I promised a couple of weeks ago to write a piece on the role of the promotion and relegation in promoting the popularity of Major League Soccer. Promotion and relegation applies in every major soccer league in the world. The worst performing teams (in purely sporting terms) at the end of each season are sent to play at the next level down in the hierarchy of leagues, to be replaced by the best performing teams from that level.
Promotion and relegation (P&R) promotes intense competition at all levels of the league. This contrasts with the American closed league model which MLS has adopted, which creates meaningful competition at the top. There are pros and cons to each system. P&R promotes competition, creates opportunities for small teams and cities to compete at the highest level and ensures that all teams are committed to the end of the season. The closed system provides incentives for leagues to encourage competitive balance and incentives to invest in better quality stadiums (albeit at the expense of taxpayers). Broadly, P&R undermines profitability, so is very bad if you are a businessman trying to make money.
Generally speaking anything that promotes competition is good for consumers – so the fans probably benefit overall from P&R. Some people say that Europeans could not live with a closed system and Americans could not live with P&R. That is nonsense – it’s like saying that an American can’t learn French or a Frenchman learn English. Indeed, if you changed the system then kids would adopt it in a heartbeat, in the same way that they learn new languages. And while middle aged men like me do most of the talking about sports, it’s the kids who define the future of the sport.
As someone observed on the blog a while ago, it might be that P&R is better for fans, right now it is more likely that Europeans, driven by owners that want to make money, will adopt the closed American model than it is that any American league will adopt P&R. I wish it were the other way around.
But I also want to say something about MLS specifically. To be honest, until I looked at the numbers I was not aware of quite how vast the salary gap is between MLS and the major soccer leagues of Europe. A ratio of 30:1 with the EPL seems unbridgeable. To become a major league MLS needs to work on TV, which it never will at current levels of quality. I said that they need to invest, but as several people pointed out, the scale of investment needed at the moment would involve large scale losses in the short term which the owners would not be willing to tolerate.
I think the only way around this conundrum is for MLS to become a minor league for Europe and for European teams to buy up MLS franchises. European teams already employ the talent that would make MLS attractive and the big clubs have more talent than they put on the field. Manchester City’s acquisition of the new New York City FC franchise is surely a logical step. Of course, European teams could just loan players to MLS in the same way that they do in Europe, but then there’s the worry that the borrower will not take good care of the asset.
Following this model, Americans would get to see a better quality of soccer in the US, while European clubs would cement their global dominance. This is just the reverse of Coca-Cola taking over local soft drink producers in Europe. Eventually Americans would be willing to pay to watch this on TV, and MLS would become a major league. Maybe even the European clubs could then sell their franchises at a profit.
Of course, now that so many English clubs are owned by Americans, the ultimate owners might still be American, but this hardly seems important in world of global capital. I doubt this mechanism for raising the quality of MLS is as attractive as P&R, but it seems considerably more realistic.
Three questions:
1. How would you accommodate in your proposal the development of players for the U.S. national team? To my mind, a highly successful Team USA is a prerequisite for the elevation of the MLS. That will be hampered by stuffing MLS teams with euro-loanees.
2. How would you convince U.S. TV networks that offering better quality football is the key to building an audience, given their obsession with personality-centric narratives as the heart of sports coverage (see, Olympics, MLB, NBA, NFL, MLH et al).
2., and related to 1: How do you break the vicious cycle of football not getting the best American college athletes because the traditional major pro sports offer prospectively far more lucrative professional careers?
1. If MLS were a higher quality league there would be very few American players. However, those few that did play would play at a much higher standard. You don’t needs hundreds of American players to make a national team- a core of 20 is plenty. In any case, national teams don’t suffer if their best players play abroad- think Argentina or France.
2. the EPL gets higher ratings than MLS- quality matters
3. Simple: if you raised pay more college athletes would want a career in soccer. This is not a vicious circle at all, but linear cause and effect.
1. Pro/Rel is a solution to a problem that the US never had in its professional ranks. It organizes teams into tiers when there are too many teams for one division…thats it. We have this problem in our youth game and our adult leagues and thus why many of these leagues uses pro/rel to this day here in the US. And it does not make these leagues any more exciting to the masses (unlike HS sports which is closed and gains huge support). So why does every league in the world do this outside of the US? Because they all started as amateur leagues and eventually went pro once the support was there. Our amateur leagues didn’t grow to become professional, we needed to start them from scratch. And when an investor writes a check to form a team and an actual league, then he/she isn’t going to want to leave that league any time soon.
