MLS Finances

Wages Are Still the Best Predictor of Results in MLS by Jared Young

Isn’t it great when the numbers are on your side? When they are sure to make your case quickly, because one thing for certain is that those numbers will be different next season? As the first MLS semifinal weekend approaches, an examination of the wages paid by the final four teams has parity parrots talking. Both the New York Red Bulls and FC Dallas sit at the bottom of the league payroll but are at the top of the league in results and hosting the second leg of the semifinals. The payroll underdog story makes all fans feel good. But should it?

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The Practical Effects of MLS's Newest Rule by Mike Fotopoulos

The new Targeted Allocation Mechanism (TAM) does a lot of things right for MLS. It creates another loophole to get more big-name players into the larger clubs, and creates some interesting pressure for smaller clubs. Overall, it tips the scales once again towards a star-driven league, as bigger clubs capture most of the benefit while their competition can only watch as the table stakes rise. It is an interesting development to the capgeeks out there, as it sets a precedent for more open spending and other, more balanced roster rules. If the league’s goal is for bigger and better plus (some) parity, TAM adds another building block. With a little bit of reorganization, the latest version of the MLS rulebook could be its best.

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Champions League: How Much is it Worth to an MLS Club? by Drew Olsen

The major talking point concerning the CONCACAF Champions League, and gaining entry into the tournament, is the payroll increase that MLS affords a club that qualifies. Now, this isn't the sizable increase for a club that we see for a team in Europe, but it has the potential to be a game-changer in MLS, depending on the team and its ownership. Most figures concerning team salary/payroll are generally guarded for obvious reasons. However, rather than using official numbers, I went through the data generously provided by the Players Union and calculated the accrued difference in pay between when the team won entry and the following year after the increase.

Now, as it happens, the Union only has data posted as far back as 2007, that's okay. Since the tournament underwent changes, adapting to it's current format back in 2008.

ChampionsLeagueIncrease

Obviously, this is still a small sample size, but it gives you a rough figure on how this could help DC United and the other Champion-League-bound clubs this season.  A big caveat to using the Unions' data is that its just a snap shot at a given point in the season. Not necessarily what they paid out in dues for the entire campaign.

An obvious tip-off to that is Seattle dropping payroll from 2009 to 2010. They didn't cut funds, but because late in the season they traded away Freddie Ljungberg to Chicago, his cost was associated with their club despite Seattle playing the majority of his contract for the season.

This is just one example among 20 unique situations. No season is the same. The LA Galaxy and their 16% cut in 2011 largely came from David Beckham's greatly reduced fee. 2013 comes and that fee is entirely off the book with his trip to PSG and the Galaxy not replacing his huge contract with another high paid designated player. Instead they signed Omar Gonzalez.

Still a team gaining access to the Champions League enjoys a nice 9% raise in their annual spending, and as is the case in other leagues, dollars spent correlate to points and position in the table to some degree.