MLS Soccernomics Part 1: An Overpriced Commodity

Welcome Raving Readers to our first serial post!

I forgot where I read it, but one of the many postgame articles from Saturday’s loss referenced Soccernomics. The article cited the book’s simple correlation between team payroll and results, as evidenced by Toronto’s success. For those who haven’t read Soccernomics by Simon Kuper and Stefani Szymanski, it is worth your time. It is not the Moneyball of soccer. However it’s an informative book, dry and not gripping, but full of interesting perspectives on the intersection of soccer and economics (as the title successfully portmanteaus).

Kuper and Szymanski discuss how the better teams spend the most money, and that most clubs lose money. However they are mostly analyzing European leagues. MLS is a very different animal, and I’ll discuss the values of a salary cap in tomorrow’s post. Today, I want to talk about an overpriced commodity, the American soccer player.

MLS is in a transition. Saturday’s game was proof. The hype around the Seattle-Toronto game was rampant with all the international quality talent on the field: Bradley, Dempsey, Defoe, Oba, Julio Cesar, even Evans. I don’t know if it’s a tipping point, but it is indicative of a trend in MLS. Other than just the acquisition of world-class players (Henry, Keane, Defoe), which has been happening since the Beckham acquisition, teams are now paying a premium for USMNT players. Bradley’s salary skyrocketed coming to MLS. Dempsey got a raise, Eddie finally got his wish and got paid, and even Omar Gonzalez got a DP contract.

Are these players worth their salary on the pitch? Sure, but teams are paying for exposure, especially in a World Cup year. Among the owners’ suites, you have a lotta dudes in suits salivating as the US soccer market again blooms. With the World Cup cycle, owners want a big name American attached to their club. When the causal fan tunes in this summer, he/she will see that Dempsey plays in Seattle and think, cool, I’ll check that out. Teams are betting on growing fan interest and thereby investing in Dempsey, Bradley et al., pure and simple.

How do the economics of the World Cup and a growing States-side soccer market affect the game? Soccer’s growth here has been slow. Beckham and Henry moving to MLS was the first spurt in MLS’s evolution. International superstars retiring in MLS caught fans’ attention. Dempsey coming home was another major press release. Dempsey is north of 30 and, arguably, his return is consistent with Beckham’s and Henry’s.  But Dempsey is an American, and that changes the equation, as he got paid more than any native son in MLS history. Bradley coming back, at only 26, was another evolution. Did Beckham and Henry treating the league as a retirement home hurt the game? Will Dempsey and Bradley plying their trade here hurt the game? I can’t say. I’m being analytical here, just looking at angles.

As I explored earlier, soccer is growing exponentially in this country. A downside to this growth is fan access to the game, as ticket prices are rising. One of the many charms of MLS is fan access, both to teams/players but also at the gates. Tickets to Sounders game are affordable, and people how up. Games aren’t prohibitively priced like the NFL. Some owners are trying to cash in on their product prematurely.

Merritt Paulson and Dave Kazan, of Portland and San Jose respectively, are betting fans will pay more their product. These greedy owners are trying to price out the plebes and ruffians who make soccer soccer. The ECS is taking a stand and boycotting this year’s game in San Jose. I fully commend them on standing up now for what will surely be a problem later. It’s a pity, but as the league grows and gets more competitive, prices will rise. An interesting feedback loop exists. Interest grows because the product is accessible. As interest grows, prices rise and the product becomes less accessible. Does interest wan?

Hopefully the league can secure a better TV contract, this could keep ticket prices stable. TV is a visual medium. The league knows this, all their commercials have images of boisterous supporters from the Cauldron, Timbers Army, and, of course, the ECS.  Your product isn’t just sports Mr. Paulson and Kazan, it is entertainment. You need to sell an image of excitement, so you need asses in seats. Not khaki corporate asses, but jumping, singing supporter asses.

  • Karl Schaeffer

    Plebes and ruffians??? Pass the grey poupon please…

  • Mrs. Ravinggreen

    Am I the only one that is, in a part of my heart, sad about the amounts of money starting to be flaunted around the league? I mean, it’s amazing to be a fan of the team with Clint Dempsey. And it was incredible, did-he-or-didn’t-he nutshots aside, to see Dempsey and Bradley (WOW is he good) and Defoe and Oba at the field on the same time changed the whole concept of what an MLS game can be, in my mind.
    However! I can’t help but thinking that more huge salaries are just around the bend, and with huge salaries come so much of what is terrible, cynical and disillusioning about the Big Three pro sports in this country. Unaffordable seats for regular fans, with regular jobs. Players willing to sacrifice relationships with clubs and teammates in pursuit of the big paycheck. (Eddie Johnson, Mike Magee?) Jerkface moneybags presidents/owners jacking up ticket prices because they feel like they can, telling fans to either pay up or stay home.
    I’ve so enjoyed following MLS because I feel like it’s a sport that’s still accessible on a human level, still connected to and responsible to fans, regular old community-college teacher fans, screaming their heads off at the games. I feel like we are about to see the transition away from those values, into Just Another Professional Sport.
    You?

    • http://www.ravinggreen.com Brent Schaeffer

      I agree that right now MLS still has a DIY, amateurish vibe. But cynicism will follow the money. And more money is flowing into MLS. Bilking joe and jane normalfan certainly seems to be the intent of some owners (Merrit Paulson “cough cough”): get rich and lie trying.

  • Geoff

    I think the thought in San Jose is that out of around a million people (not counting the rest of the Bay), they’ll probably be able to find 17,000 interested people to fill the new stadium.

    I’m not sure about soccer in particular, but San Jose has a kind of a weird intense set of sports fans. Like all the people that love the Sharks.

    • http://www.ravinggreen.com Brent Schaeffer

      Thanks for weighing in! The owner Dave Kazan was still being an ass on Twitter and making no bones about “real fans pay whatever the cost.” Whereas, in fact, only tools do such a thing.

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