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Thursday, January 25, 2018

The dangerous cartel that is the US Soccer Federation & Major League Soccer



The US Soccer Federation (USSF) is an unhealthy cartel that works in collaboration with Major League Soccer (MLS) to stunt the growth of the men's game in the United States.

January 25, 2018

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Soccer over the past twenty-five years has made tremendous gains in terms of viability, partial financial success, and popularity.  Certain players have become household names (Landon Donovan, Clint Dempsey) from their play on the world stage (FIFA Confederations Cup, FIFA World Cup), but all of that came to a crashing halt (at least temporarily) with the United States Men's National Team (USMNT) missing the 2018 FIFA World Cup in Russia this summer. This epic disaster has caused a lot of soul-searching in the United States, on the men's side, and forced current USSF President Sunil Gulati to not seek another unpaid term as its president. The election for a new president is one that for the first time has national interest from the American media.  Former women's national team goalkeeper Hope Solo is a candidate, as is former men's national team players Eric Wynalda and Paul Caligiuri.  There are a few other unknown candidates but they do have work experience involving soccer as a whole, including Kathy Carter, the current head of Soccer United Marketing (SUM) which is a promotional and business endeavor amongst the owners of MLS teams.  SUM owns the television rights to all US national teams, plus the lucrative rights to the Mexican national team telecasts in North America.  It allows MLS owners to collect necessary revenue for a sport that does not have the financial heft of other men's leagues in the United States have (NFL, NBA, NHL, and motor sports-NASCAR, Indy Racing League).

The sudden soul-searching by the soccer community as a whole has forced me to look into the sport I am so passionate about.  [Full disclosure: I am a die-hard supporter of MLS as a whole, along with my favorite professional sports team, the Los Angeles Galaxy].  I attend games regularly, and hope to see the league ascend the lofty heights I dream about before I die.  The bedrock of the league's business model is something called "single entity," which is that the league is a single monolith that owns all player contracts and teams and generally controls where certain national team players can ply their trade, and attempts to improve the fortunes of smaller clubs. "Owners" are considered investor/operators and get to control the team they pay a fee for. It is designed to protect less wealthy owners by having all owners share losses and split profits according to whatever monies they collect from gate receipts, television contracts, and merchandise sales.

The goal is to make sure that no one team has a monopoly on talent and big names from the USMNT and focus more on slow and steady growth. At times this works, and other times, it causes fans to question the league's motives.  For instance, Jermaine Jones, who starred in the 2014 FIFA World Cup by scoring a goal against Portugal for the United States, wanted to come stateside and play for the LA Galaxy, since he has a home in Los Angeles (the San Fernando Valley, to be precise).  However, with a rule that most fans did not know of, he was assigned to the New England Revolution, the MLS team based in Boston, and plays in the home of the NFL's New England Patriots.  That was not even his second choice, but he nonetheless played there for two seasons before finally playing the last few years of his career in Los Angeles.  In most other leagues, this would never have happened.  Jermaine Jones would get to play wherever he chose.  MLS does this to protect teams that generally are not a draw for elite players, since New York, Toronto, and Los Angeles are the preferred destinations, in most cases.

I believe this was a good strategy in the beginning years when MLS was struggling to gain a foothold in the American sports landscape.  The last 20 years have proven that was acceptable, since the league allegedly was losing money, and needed a format that would share those losses with owners who did not have the finances to make their teams better.  Most of these teams are in small markets, such as Colorado, San Jose, Columbus and Salt Lake City.  I understand this was needed because most teams are dependent still on gate receipts, and the teams mentioned above really need those to have that necessary revenue streams.  

The USSF comes into play in helping the league by assigning MLS "First Division" status, which gets an advantage for talent coming into the league, as opposed to lower division soccer.  Part of the reason that the Federation and MLS work together is that lower division soccer, like the National American Soccer League (NASL), does not have a salary cap.  This could threaten MLS if someone with deep pockets provides a massive infusion of new revenue.  This would put MLS in a precarious position of being the first division for soccer, but trail a lower division in terms of financial power to attract top male talent.  It is a problem because MLS gets to control competition, and ensures that the business model it uses, single entity, does not lose any competitive advantage against another league.  MLS does this to protect the parity it promotes to potential owners and current ownership, in that they can move as slowly as possible on their own terms, to the detriment of the sport, in my opinion.

This cartel hurts soccer in the long term.  For US Soccer and the national team to be able to compete on the world stage, it needs to work to cultivate talent.  Part of this responsibility falls on MLS teams, but since they have no motivation or urgency to develop young talent, takes its sweet time in seeking out top soccer players throughout the country.  Critics say that this includes not searching for talent in minority communities and especially in the urban centers and inner cities. Additionally, a critical element of how soccer provides talent is that is it a sport for primarily white families since they are the ones who have money to send their kids on travel teams and receive good coaching.  Most minorities do not have the time or money to provide their kids the access to succeed. It is why I feel that soccer will plod along at its own convenient pace, and that does not bode well for international success.

How does one change this?  Well, since there is a new election for the President of the USSF, I hope that the new person in charge will force MLS to modify its ways.  This would include promoting and supporting lower division soccer, and allow those who want those leagues to succeed can do so.  Lower division soccer needs to have more financial support, and the Federation needs to seek wealthy individuals to provide a necessary cash flow that will allow it to compete on some level to MLS.  This can motivate MLS to either buy those players, and give much-needed financial help to those leagues, or provide MLS with another pipeline of talent with which to cultivate.  The Federation should also on its own develop talent that MLS does not find, and either send them to MLS clubs or allow them to ply their trade in Europe or South America.

These are some steps that soccer can do to promote the sport as a whole and provide a new foundation to succeed on the international level.  I sincerely hope that this happens for the sport I love to move in a more positive direction.








1 comment:

  1. This is an interesting in depth perspective of the "powers" that control soccer. It would be very unfortunate if the personal gain from these powers surpasses the goal of improving the sport in this country which will impede our gaining stature on the international scene.

    ReplyDelete

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