Major League Soccer is still a relatively small league, but it's quickly closing the gap with America's other pro leagues. The average team is now worth $103 million, up from $37 million just five years ago. New soccer-specific stadiums have been a big part of that growth, but another key revenue driver has been a wealth of on-field talent. That wasn't always the case.
In 2007, MLS changed its player rules to allow teams to sign designated players, or players who could be paid outside of a team's salary cap. The idea was that teams with the financial ability could attract talented international players while the league as a whole controlled costs with a low salary cap. The new structure colloquially came to be known as the "Beckham Rule," thanks to the fact that it was instituted, in part, to allow the LA Galaxy to sign international superstar David Beckham.
The Galaxy paid Beckham a base salary of $6.5 million plus a share of team revenue, which helped him amass $255 million over his six years in MLS. That deal paid off for the team, too, and not only on the field, where the Galaxy won two MLS Cups with the English midfielder. In 2008, FORBES estimated the Los Angeles franchise was generating $36 million in revenue and was worth an enterprise value of $100, each being nearly three times the league average.
Beckham's playing days are now over - he plans to return to the league as a franchise owner, another perk from his Galaxy contract - but the designated player rule continues to make rich men of the league's biggest names. A handful of them are part of MLS' exclusive club of players who make more than $1 million in annual salary:
Of course, at just nine players, that's a small handful. In fact, there are almost as many billionaires - seven - that own MLS teams. And a $1 million salary isn't much to brag about when it comes to major pro sports leagues. Consider that the San Diego Padres, who in 2013 had MLB's sixth-lowest payroll, alone have nine players above the $1 million mark. The average salary of a player on a top Premier League or La Liga team is well over $5 million annually.
Within MLS, however, those top-paid players are truly in a class of their own. The league's nine top earners collect more than $23 million each year in combined base salary, which is around 40% of the amount of money MLS' 19 teams can collectively spend on salary budget players ($56 million). Only three players - David Ferreira, Dwayne De Rosario and Chris Wondolowski - are in the bracket of $500,000 to $1 million in base salary; Federico Higuain crosses into that range after counting bonuses, and Philadelphia's Jose Kleberson just misses at $495,000. Just seven more players have a base salary over $300,000.
Of the lucky few players making over $1 million, only two hail from the league's home continent: Americans Landon Donovan and Clint Dempsey. The latter recently joined the Seattle Sounders from Tottenham, a move that reportedly cost his new team a $9 million transfer fee. Dempsey is now the league's highest-paid player, with a base salary of $4.9 million. Bonuses should put him over $5 million in a full season - he only played in nine regular season games this year - making him the only MLS player besides Beckham to ever cross the $5 million mark.
Between Dempsey and Donovan (No. 5 at $2.5 million per year) are the New York Red Bulls' Thierry Henry and Tim Cahill, who rank at second and fourth, respectively. Donovan's LA Galaxy teammate Robbie Keane sits in third with a base salary of $4 million.
The Galaxy, Sounders and Red Bulls are easily the biggest spenders; each has two of the top-paid players, and those six rank among the seven highest-paid players in the league. The other three players with seven-figure incomes all play on Canadian teams: Montreal's Marco Di Vaio, Toronto's Danny Koevermans and Vancouver's Kenny Miller.
With so few players ranking in the top pay grade, a single question begs answering: Are they worth the investment?
From an on-field perspective, maybe not. It's debatable how much a single player can contribute to a team's success, and some teams have gotten the same level of production from much cheaper pieces. Take Thierry Henry and Portland's Diego Valeri, for example. Each posted ten goals this year, with Valeri tacking on 13 assists to Henry's nine. Yet Valeri, at a base salary of $400,000, is making around one-tenth the salary that Henry is paid.
Another part of the competitive problem is that many of MLS' top-paid stars are aging players - Seattle's Obafemi Martins is the only one younger than 30 - who once played in more competitive leagues but perhaps no longer have what it takes to compete overseas.
Yet those lengthy international careers are also the perfect tool for attracting fans to the game. Put simply, it's hard to argue against the financial power of superstar names. Henry, Donovan, Cahill and Keane all rank among the league's top-selling jerseys. When Robbie Keane joined the Galaxy in 2011, home attendance jumped by nearly 2,000 fans per game. And when Beckham, the biggest name to ever don an MLS jersey, traveled to away games, teams would often host their biggest crowds of the year.
Attracting superstars to MLS is undeniably one of the keys to the league's future success. Achieving that goal requires teams to pay big, and only a few teams have proven a willingness thus far. Yet with attendance surging, now ranking third behind the NFL and MLB in average per-game attendance, and new TV deals on the horizon, Major League Soccer's talent gap may soon be coming to a close.
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