2. There are maybe 1000 professional and semi-pro leagues in the world, and Europe alone has 53 top divisions. In every discussion about pro/rel 99.9% of leagues in the world are ignored and we fixate on the super leagues and especially the super clubs in the super leagues. We forget that these are the .0001% of global clubs and trick ourselves into thinking that to build a team like this we have to take the same path they did (open leagues with pro/rel). But we have built these kinds of leagues and teams in our country before. Out of the top 100 richest sports teams in the world, 80% them are in US/Canada (about 5% of the world’s population) and they all play in closed leagues. Even if you combine MLS and EPL TV ratings they are still smaller then NHL ratings (the 4th biggest major league). If MLS is to ever become a ‘super league’ with ‘super clubs’ they need to tap into casual fans, the hard core EPL fans won’t be enough. And those casual fans will not have a deep desire for pro/rel since they will be so use to closed leagues.
3. The most popular soccer league in the United States IS NOT THE ENGLISH PREMIER LEAGUE! It is the Mexican League.
http://tvbythenumbers.zap2it.com/2013/12/16/liga-mx-apertura-final-on-univision-network-reaches-5-6-million-total-viewers/222859/
http://worldsoccertalk.com/2013/05/31/1-4-million-viewers-watched-uefa-champions-league-final-on-fox/
Liga MX has a format much closer to MLS than EPL. The limit free agency, have multiple teams owned by the same owner, franchises, drafts, and a way to buy your way out of relegation. The quality of play is also much closer to MLS than EPL. EPL teams are outspending Liga MX 10:1 and Liga MX is still beating them in the ratings in this country. Why? The same reason why college sports can dominate in ratings despite quality of play being ‘lower’ because people have a deep connection to the teams. The competition/teams are relevant in the culture and people care. We live in a country where thousands of people pack stadiums to watch HS sports. Quality of play! Come on, its about cultural significance as much as being perceived as the best. Our other sports have the best of both worlds, they are the best and they are a deep part of our culture. Within the Mexican American community Liga MX might not be the best, but its a part of the culture and thus gets the ratings. EPL might be the best (or one of the best) but its not a deep part of our culture, so it gets decent ratings. MLS is basically an expansion league filled with mediocre clubs. They are neither great nor a deep part of our culture. Both of those things can change with time and youth development but a change in competitive format alone will change neither.
4. The United States probably has the largest untapped talent pool in the world. If you look at the participation numbers in China/India they are much smaller than the US. Why do you think Kobe Bryant plays almost exactly like Jordan? Because he spent his life studying him on TV. This is the same for every great athlete, but this has never happened in the US with soccer until recently. If you played soccer in the US you could not watch the best in the world on TV. You couldn’t watch Maradona every week and then go to the park and practice. Now kids can. And MLS is finally creating professional academies for the first time in our history. We have a long way to go but we are sitting on a goldmine of potential talent. Everyone who talks about our youth players (under 15) talk about how they are the most technical we’ve ever seen in the US. This is because they are growing up watching the game played at a higher level. Yes, i the short term if we wanted to improve MLS then you would need to bring over international talent. But we do not need to limit ourselves to a farm team forever because we have enough talent here to build a quality league.
1. historically incorrect. The English Football League started in 1888 as an all pro league. The more interesting question is why almost every soccer league in the world chose to follow the English model
2. I don’t think I’m saying that MLS has to adopt P&R to be successful- I’m just saying it will never be a true major league with these levels of spending on talent.
3. Good point on Liga MX. Worth studying
4. Interesting – the US dominates most sports which it plays – but also devotes far more resources than anyone else – except in soccer. I’m not sure the US would dominate even if soccer were the no.1 sport here- but this is speculation
1. AGAIN there are 100s of 1st divisions in the world and you continue to bring up England as the only example. The organic growth from amateur to professional is the path almost every country in the world took. Our leagues also began as amateur leagues but to create a nation-wide professional league in a country this size at that time became much more problematic. Our amateur leagues remained (and still remain) regional. Here in Chicago we have the National Soccer League that has played for almost a century. It also has pro/rel but to organically grow this league and connect them with other regional leagues was difficult because of costs. Chicago and New York is very far away especially before the highway system was developed. This wasn’t the case for smaller countries in which soccer was the #1 sport. There was more interest and smaller travel.
2. You solution to become a major league is to become a minor league? MLS is going to always sit outside of the big 4, but the size of its growth will depend on how well they can develop their talent and how deeply their teams can become part of their local sport cultures. People can fantasize all day about England and their system but talk to any Englishman and they wish they had the development system of Uruguay (pop. 3.5 million). If we can get our development right, then we will have all the talent we need to be a strong soccer league internationally. That will take time and our salaries will go up gradually as our development becomes stronger. The players we develop will have an true market value, and MLS will need to raise their spending to meet that price (as they’ve done with Dempsey/Bradley). Start creating world superstars who demand superstar wages and then you can talk about spending superstar money.
