U.S. Soccer Follows Typical Government-Authorized Monopoly Script

The MLS monopoly that sits atop USA soccer is not necessarily founded and preserved by a lack of oversight from governing authorities – namely, the U.S. Soccer governing federation (USSF). The thinking here is that the federation either did not have the capacity, or was unwilling to prevent MLS capture of the USA soccer marketplace. This line of reasoning is a bit off base. It is important to understand this key truth when examining MLS’s position in the USA soccer ecosystem: the MLS monopoly over USA soccer is knowingly enabled and authorized by the U.S. Soccer Federation. USA soccer fans must realize that blame for USA soccer closed-system ineptitude rests 100% on the U.S. soccer federation. The 100% authority that USSF holds over USA soccer must also include the corresponding 100% responsibility.

The battle to free American soccer from harmful MLS control starts and ends with appeals toward USA soccer’s governing federation. The two possible scenarios are to reform the existing U.S. Soccer Federation from within through fan or FIFA pressure, or set up a replacement USA soccer federation and acquire official recognition from FIFA. The latter scenario seems to be the best bet for success at this point. The foresight of MLS in a wild-west USA soccer era was shrewd, and USSF did fall asleep at metaphorical wheel of governance, but the important fact is that the U.S. soccer federation has been captured through either payoff or infiltration, and U.S. soccer leadership is fully aware of this. The MLS tail is waging the USSF dog, so to speak, and USA soccer fans must now intervene to restore authority back to all USA soccer constituents instead of a select few. 

This USA soccer market-capture dilemma follows the same pattern we see with truly harmful monopolies in other industries. The practice of regulatory capture, where one firm uses government as a puppet to protect itself from competition, rings familiar. Liberty and the free market are not bad at their essence. Problems arise in the free market when a government oversteps its bounds thanks to corruption or ineptitude. Do you blame private healthcare firms for simply taking advantage of the lobbying and bribery opportunities the U.S. government affords them? Of course not – the enabling governing officials are at fault. The solution for problems in the free market is not slapping on more regulation and restriction, but rather granting more freedom and autonomy. A government’s job is to be a watchdog and enforcer of fair market opportunity for its constituents, not to determine the winners and losers within the market. 

We must understand USA soccer governance duties as well as MLS’s relationship to the U.S. Soccer Federation. Blame in this case must fall on USSF since it has ultimate authority to decide on the matter. Blaming a free USA soccer market for MLS’s capture of the USA soccer ecosystem is the same as blaming USA healthcare woes on a free market. Both are sourced from crony capitalism brought about by expanded government, not true capitalism. The U.S. Soccer Federation has decided that the MLS company is the winner and everyone else is the loser in the American soccer market competition. This is clearly a case of a soccer governing body fundamentally failing in its FIFA-mandated duty.

USA soccer players, fans, and clubs must understand that priority number one in the quest for USA soccer progress is appealing for change at the policy level of the ecosystem. It is not very productive to expend time and resources building in the USA grassroots when the MLS monopoly has power to hold a glass ceiling above and topple the build work of any club it sees as a threat. It is still commendable to build in the grassroots, but if you can only pick one task between building in the grassroots and speaking up for policy change, speaking up is the best choice. Power lies in the hands of USA soccer constituents. Silent hope is just the same as complying with failing and toxic USA soccer closed-system policy. The key to reform is building enough public pressure so that either USSF, FIFA, or the U.S. government is forced to act.

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U.S. Soccer’s Ugly Systemic Racism Problem

The default presumption of most people analyzing the USA soccer ecosystem is that the country does not possess a very large soccer culture. However, there are are number of facts and figures which promptly dispel the “soccer is a small sport in America” myth, such as USA’s 24 million soccer player population total (1 of every 14 people in the country). USA indeed has all of the necessary ingredients to be a powerhouse soccer nation, but there is an ugly truth that underpins USA soccer’s inability to leverage this potential: The U.S. Soccer governing federation upholds closed-system policy which discriminates against millions of people and thousands of clubs in USA soccer. This discriminatory policy impacts USA’s ethnic and minority populations the most.

Is this structural racism and discrimination created and upheld intentionally? One would tend to think that leaders and fans within USA soccer do not truly intend to harm others, but the insistence of some to preserve this closed system really does start to amplify doubts. The good news is that USA is one promotion/relegation policy change away from correcting this problem. A promotion/relegation system would provide fair opportunity for millions of people and thousands of clubs in the USA soccer ecosystem. The creation of this opportunity is not just about sport, it extends to the social and economic realms as well (think GDP, jobs, community pride, and positive youth opportunity). Soccer is not just a game, it is also an industry just like any other. Real livelihoods are at stake in this battle, not just trophies and prestige. It is time to cut ties with the toxic status quo of USA soccer. 

