Saturday, April 3, 2010

The new MLS salary rule: LA Galaxy's poor will get poorer

Look, we know American soccer doesn't compare to European football. We don't have the traditions, the superstars, the fan base/passion, the media coverage or the money. It's arguable that all this could come over time but there is no clear path on how MLS plans to achieve these goals. And this new salary rule is not a step in the right direction.

A few years ago, the league instituted the Designated Player Rule (nicknamed the Beckham Rule) which allows teams to add "Designated Players" to their roster. These Designated Players are those who could be considered outside of the team's salary cap of $2.55 million. If an individual's salary exceeds $335,000, they must be considered a Designated Player and the team has to pick up the rest of the player's salary on their own. This rule allows MLS to bring international stars into the league--this will hopefully up the gameplay to another level, draw in more fans, and should also drive some more merchandise sales.

ESPN reporter Jeff Carlisle summed up the new rule well: "each designated player [DP] will count $335,000 against a team's salary cap. Teams can also purchase a third DP slot for a $250,000 fee..." For example, the LA Galaxy can now have both Donovan & Beckham as their two Designated Players and purchase an additional DP spot as well.

Meanwhile, the rest of the Galaxy will suffer. For you and me, $2.55 million is nothing to sneeze at. For a professional sports team's entire salary, that number is laughable. Cristiano Ronaldo made almost $17 million last year as an individual with Real Madrid. Luckily, the 2010 season's "minimum salary for senior players will rise to $40,000 this season from $34,000, and the developmental minimum will rise to $31,250 from $20,100 under the five-year contract agreed to last weekend."*

Yes, you read that right: new MLS players made as little as $20,100 last season. To put that in perspective, there are full-time In-N-Out workers who make more than that in a year. I actually make more money per year than 7 of the Galaxy's players did in 2009. I'll repeat that: I make more money than American professional athletes.

With the new rule, a team could now be setting aside up to 36% ($920,000 out of $2.55 million) of their salary toward just 3 of their players. Before, that maximum was only 17% ($400,000 out of $2.3 million). Granted, the minimum pay raises are a good start but that only came after lengthy negotiations and the threat of a players' strike...That's not really a great message to send to developing players.

Think of the analogy of the MLS as a company. You know the executives make bank but there are plenty of sources that tell you regular employees get paid crap. Would you want to join that company as an executive? Hell yeah. Would you want to join that company as a lower level employee? No way.

*From 3/23/10 New York Times article "M.L.S. Pay Minimums Raise":