valencia and Atletico Madrid. D.C. United signed playmaker and Montenegran international Branko Boskovic, a former player for Red Star Belgrade, Paris St. Germain, and Rapid Vienna. The Chicago Fire have signed Mexican international Nery Castillo. Another Mexican international, Omar Bravo, is expected to play for Kansas City once Chivas de Guadalajara’s Copa Libertadores campaign is over. And of course, the big news is that the New York Red Bulls have signed Thierry Henry.
So, what do these signings mean? Obviously, first of all, they mean that the level of play in MLS has a chance to get a lot better. When Major League Soccer’s absolute best players leave to play in top European leagues, they usually play roles similar to what Mista, Boskovic, Henry, and Castillo have played in their most recent stints in those top leagues. It might take a while for them to get used to their teammates and the way officials call games, but these players should establish themselves as amongst the best in the league shortly.
Second of all, it shows that the league is growing from a financial standpoint. MLS owners, as a whole, are stingy. There are exceptions to every rule, but it’s true for the most part. Toronto FC and Seattle Sounders have had great ticket sales from day one, so they might be counted among those ranks despite their spending. If a bunch of cheapskates in a league founded on OCD levels of cost control are willing to spend money on international quality players, they’re getting some serious cash in from multiple revenue sources.
Third of all, and most importantly, these signings show that the league is growing out of the humble beginnings. Major League Soccer is not going to be the English Premier League or La Liga within the next ten years, but it can become as well respected as the Mexican Primera Division, Argentine Primera Division, and the Brasileiro Serie A. It can become a league that is thought of in the same category as the Russian Premier League, the Eredivisie, and Liga Sagres. Fourteen years ago, this would have been inconceivable. Even when David Beckham signed for the Los Angeles Galaxy in 2007, most people thought MLS was nowhere near that kind of status.
The next step MLS has to make to become a professional outfit on the level of the aforementioned leagues is to consistently bring professional quality players through its youth academies, and players such as D.C. United’s Andy Najar and Bill Hamid seem to be a great start. Los Angeles and Houston have also signed players directly from their youth academy to their senior team. A team that’s had a legitimate European-style youth academy for years, Vancouver Whitecaps, is joining the league next year. That phase of the long project that is Major League Soccer seems to be well underway.
Major League Soccer started as a league with a model of fiscal responsibility. Despite still operating within that model, it has been able to attract international quality players from around the world and pay them top dollar for their services. There isn’t a much better indicator of maturing and stabilizing revenue streams than when a company is able to hire more people, better people, and pay them more money without going into a financial hole or sacrificing any other part of their business. Thanks to its fans, its sponsors, a new CBA, and a growing reputation, MLS has been able to increase the quality of the league without deviating from its financial model, and that is the most important thing that the public can take away from the influx of Designated Player signings.
For more on Major League Soccer, visit Goal.com's MLS page and join Goal.com USA's Facebook fan page!
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