In an ironic twist, the leaders and apologists behind the U.S. soccer and MLS/SUM closed-system cartel claim to be head over heels diversity in inclusion. Sadly, it seems that most of this “fight for inclusion and equality” only takes priority when profit and marketing opportunities are at stake. When will this U.S. soccer federation start fighting to create real-life equality and opportunity structures instead of just paying lip service for its own gain? The U.S. Soccer Federation of today is built upon a foundation of closed-system discrimination. If one claims to stand for equality and opportunity, then they will not comply with, and uphold closed-system policy which denies fair opportunity for millions of people in the USA soccer ecosystem.

What is the depth and nature of the massive soccer population that U.S. Soccer leadership is shunning? USA has 30 different ethnic groups with populations that exceed 1 million people. Stop and think about the booming levels of culture, diversity, skill, and passion that the future USA soccer open system will have once the ecosystem is opened to all. USA soccer would truly embody the American “melting pot” ideal with clubs representing cultures from every corner of the globe. Furthermore, USA’s Latino-American demographic of 58 million people represents 18% of the country’s total population (330 million). In a normal, open system, many of USA’s greatest soccer clubs would be built around Latino culture. The composition of the U.S. men’s and women’s national team pools would also reflect this. It would be safe to wager that USA’s Latino population represents the majority demographic when it comes to quantifying segments of the nation’s total soccer population. USA’s African-American and Asian-American demographics would also reflect accurately as large portions of the USA soccer population under an open system.

Would promotion/relegation policy forever eradicate all instances of discrimination, failure, and missed opportunity in USA soccer? No, but #ProRelforUSA policy does not promise utopia. If no policy change can create 100% perfection, does that mean that USA soccer should scrap policy efforts that would elevate it to 85-95% perfection? Absolutely not. USA soccer can do so much better than an extremely unpopular USSF/MLS closed system that caters primarily to a rich, white, suburban demographic. It is time to leverage USA soccer’s gigantic and diverse soccer potential through a free-market system that provides fair opportunity for all people and clubs. No more waxing poetic about virtues and ideals. It is time to take the obvious and tangible step of opening the USA soccer ecosystem.

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MLS’s Rushed Expansion Dilemma

Major League Soccer (MLS) is being forced to expand larger and more quickly than it originally intended. As recent as 2014, MLS Commissioner Don Garber stated that the league would stick to 24 teams “for some time.” How is that declaration panning out? As of the 2019 season, MLS has reached the 24-team mark, and it is scheduled to blitz its way to 26 teams by the year 2020. To top things even further, MLS also announced in 2019 that it eventually plans to expand to 30 teams. The “end of MLS expansion” goalposts are constantly shifting and it is clear that there is no clear roadmap or limit. The location and timing of expansion is purely in reaction to rising competition from non-MLS entities in the USA soccer ecosystem.

Some see the MLS expansion rush as nothing more a money play. MLS is now commonly seen as a ponzi scheme that relies on new “investor” teams to buy in so that the existing apparatus can stay afloat and turn a profit. While money is certainly a factor, It appears that there is a chief underlying motive behind this expansion rush: MLS is desperate to protect and maintain its monopoly control over the entire American soccer ecosystem.

The U.S. sport owners that moonlight as shareholders of MLS are not necessarily focused on raking in profits from their MLS side hustle. Their MLS teams are just tiny portions of their overall portfolios of companies and U.S. sports franchises. Though the kingpins of MLS see the soccer itself as an afterthought, it is still advantageous for them to keep soccer limited within their control so that it does not threaten the popularity and profitability of their U.S. sport empire. MLS appears to be designed to keep soccer contained in the vacant, niche space below big U.S. sports like NFL or NBA. MLS does not want upstart soccer leagues and clubs to create a real club soccer competition with promotion/relegation that could steal the attention and dollars of U.S. consumers.

This reactionary MLS expansion craze is primarily driven by emerging competition from lower division USA soccer clubs and leagues. MLS deliberately leverages its monopoly over the USA soccer division 1 sanction to absorb (see Minnesota United FC and FC Cincinnati) or extinguish (see Atlanta United) the latest external threats from the lower divisions. Of course, the growth of lower division soccer clubs points all eyes to the elephant in the room: Why no promotion/relegation in USA soccer? The realization of USA soccer’s absurd closed-system policy is fueling an ever-increasing buzz for the promotion/relegation (#ProRelforUSA) movement, which in turn is adding to the overall heat MLS is feeling from the lower divisions.