3. Liga MX is the elephant in the room that English speakers ignore to fit into their anti-MLS narrative. We are awfuly close to them in almost every way and they succeed with having deep ties to communities not with spending. That is something any new league is going to struggle with. Spending and structure change will not create culture.
4. US would not dominate if soccer was the #1 sport here? If soccer was the #1 sport there would be resources there. The problem in the US is pay-to-play. Create a pay-to-play system in basketball today and do you think Lebron James would be playing basketball? Or any kid who grew up in a lower income house? Traveling soccer team costs are up to $3000 a year for kids, this is why there is a drop off. Other sports rely on free school sports and we’ve abandoned it. In Europe/Latin America you have A) far less travel B) more professional teams providing academies C) a higher overall ‘soccer IQ’ allowing kids to find good coaching almost anywhere. As our leagues grow we will begin to offer more professional training options and as soccer on TV popularity grows you will see an overall increase in ‘soccer IQ’. This will result in better players. Having the EPL on in the US will actually end up helping MLS as much as it will help EPL.
1. I think you make my point- it does not really matter how the league started- the American closed model and the open league models adopted almost everywhere else in the world have their origins in different histories, but the continued existence of these models is not a given- change can and does happen.
2. No, I’m saying it is a minor league now (whatever it claims to be). I don’t think the gradualist policy will work- US talent will play abroad if the salaries are so much higher. I was just suggesting another route, which I think has a better chance of working – but maybe it wouldn’t, and maybe MLS doesn’t want to become a major league anyway.
3. I don’t have an anti-MLS narrative (at least, not intentionally), I was just commenting on the present reality and possible futures.
4. I’m not saying that the US would not produce better players if soccer was the #1 sport here. I am saying that I do not think the US would be likely to dominate as much as it does in many other sports. You don’t just have to be better, you have to be better than your opponents. Basketball, baseball, football, hockey are not such important sports in most of the world- even in countries where basketball and hockey are popular these sports are usually not as popular as soccer. It’s a far more competitive world, and therefore the size and wealth of the US population would not prove to be such a great advantage.
Hi Paul,
I’m not sure you have any basis for fact to defend your #1 point (in your first comment): If MLS was higher quality, it would have fewer American players. MLS right now has 44% foreign players, which is on par with most other leagues. For example, Liga MX is “better” than MLS right now by most metrics and they have only 23% foreign players.
More importantly, though, I think your assertion that “the only way around this conundrum is for MLS to become a minor league for Europe” needs actual data to support it. For example, we might look at other places where teams become feeders for European teams. Vitesse is a feeder for Chelsea, being owned by Abramovich. The new ownership has not resulted in any substantial change of their attendance (which is actually down from the mid-aughts). Without data, how could we possibly come to the conclusion that “the only way around this conundrum” would be for European teams to own American teams? First, we’ve seen this happen (Crystal Palace Baltimore, anyone?). Or, more recently look at DC United’s owner taking over Inter Milan. Has that really worked out for United? You seem to assume that the quality of play would increase, but if you look at the loan players brought into MLS, are they really that much better than the players here? Did Simon Dawkins really light up MLS after SJ’s affiliation with Spurs brought him here?
This is a blog and I was speculating – I don’t think there’s any amount of data that would prove the point beyond doubt 🙂 It was my opinion – reasonable people may disagree.
Fair enough then. I think there are ways to use data to at least test some of your speculations though and I’m not sure if they hold up.
Thanks in no small part to your work, I’ve long been persuaded that the MLS model is designed to function well in the States but won’t offer the quality of play–and widespread accessibility of teams–that Europe offers. The scenario you propose for the future of MLS is interesting, but I wonder if you’ve given any thought to how a disruption might occur. Have you been following the revived North American Soccer League, in particular its ownership groups from Brazil and Saudi Arabia?
The motives of some of the investors are not entirely transparent, but recent aggressive expansion moves by MLS seem designed to attack NASL’s strongholds. My point isn’t whether MLS is right or wrong to do this, but rather that these moves suggest they are concerned about the threat NASL might pose to their business model. If I’m not mistaken, the English second division began as a merger between an upstart league and the (recently) established Football League, so this makes me wonder if this is NASL’s goal.
The history of rival leagues is one of all out war followed either by collapse or co-option – the question is which is more likely in this case. Generally even co-option is only for the best franchises. But I think you’re probably right that MLS is more concerned about domestic issues than international competitiveness.
