Guest Post from Christos Michalakis: What the World of Soccer Can Learn from MLS

May 1st, 2013 | By: Ben | 80 Comments

world soccer ball (1)

In the Summer of 1996, Major League Soccer had its first season and I was ecstatic. Since Detroit did not have a team (and still doesn’t sadly) I organized a group of friends and family to go down to Columbus toll see my then favorite team- the New England Revolution play the Crew in Ohio Stadium. After 90 minutes, Columbus and New England played to a 1-1 tie and my cousin from Belgium said (in Greek) to me and my friends, “good game guys! I had a blast! Time to go home!” As I started to tell him that the game was not quite over, he saw players line up on the field for what looked like a shootout. I explained to him that in the US, when games are tied after 90 minutes we have a modified shootout to determine the winner.

My cousin then EXPLODED. He started yelling in a combination of Greek and French, “THIS IS AN OUTRAGE! AMERICA HAS RUINED SOCCER! WHAT ARE YOU DOING TO THIS GAME!”

He was right. When Major League Soccer first started, it tried to sell soccer as “hockey on grass” and conformed to so many unnecessary American sports standards. We had countdown clocks, goofy team names, best of three series’, and of course shootouts in case of a tie. Since then we have learned our lesson, righted some of those wrongs and evolved.

Recently, there has been interesting discussion and debate in the soccer world, as to MLS’s future. Where once the question was “can MLS survive?” the question now is “what role will MLS play in the soccer world?” Sepp Blatter recently criticised the league saying “There is no very strong professional league (in the U.S.). They have just the MLS but they have no professional leagues which are recognized by the American society.” Such a comment ignores the fact that MLS has the third highest average attendance of any sports league in the United States- above the NBA and NHL- not to mention a higher average attendance than the top leagues in France, Brazil and Argentina.

Meanwhile, Alexi Lalas recently sparked debate in the US when he tweetted, “If you live in the U.S., can you call yourself a “soccer fan” even if you don’t support @MLS?“ In the spirit of Lalas’ tweet, I would like to point out that some of what makes MLS unique and unlike its European counterparts is actually good for soccer in this country and can actually help struggling leagues abroad!

What upset me the most about Blatter’s comments on MLS was the complete denial that there are any problems with league play in Europe. Lalas mentions the level playing field in MLS, while many leagues in Europe are dominated by a select few teams. In many countries, for many reasons we have situations where there are a select few (or one) “Harlem Globetrotters” in each league followed by a massive number of “Washington Generals.” This disparity creates a huge imbalance in these leagues, where clubs in the top tier do not have the money, the facilities, or even the market to compete with the top teams in their league.
In Economics there is a method used to calculate how competitive a market it by how much power is concentrated in an industry’s top four firms. While market value of clubs outside the elite of each league are hard to find, if you were to measure market dominance in terms number of championships won you will see that most leagues operate as a oligopoly, and in some cases a monopoly!

Now, some may argue that soccer is above business and that is shouldn’t be treated like such. I wish that were the case, but when the top clubs of Europe have created unfair market conditions where most games are uncompetitive, I think one has no choice but to acknowledge the business of the sport. That is what I like about Major League Soccer, is it is honest about the fact that a league and it clubs are businesses. It wants ALL of its clubs to be successful, profitable, and each have a fair shot at winning the Championship. Since its inception in 1996, 9 different clubs have won the Championship. Its top four clubs in terms of Championships won are: DC United (4), Los Angeles Galaxy (4), San Jose Earthquakes (2), and Houston Dynamo (2). 75% of the championships were won by the 4 most successful teams. Lets look at other leagues since 1996:

Major League Soccer:
DC United - 4
Los Angeles Galaxy - 4
San Jose Earthquakes - 2
Houston Dynamo - 2
Top Four Clubs - 71%
Top 2 Clubs - 47%

English Premier League
Manchester United - 10 (59%)
Arsenal - 3
Chelsea - 3
Manchester City - 1
Top Four Clubs - 100%
Top Two Clubs - 76%

La Liga:
Barcelona - 7
Real Madrid - 7
Valencia - 2
Athletico Madrid - 1
Top Four Clubs - 100%
Top Two Clubs - 82%

Bundesliga:
Bayern Munich - 8 (47%)
Borussia Dortmund - 4
4 teams for 3rd and 4th
Top Four - 82%
Top Two - 70%

