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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USA Soccer’s Closed System Is Immoral

In the midst of the battle to bring open, promotion/relegation soccer to America (#ProRelforUSA), it is important to not lose sight of the very heart and soul of the cause: USA soccer must be opened because it is the just and moral thing to do. Upholding a closed domestic system in global soccer is flat-out immoral and evil. There is no need to rest all hope and debate on utilitarian arguments such as, “open systems produce better soccer and more money so therefore USA should adopt it as well.” Never forget that the clinching argument in the promotion/relegation USA debate is the question of right versus wrong.

There are many great illustrations and aspects in the trimmings of the promotion/relegation USA soccer argument, such as the nuts and bolts of the format, success stories from open systems around the world, and observations and experiences in the U.S. closed system. By all means, paint the world with these talking points, but always remember:

The onus is not on open USA soccer advocates to prove the utility or benefit of open soccer systems. Closed USA soccer system apologists should be put on the spot to explain why blatant discrimination and disenfranchisement is right and tolerable. 

Why is closed-league soccer immoral? Global soccer operates in a FIFA-governed ecosystem. Each country has a promotion/relegation ladder capped by a division 1 which is used to filter the best of the best into regional and international club competition (think UEFA Champions League and the FIFA Club World Cup). Besides the revenue and prestige that entry into international competition generates for clubs, the fact that a club is “division 1” carries with it implied legitimacy and recognition in global soccer. It is not just a label attached arbitrarily. If a club is D1, they must be pretty good. This leads even more of the revenue and prestige mentioned above.

How would these same principles apply in a hypothetical U.S. Soccer open system? As a USA soccer club moves up and down the ladder via wins and losses, corresponding revenue and prestige increases and decreases. There are variables and outliers, but the general rule remains constant. The rise and fall of independent clubs should be looked at just the same as individual businesses rising and falling within any industry. Soccer, and sport in general, is not “just a game.” There are economic and social consequences beyond the grass field. Real lives, jobs, and pocketbooks are part of soccer competition as well. Most agree that economic and social equality are human rights, so it would then follow that the U.S. Soccer closed system of today is immoral and unjust.

Make sure to always approach the promotion/relegation USA soccer question from its primary standpoint of morality. The sporting quality details are great, but remember where the true high ground is. A promotion/relegation USA soccer system has tremendous potential to make a giant economic and social impact in America. For those who oppose an open system, the onus is on you to explain why keeping the USA soccer system closed is more just and moral than opening it.

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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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The Promotion/Relegation USA Soccer Decision Is Not up to MLS

“What if MLS doesn’t want to go along with promotion/relegation in USA Soccer?

“How will we convince MLS shareholder-owners to accept the promotion/relegation risk despite paying hefty franchise fees to enter MLS?”

America MUST understand that USA soccer’s decision to move to a 100% open system with promotion/relegation is NOT up to MLS.

Yes, when projecting what American soccer might look like under open system conditions, MLS is usually considered as the defacto division one container-league, but MLS participation is not required in order for USA soccer to move forward to an open system.

This decision is 100% in the hands of USA soccer’s governing federation (currently USSF). With one pen stroke, the federation can create fair opportunity for millions of people in the USA soccer ecosystem.

Opening USA soccer does not depend on USSF officials walking into a board room of MLS shareholder-owners and successfully pitching them on why going along with an open system would be great business for the future of MLS. Yes, it would still be beneficial to ask MLS to participate in the open system, but the USA soccer governing federation is free to walk away and move forward if MLS does not want to play ball.

The USA soccer open system transition can be distilled down to one key pillar: reserve USA soccer’s divisional sanctions for open leagues only. 

An open system uses leagues as open, tiered containers for clubs move up and down through. They represent the very structure of the USA soccer industry itself. Any league that refuses to serve in this fashion has no need for a divisional sanction.

MLS models itself after U.S. sport franchise leagues such as NFL, NBA and MLB. These leagues do not require a division 1 sanction to survive and thrive, so there is no reason that MLS should require a division 1 sanction.

Here are the two potential MLS and open-system transition scenarios:

A) MLS agrees to participate in an open system and proceeds to break its single-entity “club MLS” structure into autonomous clubs that are fully controlled by individual owners. Pretty straightforward.

B) MLS refuses to participate in an open system. It would then have its division 1 sanction stripped by the USA soccer governing federation and operate off on its own like a non-sanctioned U.S. sport league. MLS remains untouched and its shareholder-owners are not exposed to the risk of open system competition. There would then be a competition between unsanctioned MLS soccer (or any other closed league that wants to operate like MLS) and the sanctioned, open system of independent soccer clubs. MLS shareholders would be free to buy their brands out of the MLS entity (if MLS is willing to sell) in order to become an independent club and flee to the open, sanctioned system.

There is a path forward to an open USA soccer system no matter where MLS stands on the issue. The decision to open USA soccer up to all people and clubs should not be left up to one single constituent (MLS). Why should one group determine the fate of everyone else? If the current USSF governing federation is putting the interests of club MLS first in its decision-making process, that is corruption.

Any USA soccer governing federation is responsible to look fight equitably for all American soccer constituents. The people of American soccer ultimately have the final say as to direction of governing policy. When the people unite and speak up for change, leadership must bow. Will this current USSF organization be the one that moves American soccer into its future of equality and opportunity, or will a new Federation be required?

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