Major League Soccer and the Major League Soccer Players Union are currently engaged in a Collective Bargaining Agreement (CBA) negotiation that will usher in a new era for soccer in the United States and Canada. One of the bigger areas for potential change (at least from a fan point of view) is the structure of the league, referred to as a single-entity structure. Don Garber provided a few thoughts on the future of single-entity last week in an article by Grant Wahl of SI.com. Before digging into the quotes, here is a refresh of the structure of the league and why it is so important.
Single-entity means that individual team owners are really just shareholders of one company, Major League Soccer. The owners are responsible for operating the teams, but MLS is the sole entity and owns all of the player contracts. Owners earn revenue from their team's operations and are incented to increase the profitability of the franchise, but they don't own the franchise. They own a piece of MLS.
Why Single-Entity is Good
The biggest advantage of the structure from a league perspective is that it controls player costs. In other sports leagues, players have multiple teams bid for their services and they drive up their salary by using that leverage. In MLS, that player just negotiates with one entity - and usually just one team which is determined by a series of rules. Right now, MLS players are paid less than half of the players in other sports leagues (soccer and other) as a percentage of league revenues. That would not be possible without a single-entity structure. In essence MLS has created a unique price controlled market for soccer players in the United States.
Keeping player costs low has given the league the ability to grow at a measured pace, aligned with the revenues as they increase, and not before. It's hard to argue with the results as MLS is about to celebrate it's 20th season after multiple soccer leagues in the United States failed to survive.
At the end of the day, MLS is still here. It is thriving and attracting top U.S. players like Clint Dempsey, Michael Bradley and Jermaine Jones as well as international stars like Frank Lampard and David Villa. Single-entity is a big reason the league has been as successful as it has.
Why Single-Entity is Bad
The detractors of the structure maintain that the league is mature enough financially to give individual owners more freedom to aggressively go after players that will improve the team. Furthermore, fans don't like the controlled salary market and that players don't have the same financial options as players in other leagues do. The freedom from a traditional structure would open up the doors for better players to enter the league and improve overall quality.
But the bigger issue with single-entity is the fact that MLS ultimately controls the distribution of players. There is a sense that the game is rigged when only one company is responsible for all player contracts. Yes there are rules, some of them even public, that reveal how players get allocated to the different teams. But the reality is the league has a responsibility only to serve itself and conceivably may not have the best interest of individual all teams in mind at all times.
When Philadelphia Union CEO Nick Sackiewicz says, "We're an ambitious club. We want to win. We want to lift trophies," you have to question how much control he really has to achieve his ambition, and also how important it is to the league that Philadelphia have a winning team. A winning Union club is certainly important to Nick, but it may not be important to MLS. It's easy to imagine that the league would love to have good teams in New York and Los Angeles, where the financial upside is greater for winners. Owners or coaches may not like decisions made by the league, but they aren't going to scream too loudly. Remember, they all own part of the same company.
A perfect example of this is the Sasha Kljestan case mentioned in the SI.com article. Don Garber said that MLS did not want to sign a player for a short period of time. That sounds like MLS is choosing what it considers to be best for the league over what is best for the LA Galaxy. Kljestan would certainly have helped the Galaxy make a run at this year's MLS Cup, even if he was a short term rental.
The bottom line is that a single-entity structure has the potential taint the purity of the sport if the league biases some teams over others. Over the long term that could turn fans off from the league and could limit growth. The question is then, when will the league be financially secure enough to empower the owners to fully compete against each other for trophies?
Don Garber's Latest
When Don Garber speaks about the future of single-entity, fans will tend to listen because a change to that structure would indicate the league is on solid financial footing and looking to bring in a higher quality of talent. Here is what Garber said last week,
"Single entity, as I remind everybody who asks me, is a mechanism that provides our owners the ability to make decisions collectively on everything related to the game," Garber said. "That structure will remain the same. There are elements that we do decide to do together that might change over time-and have changed over time, particularly in our current collective bargaining agreement.
But the idea that owners will sit around a table and decide how they will collectively chart the turbulent waters of professional sports is something that I believe will always exist," Garber added. "Because if it didn't, Major League Soccer would not be here today, and I don't believe it would be able to do what it needs to do in this incredibly competitive environment to succeed."
Let's unpack what he's saying and see what we can take away.
"That structure will remain the same."
Pretty clear. This structure isn't going anywhere in this CBA, unless this was just a Led Zeppelin reference.
"There are elements that we decide to do together that might change over time."
By "elements" I'm going to assume that means those "decisions" that get made collectively as an ownership group. It sounds as though he is open to taking some decisions and pushing them out to the individual owners. What those are is obviously unclear. But it sounds like he's leaving room to give in the CBA.
"Sit around a table and decide how [the owners] will collectively chart the turbulent waters of professional sports is something that I believe will always exist."
Um, so he means that he needs to have owners meetings? Wait, don't the NFL, NBA, MLB and NHL also have ownership meetings? Last I checked owners in other sports vote on all sorts of decisions - Donald Sterling's turbulent regime comes to mind. I have to imagine that other league owners collectively chart turbulent waters all the time. If that's all that single-entity provides, there are four pretty good examples where owners "collectively chart" with a different league structure in place.
"Because if [single-entity didn't exist] Major League Soccer would not be here."
This is a perfectly agreeable statement. However, none of what he's said previously connects to the "because". Just because single-entity was responsible for the health of the current league, that doesn't mean it's the best structure going forward. In fact, that is the crux of the question. When is the best time for it to change? Because eventually the league will be too big and important for the main office to be trying to play fair for all clubs.
"[Without single-entity] I don't believe [MLS] would be able to do what it needs to do in this incredibly competitive environment to succeed."
Here Don Garber ends his comment unfortunately. I say unfortunately because this is precisely where he finally says something intriguing. He believes it is necessary to succeed. Hearing his thoughts on this would be important for fans to understand. As fans debate its merits, we hear that The Don believes its necessary. But we don't get to hear why he believes that.
The "incredibly competitive environment" is also a key phrase. Garber is implying how difficult it would be for his league to bid for players around the world, if left to their own devices. The use of the word "need" indicates that a world without single-entity is not yet an option.
What the league needs to do according to the Commissioner, is carefully choose which players enter the league and what they are paid when they arrive. They must maintain this cost control until the league is on more stable footing.
Until then fans are going to have to live with player rules that change or seem unfair. They'll have to live with players turning away from the league just because they don't like the salary or the arrangement of the contract.
Don Garber said 130 words but he might just as well have said 6, "That structure will remain the same." But the hope is that he was really just saying 2 words, "Be patient."