Usually in pro sports, a league either busies itself trying to rectify weakness by relocating an existing team or it plays up its strengths by adding expansion franchises. Leagues never do both at the same time, given the contradictory approaches and messages they would send.
Inside sports business
TORONTO – It was a scene typically not seen in professional sports.
Major League Soccer commissioner Don Garber stood at the podium of a hotel ballroom giving his annual “State of the League’’ address Friday in which he simultaneously talked up an aggressive expansion path while defending the right to relocate a flagship franchise. Usually in pro sports, a league either busies itself trying to rectify weakness by relocating an existing team or it plays up its strengths by adding expansion franchises.
Leagues never do both at the same time, given the contradictory approaches and messages they would send.
But there’s nothing typical about MLS, its business model or the outcomes of its decisions to this point. It’s a league where television ratings have struggled to surpass even the WNBA’s, yet where stadium crowds rival the NFL in places. A league where franchise values continue to soar, despite the fact more Americans watch English Premier League television broadcasts than they do the domestic circuit.
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By that standard, it was business as usual for MLS when, ahead of its showpiece championship, the assembled media wasn’t asking much about the finalist Sounders or Toronto FC squads. Instead, their questions to Garber were mostly about whether the Columbus Crew would be relocated to Austin, Texas, before the 2019 season.
“It’s not the league’s decision,’’ Garber told reporters. “It’s the league’s approval of an owner decision to determine whether or not moving out of Columbus is something that makes sense.’’
Crew owner Anthony Precourt bought the team from the Hunt family in 2013 and negotiated the right to relocate. After claiming losses of $40 million since, he began exploring relocation to Austin this year and talked openly about moving if a downtown-stadium solution in Columbus, Ohio, failed to materialize.
The whole thing has become a public-relations nightmare for the league. The Crew went on a playoff run and nearly upset Toronto to reach the final against Seattle before a late Jozy Altidore goal spared the league from further embarrassment ahead of its championship match.
It hasn’t helped that the mayor of Columbus has stated MLS is hampering talks in that city by allowing Precourt to conduct simultaneous negotiations with a rival location.
And yet, the league continues to condone the situation despite the Crew being one of its 10 original franchises from 1996. It was also the first MLS team to have a soccer-specific stadium built for it and won an MLS Cup title in 2008 with a squad that included current Sounders Chad Marshall and Brad Evans.
Garber didn’t mince words when spelling out how the Columbus marketplace isn’t keeping up with the aggressive pace of MLS growth. Garber barely stopped short of calling Columbus a hick town.
“You need to be in a situation where you can be viable,’’ Garber said. “As we have new teams coming in that are deeply connected within the community, with dramatically more commercial revenue, higher fan bases, all the measures that matter, what we’ve been experiencing in Columbus for many years is … it is among the lowest teams — 20 out of 22 — in every measure that matters in pro sports.’’
Those measures, he added, include average ticket price, average attendance, average revenue, local-television numbers and TV revenue.
“So there’s a lot that needs to happen to address those situations,’’ he said.
Meanwhile, the league continues to expand. It added Atlanta and Minnesota this past season, will put a second Los Angeles squad in next year and possibly one in Miami at some point if legal entanglements over a stadium project get resolved.
But even as lawyers muddle through that one, the league recently interviewed four finalist groups for two expansion cities to be added in 2019.
And as wacky and careless as this expansion-relocation approach might seem on the surface, the bankers seem to agree it works.
The average MLS squad, according to Forbes, jumped 20 percent in value this year to $223 million. That’s a 275 percent growth rate from five years ago. The Sounders were bought for a $30 million expansion fee in 2007 and now are worth $295 million — nearly 10 times their original price.
And the league, which owns a piece of every franchise, is pouring gains back in to the product. Garber announced Friday that each MLS team can use more Targeted Allocation Money (TAM) beyond the salary cap in 2018 and 2019 to attract the above-average — but not superstar — players to bolster rosters.
The maximum a player can earn under MLS rules is $480,625. But teams receive an additional $1.2 million of TAM annually to lure top import and domestic players — as long as no more than $1 million is spent on each.
Starting next year, teams will have up to $2.8 million in additional “discretional” TAM money that can be spent annually out of their own funds. And the limit that can be spent on any one player will jump from $1 million to $1.5 million.
Raising those TAM limits betters the players brought in and improves the league’s overall quality. The Sounders, for instance, have used TAM in recent years to add Roman Torres, Kelvin Leerdam and Victor Rodriguez.
So, while a league that discusses relocating an original franchise in the same breath it keeps expanding might seem unorthodox, the MLS path seems to be working.
For years, folks complained the league was too rinky-dink. Now, it’s doing something about it by aiming higher, at bigger markets with bigger money. And it will keep on doing it — even if means some casualties along the way.