I don’t think the author’s understanding of quality of play is very accurate. The EPL is played at a more frantic pace. That doesn’t mean that it’s “better,” just more frantic. Remember that quality isn’t measured by how it looks on TV, but by who would score more goals in a soccer game. I doubt that most casual TV viewers don’t know or really care about that anyway. They care more about the name on the crest and whether they have some sort of fan connection with it.
In fact, I suspect that while the top 5 EPL teams would win the MLS Cup, the bottom half of the table would struggle to make the playoffs. The gap between top and everyone else in the non-salary capped leagues is that dramatic. Of course, it’s all speculation and the teams won’t be playing in any competitive game any time soon so there’s no way to know for sure.
One big difference between MLS salaries and EPL salaries (outside the richest 5 teams) is that the EPL teams pay much, much more for comparable role players. A 500,000 – 750,000 pound a year center back for a middle of the table EPL team makes about $200k in MLS. There is little difference in soccer talent between the two and often the MLS center back just happens to be American.
The lack of a salary cap in the EPL combined with the top 5 having nearly limitless budgets makes it so that the other teams have to pay more just to have serviceable first division quality role players. That extra money isn’t just what the player would demand in salary; that extra money over the MLS wages is what is required to prevent Chelsea or Man City from buying them up and putting them on the reserve team just so their opponent doesn’t have access to them. The Yankees do it all the time to other MLB teams like the Orioles.
I think you should consider the numbers more carefully here. The average payroll in the Premier League is 30 times larger. There can be only two possibilities here. Either there is a global market for soccer talent, and therefore the higher payroll reflects higher quality (players go where they are paid the most), or the players in the EPL participate in a separate market from players in MLS, in which salary levels are determined by local economic conditions alone. I think there’s plenty of evidence that this is a global market. Teams made up of EPL players should on average defeat players on MLS teams by a large margin. Players in the EPL do well when playing against teams that are roughly as expensive in Europe in La Liga, the Bundesliga and Serie A – so I don’t see why wouldn’t expect them to do very well against MLS teams. MLS salaries are roughly the level of the Romanian league- I would expect MLS teams would do about as well against EPL teams (or BL, Or La Liga, or Serie A) as do the Romanian teams- not very well.
I think looking at a player-by-player basis would be interesting. I’d agree that the EPL pays a startling amount of money for some middling players — some of them former MLS players who, astonishingly, didn’t get twice as good when they started making a lot more money.
You can actually see some MLS-vs-EPL results, albeit in friendlies in which the MLS teams surely have a bit more motivation than the EPL sides.
Average payroll doesn’t mean what you think it does when there is such a gap between rich and poor. You’re confusing the top 5 in the EPL with the EPL as a whole. They’re two groups competing for very different goals who happen to play against each other. The figures I noted are for a team in the bottom 5 or so, not for the top 5.
I’m sorry but you really need to check your facts before you make claims about numbers. According to data released by the player union in 2013, the highest team payroll in MLS was $10 million. According the Deloitte survey for the financial year ending 2012 (based on the audited accounts of the clubs) – the lowest payroll of the EPL was £37 million, which at current exchange rates is over $60 million. So the lowest in the EPL is six times more than the highest in MLS – that is a very big gap, which means that if the market for players works with even moderate efficiency, the best of MLS is significantly lower in quality than the worst of the EPL.
But the key is that the market for players isn’t efficient at all. There’s a lot of rent seeking done by the top teams in the non-salary capped league. That rent seeking makes the cost of talent more expensive for the non-oligarchs.
It’s kind of like how high inequality of incomes makes things like residential rent higher for everyone else because the landlords adjust their prices towards what the richer people would pay.
The salary cap acts like an arms treaty in that everyone ends up better off because they don’t have to spend more and more to maintain the same relative position. At least, everyone except the players end up better off.
Money isn’t quite the proxy for talent that you think it is. What actually happens on the ground is more complicated than a simple more salary = better soccer axiom. There’s a lot of market inefficiencies and failures you’re either unaware of or ignoring because you want to “prove” that MLS sucks and should imitate the EPL. You’re trying to use numbers to make that case when there isn’t much of a case to be made. Both leagues are products of different times and places and are going to evolve to adapt to their current time and place.
Stefan, don’t you think the bizarre MLS wage structure/allocation is a problem too? The squads have no depth and barely get close to winning the Concacaf Champions League. Also wages are allocated inefficiently, no other league in the world would pay players like Michael Bradley, Clint Dempsey, Graham Zusi and Matt Besler the amounts they do.
This is an interesting point. It’s difficult to compare with leagues in the rest of the world since individual wage data is not available except in MLS. But I think the biggest problem for MLS is that few big stars would consider moving to the US, and most top quality Americans will move abroad. As an illustration, my guess us that Frank Lampard will do very well in MLS, even though he would now struggle in the top European leagues