The accessibility of global soccer in the USA market, thanks to the internet and TV, is bringing about an unprecedented awakening in the American soccer fan appetite. These fans also want to see the game in person and get behind their own local club like the rest of the world. The past decade alone has seen a remarkable amount of shake up and growth in the USA soccer landscape. New lower division U.S. clubs are now being founded by the dozens each year. There is quite a bit of instability still, but despite the toxic closed system that stifles the upward mobility of clubs, there is a large net positive growth quotient with each passing year. The hopeful scent of an open-system future is alive and well in the USA soccer ecosystem.

How will the MLS expansion story end?

Will MLS decide to follow U.S. sport precedent and set a stone-cold-lock limit for expansion at around 32 teams? If so, how will the 9,000+ US soccer clubs permanently left out of division 1 react? I estimate that many will quite upset that the Noah’s ark door of USA soccer division 1 expansion has been closed forever – particularly the larger clubs in larger cities. Will MLS try to expand to 50 to 100 teams in order to create an umbrella of MLS divisions that runs promotes and relegates within itself? If so, will its shareholders be upset over the prospect that some of them might face relegation to the “MLS basement” tiers?

In the meantime, we can be sure that MLS will continue to chase after the most trendy lower division clubs and fan markets. As of 2019, a division 2 (USL) club in New Mexico, USA is drawing 15,000+ fans per game. Even if a new USA soccer club popped up in Timbuktu-Nowhere, USA and drew 15,000+ fans, you can be sure that MLS would add it to their expansion list. The MLS expansion saga may wind up with the entire MLS monopoly over American soccer imploding as the calls for a fully open system crash against it. Hitting the reset button and reserving divisional sanctions for open leagues only may just be the best thing that can happen to USA soccer. As always, if this current U.S. Soccer Federation can’t represent all constituents in American soccer, then we will need a new USA soccer governing body that will.

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MLS is Embarrassing USA Soccer

Is American soccer really the best version of itself in 2019? How long will the people of America let the failing Major League Soccer closed system squat aimlessly on the USA soccer division 1 sanction? Surely, in a land with 24 million soccer players and an insane abundance of infrastructure and resources, American soccer can do better than the paltry TV ratings and embarrassing attendance numbers of the MLS/Soccer United Marketing cartel.

It is time to reevaluate America’s commitment to MLS as the capstone of its soccer ecosystem. For years, fans have been battered with the tired old “give it time” excuse, yet two and one half decades later USA is no closer to closing the gap with the world’s top soccer nations. The U.S. national team is no better off than it was in the mid-1990s, USA club teams have not won the CONCACAF Champions League for 20 years, and the “best” American players are still nobodies in the global marketplace.

MLS launched in 1996, and it has had nearly 25 years to stabilize and prove itself as the standard-bearer for the future of USA soccer. What are the results? MLS captures a smaller and smaller slice of the entire American soccer fan market with each passing year (this slice is down to 6% as of 2018). MLS national TV broadcast numbers, which happen to be the most accurate way to gauge product popularity, are embarrassingly low. Apart from a few outlier teams with peculiar, carnival-like crowds, MLS fan attendance is sparse. Even the small, tin-can, soccer-specific stadiums are being fitted with tarps to cover empty seats.

It is not a crime for MLS to be less popular than foreign club soccer options in 2019, but the crux of concern should be that the MLS popularity share in American soccer is trending downward. Even if MLS is “growing” when evaluated against versions of itself in previous years, that marginal growth is worth little when foreign club soccer competitions (Premier League, Bundesliga, Liga MX etc.) are growing at a faster rate. MLS might be growing a little inside of its own isolated bubble, but zoom out to the entire American soccer market pie, and MLS relevancy is shrinking. Is this really a course worth continuing on?

What is the next step in the evolution in American soccer? The fork in the road is clear: Continue down a path of “we’ve always done it this way” with a failing MLS closed system, or dream and plan for an American soccer that will one day be the best soccer nation in the world. It is up to the millions of people and thousands of clubs in American soccer to decide their future. The governing authorities must ultimately submit to public pressure, so each and every person must understand that their voice matters. If enough common constituents in USA soccer decide to speak up for change, either USSF, FIFA, or the U.S. government will be forced to open USA soccer for all with a system of promotion/relegation (#ProRelforUSA).

