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Business Off The Pitch: Eto'o transfer proves MLS success is dependent on corporations, investors
Without sponsorships, funding from corporations and investors, success in MLS and other leagues proves difficult.
Aug 29, 2011 6:11:00 PM
By Christopher Savino
Getty Images
If it were not already apparent, success of the modern game is dependent on corporate funding and owner investments. The growth of the game would be quite different if not for sponsors and external funding. From the naming rights of many stadia to the field boards and club kits, the branding from corporations is near impossible to ignore.
The current structure of Major League Soccer's player rules and salary cap present its own challenges. Without corporate funding, how would Major League Soccer rationalize the cost of David Beckham’s $5.5 million salary, or even Freddy Adu’s reported $425,000 in salary and compensation? Imagine a player in Major League Soccer earning $29 million annually, more than five times that of the league’s top earner. Only a small percentage of MLS players earn an amount worthy of comparison.
Samuel Eto’o’s transfer to Anzhi Makhachkala of the Russian Premier League is worth as much as $87 million. The three-year deal makes him the highest paid footballer and the second highest paid athlete of 2011. (Formula One driver Fernando Alonso reportedly earns more than $40 million annually.)
The important note to consider that Eto’o’s latest deal is without endorsements. Eto’o is sponsored by Puma, which extended its partnership with the Cameroon national team at the end of 2010. Financial terms of his endorsement were not disclosed.
The Eto’o deal mirrors similar but not quite as lucrative transfers as top talents above the age of 30 continue to move. Los Angeles Galaxy striker Robbie Keane was acquired from Tottenham Hotspur earlier this month for $4.8 million per year. The two-year deal did not include a transfer fee from his former club.
In light of the many big names transferring both to clubs abroad and in Major League Soccer (as the league's transfer window closed), less has been discussed about each nation's ability to retain homegrown players in their respective league. Lucrative contracts with clubs capable of winning hardware year after year provide few reasons for players not to consider a transfer. It is the tradition that is forgotten in the shadow of large salaries - an opportunity MLS may be capable of restoring.
Regardless, the result of the Eto’o transfer is an increased value for the soccer industry as a whole. While interests of players include new opportunities and environments, the interest of investors and owners is to transform a club into a business with the global brand power of Barcelona and Manchester United.
It is becoming the standard that corporate dollars are a requirement for world class soccer.
With MLS receiving more interest now than ever, the brand is also in its infancy on a global level. When is it time for MLS to begin building an international brand? As the league continues to attract world class talent (albeit in the latter stages of their careers), there is obvious potential with the likes of Beckham, Henry, etc.
However, little has been done to provide Major League Soccer with face time abroad. International preseason training and participation in the Emirates Cup may be just the start.
Under current terms, MLS broadcasting partners are limited to televising matches in the United States. The official video streaming service produced by MLS, MatchDay Live, also limited viewing to customers located in the United States during use via IP address, etc. According to Major League Soccer’s Blackout Regulations, MatchDay Live is not available outside of the United States, Canada and Mexico.
It is the lure of the UEFA Champions League that is the most obvious draw for both corporations and the rich alike. The clubs finishing first and second in the Russian Premier League are guaranteed a spot in the group stage while the third place finisher is allowed a chance to qualify from the second stage of the competition. Neither Major League Soccer nor the CONCACAF Champions League are able to produce the television ratings and popularity that surrounds tournaments hosted by UEFA.
For those unfamiliar with the Russian Premier League, some may consider it comparable to Major League Soccer in its obscurity. However, the current UEFA Club Rankings list a number of Russian sides amongst the likes of AC Milan and Valencia, and even ahead of AS Roma, Tottenham and Manchester City.
Russia’s top division is currently listed as the seventh in UEFA behind England, Spain, Germany, Italy, France and Portugal - many of the world's top leagues. Neither FIFA nor CONCACAF provide league rankings.
Update: Sports media company MP & Silva acquired the rights to broadcast Major League Soccer internationally in 2008. The deal provides the exclusive rights to all MLS competitions and events through 2013. ESPN previously had owned the league's international broadcasting rights. Additionally, MLS partnered with LIVESPORT.TV in order to stream matches internationally via the Internet.
