MLS Model Thriving, Contrary to Popular Belief
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MLS News
Monday, 16 March 2009 11:10
This week Major League Soccer, the United States of America's FIFA-sanctioned professional first division football league, kicks off it's 14th season.

Those of you who were around for the first opening week in 1996—who cheerfully handed over perfectly good money so you could watch perfectly awful soccer—will remember the almost deafening chorus of naysayers, know-it-alls, and nattering nabobs of negativity who assured everyone that the league was destined for the alphabet soup trash heap along with all the other ill-conceived leagues that had fallen by the wayside over the years.

We didn't much care back then, and we sure as hell don't much care now. For all it's warts, flaws, shortcomings, and arguments about schedules, formats, single tables, relegation, we have a collective message for the rest of the U.S. sporting world:

Bite us.

One of the many little side dramas of the recent expansion and stadium construction discussions has been the almost inevitable "concerns expressed" by some self-important ratty-assed local politician, that says Major League Soccer is a shakey proposition (they always bring up the NASL, as if they had the first clue about what happened there and why), and that investing in infrastructure to support it risks ending up holding the bag on some white elephant stadium that nobody but the local Drum and Bugle Corps will ever want to use.

One of the locals in Chester, PA went so far as to demand that MLS show him their books so he could see for himself whether this was a real, live sports league. And just the other day, some council member in Portland was whining about how she wasn't convinced that MLS has "a future."

Of course the flaw in this kind of thinking—besides the belief that there's a snowball's chance in hell that MLS will invite some idiot in to poke around at will in their filing cabinets—is that unlike any other league in the history of leagues, is that for MLS, the balance sheet is the next best thing to irrelevant.

Joe Roth, for an example, isn't investing his kid's college money in the Sounders, needing to show a profit from day one to keep him from hauling out his big old Rand McNally and start scouting around for another town he can move to. Neither is anyone else.

And that's the point that all of these people who've been boldly predicting the demise of the league for these many years have been missing and continue to miss: It's not going to happen because these guys aren't—as I keep saying until I want to scream—"buying a franchise" in MLS.

Rather, they're buying into MLS as a concept.

Almost all of us tend to forget that Roth and the others don't "own" a team. The closest any of the "owners" come is that they are 49 percent shareholders in the local branch of a larger corporation.

(In fact, the league was in jeopardy not so long ago, when Horowitz bailed on Miami and Tampa was contracted and two guys owned nine teams between them. If you weren't scared back then, it was because you weren't paying attention. But the inclusion of a dozen or so extremely rich partners, MLS became a very solid outfit. These are guys who don't run scared.)

We call these guys "owners" only because we don't know what else to call them. Initially they were called "Owner-Investors," but that wasn't particularly helpful. So a few years ago they changed the title to "Investor-Operators," which they apparently felt cleared the whole thing up.

And in truth a good deal of the iron-fisted control that MLS headquarters used to wield over virtually every aspect of team operations has gone by the boards, a movement which began when the MetroStars slapped down league VP Sunil Gulati (Ivan Gazidis' predecessor) for giving his pal Tab Ramos a huge raise and contract extension when the team wanted to waive him.

And as the thing has evolved, the teams have much more control over their rosters and their own front office and their own local operations than ever before. But only up to a point.

And that point is the salient issue, the one that makes stuff like that Forbes magazine survey of team-by-team profitability interesting but, in the end, almost entirely irrelevant: These guys don't much care. Collective results matter a lot more than individual ones.

Sure it's everyone's job to bring their operation into the black, but not in order to save themselves from having to fold or move to Oklahoma City or Milwaukee.

Rather, it's because each team's profitability enhances the league's profitability, and it's their interest in the league which matters, not whether FC Dallas shows an increase in concession sales this summer.

Some smart aleck at Forbes, instant expert Tripp Mickle at SportsBusiness Journal, or some sportswriter in Toronto can wax eloquent about how this team or that is making money and what a shame it is that some others—which they're usually delighted to name but I won't—lag behind in attendance or parking revenue.

Which is true and which needs to be remedied, but which also misses the point: MLS as a league has more value with an operation (for example) in Dallas, even an operation which may not be making money, than it does without it. It's the league which matters to the shareholders, not this team or that. Developing the league as a whole is their goal. Sure owners like the Hunt brothers love showing up at MLS Cup wearing Nordecke scarves like the fans and hoisting the trophy. Who wouldn't?

But after the crowd goes home and the owners retire to whatever exclusive corner of L.A. they retire to, it's the welfare of the league that they talk about, not Guillermo Barros-Schelotto. Because at the end of the day, the other MLS owners quite literally "own" the majority of the Columbus Crew. Just like—are you paying attention up there?—the other 13 MLS teams own 51 percent of Toronto FC.

They're delighted as hell to see the turnstiles spinning away up there. It's their money too.

Which is how it's designed to work. Which is why it's still around. Which is why, at this point, it looks like it's going to be around.

In terms of expansion, I'm the first one in line to complain about how Jeff Cooper in St. Louis is getting a raw deal, but in reality the Board of Governors knows exactly what they're doing. They aren't looking for ridiculously wealthy deep-pocket partners because they're snobs or because the new guy always has to pick up the dinner check and they want to make sure he can afford it.

It's because they want, they demand partners who aren't terribly concerned about this year's P & L in whatever city they're running. Their eyes are 10 or 20 years down the road.

People don't usually remember that so-called "single entity" was supposed to be temporary, a short-term idea that would help the league get established without a bunch of franchise transfers, team foldings, and the other evils of free-for-all sports league ownership.

But nobody talks about it being temporary any more. It's about as permanent as it can be.

Toronto fans, and soon enough Seattle fans, moan and groan about how the single entity concept is outmoded and should be eliminated. What they're really saying is "our team could become the New York Yankees of MLS if you'd let us spend our money."

And they're right. Except that the damn league wouldn't be here without it.

(And of course single entity is why talk of promotion and relegation is utter nonsense; you can't cash Joe Roth's mega-million dollar check in March and then in October, when his team finishes in the bottom three, tell him he has to go play in USL1 again.)

And Seattle fans in particular need to be a little more circumspect with all this chest-thumping and "we're showing everyone how it should be done" stuff. All of thatis already annoying everyone before they ever kick a ball in anger. Everybody already knows. We've been here for 14 years.

There's talk these days about European leagues "looking at the MLS model," but what they're talking about is a salary cap. Which is fine, but U.S. sports leagues all have salary caps now and it doesn't prevent the Mets from trying to buy pennants. It's the league structure which makes MLS stable, not their salary budget.

The naysayers can blab all they want—and they will. But MLS is growing and doing just fine, and the ownership structure which everyone derides is the biggest reason why.

It reminds me a lot of the old saying about democracy: It's the worst possible form of government, with the exception of everything else.

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