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The Antitrust Argument that Will Open USA Soccer

What would it take to defeat the Major League Soccer (MLS)/U.S. Soccer monopoly with an antitrust  lawsuit? It is important to remember that the USA soccer closed system has something that the isolated U.S. sport closed systems do not: a globally recognized divisional sanction that provides a clear pathway to individual club profit beyond internal league competition. Hinging an antitrust lawsuit on the lucrative nature of FIFA’s divisional sanction standard is the key to toppling the unjust MLS/U.S. Soccer monopoly.

There is a strong antitrust lawsuit case to be made against MLS/U.S. Soccer monopoly because a nation’s division 1 sanction is directly linked to profit via international club competitions. Qualifying for the CONCACAF Champions League and the FIFA Club World Cup are the profit pathways in USA’s case. USA clubs directly benefit from participation in these competitions through shared TV and ticket revenue from the tournament itself. The other side of this same coin is that division 1 sanctions are seen as the standard indicator of club quality around the world, and that achieving this status indirectly leads clubs to profit through global prestige and notoriety. International shirt sales and TV rights for the D1 league are indirect profit examples in this case. 

When stake the antitrust argument on the factors of domestic competition only – as the case example of the Fraser vs. MLS did around the turn of the millennium – it is a much more difficult case to win. For example, isolated U.S. sports like American football or baseball can make a decent case that they are competing fairly because there are no extracurricular profits to be had outside of the confines of their own competition. Sure, teams and owners can make profits within a U.S. sports league, but the direct and indirect profits they generate are not assisted by the outside interference of a global governing body for their sport. Being in their U.S. sport league does not assure them of entry into any international competitions that provide externally generated profit opportunities as FIFA does for domestic soccer clubs around the world. These U.S. sports leagues could also make the case that anyone is free to start a competing league since there is no globally recognized D1 standard to adhere to in these isolated sports.

The winning legal case can be distilled down to this: Access to the USA soccer division 1 sanction allows clubs in the USA soccer ecosystem to attain profits through access to FIFA-sanctioned competition. Allowing one company or club to hold exclusive ownership of this D1 sanction is violation of U.S. antitrust law and principles. MLS should be given the choice to either align with an open-access, promotion/relegation USA system, or it should be forced to give up the U.S. Soccer Federation division 1 sanction an operate sanction-free like all of the other closed USA sports leagues.

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The USA Soccer “Unique Market” Myth

Every so often, an investor-operator or media apologist affiliated with the MLS/U.S. soccer closed-system status quo declares that the American soccer market is somehow “unique” and drastically different from the rest of the soccer world. These unique differences exist, but every country in the world possesses its own set of them. These characteristics should be folded into the standard open, promotion/relegation soccer system, not used as an excuse to run a perverse and immoral closed system.

The latent purpose of this “unique soccer country” claim is to provide the grounds of justification for the discrimination and disenfranchisement brought about by USA soccer’s closed system. “You see, the USA soccer market has unique challenges and needs special considerations and protections in order for the game to survive and grow,” they exclaim. Year after year, USA doubles down on the failing MLS closed system and sees little to no progress. The nation is reluctant to break the cycle and change course because it is stuck in a flat-earth mindset that makes it believe that a closed system is required for soccer’s very existence in America.

If you take stock of USA’s cultural and sporting attributes, it is difficult to conclude that the USA is missing required soccer-nation ingredients:

  • 24 million soccer players (still a gigantic number even if off by multiple million)
  • 330 million total population (with 24 million players, it is clear that there must be at least 30-50 million soccer fans in America)
  • #1 national wealth and infrastructure
  • 100+ years of professional soccer history
  • High U.S. TV ratings for foreign, open-system club soccer and the World Cup.

USA clearly has strong soccer culture and history. Some say that competition from other sports (NFL, NBA etc.) is an insurmountable barrier, but with a population of 330 million, the 24+ million soccer players and fans mentioned above are more than enough to build a top-notch soccer nation. There is enough room for both “big American sports” and “big USA soccer” to exist.

Every nation has its unique cultural mixture and identity, but these differences simply provide the backdrop for the open soccer competition that must ensue. The entire soccer world and all of soccer history proves that the sport’s open-system essence is never the cause of instability. The 0% open system collapse rate speaks for itself. The only way that things can go wrong is through government mismanagement, and this is exactly what is happening with the overreach and corruption of today’s U.S. Soccer governing federation.

