CBA Talk: Why it's so good to own a sports team by Jared Young

In September a portion of the Chicago Fire was sold, valuing the team at $400 million. In a sports world where large numbers float by with regularity, another big dollar sign went largely undigested. In 2007, Forbes began to publish valuations of MLS franchises, including the Fire. The first valuation estimated the team was worth $41 million, and so the investors appear to have returned almost ten times their money since then. That’s a 21% annual rate of return, which is a remarkable number for a twelve-year period, especially one that included the great recession of our lifetime. Over that same period, the Average Pat might have seen returns in the 6% range. The Dow Jones Industrial Average (DJIA) had an annual growth rate of 6.1% from the end of 2007 to September of this year, while the S&P 500 trailed slightly at 6.0% over the same time period.

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CBA Talk: Comparing MLS Player Salaries to Leagues Around the World by Jared Young

Before the 2020 Major League Soccer season begins the owners and players will need to negotiate a new collective bargaining agreement. Metaphorically speaking, we could compare this negotiation to a pie eating contest, with the wrinkle being there is only one pie, and the goal is to eat the biggest piece. The fans offer the ingredients for this pie in the form of revenue, but it’s the league, the owners and the players who get to eat it. This contest won’t happen on the Coney Island Boardwalk or be streamed on ESPN+, but from time to time someone will emerge with public declarations intended to meddle with our opinions, and therefore put pressure on the other sides of the negotiation. Because we make the pie, you see, we ultimately decide how big it gets, so our opinions matter.

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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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Visualizing MLS Salaries Compared to Other U.S. Leagues by Drew Olsen

By Drew Olsen (@drewjolsen)

With the MLS season rapidly approaching and players talking tougher about their demands for the new collective bargaining agreement (CBA), it helps to give some context for where MLS players stand compared to other leagues. Data is hard to come by for foreign leagues because they don't disclose much about salaries, but the other major American sports leagues are more forthcoming. By looking at the other major US leagues, we can examine how MLS wages match up against their fellow pro athletes.

There are many caveats to this comparison. To start, an increase in the minimum salary doesn’t even seem to be the MLS players’ major priority; that would be free agency. Second, MLS is famously secretive, and does not release the exact terms of any player contracts. We get these numbers from the Major League Soccer Players Union (MLSPU), which publicizes the cost against the salary cap of each MLS player a few times a season. Often, that number does not necessarily match the player's actual salary, as teams often use allocation money and other magic to limit their cap hit (a good example is David Villa, who made much more than the $60,000 he was listed at most recently). Indeed, league officials can be counted on to claim the inaccuracy of these salary releases each time they are published. But until they provide proof, claiming foul while also refusing to release the the “real” numbers reminds me of when I ask my baby cousin how he knows unicorns live in his backyard. He usually replies “because they do!”

With those limitations aside, below are presented the five major US sports with a variety of arbitrary bits of salary information, as determined to the best of my ability using public data. We've also got all MLS player salary information in a sortable table here.

League Average MedianAve-MedAve/MedMinSalaryMaxSalaryMax/MinTop salary as % of league totalTop salary > X lowest salaries combined
MLS $226,454$91,827$134,6272.47$36,500$7,167,500196.375.53160
NFL $1,900,000$770,000$1,130,0002.47$420,000$22,000,00052.380.68*
MLB $3,818,923$987,500†$2,831,4233.87$507,500$30,714,28660.520.88
NHL $2,696,069$2,000,000$696,0691.35$550,000$14,000,00025.450.7224
NBA $4,153,249$2,245,886$1,907,3641.85$507,336$20,644,40040.691.0877

There are a few things to note when looking at these numbers. MLS has a much smaller average wage and a much smaller total wage sum than all the other leagues; the $226,464 average wage is less than the minimum salary of all the other leagues. Conversely, MLS has no official maximum wage, which differs from leagues like the NHL, NBA or NFL, where there is a max possible salary and a harder and harsher salary cap. Furthermore, the other four leagues are the apex of talent and competition in the world for these sports, while the most generous MLS fan would be hard pressed to argue that the league is in the top five soccer leagues in the world.  Lastly, MLS is a league that continues to grow, entering 2015 with 20 teams. The NBA, NHL, and MLB all have 30 teams, and the NFL has 32. Perhaps MLS' comparatively small number of teams contributes to some of the difference. We could go on here, but these all essentially boil down to this: MLS doesn’t compare perfectly to the other American sports. But you already knew that.

