A Special Series By Rob Luker
This is the second installment in a four part series by Clarkson University business student Rob Luker. You can read Part I, American Soccer Ambitions, here.
Part II: The Role of MLS
Major League Soccer, as Wikipedia states; “was founded in 1993 as part of the United States' bid to host the 1994 FIFA World Cup.” By giving the ’94 Cup to the US it was blatantly obvious that FIFA wanted to tap into this huge, and at that time, basically soccer bare market. There was one catch, though, which ended up being that the USSF had to create a top-flight league for the country; the first since the NASL (the APSL was never granted top status). So, with a little interest left over from the World Cup, MLS had its base market which did wonders for the league in its first season. Then the reality set in that soccer, for the most part, was going to be a tough sell for MLS and its investors/owners.
Today, MLS has its place in American sports and if the right moves are made it can continue to grow. What is MLS’ business problem though? It has been put pretty perfectly by Richard Whittall of A More Splendid Life:
“Let me present a very simplistic formulation. Let's assume that in order for MLS to receive higher television revenues, it must draw in more supporters. Let it also be resolved that, for those fans to show up at MLS games and commit wholesale to the league, the quality of the on-pitch product must get better. And let's assert that the only way the on-field product will get better is if the league spends more money to buy better players. Finally, be it resolved that the only way MLS can afford to buy better players is to generate higher revenues.”
Essentially, because the MLS Reserve Division was disbanded and the youth systems among MLS clubs, although more evident for some than others, is below-par, MLS is in quite a tight spot. From an owners standpoint they would like return on their investment as soon as possible without further outlay. This is not unique to MLS as every business venture has a degree of risk no matter what the market sector. But, if we are to assume that MLS has hit a plateau in terms of the playing level as some have suggested, then what is MLS to do? We have no idea if or how much MLS clubs are profitable as an average fan, so how much does MLS have to play with? Since there seems to be so much uncertainty, which is never a fun word to throw around in business, it seems as though one option could be to take what exposable funds MLS and its clubs have and invest in the long term to reduce the uncertainty. What does this mean for MLS? In my perfect American soccer world, this means a North American youth system that feeds MLS clubs along with the combine/draft (college soccer). But, in order to continue the mainstream interest and considering the fact that MLS most likely does have money to spend, the Designated Player should stick around to help and allow MLS clubs to attract the possible MLS fans.
MLS was created on a FIFA mandate to feed the domestic need for soccer in the US when the World Cup wasn’t playing. Obviously the interest in the USMNT is much higher in the American sports scene, but the supply of USMNT soccer isn’t enough when it comes to the demand. MLS and its product can easily reap the benefits of the demand, but with questions about the quality of play fans may be turned away if something isn’t done soon. The US must set up a proper system to feed the MLS down the road, (and essentially cut off the Scandinavian pipeline) and in the end help the USMNT and the USSF with the development of young American (and Canadian, as a result) soccer talent. How and why I think this should happen will be addressed in Part IV.
Up next is the United States Soccer Federation’s role in this.