The only thing “unique and challenging” about American soccer is the fact that its governing soccer federation refuses to align with the open-system essence of global soccer, and FIFA’s corresponding promotion/relegation mandate. Division 1 sanction exclusivity should not be granted to one single constituent (company or club) in the ecosystem, as has happened with club MLS and its control over U.S. Soccer D1. The current U.S. Soccer governing federation is completely compromised. It is acting as a proxy federation working for the business interests of the MLS company.

USA soccer does not struggle because of bad ingredients, it struggles because of a bad chef (U.S. Soccer). It is time to start holding leadership accountable. If this federation will not lead USA soccer into alignment with FIFA’s mandate on promotion/relegation, it is time to start a new governing federation that will. Until then, keep speaking up for change and keep educating people on the myths and realities of the USA soccer ecosystem.

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USSF Is Responsible for USA Soccer Instability

The common declarations on the state of USA soccer continue to be: “We need a stable system!” and “We need to grow the game!”

Wait a minute. Let me get this straight:

  • USA has had soccer for 100+ years (yes, even pro clubs and players that go back that far).
  • USA has 24 million soccer players (more than the entire populations of many great world soccer nations).
  • USA sets the attendance and profit standard for hosting World Cups (USA just promised an $11 BILLION 2026 World Cup profit to FIFA).

Despite all this, USA is still lamenting over how weak and unstable its soccer is?

The real story? America goes bonkers for the normal soccer seen around the world, but its domestic club soccer competition (led by a failing MLS closed division 1) is woefully unpopular (MLS has a paltry 6% share of soccer TV viewers in USA).

There is no soccer problem in USA. There is no soccer fan and player interest or passion problem in USA. Perhaps it is time to examine U.S. Soccer governing federation (USSF) leadership and policy?

“It’s the SYSTEM, stupid!” – me

A closed USA soccer system that only gives one company/club (MLS) access to division 1 is absolutely toxic to stability and growth. Why should millions of soccer-crazy Americans care and invest in USA domestic soccer when they are denied a fair opportunity to compete? Compare the world’s open systems with USA soccer’s closed system and there is no contest.

Open systems:

No open soccer system has collapsed in world history.

I repeat:

Open. Systems. Never. Ever. EVER. Collapse.

100% stability rate.

Most of the soccer world has seen wild success under open-system policy. The planet’s top national teams, club teams, and players all come from open systems. Off the pitch, the most profitable and popular domestic and international competitions are made up of open system clubs and national teams. The most profitable clubs come from open systems.

USA’s closed system:

USA’s domestic club competition sees an average club collapse rate of TEN clubs per year. This really is all the evidence we need in this debate. USA has the most unstable domestic soccer system – by far.

Many USA first-division (MLS) players make less than $100,000 per year. Many second-division players (currently USL) do not make a livable full-time wage. No paid playing opportunities exist with clubs below these two divisions.

USA soccer’s closed system encourages league versus league infighting. Leagues are able to poach clubs from competitor leagues (MLS D1 has poached multiple clubs from NASL D2 in the last 15 years) or place new clubs in close proximity to competitor-league clubs in order to drive them out of business.

Here is a snapshot of USA soccer closed-system chaos as of October 2017 (via @Flight_19):

stability123

The evidence is clear: open soccer systems are far superior to closed systems. Any argument that the current USA soccer closed system is more conducive to stability and growth than the open system alternative is just plain wrong. USA soccer’s closed-system policy is a self-fulfilling prophecy of instability.

Are open soccer systems utopia? No one is claiming perfection or that the harsh realities of open markets do not exist, but an open system that is 90% healthy is leaps and bounds ahead of USA soccer’s current stability standard.

Clubs can struggle or even collapse within open systems, however, these examples account for just a tiny percentage of the ranks of healthy clubs in open systems. Even with these outlier instability cases, clubs that have to shut their doors or file for bankruptcy (administration) usually have brands and supporter trusts that live on for “rebirth” in the future. Soccer clubs, when hosted in an open and unlimited soccer ecosystem, are practically inextinguishable.

Does the current U.S. soccer federation intentionally plot this instability, or is it just a result of clueless incompetency? Is this federation now just a front for MLS business interests and are the decisions made by this supposed “impartial” body meant to benefit MLS and kill of any outside competition? With the way the federation continues to double down on this toxic closed-system policy, questions like these must be asked. It is time to hold the USA soccer governing federation accountable.

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