That said, these are still the five major professional sports leagues in the US, and these are the leagues that we MLS fans are constantly measuring ourselves against. It’s also why this is still an interesting and valuable exercise.

In some areas, MLS falls in right among the other major sports, while in others it is a clear outlier. For instance, when dividing the average salary by the median salary across leagues, MLS is on par with the NFL and more equitable than MLB. This is one way to say that MLS salaries as a whole are not as skewed upwards as those of MLB. MLS’s major differences come in the income disparity at the extremes – those with the biggest salaries are simply making much more than those at the bottom, especially when compared to other leagues.

When an unheralded young player gets his first callup to the Majors, he is usually making around $500k, which is about 1/60th of the $30 million Clayton Kershaw will make in 2015. Similarly, the NBA has the highest average salary of any other league in the world (beating out the Indian Premier Cricket League. Who would have guessed?), and Kobe Bryant makes about 40 times the rookie minimum. While MLS has the shortest average career of the major sports at only about 2.5 years, the NFL is second shortest, and presumably comes with a more severe wear and tear on the body. In that league, Aaron Rodgers’ salary is 52 times the size of the league's lowest paid player. Kaka, the flashiest name on the roster of the newly promoted Orlando City, makes about $7 million per season, which is almost 200 times what players like Dylan Remick and Bradford Jamieson IV made last year. Indeed, Kaka alone made more than the 160 lowest paid players in MLS… combined, and he accounts for more than 5.5% of total league wages; next closest is the NBA where Bryant is at 1%.

*NBA and NHL Salaries were prorated linearly to fit on the graph. X-axis is reverse-ordered rank of individual player's salary.

*NBA and NHL Salaries were prorated linearly to fit on the graph. X-axis is reverse-ordered rank of individual player's salary.

To put this disparity in perspective, if all 145 players that made less than $50,000 last season were given a modest wage increase to $50k, it would cost MLS about $900,000. That sum is less than 1/7th what players like Defoe, Dempsey, and Bradley made last year, and pales in comparison to the $200 million that is about to be spent to build a new stadium for DC United.

These numbers help us paint a picture of what this small portion of the CBA means. They help explain why it just doesn’t ring true when Don Garber and the MLS ownership group claims poverty, even after they’ve signed a record-breaking TV deal and brought in the likes of Kaka, Dempsey, Bradley, Altidore, Villa, Giovinco, and Lampard for many millions of dollars each. Without a doubt, MLS is in a different place in its history, operates under different rules, and competes in a different market compared to the other four major American pro sports leagues. But it is still the apex of pro soccer talent in the USA and Canada, and so when the MLSPU asks for a raise in the minimum salary, it might be time for the league to listen.

*I wasn't able to find the number of players that are measured to create the published average NFL salary, but each team has 53 players, and there are 32 teams, so I multiplied by the average salary to estimate the sum of all NFL salaries (53*32*1900000=3,222,400,000).

† Because of the majors/minors aspect of MLB, median is a bit hard to judge. This article states the average salary and the number of players (910) that played last year. The median would be the 455th, player, which I found here, a list that only goes through 468. This obviously presumes that the 400 or so players not listed made less than those who are listed. In other words, this estimate may not be exact but it's probably pretty close.

‡ I couldn't find a comprehensive list of all NFL and MLB contracts and their sums, and so was unable to estimate how many of the lowest salaries were roughly equivalent to the biggest in those leagues.