The MLS’ Growth and Role in World Football

In 2011, Major League Soccer’s (“MLS”) commissioner, Dan Garber, boldly claimed “…we want Major League Soccer to become one of the top leagues in the world by 2022.”[1]
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This set the bar high for many followers of the MLS – both as critics and fans of the league. And while the MLS has not yet reached the goal it set for itself, it is undoubtedly on the right track, even if it might take a few years longer than Garber boldly exclaimed in 2011.

The Growth of the MLS

The MLS is expanding at an unprecedented pace. In the fifteen-year window from the 2005/06 season to present day, the MLS has expanded from 12 teams to 24 – an increase of 100%. Additionally, with five new teams announced for the cities of Miami, Austin, Nashville, St. Louis and Sacramento (teams 25 – 29) all expected to begin playing in the MLS by the 2022 season, the league is not slowing down any time soon, with plans to eventually expand to 30 teams.[2] Expansion fees for new teams are now $200 million,[3] a massive increase from the $10 million Toronto paid for a franchise in 2007 just 12 years ago (as means of progression and comparison, Portland paid $35 million in 2011 & Montreal paid just $40 million in 2013).[4][5] These costs continue to skyrocket as the MLS maintains its staunch position against the promotion / relegation system, making the expansion fee buy-in a reasonable investment for owners looking to own a professional sports team in the US.

To put the value of MLS teams – which is around $240 million on average – in perspective, one could look at the sales of Everton FC of the EPL and AFC Fiorentina & UC Sampdoria of the Italian Serie A in recent years. In 2016, Iranian business man Farhad Moshiri acquired a 49.9% stake in Everton – top 10 finishers in the English Premier League three years running – for £87.5 million, which valued the club at £175 million (he has since acquired a stake of around 70% of the club).[6] More recently, Sampdoria of Serie A in Italy – whom finished 9^th in the league last year – sold for a mere €140 million while Fiorentina – who has played European football 5 times since the 2009/10 season – was sold for €160 million.[7] While these are not the FC Barcelona’s and Bayern Munich’s of the world, it speaks volumes that the average MLS franchise is worth more than many of the world’s biggest clubs.

The commercial side of the game is growing at a fantastic clip. To help with financial stabilisation and long-term growth, the MLS and its team owners have committed to building “soccer-specific” stadiums, further investing in the football infrastructure of the United States with a total of 20 such stadiums for the 24 current teams and an additional six more on the way in Cincinnati, Nashville, Miami, Austin, St. Louis and Sacramento.[8] While the moving out of American football stadiums and into smaller, “soccer-specific” stadiums have led to small fluctuations in per-match attendance over the years, the attendance rates have remained steady, with an average attendance of more than 21,000 fans per game since the 2015 season and a 40% increase since 2006.[9][10] By analogy, the NBA, considered one of the most popular sport leagues in the world, averaged less than 18,000 fans per game.[11] Moreover, the MLS is currently in the midst of its two most lucrative monetary deals in its history: an eight-year broadcasting deal worth around $90 million per year and merchandise deal with Adidas worth around $117 million per year.[12] Furthermore, viewership numbers in 2018 continued to reach new highs. In 2018, the MLS had a record-breaking year delivering: 26 million viewers across all US networks for a 6% increase from 2017, recording an increase of nearly 10% in ticket revenue per game,[13] and reporting a 65% increase in the number of views for MLS content on social media.[14]

It is also important to note that the MLS has set themselves up for future success. Following in the wake of the English Premier League, who package all media rights for their teams and the league together to increase their bargaining power, the MLS has told all its clubs in both Canada and the US to ensure none of their local broadcasting agreements extend beyond 2022.[15] The Adidas apparel contract ends in 2024. Why are these dates so important? The United States will be hosting the FIFA World Cup in 2026 and has begun putting together a bid for the Women’s 2027 World Cup. By aligning all their bargaining power together at such an important time for the sport of football in the United States, the potential return on future broadcast and sponsorship deals will most likely land the MLS record-breaking deals in comparison to the record deals they have now.

Whist the commercial and infrastructural growth of the league is important, it is how the MLS positions itself in the international world of football, and specifically the transfer market, that will ultimately dictate how the league is perceived in the world of international football in the future.

Role in International Football

While the MLS continues to grow, many around the world still view the league as a level below many of the top leagues around the world. With global icons such as David Beckham, Andre Pirlo, Bastian Schweinsteiger, David Villa and more recently, Wayne Rooney and Zlatan Ibrahimović all leaving Europe in the twilight of their careers and finding success in the MLS, the league is often labelled a “retirement league” for ageing superstars to join for big money deals in the United States. While for nearly the entirety of the MLS’ existence this has been true, like it or not, the tide is starting to turn, and the MLS is changing rapidly before our eyes.

