Fans of North American soccer, by and large, are an insecure group. It makes sense. Many of the older generation remember the NASL flameout. The younger generation may be imbued with more confidence in the sport’s future, but they also understand that MLS still exists on the fringe of the mainstream American sports landscape. It is why they obsessively tabulate MLS attendance, engage in constant comment-section debates on the usage of “soccer” vs. “football,” and tweet every MLS “golazo” at Sportscenter. The league is in a constant competition for exposure and respect. However, this competition is not with the American cultural mainstays NFL, NBA, and MLB. MLS is competing against international soccer (EPL, Liga MX, UEFA CL). And right now it is losing. In the United States there are many more fans of international soccer than MLS. This is indisputable. Yet, this current state is not immutable.
As was pointed out in Part I of this analysis, the main problem facing MLS teams is the lack of TV money being generated. The comparison to the EPL is stark.
But how can the league boost TV revenues (estimated at a paltry $36 million league-wide)? TV revenues are low because people are not watching. The league has put up these numbers on ESPN2 so far this year (Via Big Soccer):
Those numbers are not good. By comparison, regular season college basketball averages 515k viewers and college football between 1.5 and 2.0 million viewers on ESPN2. The EPL averages around 320k viewers during much poorer time slots than MLS. Without better ratings the league will never get the TV money that they crave.
The most obvious answer to boost ratings is to improve the product. The most recent release of MLS salaries, nicely visualized by Steve Fenn, underscores just how little MLS pays their players vs. other leagues.
Here’s the EPL. They spend lavishly on talent.
These are the Top 20 Global teams.
I have heard many people comment that they would like MLS to pursue the Bundesliga’s more restrained approach to spending. Compared to other leagues in Europe they certainly appear to be more prudent. According to this report Bundesliga teams spend approximately 38% of their revenues on player wages, which is far under the approximately 64% the rest of the UEFA top flight spends.
If you are wondering, this is what MLS teams spend as a percent of their revenue. And the figures in red are what they would be spending if they operated like an EPL club, Global Top 20 club, or a Bundesliga club.
Being financially prudent is good, but the problem is the league is being financially prudent in the one area where they can’t afford to be. If MLS wants to be thought of as one of the premier soccer leagues in the world, then it probably should be the best league in North America. And right now that is not the case. There are teams out there (New York, Los Angeles, Seattle) who want to spend more than they are able to under current MLS rules. That is a problem. These rules are potentially hindering a MLS team from participating in the Club World Cup, which would be massive for the league.
What is a potential solution? MLS does not need to spend like the EPL to be successful. If MLS teams spent like German teams their average wage expenses would be approximately $7.5M per team. What would this “average” MLS team look like? To test this hypothetical, a random number generator was used and a 30 person $7.5M team was constructed. In fact, it came in under $7.5M.
Could this team win the CONCACAF Champions League? Would more international soccer fans (not MLS fans) tune in to see this team play? I think so. It is up to MLS and its owners to decide what is best for their league, but perhaps it is time to ante up.