MLS teams spend a lot more money than you think

Major League Soccer
(Yahoo Sports)

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At this point, to describe Major League Soccer as anything but “thriving” is to either be unrealistic, unfair or willfully ignorant of the enormous ground the 21-year-old circuit has made up in just the last few years.

Two more highly anticipated teams – Atlanta United and Minnesota United – join the new season that starts on Friday. The level of play is noticeably improving every season. The playoffs invariably make for great theater. Star power has multiplied. Average attendance is now the sixth-highest of any soccer league in the world – ahead of the Italian and French leagues. New ownerships are falling over themselves to buy expansion franchises for $150 million apiece, plus stadium construction. TV viewership has finally risen and sharply. And the youth academies are starting to bear fruit.

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This is not some overly friendly assessment. It isn’t cheerleading our domestic league. These are either facts or widely-held and well-supported opinions.

MLS is taking off.

Yet in the middle of this boom, the league is holding fast to the caution and considerations that brought it this far. That is, the things that made MLS the first truly viable and sustainable professional soccer league in American history, for men or women.

As ever, MLS – which holds a kind of veto power over its clubs’ major transactions – remains willing to spend big on established stars who bring attention, quality and credibility. And it has made increasing funds available to sign or retain tomorrow’s stars as well. But its control on the wages of all other players remains strict. An impossibly arcane system of acquisition mechanisms, rules and limitations shackles teams and all but the highest-value players to tight salary limits.

This jumble of budgets and allocations, in the MLS parlance, creates something of an optical illusion, though. It makes the league look cheaper than it is, even if it only really wants to spend on elite talent. This, in turn, creates an optics problem.

Take, for instance, the salary cap. This season, it will be about $3.8 million – per team. This makes most casual observers assume that the 22 teams participating this year will spend a combined $83.6 million, or about half of what one of the juggernauts of the European leagues might lay out on player salaries by itself. Yet every single MLS team will almost certainly spend more. Multiples more.

Because in addition to the salary cap, clubs get $1.2 million in Targeted Allocation Money to spend on difference-making talent, as well as an unknown amount of unrestricted General Allocation Money – two mechanisms to bring teams under the cap. And three Designated Players per club, of course, can earn as much as teams are willing to pay them and only count towards the cap at $480,000.

Last year, two teams – Toronto FC and New York City FC – had guaranteed payrolls in the $21 million range, per MLS Players Union figures. Five teams were above $10 million.

Two years ago, salaries in Mexico’s older and more established Liga MX were, on average, still twice as high as in MLS.

Now, payrolls at the high end of MLS would seem to be comparable to a lot of those south of the border – although it’s hard to get exact numbers – with the top salaries far higher stateside. “It’s competitive with what’s happening in Mexico and exceeds what a lot of countries in our region are spending,” MLS President and Deputy Commissioner Mark Abbott confirmed.

What few numbers are available to the public don’t quite reflect what is really being spent in MLS. In a sport where fans judge teams and entire leagues by how they spend money – lacking some other global metric – that’s an issue.

“I agree that probably there are many fans who are not aware what some of the higher-spending teams are spending when you combine all of the elements,” Abbott conceded. “But I think they are recognizing the quality of the product. They may not know what goes into it, but they’re seeing soccer that they like. I think that helps explain many of the metrics that we’re seeing.”

There are no plans to dismantle the whole giant structure of wage limitations. For the foreseeable future, MLS will not go to a more traditional hard or even soft salary cap. Evidently, the PR cost of overlooked investment is still a worthwhile price to pay for stringent cost control.

Mark Abbott
Abbott says MLS is poised to be recognized for the ‘quality of our product.’ (Getty Images)

“We need to be very focused in how we use our resources because we’re competing against this international market,” Abbott said. “And what we find is by being able to target our spending in a certain way, we’re more likely to achieve the goals that we’ve set out. TAM is a great example of that.”

What it all boils down to is that MLS continues to fix its gaze to the horizon, looking to go from a good place – just a decade and a half after contracting two teams just to save the league from going under – to an even better one. It’s less worried about how it looks now than investing in the right places and getting maximum return later on.

“It’s a strategic approach to growing our league and, in fact, helping grow an entire sport,” Abbott explained. “The investments that we need to make are in a wide variety of areas. And what gets spoken about the most – and it should be, because it’s at the core of what you are as a league – is what you spend on players. But it’s not the only aspect of investment that we need to make in order to build our fan base.”

Owners have spent huge sums on stadiums, academies and training facilities, while the league has built extensive digital platforms and done out-of-view things like invest in the quality of refereeing – the league is also a global leader in video replay – and collaborating with the French federation on developing youth coaches.

“It’s a futures play,” Abbott said. “And our owners are prepared to make these types of investments knowing that it will benefit us in years down the road. And that investment is in a wide variety of areas. If we only invested in one of those pillars, we would not grow the fan base. We know that because the research tells us.”

So long as the league keeps on investing, Abbott argues, people will eventually see improvement in all areas – play, young talent, refereeing, coaching, infrastructure – and appreciate what is really happening, regardless of surface appearances.

“Particularly this year,” he said. “I think we’re poised for further recognition of both the reality of the quality of our product and the perception of it.”

Leander Schaerlaeckens is a soccer columnist for Yahoo Sports. Follow him on Twitter @LeanderAlphabet.