Professional sports leagues have discovered that they are not immune to the current economic difficulties. Revenue is flat or falling. Fixed costs are high. The weakest franchises in some leagues are losing tens of millions of dollars a year.
Amid the carnage, a few smart operators are learning a valuable lesson: You can’t lose $30 million a year on an MLS team when you’re total expenses are only $10 million. Suddenly, an investment in MLS doesn’t seem so bad. In fact, an investment in MLS is starting to look like a pretty good idea.
MLS is the only North American professional sports league that is growing.
Expansion franchises in Seattle (MLS’s 15th team) and Philadelphia (16th) recently agreed to pay $30 million each to join the league, three times what Toronto FC paid to join MLS in 2006. Portland (17th) and Vancouver (18th) are paying a $40 million franchise fee to join MLS in 2011.
Back in 2002, after the league had contracted the Fusion and Mutiny to get down to 10 teams, the situation was bleak. No matter how optimistic you wanted to be about the league’s future, seeing the Fire play the Columbus Crew approximately 15 times a season didn’t make for compelling sport. The critics were right: Major League Soccer was really Minor League Soccer.
But then, as real fans of MLS, we tried not to delude ourselves. We knew we weren’t watching the best players in the world and we were fine with it. The joy of watching MLS came from seeing Landon Donovan and DaMarcus Beasley develop. From screaming at Justin Mapp’s unfulfilled potential. From seeing the mythical John Thorrington injure himself 3 minutes into his Fire debut and not caring that the people sitting next to you had no idea why you were laughing so hard. From hoping that there would eventually be enough good players in the league that a thug like Joey Franchino wouldn’t find a spot on the field or that Preki’s 73 year-old left foot wouldn’t win a second MVP award on one leg.
It came from seeing Chris Rolfe’s wonder-strike against Milan.
MLS was small time, the pleasures were simple and we enjoyed them. We still do.
But small time thrills are only worth so much. As fans, as Americans, we want to watch the best. We want Major League Soccer. Well maybe, just maybe, we’re on the precipe of big changes in the American soccer scene.
2011 and 2012 are poised to be the most pivotal years in the history of the young league. Consider the very real possibilities that:
- The league will have 18 teams in it the summer of 2011 and none of them will be an expansion team in their first season.
- The summer of 2011 may see both an NBA Lockout and an NFL lockout as part of new collective bargaining negotiations.
- The NHL will have just experienced its third straight year of stagnant or declining revenues.
- The Baby Boomers are starting to retire and MLB will be leaning over a precipe of a long demographic decline.
- The 2010 World Cup, held that summer in South Africa, will have achieved record ratings in the United States.
- MLS will used the branding and advertising associated with the World Cup to sign a number of aging, yet still high-performing stars.
- Financial problems at clubs throughout the world will increase somewhat the quality of player available in MLS’ price range.
All of these events are arriving at just the right time for MLS. MLS left the survival phase a few years ago. The expansion phase is about to take a rest. Soon, the league will be able to put all of its energy into increasing quality of play and growing the domestic game into true competition for the European leagues.
What does MLS’ future look like? What kind of growth can reasonably be expected? Let’s explore.