Cap debate gets interesting
By Ben Knight
My ongoing debate with Bill Archer over the future of the Major League Soccer salary cap is finally starting to bear fruit.
For me, this was never about Bill. It was about trying to raise awareness and debate of the idea of creating a two-tier cap for MLS, where individual ownership groups could spend some of their own money to ease parity and increase the standard of play in Our Little League.
And, while we’re still getting troll tracks from under the bridge in Uniontown, two very fine American bloggers have taken the time and care to elevate the discussion nicely. Both Dan Loney of BigSoccer and the anonymous mind behind The Fake Sigi Schmid Blog are arguing elegantly – against the idea.
The figure on the table is an overall cap of $10 million, as proposed last December by Richard Snowden at Soccer365.com. I feel this number is way too high, but it remains our starting point.
Here’s Fake Sigi:
“Under [Snowden’s] terms, MLS clubs could spend up to $10 million on *any* players, including Americans. The result would effectively *quadruple* the current salary cap, and would result in massive wage inflation across the board as every team would be forced to spend more just to keep the players it has. The fact that the last $7 million would come out of an owner’s pocket instead of the league’s coffers does nothing to mask the massive increase in wages. Given the limited pool of American talent (and even more limited pool of Canadians), the league would not see a proportionate jump in the quality of play compared to the massive costs incurred.”
That there’s a counter-argument. I see a disconnect in my argument now. I was hoping the salary jumps would be discretionary, on a team-by-team basis, as they are in the current Designated Player arrangement. Clearly, it’s not that simple, and the idea needs some tinkering.
Rather than rush into that, let me offer a couple more thoughts for – I hope – the same sort of intelligent response:
1) Can we at least eliminate the DP cap hit? Right now, DPs can sign for any amount of ownership dosh, but $400,000 counts against the cap. That’s a sixth of everything, minus whatever allocation deals have been wrought. Icing that little bit of bookkeeping frees up more money for everyone else. (Okay, not every team has a DP. But the ones that don’t already have access to that cash.)
2) Can we pay MLS rookies a living wage? I made more writing about soccer for the Globe and Mail last season than some players got for playing the game. That was part-time money, and I am not a wealthy man. That $400,000 would come in very handy for keeping decent prospects from having to hot-plate hot dogs in shared college dorm rooms.
3) If we’re not going to allow a soft salary cap, what about a second DP? Again, without a cap hit.
The idea here is to try to end this endless parity. We’re not talking about enough cash to eliminate most teams from any chance of winning before the season starts. I deplore that everywhere else in the world. I certainly don’t want to see it in MLS.
But we’re losing a lot of drama. This league needs a powerhouse team (or two, or three) everyone else can get angry about. The L.A. Galaxy would be there right now if landing David Beckham had translated into winning back-to-back MLS Cups.
I’m not trying to destroy the league, people. At least Loney and Fake Sigi are making coherent arguments about the pitfalls in the two-tier plan, without feeling they have to recast the Addams Family with my friends.
Okay! I don’t know the answer.
But the questions are going to keep coming. I look forward to (almost) everyone’s response.
Onward!



September 18th, 2009 at 8:20 pm
Ben, I think that they key idea has to be increasing the total amount spent on player salaries for MLS to raise the overall quality of player the league can attract (or retain).
All of these gimmicky ideas about two tier caps, DPs that don’t count against the cap and multiple DPs are nonsense. Eliminating the $400k hit for DPs would penalize teams that don’t have a DP, or at least encourage them to sign a player for $1 more than the max to eliminate the $400k hit.
At the end of the day, the cap has to be gradually raised to something close to double the current amount to allow for the league to become a more serious player.
September 18th, 2009 at 9:13 pm
Why not the NHL model? Set a salary cap based on league revenues from the year before. So long as the revenues don’t fluctuate too much from year to year, this might work. Basically, I agree with joesoccerfan: keep it simple, allow controlled growth.
Does anybody know what percentage of league revenue goes to player salaries? Sniffing around the web, I find that the NHL had a league revenue of $2.4 Billion and a cap of $57 million per team which gives, let’s see, salaries making up a maximum of 70% of league revenue. The number is less, tho, since most teams carry cap-room.
September 18th, 2009 at 9:18 pm
By the way, you switched topics before I could post my Barrett/Vitti opinions. Vitti would be better if he had a stronger sense of where his team-mates are. I think he gets his head down and then has to have a look around once he’s done dribbling. That extra second of hesitation removes any advantage gained by beating a player. O’Brian White’s goal from DeRo’s redirect was a classic example of not having to look to find your team-mate. Vitti doesn’t seem to be able to do it. Dichio was pretty good at this.
September 18th, 2009 at 9:34 pm
Intersting discussion about the cap. I too thought the DP shouldn’t count against the cap, or the two tier system, but at the end of the day what Joesoccerfan suggests is a very logical step for now. Doubling the cap and creating a minimum wage/developmental salary to 50K so that people like Nana and others are not exploited is a very fair step. If they can’t or are unwilling to raise it by that much than they are missing the growth potential or are indeed exploiting the business model.
