The strange financial woes of Major League Soccer

In the major professional sports, player salaries are a completely open book. You can easily figure out that Kobe Bryant is the highest-paid NBA player by a considerable margin, or that being a superstar is probably more lucrative in baseball than in any other sport. None of those things are particularly surprising or relatable; professional athletes make a ton of money by any count.

At least, unless you play in the MLS. The league just released its salaries for 2011, and having personally never seen them before (the league does this every year, but I’d never noticed) it blew my mind. You’ll never, ever see a five-figure salary in any of the other professional sports leagues, because it’s not allowed. The NHL’s current minimum salary is $525,000; the MLB’s is $480,000. If you play in the NBA, you’re guaranteed at least $473,604, and NFL football players collect at least $390,000. But for MLS players? You’re guaranteed to take home all of $33,750.

Really seems like there’s a zero missing there.

The obvious reason would be that, well, soccer’s just not very popular in the US. But as the New York Times’ John Godfrey points out, that’s not really true. The average attendance at a Major League Soccer game is higher than that of either the NBA or the NHL, both of which pay their players a whole lot more than the MLS. The real difference, it seems, comes down to TV money:

According to Forbes, the N.B.A.’s current TV contracts pay the league more than $1 billion per year, and will be increasing by at least 30 percent when the next contract is signed. The N.F.L. receives some $7 billion in annual TV rights. And some baseball clubs, including the Texas Rangers and the Los Angeles Angels, have agreed to multibillion-dollar TV contracts of their very own.

M.L.S., by comparison, currently generates somewhere in the neighborhood of $27 million in annual TV revenue. Yes, million with an “m.” Those other leagues? Billion with a “b.” A few extra zeros go a long way toward explaining the salary discrepancies between M.L.S. and other major American professional leagues.

Godfrey points to some compelling evidence that the numbers are trending upward for the MLS — more players are making over $1 million than ever, and the same goes for players making over $100,000. The bigger problem, though, is that given the current financial conditions there’s absolutely no incentive for a talented soccer play to come and play in the US, or even for American natives to stay here.

While MLS payrolls remain anemic, salaries for soccer players around the world continue to grow. At the extreme are teams like Barcelona and Real Madrid, who pay more per player than any other team in professional sports — the average salary for a Barcelona player is nearly $9 million annually. Seven of the top ten teams in terms of salary per player per week are European soccer teams. But again, those are the best of the best, the Yankees of their respective leagues and sports (oh, and the Yankees are number 6 on that salary list). The highest MLS team, the LA Galaxy is #219 on the list, below a handful of mediocre European teams and a few teams from Japan’s baseball league. The Galaxy, by the way, have three of the five highest-paid players in Major League Soccer in David Beckham, Robbie Keane, and Landon Donovan. The rest of the MLS is crowded at the very bottom of the list.

For a good soccer player — good enough to play in Europe, but not necessarily a superstar or even on the roster of a great team — there’s absolutely no debate on where you should play. You rarely find a salary in Europe below $20,000 / week, which works out to just over $1 million a year. Only nine MLS players make more than $1 million per year.

It’s a classic chicken-and-egg problem: there’s not a lot of money because there’s no lucrative TV deal. There’s no lucrative TV deal because there are no marquee players. There are no marquee players because there’s not a lot of money. There’s not a lot of money… and on and on it goes. The MLS desperately needs to bend its system enough to allow a Manchester City-like situation: a rich owner with a love for soccer and a penchant for spending money shows up, spends his way to victory, and raises the excitement for both team and sport in one fell swoop. The MLS needs a Yankees — then and only then will the rest of the league, the media, and the fanbase be forced to take American soccer and the MLS seriously.

So how ’bout it, Mark Cuban?