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Goal.commentary: Soccer’s Trickle-Down Economics
The global markets are in decline, but MLS clubs might have something to gain from the current economic climate, argues Goal.com's Randy Davis.
Mar 27, 2009 11:38:54 PM
By Randy Davis
The economy is bad. You might have heard something about it. There may have been one or two stories about it in the media over the last few months. However, it is just possible that there could be some potential benefits Major League Soccer teams may reap from this struggling economy in the coming year. Call it trickle-down economics: futbol style.
The hypothesis goes like this: Because of the state of the current economy, major clubs like Barcelona and Manchester United are a little less willing to spend big dollars on players. Because of this, fewer players may move during this year, and the dollars for the ones who do move may be significantly less than they otherwise would have been. This economic impact will then cascade down to the mainstream clubs in La Liga, the English Premier League and Serie A. Players who, in the past, would have been plucked from out of Europe's lower divisions or South America, may not move to the prestigious leagues.
The result? Players that ordinarily would have been unavailable or over-priced for MLS clubs may now suddenly be in the mix. Because of the league’s salary cap, and the insulation that MLS is seemingly experiencing from the dramatic economic problems, MLS clubs would gladly swoop in and snatch up these players at a bargain price.
Another factor at play is currency rates. The US dollar has actually strengthened against the Euro since last summer to the tune of about 18%. For example, a player costing 100,000 Euro’s would have cost $157,000 last July, but now would only cost approximately $133,000.
As Real Salt Lake General Manager, Garth Lagerwey, told Goal.com at the opening of the most recent FIFA transfer window, “I think you could see some great deals after the window closes, because players who would normally be signed in Europe, won’t be.”
That brings us to our case study, Rachid El-Khalifi. El-Khalifi is a player currently with SC Cambuur in the Dutch Eerste Divisie who came on trial with RSL early in the preseason. According to Lagerway, RSL “likes Rachid as a person”, and he “was the best of all the trialists we had in camp, but also the most expensive.” In addition, El-Khalifi seemed to fill one of RSL’s most pressing off-season needs, that of a left-sided attacking player.
El-Khalifi returned home from his trial on Feb. 12 and appeared headed straight back to SLC according to Dutch papers. However, a report emerged on Feb. 19, just a week later, that El-Khalifi had rejected an initial contract offer from Real Salt Lake and was waiting for a new offer. As recently as mid-March, reports in Dutch papers indicated that El-Khalifi was still waiting.
Around that same time (mid-March), Lagerwey suggested that El-Khalifi likely wasn’t in the cards, even though there was some thought that he may have even been willing to take a pay cut to join the league. His salary for the Dutch club was believed to be in the low $200K range, which would have put him possibly as RSL’s top paid player.
Oh well, case closed. Or is it?
Since that point, new developments have come out of the Netherlands. First, there were rumblings that El-Khalifi’s club, SC Cambuur, might soon enter receivership (bankruptcy). Then there was a report that the club would not pursue renewing El-Khalifi’s contract, which expires at the end of the season.
So where does this leave the situation? Could the status of the economy, and developments with his current club be causing El-Khalifi’s market value to drop? Will he re-enter the sights of Real Salt Lake, and will negotiations resume? Will Lagerwey’s speculation from a couple of months ago turn out to be prophetic?
This is where the “case” is currently at - on hold. Quite frankly we’re not yet sure where all of this will lead – with El-Khalifi, and potentially other players that general managers and technical directors across the league have been tirelessly pursuing over the past several months.
However, as you may come across a few other news stories out there in the media on the economy over the next few months, keep your eye out for news on “bargains” for players coming into the league. They may just be an example of soccer’s global, trickle-down economics.
Randy Davis is a regular contributor for Goal.com.
The economy is bad. You might have heard something about it. There may have been one or two stories about it in the media over the last few months. However, it is just possible that there could be some potential benefits Major League Soccer teams may reap from this struggling economy in the coming year. Call it trickle-down economics: futbol style.
The hypothesis goes like this: Because of the state of the current economy, major clubs like Barcelona and Manchester United are a little less willing to spend big dollars on players. Because of this, fewer players may move during this year, and the dollars for the ones who do move may be significantly less than they otherwise would have been. This economic impact will then cascade down to the mainstream clubs in La Liga, the English Premier League and Serie A. Players who, in the past, would have been plucked from out of Europe's lower divisions or South America, may not move to the prestigious leagues.
The result? Players that ordinarily would have been unavailable or over-priced for MLS clubs may now suddenly be in the mix. Because of the league’s salary cap, and the insulation that MLS is seemingly experiencing from the dramatic economic problems, MLS clubs would gladly swoop in and snatch up these players at a bargain price.
Another factor at play is currency rates. The US dollar has actually strengthened against the Euro since last summer to the tune of about 18%. For example, a player costing 100,000 Euro’s would have cost $157,000 last July, but now would only cost approximately $133,000.
As Real Salt Lake General Manager, Garth Lagerwey, told Goal.com at the opening of the most recent FIFA transfer window, “I think you could see some great deals after the window closes, because players who would normally be signed in Europe, won’t be.”
That brings us to our case study, Rachid El-Khalifi. El-Khalifi is a player currently with SC Cambuur in the Dutch Eerste Divisie who came on trial with RSL early in the preseason. According to Lagerway, RSL “likes Rachid as a person”, and he “was the best of all the trialists we had in camp, but also the most expensive.” In addition, El-Khalifi seemed to fill one of RSL’s most pressing off-season needs, that of a left-sided attacking player.
El-Khalifi returned home from his trial on Feb. 12 and appeared headed straight back to SLC according to Dutch papers. However, a report emerged on Feb. 19, just a week later, that El-Khalifi had rejected an initial contract offer from Real Salt Lake and was waiting for a new offer. As recently as mid-March, reports in Dutch papers indicated that El-Khalifi was still waiting.
Around that same time (mid-March), Lagerwey suggested that El-Khalifi likely wasn’t in the cards, even though there was some thought that he may have even been willing to take a pay cut to join the league. His salary for the Dutch club was believed to be in the low $200K range, which would have put him possibly as RSL’s top paid player.
Oh well, case closed. Or is it?
Since that point, new developments have come out of the Netherlands. First, there were rumblings that El-Khalifi’s club, SC Cambuur, might soon enter receivership (bankruptcy). Then there was a report that the club would not pursue renewing El-Khalifi’s contract, which expires at the end of the season.
So where does this leave the situation? Could the status of the economy, and developments with his current club be causing El-Khalifi’s market value to drop? Will he re-enter the sights of Real Salt Lake, and will negotiations resume? Will Lagerwey’s speculation from a couple of months ago turn out to be prophetic?
This is where the “case” is currently at - on hold. Quite frankly we’re not yet sure where all of this will lead – with El-Khalifi, and potentially other players that general managers and technical directors across the league have been tirelessly pursuing over the past several months.
However, as you may come across a few other news stories out there in the media on the economy over the next few months, keep your eye out for news on “bargains” for players coming into the league. They may just be an example of soccer’s global, trickle-down economics.
Randy Davis is a regular contributor for Goal.com.
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