Serie A:
Juventus - 6 (one was technically rescinded)
Internazionale Milan - 5
AC Milan - 3
Three teams tied at 1 - 1
Top Four - 88%
Top Two - 65%

Eredivise:
PSV - 8
Ajax - 6
Feyenoord/AZ/Twente - 1 each
Top Four - 94%
Top Two - 82%

Prva HNL:
Dinamo Zagreb - 13 (76%)
Hajduk Split - 3
NK Zagreb - 1
Top Four - 100%
Top Two - 94%

Greek Superleague:
Olympiakos - 15 (88%)
Panathanikos - 2
Top Four - 100%
Top Two - 100%

Scottish Premier League:
Celtic - 8
Rangers - 9
Top Four - 100%
Top Two - 100%

You get the point. In Europe there is a problem of non competitive with a lot of non competitive soccer being played each week. I believe that some things MLS has done, can be helpful to other countries. Things like summer leagues, fixed teams (instead of promotion and regulation), trans-national leagues, salary caps, and an end to condoning gambling in the sport can be helpful.

Summer Leagues:
The world is not Europe. North America gets REALLY cold in the Winter- and south of the equator our winter is their summer. Blatter complains that he wants the whole world on one calendar- however with a simple understanding of geography, one could see that this is impossible. Even in Europe, Scandinavian countries are given permission to have summer leagues- why not promote this further?

Yes, every four years all the globe turns its attention to the World Cup, and leagues should definitely take this into consideration. After the first couple of weeks of competition however, with only a few teams left competing, how many players are displaced- especially from leagues like MLS?

Rather than have FIFA push for one global euro-centric calendar, they should suggest season coordination where there are summer leagues and winter leagues- with breaks for appropriate tournaments. With more leagues opting for summer, and with television contracts going global- there is no reason why you cannot watch top tier soccer all year round. Soccer on TV all year is not only good for promoting the sport in all corners of the earth- but can generate more revenue for some leagues.

More summer leagues also provides many more opportunities for loans. Winter-based leagues could see their teams keep their stars or prospects in shape over the summer, and vice-versa. Furthermore, leagues could also benefit from the World Cup, as there are opportunities to improve domestic ratings for leagues by promoting televised “double-headers”.

Fixed Teams vs. Promotion and Regulation

Promotion and regulation may make sense for many countries- and thats fine. I would just like to point out some of its shortcomings, and why fixed teams work well in MLS.

The ideal behind a promotion/regulation system is noble. The idea is that no matter how small your club or your team, you still in theory can compete with the big dogs in your league. In reality it means that your club’s success in division 2 is doomed when you make it to the top flight, as you just don’t have the resources to compete.

Because of promotion and regulation, teams like Olympiacos have to play teams like A.O. Kerkyra- a team whose host city has a less people than the typical attendance of an “Athens Derby” match. In Holland, can you expect a team like De Graafschap- a team located in the town of Doetinchem whose 56,000 residents could almost all fit in the Amsterdam Arena- to compete with teams like Ajax, PSV, and Feyenoord? In Serbia, Belgrade clubs like Red Star and Partizan compete with teams like FK Novi Pazar- whose 66,000 residents could almost all fit in Red Star’s stadium.

In fact, in Greece- as I’m sure is the case in many leagues- it is well known that owning a soccer team requires an investment in which the owners will lose money. With the exception of Olympiacos, almost all teams lose money every year as owners invest in teams “just for fun”. In Scotland, Rangers couldn’t keep up with Celtic, and have since gone bankrupt, giving Celtic a monopoly over the league. Such instability means that teams change ownership often, which creates more instability for the club, and less success.

In order to get a franchise in MLS on the other hand, you need to show a plan on how your club will be profitable in in the near future, as well as have a suitable stadium for your team to play. When the league itself does not expect its lower rung teams to be profitable, it only makes the bigger clubs more dominant. With that I ask- which is system is more fair, and better promotes the Beautiful Game? One where it is only theoretically possible for all of clubs to have a shot at a league championship, or one where any team in its top flight has this chance?

Finally, on the subject of fixed teams vs. promotion/regulation- I ask this. Is it good for the sport of soccer when Berlin- one of Europe’s largest cities- goes almost every other year not having a team in the Bundesliga? Or that cities like Leeds and Sheffield- both cities larger than Manchester and Liverpool- do not have teams in the Premier League?

