Will new rule create MLS of haves and have-nots?
For years, a debate has raged on how to best build a team in Major League Soccer. Do you build around stars, or do you emphasize an expanded core of solid contributors? In the wake of the league's announcement that each team can now sign two, and perhaps three, designated players, it's clear that MLS has moved sharply in the direction of the star system -- a move that carries with it some sizable risks.
Under the new guidelines announced by MLS on Thursday, each designated player will count $335,000 against a team's salary cap. Teams can also purchase a third DP slot for a $250,000 fee, which will be dispersed to those teams with fewer than three designated players on their roster. DPs who join their clubs in the middle of the season will now result in a hit of $167,000 against a team's cap. Teams also have the ability to use allocation money to pare down a designated player's cost, which was forbidden under the old agreement.
This stands in contrast to the terms of the original rule. Under that agreement, a team's first DP counted $415,000 against a team's salary cap. When combined with the previous total cap of $2.3 million per team, this amounted to 18 percent of a team's budget for salaries. If a club acquired a second DP slot, that player would count $335,000 against the cap. Now, with the salary cap listed at $2.55 million, a designated player's salary will occupy just 13 percent of that total.
On a conference call with reporters, Todd Durbin, MLS executive vice president for player relations and competition, insisted that the goal was to give teams maximum flexibility in terms of how they construct their rosters.
"What we're trying to do is design a system that gives every team the opportunity to be successful," Durbin said. "The way in which we structure the designated player rule is supposed to allow teams who want to go out and sign a high-profile player, that they have the opportunity to be successful. But at the same time, it's calibrated in a way that teams that don't want to go out and sign DPs also have the opportunity to be successful."
But without question, the modifications are intended to entice more teams to pony up the money for a DP by lessening the risk involved. At present, only five of the league's 16 teams have a DP on their roster, with the Los Angeles Galaxy currently featuring two in David Beckham and Landon Donovan. If such a signing turns out to be a bust, the decrease in the salary charge combined with the increase in the overall cap lessens the damage, making it easier to sign another high-profile player.
So is this a positive move by MLS? Clearly, the league is intent on finding ways to grow attendance and television ratings, and the thinking is that if a flurry of stars were to join the league right after the World Cup, then MLS might be able to ride that wave of interest into tangible growth.
Yet the historical impact of players who have worn the DP mantle has been checkered at best, both on and off the field. No team with a DP has ever won an MLS Cup, and for every Juan Pablo Angel and Cuauhtémoc Blanco, there have been busts such as Denilson and Claudio Reyna. For that reason, there is still no guarantee that designated players will deliver what is promised.
There are other potential pitfalls, as well. By increasing the number of DPs, the potential threat to the league's operating model -- one in which parity and cost containment are vital -- also goes up. The more forgiving rules have no doubt tipped the scales in favor of teams with greater financial resources, increasing the possibility that a two-tier system of haves and have-nots will emerge, with teams such as Los Angeles and Seattle likely to up the ante. Already those two teams have benefited from the rule change, with their designated players now magically counting for less money under the cap. Durbin is of the belief, however, that a middle ground has been reached.
"That's the role that the salary budget charge plays," Durbin said. "If the salary budget charge [for a designated player] is very high -- let's say it was $1 million as opposed to $335,000 -- then that would make it difficult for a team to build its roster because they would only have $1.5 million remaining for 19 players. Similarly, if it were too low, it would run the risk of giving teams a competitive advantage on the field. So part of what we are evaluating is to make sure we have the salary budget charge put in the right place so it is in fact competitively neutral."
Yet it's a move that flies in the face of the cost containment that the owners fought so hard to maintain during the just concluded negotiations on a new collective bargaining agreement. Granted, the salary cap is still in place, so runaway spending isn't the issue. But the salary costs could increase significantly. Will all teams go along for the ride, or will some opt not to keep up with the Seattles? And would the league have been better off by just raising the salary cap even further from the current level?
"Where we've come out on it is to do both things," Durbin said. "We have increased the salary budget by a significant amount, by over $200,000 this year, but at the same time given teams the opportunity to go out and sign players outside the salary budget. It's a compromise. We don't view it as an either/or."
Time will no doubt reveal if the league's competitive balance and cost structure have indeed been undermined. But the league is clearly betting that its influx of stars will help it shine brighter.
Jeff Carlisle covers MLS and the U.S. national team for ESPNsoccernet. He is the author of "Soccer's Most Wanted II: The Top 10 Book of More Glorious Goals, Superb Saves and Fantastic Free-Kicks." He also writes for Centerlinesoccer.com and can be reached at email@example.com.