Don Garber dropped a mini-bomb on soccer in the United States Monday when he suggested the possibility of Major League Soccer expanding beyond the previously identified target of 24 teams. "Over the course of 2015, we plan to evaluate potential expansion beyond 24 clubs,' said Garber. This is the first time such a statement has been uttered. Just last August, Deputy Commissioner Mark Abbott was asked about the 24 team projection and why that was the chosen number, and he said the following, "We've determined that the right rate of growth for us is to get to 24 teams by 2020. We think that's the right balance for a variety reasons - the player pool that we have, the way our television contracts work - so other than to say it's our business judgment, I can't point to any one particular answer."
What has changed between August and March? Well, there would be a new collective bargaining agreement. Despite losing a philosophical war and giving free agency to roughly 12% of the players, the owners came away with limited financial impact in the new CBA. The revenue influx from the new television deals (at least $60M per year) dwarfs the increased cost of player wages (starting at roughly $12M per year and increasing at 7% thereafter). That gives owners more flexibility to spend that new money when and where they want to. They might choose to invest it in youth academies, designated players, or their own pocket, but either way the new CBA has given them the control. Tack on the fact that soccer is quickly growing in popularity and the owners have to be excited for the future.
That's the reason for the long line waiting at Don Garber's doorstep, and he'd would be hard pressed to turn all those franchise fees away. Garber cited Minnesota as a leading candidate but ownership groups from Las Vegas, St. Louis, San Antonio and Sacramento have all made recent pitches for a franchise. Add that list to what is already in the queue; a re-launched franchise in LA, a new franchise in Atlanta in 2017, and an approved Miami franchise pending a city stadium deal. If every one of those cities got their way, the league would grow to 28 teams.
Garber did not put a timetable on any expansion beyond 24 teams. The plan may very well be to stay on track for 24 teams by 2020. Only time will tell. But dreams of the largest league in the world does bring up some interesting thought starters.
Here are three questions that are raised by the news of further MLS expansion.
Can the league improve quality while expanding?
A 20 percent increase in teams in five seasons means the league will need 20 percent more players in five seasons. That's an annualized player growth rate of 3.7 percent. Can the American soccer system increase the rate of producing MLS quality players by 3.7 percent per year? With all the investment in the academy system there is a good chance they can, but that won't be enough to actually improve the quality of the league. That will just keep the quality consistent with where it is today. Will the league become more dependent on foreign players to improve quality? It may be their only choice. But expanding beyond 24 teams makes improving the league even more challenging.
What is the future of NASL?
Three cities on Garber's expansion list (Atlanta, San Antonio and Minnesota) are among the eleven franchises that comprise NASL. While MLS is handpicking from above, USL is crowding their second division rival as well. Since 2012, USL has grown from 11 to 24 teams. Much of that growth is due to a partnership with MLS, which will only strengthen it's foothold. Further, USL has applied for second division status alongside NASL. With NASL's current roster potentially slimmed to eight teams and USL snatching up other markets, what really is the future for NASL?
Will the largest league in the world force the conversations about an all-MLS pro/rel system?
Promotion and relegation is a favorite topic among soccer aficianados. The rest of the world has embraced the concept of a dynamic league, while Garber has been adamant in his opposition of the idea. However, as any league makes their way to 28 or even more teams, the idea of splitting that league into two becomes more appealing.
The single biggest issue with a promotion/relegation system is that the cash flow of a team becomes less certain, because a relegated team will likely make less money. This assumption lowers the financial value of the teams. Many of the owners will see their franchise value shrinking in the short term, and it's therefore difficult to get everyone on board with such a big move. The key will be to convince owners over the long term that the league will eventually prosper under such a competitive system.
Keeping a pro/rel system under the MLS umbrella is one way to protect that value and ensure the upside (and even the downside) gets shared. Another reality of expansion is the separation of big and small markets. The more teams are added, the more the rich teams will continue to separate from the poor teams. In order to maintain competitive interest, the league might be forced to create a pro/rel division. And who doesn't want double the playoffs and double the trophies?
MLS growing beyond 24 teams certainly gets the imagination whirling for what might be. But for now, Garber has said he will announce the next expansion plan in 30 to 45 days. That will be the first telling of what's to come and how some of these questions will be answered.