Regional League:
So the question remains- in small countries where there are only one or two big markets- how can a fixed league be profitable? Television is the main source of revenue for sports teams in the US, and in a small country with only a couple of markets that is not possible. One way MLS addressed this issue is that it became the top of the soccer pyramid for two countries: the US and Canada.

What I also love about what MLS has done is still allow American and Canadian teams compete in their own domestic Cups. In the US, you have the US Open Cup where professional teams compete with lower tier minor league clubs- while in Canada you have the Canadian Cup. Should other countries adopt a regional league format, their domestic cups now have more meaning.

Imagine a Scandinavian League, that played in summer and included all of the top teams from Sweden, Iceland, Denmark, Norway, and Finland. Such a league would likely automatically be considered one of Europe’s 10 best- potentially good enough to air all over the world in the summer, when many leagues are dormant. In fact, such a league could look like this:

Scandanavian Super League:
1. AIK #185 – Stockholm, Sweden – pop. 872k
2. Malmo FF #238 – Malmo, Sweden – pop. 303k
3. IFK Goteborg #239 – Gothenburg, Sweden – pop. 526k
4. Rosenborg BK #108 – Trondheim, Norway – pop. 180k
5. Valerenga Fotball #245 – Oslo, Norway – pop. 623k
6. SK Brann #246 – Bergen, Norway – pop. 268k
7. HJK #199 – Helsinki, Finland – pop. 604k
8. FC Honka Espoo #282 – Espoo, Findland – pop. 256k
9. FC Copenhagen #45 – Copenhagen, Denmark – pop. 559k
10. Aalborg BK #95 – Aalborg, Denmark – pop. 126k
11. Odense BK #135 – Odense, Denmark – pop. 168k
12. AGF Aarhus #229 – Aarhus, Denmark – pop. 252k
13. KR Reykjavik #251 – Reykjavik, Iceland – pop. 119k

Of course, I would like to see a “Balkan Super League” with clubs from Greece, Cyprus, Serbia, Romania, and Bulgaria. Taking a look at what a potential “Balkan Super League” could look like we must first consider that the Greek Super League- the top league in that region- currently has 16 teams in a country with only two media markets over 250,000- Athens and Thesaloniki. 7 of its 16 teams in the Greek Super League are not even in the top 400 clubs of UEFA. The other teams in this region rank far worse. By combining these countries to form one league, as I attempted to do below, you can see a league that is far more competitive (the rank is the UEFA Coefficient Rank):

Balkan Super League:
1. A.E.K.#109 – Athens, Greece, pop – 3.7mil
2. Panathanaikos #53 – Athens, Greece, pop – 3.7mil
3. Olympiakos #33 – Pireaus, Greece, pop 450k (part of Athens metro area)
4. Aris #120 – Thesaloniki, Greece, pop- 1mil
5. PAOK #69 – Thesaloniki, Greece, pop- 1mil
6. APOEL #61 – Nicocia, Cyprus, pop – 310k
7. AEL Limassol #169 – Limassol, Cyprus, pop – 183k
8. PFC Lokomotiv Plodiv #323 – Plodiv, Bulgaria, pop – 400k
9. CSKA Sofia #163 – Sofia, Bulgaria, pop – 1.2mil
10. Levski Sofia #136 – Sofia, Bulgaria, pop – 1.2mil
11. Red Star #167 – Belgrade, Serbia, pop – 1.7mil
12. FK Partizan #103 – Belgrade, Serbia, pop – 1.7mil
13. Stauea Bucharest #66 – Bucharest, Romania, pop – 1.6mil
14. FK Vojovodina #67 – Novi Sad, Serbia, pop – 341k
15. CFR Cluj #67 – Cluj, Romania – pop – 400k

While such a league does not necessarily need to have the exact teams above, or necessarily have 15 teams, you get the idea of what such a regional league would look like. Almost all teams play in a market over with over 300,000 people. Big cities have multiple teams. With fewer teams per market, local tv contracts can help bring income to these clubs.

In CONCACAF, we could see just 4 leagues in the entire region: League MX, MLS, a Central American league, and a Caribbean League. The latter leagues playing a winter schedule, where some MLS players may want to spend their off months keeping their skills sharp and keeping fit.