September 18th, 2009 at 9:37 pm
I also feel that a gradual increase in the salary cap will provide teams the most flexibility to improve quality in different ways. If we can eventually get to a salary cap that’s significantly higher, then not all the teams will spend the maximum (e.g., like in the NHL), also providing the wealthier teams more flexibility.
At the same time, I think an increase in the maximum roster size would be important, along with the resurrection of a reserve league or some other way to keep the “bench” players happy & match fit. Or perhaps expand the Academy system so it’s the standard at all teams, but allow some movement between the senior Academy team and the MLS pro team? (I.e., Leafs/Marlies?) This could provide roster depth for the pro team, and learning opportunities for the Academy players.
All that costs money as well. Wealthier teams could be given some flexibility to differentiate themselves on the reserve/academy side. They can already spend whatever they want on coaches/managers/ other staff. One more thing: how about letting teams charter planes, instead of forcing commercial flights, at least for the longer trips?
September 18th, 2009 at 9:38 pm
Just to be clear, what is the current system for the salary cap in terms of increases? Is there anything? Or does Garber just randomly announce when there will be an increase to the cap, at his pleasure. Maybe that’s part of the problem- no clear vision of how it works or where it’s going.
Also, what does the USL1 have in place, anything?
How about:
Add $500,000 to the current salary cap + two highest paid players on the team don’t count toward the cap (same thing as 2 DP’s not counting but this way all team are treated equally). Thereafter increase the cap by a pre-determined formula tied to league revenues + inflation. Get rid of allocation money and all that other stuff. Don’t decrease the cap ever, but increase it only by a pre-determined percentage, as revenues go up, i.e. no revenue increase no increase in cap aside inflation.
This would keep the league competitive and avoid the NASL problems while still letting any team that wants to spread it’s wings go for it.
September 19th, 2009 at 7:22 am
Presently, the MLS salary cap is about $2.3M per team per year. TFC has exceeded that, by accumulating “allocation money” through various deals.
The CBA is expiring, so whatever happens in the next few months is the league we’ll be looking at for the next few years.
September 19th, 2009 at 11:37 am
According to Forbes (http://www.forbes.com/2008/09/09/mls-soccer-beckham-biz-sports-cz_kb_0909mlsvalues.html), league revenues were $165 million in 2007 and the league claims to have lost $20 million overall. (I bet 2009 turns out to be profitable, though). Anyway, this was in the days of 14 teams and (assuming the salary cap hasn’t changed too much since 2007) that would make player salaries equal to around 20% of revenue (not counting the DP), which is *really* low.
So how, exactly, did they lose $20 million? I’m confused.
September 19th, 2009 at 11:41 am
Lots of different ways. Attendance is down sharply.
September 19th, 2009 at 12:08 pm
What not have an additional salary cap specified for each team added to the league salary cap.
What I mean is that along the lines of the NHL, instead of a salary cap that is reflected on the league’s revenue, why not have it reflect it on the teams profit.
For example, TFC which turn in a profit of $2.1 million in its first season can put 50% of that profit towards the salary cap of $2.3 million, which would mean a 3.3 million salary cap that TFC has to follow.
The same goes for other teams, and thus ensuring that teams won’t go bankrupt quickly and creates powerhouse teams that Ben is talking about. Players will get better wages, and footballers will generally want to come to the teams that can afford them.
I like Joesoccerfan idea, if the DP is signed for more than $1 million, his salary shouldn’t count towards the cap! But then again the 400K cap hit would not be significant to teams like TFC under my salary cap idea.
September 20th, 2009 at 1:26 pm
[...] posts in the debate) comes by way of Fake Sigi, countering Toronto scribe Ben Knight’s list of watered down recommendations to help loosen salary restrictions in MLS. Now before you go running for a glass of water, the [...]
September 21st, 2009 at 2:53 pm
this rumour just came in(even if it is from MLS rumours) and the proposal does sounds very good
1) A salary cap of $4 million
2) One designated player added to the DP rule that is salary cap exempt.
3) A slightly higher minimum salary.
4) An increase in the max salary to $500,000
September 25th, 2009 at 5:58 pm
Ben, the big issue for me wrt Salary Cap concerns is “media impact” vs quality of play. There’s really no argument that the splash signings of big name international stars brings media attention that the signing of ten (or fifty) solid mid pack internationals doesn’t.
I also am of the opinion that the quality of play overall would be dramatically improved if even a fraction of the present “DP” money was spread across more signings. Even there, though, there are marketing drawbacks… Domestic players would be replaced by more gifted (but lesser known) foreign nationals. The football improves, but the fan interest might not.
I can appreciate the situation MLS is in re: the cap.
But for my money, the DP’s should be either eliminated or curtailed, and the cap raised to $3-3.5M. Raise the minimum salary to $50k, with a minimum guaranteed salary of $50k for all players (even if cut). No professional athlete should qualify for food stamps…
Just a quick question… with Blanco likely not to be resigned, Beckham likely to leave for Europe again next year, Donovan and a few others out of contract… who will this rule exist for?
Schelotto? Angel? Landin? de Guzman (who could easily escape to Europe if an opportunity arises)?
Perhaps we’re all thinking too hard about ways to incorporate the DP’s into the salary cap. Maybe this is a ‘problem’ that will work itself out in the next year or two…