Signing Clint Dempsey is great for Seattle, but is it for MLS? (Updated)

You will forget this statement by the time you get to the end of this post, but try to remember it. I am fine with a MLS owner spending their own money/revenue to sign DP players at any salary level they feel is appropriate to help their team get better.

The Sounders have struggled for much of the season, injuries, call ups, and a lot of changes to their roster have left them a bit desperate to make a big move, one that will shake things up both on and off the pitch.  Clint Dempsey fits that bill perfectly, it would be hard to imagine him not making them a much better team on the pitch, and for the fans who have been waiting for something big to get them back on track to win some trophies well they have to be impressed by this level of commitment of the club.

There had been some rumblings on twitter about Dempsey and the Sounders, but most people took it as typical “silly season” type of stuff, then Thursday night a single picture (of Jorge Perea of energy drink Golazo fame with Clint in the San Francisco airport) seemed to have taken it from rumor to story, a the story that I am sure a whole lot of people in Seattle and New York probably wished they could have kept secret until they could hold an official unveiling event, but within 24 hours a rumor became fact and the cat was out of the bag as the Sounders sign Clint Dempsey.

However as a fan of MLS it leaves me scratching my head a little bit, given that we just heard Don Garber talk about how MLS was so proud of their parity and then to sign off on a team paying a 9 million dollar transfer fee (3x the current team salary cap in MLS of $2,950,000) and paying a 8 million dollar a year salary for 4 years (more than David Beckham and Robbie Keane were reported to have made combined last year).  When we have a salary cap that grows at a rate smaller than the CBA mandated raises given to players that forces teams to get rid of players on a regular basis in order to stay within the salary cap, it just seems a bit off.  When we have players that are making $35,125 a year (that would be under $17 an hour if players were paid based on a 40 hour work week), paying a guy almost $22K a day just seems a bit off.

It also leaves a couple of things that MLS just needs to deal with:

First is the antiquated Allocation Process –

The allocation ranking is the mechanism used to determine which MLS club has first priority to acquire a U.S. National Team player who signs with MLS after playing abroad, or a former MLS player who returns to the League after having gone to a club abroad for a transfer fee. The allocation rankings may also be used in the event two or more clubs file a request for the same player on the same day when the discovery period opens in December. The allocations will be ranked in reverse order of finish for the 2012 season, taking playoff performance into account.

This process has been under attack for years as it really forces returning USMNT players to go to usually bottom feed teams in MLS.  For example when Benny Feilhaber came back and was sent to the New England Revolution a couple years ago, or this year when Carlos Bocanegra ends with Chivas USA.  The process of course falls apart when a player coming back gets an offer from a team (in this case Seattle) that none of the other teams in the allocation order are willing to match.  So why not just scrap the process which has probably done more to keep players from coming back to MLS than encouraging them to come back.

Second is the Salary Cap in general, first we had DP slots & allocation money that allow the salary cap to be more of a salary suggestion, then we learn about a new fund called retention funds which was used to sign 14 players before it was ever even mentioned to soccer fans as part of the rules.  The reality is that the MLS salary cap grows at about 5% each year (in the latest CBA) but player contracts grow at 5 to 15% each season in accordance to that same CBA, so while we watch some owners drop tens of millions of dollars on big name talent, most teams are left trying to figure out how to keep their teams together.

Perhaps instead of coming up with more and more ways around the cap, we consider a radical change to the cap that keeps with the league goal of parity, we could tie expenditures above the cap to team profitability?  That would still favor the Sounders and teams in big markets with more access to large sponsor and partnership deals.  Or is time to consider getting rid of the salary cap all together?  I doubt highly that will ever happen in MLS as it is the trend in US sports and perhaps the only thing that has kept MLS in business this long.

The problem is that the only team that can come close to making a deal like this work out is Seattle, they are averaging over 40,000 per match in a league where only two teams beside them average 20K or better.  MLS has forever preached parity, but my friends parity in spending was tossed aside when we added the DP role, even further aside when we added a 2nd and then a 3rd DP spot. While many teams now take advantage of the DP rule, only 10 players who make over 1 million dollars, and only three teams have more than one player on that list as New York, Seattle and the LA Galaxy each now have two players on that list.  Every team has a lot more players on the low end of the list, as MLS still seems to think that $35K is an acceptable number to pay a professional soccer player.

Finally does parity matter?  We have always been told that MLS is built for parity, the salary cap, the roster rules, everything plays to keeping the playing field level for everyone, we know that those rules have changed but still parity on the pitch has ruled, right?  Not really, lets be honest the league was quick to point out the parity at the top of the table this week with 12 teams within 7 points of the top of the table.  Nobody was talking about the fact that 3 teams were already 20 points or more off the pace of the top team.  Last year the gap between the top team San Jose and the last playoff team was 20 points, but the gap between top team and the bottom 4 teams was 30 or more.  The biggest gap between number 1 and number two in the last 5 years has been just 6 points.  However the gap between number 1 and last place has grown larger and larger since the start of the DP era (24, 28, 37, 39, and 43 points), so talk of parity is just a bit of hoax being played on fans by MLS.  It is harder to tie parity to team salary or even to the teams with DP, but clearly on the pitch the gap between the top and bottom seems to be growing.