A “Gold Coast League” in West Africa that included Nigeria, Ghana, Cote d’Ivorie, and Cameroon may provide just the resources needed to give aspiring soccer players the chance to play competitive soccer without having to leave for Europe. The same can be said for a “Pan-Arabian League” in countries like Saudi Arabia, Iraq, Baharain, UAE, and Quatar or an “Alpine League” in Switzerland, Austria, Czech, and Slovakia.

There are other advantages to creating regional “Super” leagues. First, it gives even more importance to a country’s Cup tournament, as it is now responsible for crowning the lone top club in the nation and still provides a chance for smaller clubs to become “giant killers”. Because a regional super league would only have the top teams from several nations in each league, each country would be responsible for the 2nd tier of their nation’s soccer pyramid, and those remaining teams would compete on a more level playing field. There is even an opportunity to create permanent minor league affiliates. Finally-it would mean that every country has a chance to watch competitive soccer, every week, no matter where they lived and no matter what team they supported.

Ban on Gambling

One thing that the United States learned MANY years ago, was that no matter how important a part of our culture a sport is, it can be ruined by gambling. In the soccer world, gambling is often ENCOURAGED through advertising. How many soccer teams in Europe are sponsored by gambling websites? How many countries have sanctioned sports betting? In the US, there are laws that restrict sports betting, and gambling scandals have not been as severe than in other countries. The problem is, in Europe smaller clubs have no choice but to integrate gambling into their sport. This relationship, which the New York Times claims created a one TRILLION dollar industry (source: http://rendezvous.blogs.nytimes.com/2013/02/07/asia-the-heart-of-worldwide-soccer-corruption-investigators-say/), is dangerous for the future of the game. I feel like the topic of match fixing and betting is a really, REALLY big deal that FIFA does not take seriously enough. This topic is way too big to discuss here.

Salary Caps

On the subject on competitive soccer- one thing that keeps MLS competitive is its salary cap. While controversial, salary caps proved to be essential in the United States. Our last attempt at division one soccer in the us- the North American Soccer League (NASL)- folded when teams just could not compete with the juggernaut team the New York Cosmos. When MLS launched in 1996, it took a “single entity” approach, where financial successes and shortcomings were shared. Rather than repeat the mistakes of the NASL, it looked to the (I hate to say it) National (American) Football League (NFL) on how to run a league that both respected the business and tradition of the sport. In Europe, we have massive amounts of overspending by a handful of elite clubs where other teams cannot even DREAM of competing. In La Liga for example, Barcelona and Real Madrid EACH spend more money on player salaries than Deportivo, Racing Santender, Osasuna, Mallorca, Espanol, and Real Betis COMBINED! To give you perspective on what that means in terms of American sports, these two teams together outspend the combined efforts of New York Islanders, Kansas City Royals, San Diego Padres, Atlanta Thrashers, Pittsburgh Pirates, Colorado Avalanche, Tampa Bay Rays, Tampa Bay Buccaneers, Cleveland Indians, and Denver Broncos!

Conclusion
While soccer is growing all over the world, it is not adapting well to the rising business of the sport. It worries me that FIFA President Sepp Blatter won’t acknowledge the problem of oligopolies in European soccer leagues, nor the successes of Major League Soccer. It can’t be good for the sport in Scotland when only one team dominates the table. Its can’t be good for the sport in Greece when two of the traditional “Big Three” are facing constant financial collapse. It can’t be good for the sport in the Czech Republic, when players have to go abroad to compete in a top flight. It can’t be good for the sport when aspiring young Ghanaian or Nigerian soccer fans can’t watch live competitive soccer and have to rely on TV to see their heroes play. It can’t be good for the sport in Italy or China, where match fixing scandals have have global repercussions.

The current system is good for one group of people though- the owners of the mega European clubs. With no top flight league in places like West Africa, or the Mid-East, and struggling leagues in South America- top clubs in Europe can buy up all of the foreign talent. While MLS still has a long way to go until it is considered a top-tier global league, it has a lot to teach the rest of the world about the business of sports. It is true that the soccer world does not need a successful league in the US to survive- but it DOES need a successful league in Brazil, in China, in Greece, in India, in Hungary, in Sweden, in Saudi Arabia, and in many, many other countries if it is to continue to grow and maintain its status as the world’s game.


 
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