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

By Jared Young (@jaredeyoung)

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?

Steven Goff of the Washington Post and Landon Donovan, Zeus of the U.S. Soccer universe, started the discussion with the following tweets.

So maybe wages don’t matter in soccer, right? No, they are still very important. In the uncapped world of global club soccer this is obvious - Paris Saint-Germain, Real Madrid, Manchester City, Barcelona and Manchester United make up the top five clubs in terms of wages and they are all top clubs in the world.

In Major League Soccer there is something of a salary cap that has the intended effect of creating parity. Major League Soccer also has playoffs and twelve of the twenty teams in the league make the playoffs and have a chance at the MLS Cup. The league is constructed to give the small market teams a chance, but fans should not be swayed to believe money doesn’t matter in soccer.

First let’s look at the distribution of wealth of Major League Soccer compared to the English Premier League during the 2014-15 season.

Perhaps surprisingly, MLS has a less equal distribution of wages than the EPL. Fans of parity can be comforted by the fact that the lower overall wages of MLS will bring in lower quality players and those lower quality players will likely have more variability in their play. This will lead to more parity. Part of what teams pay for is consistency and higher wage teams will win more consistently than lower wage teams, regardless of the distribution.

That said, we can look at last year’s EPL table and pretend that the EPL had a 12 team playoff. Teams like Stoke City with the 17th highest payroll and Crystal Palace with the 20th would have made the EPL playoffs as both landed in the top twelve. The average wage ranking for the top twelve of the EPL was 8.9. For Major League Soccer the average wage ranking of the playoff teams was 9.7. When you factor in that two expansion clubs were in the top five of wages there really isn’t a difference to speak of. The final standings had a similar representation of wage distribution in both leagues.

What have we learned? Major League Soccer has similar wage distribution among clubs as the English Premier League and the distribution of those teams finishing in the top twelve is not too far apart.

Okay, but what about the fact that the Red Bulls and FC Dallas, both at the bottom of the league in wages, are in the semifinals? We can examine how often this should happen, but first we need to address these rankings. First of all, the rankings that Steve Goff chose to use were from the MLSPU salary posting in July. There was another update in September which included the summer transfers. There were some important transfers like Didier Drogba which moved Montreal up the wage rankings and certainly helped with the playoff run.

Also consider that the wages published include players loaned out to other clubs. The salaries of many clubs are overstated for this reason. For example, the Philadelphia Union loaned out a number of players on the July list and their actual salary ranking would be a few spots lower if that were actually factored in.

Those caveats aside, let’s estimate what the average wage ranking of the semifinalists would expect to be. If we assume that the home team has a 60% chance of winning their playoff game (and ties are a 50/50 proposition) then we’d expect that the average wage position of the semifinalists would be 11.2. That number is lifted higher by the strong finishes of both the Red Bulls and FC Dallas, but it’s pretty impressive for a league that prides itself on parity. It’s also clear that the actual average wage ranking of the semifinalists of 15.0 is an aberration.

Let the small market fans celebrate their parity, but the reality is eight of the top ten teams in terms of wages made the playoffs and the other two were expansion teams. Only four teams in the bottom ten made the playoffs. If I’m a GM, I like doubling my odds of making the playoffs by spending more money. There aren’t many triggers you can pull to double a team’s chances.

Major League Soccer is doing their best to maintain parity in the league through a salary cap and a generous playoff format, but what’s also keeping the teams on a level field is low wages and the resulting inconsistency in play from lower quality players relative to other leagues. As the league increases player wages, the gap between the high payrolls and the low payrolls will become stronger. Sure, there will be low wage teams that make the playoffs and make a run, but the odds of those happening will continue to decrease.

Alexi Lalas understands that DPs and wages are more important than ever. His voice joined the fray on this topic.

Gotta look over the long term. Wages matter.