So does this move help MLS? Will it help them in their negotiations to find new TV partners/deals?  Clint Dempsey is a big deal to soccer fans, but he is no David Beckham and I remain highly unconvinced that DP’s alone are going to lead to higher TV ratings or a bigger TV deal.  So I say it doesn’t help there, does it help MLS gain some global respect with players? For sure it does, it shows a willingness for at least some teams to play the big salary game with top teams in Europe.  Of course here it is a rare exception versus the norm in many leagues, but it could open doors.  It could also lead to some owners being willing to take bigger risks by paying more for players, but that can be a double edged sword, even with just 3 DP slots teams could spend a whole lot of money as the 10 million dollar payrolls of Seattle, New York, and LA are proof of but very few teams could do that while remaining financially stable.

Seattle on the basis of 40,000 fans per match and great merchandise sales have an abundance of cash available, they also have owners that have very, very deep pockets.  LA and New York both have owners that are multi-billion dollar corporations that both have shown a willingness to spend without direct correlation to profits, a luxury that many MLS owners don’t have.  Is it wrong to limit those teams that can or will spend that kind of money from doing so, for the sake of teams like RSL, Columbus, San Jose and others for whom budgets are much tighter?  That is the question MLS is going to have to address, and what the purpose of the league is.

As a fan of MLS, I love that an owner was willing to plop down such a huge chunk of change on a player like Clint Dempsey, I love that I once again will get to see him play live more often.  As a RSL fan, I have come to accept that big names are nice and can get people excited, big names will get your team on TV more, but soccer is a team sport and for now spending doesn’t always equal success on the pitch.  Last year the Supporters’ Shield winner was the San Jose Earthquakes, who did it without a single DP on their roster, in the 6 years of the DP rule only twice has a team with a DP lifted MLS Cup.  So before you just hand over some trophies to the Sounders, remember they still have to earn them, this is a great move for the Sounders but exposes some very real issues that Major League Soccer needs to deal with.

UPDATE (8-5-13)

So when I wrote those thoughts it was my understanding that the Sounders organization was paying the full costs of Dempsey’s transfer and salary (minus the league portion of a DP’s salary).  However it is becoming clear that perhaps that wasn’t the case, Grant Wahl reported today on sportsillustrated.cnn.com

There were some important wrinkles to the contract. A source connected to Seattle with detailed knowledge of the deal said Seattle’s owners are paying Dempsey’s $24 million in salary (at least the lion’s share above the normal $368,750 covered by the league), but the league is covering the $9 million transfer fee. (A league official disputed that characterization without providing details.)

This would sure make it a much better deal for the Sounders, I mean heck if you can get someone else to pay almost 1/3 of the cost of such a transaction at a price tag that is about 13% of the value of the recent sale of the Columbus Crew, who wouldn’t jump all over that deal.

It also makes it a much worse deal for MLS, or should I say for the rest of the teams in MLS who are likely going to be on the string for a portion of the transfer fee paid for the rights to Dempsey.  Now I remember twice in recent RSL history where transfer fees were paid, for Alvaro Saborio and Olmes Garcia, in both cases the transfer fee was likely paid for by MLS upfront but was added to the salaries of each player over their contracts (a part of the reason Garcia was signed to a rare 5 year deal).

If that is the deal with the Dempsey deal, then I have much less of an issue with the move, but if MLS simply made a decision (which would require approval of the Board of Governors) to pay that amount because they believe the move is in the best interest of the league, well then I have some issues. Of course we are unlikely to know what is really going on for awhile if ever, as MLS simply seems unable or unwilling to be transparent on deals like this.  It would be interesting to hear them explain how they can balance the comments of Don Garber on parity, with paying a transfer fee for a player that clearly benefits the Sounders over every other team in the league.  Is it the start of a new policy?  Will every club receive 9 million dollars in allocation money that they can spend to boost their rosters?

I have been more and more convinced that the single entity format of the league, which may have been vital to the leagues success in the early days, now seems to show a lot of conflict of interest.  When the roster rules are changed to allow one, then two, and now three DP’s, when the allocation funds are still out there without any level of transparency, oh and this year they have created an new set of funds called “retention” funds which have been used more than a dozen times before anything was made public.

Today I saw a lot of people defending MLS paying the transfer fee as good for all teams, but when pushed for any details of how or why, the best they could come up with was: well maybe it will help TV ratings, every team will sell more tickets when he comes to town, increased visibility of MLS.  I will say this, TV ratings with David Beckham, Thierry Henry, Robbie Keane, and other DP’s over the years haven’t really budged the ratings, I am not sure that Clint Dempsey will move the needle overall, will he help out some for the Sounders matches on national TV, maybe but the reality is if he brings 50,000 more TV viewers it really isn’t moving the needle in a way that will impact the current TV negotiations (sure not to the tune of 9 million dollars).  I have little doubt that he will be able in most markets to sell 1-2,000 extra tickets but we also know in more and more markets they need little help selling tickets, and it is hard to again think that it would pay off to the tune of 9 million dollars.  Duece is a known name with soccer fans in the US, but he lacks the name recognition outside of dedicated soccer fans either of MLS, the EPL or the USMNT.  I doubt highly that he will be flying to New York to be on David Letterman, or hanging out with Oprah, so while he is a name that has soccer fans excited, outside of that soccer circle I just don’t believe it will be much of an impact, again hard to see the league get back a 9 million dollar investment.