Christopher Savino is a columnist for Goal.com. His feature, "Business Off The Pitch" appears every Monday. Contact Chris at csavino@businessofsoccer.com with questions, comments and concerns or follow him on Twitter @chrissavino.
The current structure of Major League Soccer's player rules and salary cap present its own challenges. Without corporate funding, how would Major League Soccer rationalize the cost of David Beckham’s $5.5 million salary, or even Freddy Adu’s reported $425,000 in salary and compensation? Imagine a player in Major League Soccer earning $29 million annually, more than five times that of the league’s top earner. Only a small percentage of MLS players earn an amount worthy of comparison.
Samuel Eto’o’s transfer to Anzhi Makhachkala of the Russian Premier League is worth as much as $87 million. The three-year deal makes him the highest paid footballer and the second highest paid athlete of 2011. (Formula One driver Fernando Alonso reportedly earns more than $40 million annually.)
The important note to consider that Eto’o’s latest deal is without endorsements. Eto’o is sponsored by Puma, which extended its partnership with the Cameroon national team at the end of 2010. Financial terms of his endorsement were not disclosed.
The Eto’o deal mirrors similar but not quite as lucrative transfers as top talents above the age of 30 continue to move. Los Angeles Galaxy striker Robbie Keane was acquired from Tottenham Hotspur earlier this month for $4.8 million per year. The two-year deal did not include a transfer fee from his former club.
In light of the many big names transferring both to clubs abroad and in Major League Soccer (as the league's transfer window closed), less has been discussed about each nation's ability to retain homegrown players in their respective league. Lucrative contracts with clubs capable of winning hardware year after year provide few reasons for players not to consider a transfer. It is the tradition that is forgotten in the shadow of large salaries - an opportunity MLS may be capable of restoring.
Regardless, the result of the Eto’o transfer is an increased value for the soccer industry as a whole. While interests of players include new opportunities and environments, the interest of investors and owners is to transform a club into a business with the global brand power of Barcelona and Manchester United.
It is becoming the standard that corporate dollars are a requirement for world class soccer.
With MLS receiving more interest now than ever, the brand is also in its infancy on a global level. When is it time for MLS to begin building an international brand? As the league continues to attract world class talent (albeit in the latter stages of their careers), there is obvious potential with the likes of Beckham, Henry, etc.
However, little has been done to provide Major League Soccer with face time abroad. International preseason training and participation in the Emirates Cup may be just the start.
Under current terms, MLS broadcasting partners are limited to televising matches in the United States. The official video streaming service produced by MLS, MatchDay Live, also limited viewing to customers located in the United States during use via IP address, etc. According to Major League Soccer’s Blackout Regulations, MatchDay Live is not available outside of the United States, Canada and Mexico.
It is the lure of the UEFA Champions League that is the most obvious draw for both corporations and the rich alike. The clubs finishing first and second in the Russian Premier League are guaranteed a spot in the group stage while the third place finisher is allowed a chance to qualify from the second stage of the competition. Neither Major League Soccer nor the CONCACAF Champions League are able to produce the television ratings and popularity that surrounds tournaments hosted by UEFA.
For those unfamiliar with the Russian Premier League, some may consider it comparable to Major League Soccer in its obscurity. However, the current UEFA Club Rankings list a number of Russian sides amongst the likes of AC Milan and Valencia, and even ahead of AS Roma, Tottenham and Manchester City.
Russia’s top division is currently listed as the seventh in UEFA behind England, Spain, Germany, Italy, France and Portugal - many of the world's top leagues. Neither FIFA nor CONCACAF provide league rankings.
Update: Sports media company MP & Silva acquired the rights to broadcast Major League Soccer internationally in 2008. The deal provides the exclusive rights to all MLS competitions and events through 2013. ESPN previously had owned the league's international broadcasting rights. Additionally, MLS partnered with LIVESPORT.TV in order to stream matches internationally via the Internet.
Christopher Savino is a columnist for Goal.com. His feature, "Business Off The Pitch" appears every Monday. Contact Chris at csavino@businessofsoccer.com with questions, comments and concerns or follow him on Twitter @chrissavino.
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