For years the MLS was a reluctant player on the international transfer market. In a recent interview with The Athletic, Garber admitted that the MLS was often hesitant to move its most talented and marketable stars.[16] However, as the MLS has continued to grow and carve out a role in the world of international football, the MLS has slowly begun to change its ways. During his MLS State of the League Address in December of 2018, Don Garber stated:

“We need to become more of a selling league…we all need to get used to the fact that in the world of global soccer, players get sold.”[17]

The actions of the MLS have echoed the sentiments of Garber’s speech. The transfer that truly announced the MLS’ arrival to the transfer scene was Miguel Almirons sale from Atlanta United to Newcastle United for around £21 million, a record for both the MLS and Newcastle United.[18] Other transfers have since followed suit, with teams such as Bayern Munich and RB Leipzig of the Bundesliga signing MLS players in the last two years.

The MLS is not only a seller in the international market however, and the trend of incoming players might give the best inclination of where the MLS is headed in terms of its role in the international transfer market. Since 2018, 10 of the top 15 incoming transfers into the MLS have taken place, with 8 of the 10, being young prospects from Central and Latin American countries.[19] Furthermore, of those 10 players, only three were 27 or older (the oldest being 29), signalling a clear shift away from the “retirement league” stigma that the MLS seems to have. Other notable transfers from the CONMEBOL and Central American countries since July 2018 include:

As demonstrated in the table above and by the graphic with the top 15 MLS transfers, the MLS is in the midst of undergoing a clear shift in philosophy away from that of a “retirement” league; instead targeting young, promising players who can develop in the league, raise the MLS’ international profile, and later be sold – likely to the “big 5” leagues in Europe.

It is notable that many of these players – almost all of which are under 25 – are electing to leave for the MLS rather than stay in South America or head across the Atlantic to Europe, as historically has been the case. The reasoning for this is simple: the MLS is an attractive destination for players. As the level of play in the MLS continues to improve, it offers players a new proving ground where they can earn high salaries in alluring cities in the United States. According to statistics released by the MLS Players Association, over 55 players in the MLS are currently earning more than $1 million per year, with around 40% of the league making $200,000 or more per year.[21] Additionally, players are not the only ones taking part in the culture shift of the MLS, as front offices (technical development staff) and coaches are as well. Of the 24 MLS teams, 10 have non-America coaches, including notables Frank de Boer of the Netherlands and Matias Almeyda of Argentina, with the latter widely considered one of the more-highly regarded coaches in North America. Tata Martino of Argentina is another notable former international coach who worked in the MLS, being crowned champions with Atlanta United, before leaving to coach the Mexican National Team following the 2018 season. Regarding front offices, two MLS teams recently hired foreign technical directors (commonly referred to as “General Managers” in American sports) with the Philadelphia Union hiring Ernst Tanner of Switzerland (formerly Academy Manager at RB Salzburg in Germany) and FC Dallas hiring André Zanotta of Brazil (formerly an executive at Grêmio in Brazil). Both hires come from well-respected football clubs, further pointing to the fact that the MLS is an attractive destination.

Data from the FIFA Transfer Matching System (“TMS”) and the FIFA Global Transfer Market Report 2018 reinforces the notion of the CONMEBOL and CONCACAF[22] connection. According to the report, the CONCACAF region increased their amounts received from CONMEBOL teams by 13.7% from the previous year; conversely, CONCACAF increased their spending on CONMEBOL players by 50.8%.[23] Further analysis into the reported statistics demonstrated the US’ willingness to enter into the international transfer market with the US’ total spending on transfer fees for international players increasing by 52.7% and their total receipts from transfer fees for international transfer fees increasing by 721.8%.[24] Lastly, while the following numbers are not directly correlated with the MLS, it still shows the impact the US market is having on the world of football. In 2018 American players saw an increase in both their involvement in international transfers (196 transfers for an increase of 13.3%) and the combined transfer fees of the international transfers they were involved in ($21.3 million for an increase of 243.55%). Considering Christian Pulisic was sold for $73 million at the beginning of 2019, those numbers will only continue to go up for the 2019 year.

Conclusion

While the MLS still has room for improvement and a long way to go if the aim is to truly become one of the top leagues in the world, the growth and improvement the MLS has undergone is undeniable, as is their presence on the international stage. The actions of the MLS and its teams have echoed Garber’s recent comments, with the MLS now recognising that selling players is part of the process if you want to be a top tier league worldwide. It appears that they are now willing to participate in the transfer market – both as buyers and sellers – to establish themselves within the world of football.