Anyhow wanted to share those additional thoughts as the situation changes, it still is a great move for Seattle and a move with a lot more questions than answers for MLS.

That’s How I See It

4 comments

  1. Jazzy says:

    This isn’t just a showman type of move by soundersFC. It was pretty obvious from the matches, and Sigi Schmid made it clear they were looking for someone to play the CAM role to make the attack more fluid and they hit gold with Dempsey.

    • admin says:

      Yes and know, there are plenty of great attacking midfielders you can get for under $41 million dollars is Dempsey the best of them, nope not even close. He is good but probably better as a forward than as a midfielder, at least over the last few years at least. This is also a show, this is the Sounders saying we can do things that nobody else can because we sell more tickets than anyone else can, and good on them. Will it pay off with the Sounders winning a trophy this year? Only time will tell, but they are a lot closer than the Galaxy were when they brought in Beckham.

  2. K says:

    This is a pretty even handed post from you denz (given your previous rants about the DP rule over at rslsoapbox), not bad. There are some moments where it feels bipolar though. So first you argue that league parity is dead because of the DP rule and retention funds and the provide proof with the growing gap in points between first and last place teams. Later you seem to imply that parity is alive and well by pointing out that last years SS winner, SJ, dud it without a DP and that, in the 6 years of the DP rule, a team with a DP has won MLS cup only twice. So which is it? Parity is dead? Or parity is alive and well?

    You don’t seem to be complaining about the Dempsey deal. You appear to be okay with it which is not unusual. Most fans who railed on LA/MLS for the Donovan and Beckham deals seem to be much more okay with Dempsey coming to Seattle. I think its because he’s American and we all want a chance to see him in person on a more regular basis. Hey, maybe SKC can go get Micheal Bradly or RSL can go get DeMarcus Beasly and we’ll be just as happy.

    • admin says:

      I don’t mind the DP rule, if it is evenly applied and if it is kept at least somewhat transparent. I don’t think the DP rule as it stands today will kill parity, but it clearly can create a gap of perception and sometimes of reality if it is combined with all these other exceptions to the salary cap. I mean if you have a salary cap with each team able to get 3 exceptions, that is one thing, but then you add in the mystery of allocation money which is given to the top teams who qualify for CCL, and then to the teams that don’t make the playoffs. So you reward both great performance and poor performance and leave a gap in the middle, that just seems odd. Then we find out this year that there is another fund that can be used by teams to resign some players but not all players, again very vague and the league didn’t make it public until the media found out about it, why the secrecy?

      On Dempsey in particular I think it is a great move for the Sounders, he is a great player and they have the resources to make that deal happen. When it was leaked that perhaps MLS (meaning all the teams) were tapped to pay the transfer fee, well then I have some issues with it as it would seem very odd to force other clubs to pay for one club to get a top player. Again with MLS being very tight lipped about the deal, we are all left to wonder what is going on. It appears based on what little info is coming out from various sources that the league did pay the fee, but that it will be broken into pieces over the 3 1/2 year deal that the Sounders will pay back to the league, which would explain the gap between what the union reports Dempsey is being paid and what the Sounders are saying they are paying for him. RSL had a similar deal with Saborio when he joined the league. It just seems it would have been a lot easier for the league to just be up front about this deal, but that just isn’t the way MLS operates.

      The San Jose run last year was a rare fluke, the goals they scored late in matches was just unnatural and as we see this year unsustainable, DP’s by themselves aren’t the end of parity, but smart DP signings can surely impact it, and when you have a couple of clubs with much deeper financial resources to use outside of the normal roster well then those DP moves can have a very wide range of effects. With Beckham and Donovan LA was a top team, but it wasn’t until the addition of Keane that they become dominant. In New York they tried a couple pairings but Henry became much better when Cahill was signed. I am kinda amazed that neither New York or LA announced a 3rd DP in the transfer window, which means they could now only sign player who were released (out of contract), but one has to consider in LA the motivating force was Tim Lewekie who is now gone from AEG and up in Toronto, and perhaps in New York they just don’t think it is necessary at this point. What makes the signing of Dempsey so dangerous for MLS is it could open the floodgates of other clubs who can’t financially afford it trying to play keep up, both in the marketing/name side of things as well as on the pitch. Only Seattle can sell 40K tickets a match to help pay for such a big contract, no other MLS team can come close to that and so it could raise some real issues.

      On the larger scale, I don’t think Dempsey long term moves the needle for MLS not on TV ratings, not on overall league awareness, and so to me he is a pure on the pitch results kinda guy. Oh yes MLS will be pimping him every chance they get in an attempt to convert the large numbers that watch and follow the USMNT into MLS fans, but I just don’t buy that one guy is going to convert those who have for so long turned their noses up at MLS.

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