By Richard Snowden

With Major League Soccer deputy commissioner Ivan Gazidis set to take over as CEO of storied English Premier League club Arsenal next month, MLS's soon-to-be former second in command took some time recently to reflect on his tenure with the league.

A key player in MLS's rise from instability to viability whose myriad contributions to the league cannot be overstated, Gazidis pointed to MLS's business philosophy as the main factor behind the league's laudable progress over the past several years.

"Our strategy has been about slow and steady growth, laying down an infrastructure, and growing the sport in a controlled way," Gazidis told FoxSports.com. "That sometimes has been frustrating, but what it means for us is that now our viability is unquestioned."

As the man charged with pulling the strings on MLS's player deals, Gazidis will be remembered in particular for doing a remarkable job of attracting decent talent with limited resources, enabling the league to improve its on-field product bit by bit and setting the stage for continued growth.

"We've been conservative with player spending and kept our spending in proportion to our revenues, which many clubs have not done overseas," he explained. "And we have not funded it through debt.

"That gave us the ability to move forward and start to be a little more adventurous in turn with players, like signing [David] Beckham and [Cuauhtemoc] Blanco. Those are the type of on-field moves that would not have been contemplated in the early years."

Beckham and Blanco, along with other high-profile stars such as Juan Pablo Angel and Marcelo Gallardo, made their way to MLS via the league's Designated Player Rule, implemented in 2007 in an attempt to raise the league's profile and standard of play. The DP Rule permits each team to sign up to two players whose salaries are largely exempt from the league's per-team salary cap of $2.3 million. 

While Beckham and Blanco in particular have been worth their weight in gold off the pitch, raking in added revenues and raising awareness of MLS, the impact of DPs on the field has been dubious. These players generally appear to add little to the league's caliber of play, although it should be noted in fairness that one standout player should not be expected to make a team with 10 average teammates great by himself.

Some observers have also questioned the off-field value of signing Beckham, declaring his presence a failure due to the fact that MLS has not seen huge spikes in attendance, TV ratings and the like. Here again, it hardly seems fair to place so much weight on one player. However, such assertions raise a valid question: Has the DP Rule had a positive overall impact on MLS?

To date, the DP Rule appears to have served primarily as a sales gimmick of sorts, a "hook" to grab prospective consumers' attention. And to be sure, Beckham and Blanco in particular have brought the league extra attention, both at home and abroad.

Yet while this may generally be considered a good thing, it raises other useful questions. Will the extra attention have a long-term positive impact on the league? And will the extra fans attracted in the short run by the presence of players like Beckham and Blanco be inclined to keep showing up after they depart from the league?

As Gazidis rightly points out, "Bear in mind, as a fan, everyone wants to see the best on the field, of course." In this respect, one could argue that the DP Rule has come up short, for it will likely be of little long-term value for MLS to attract extra attention (an area where DPs have been helpful) if the new fans who show up see an unattractive on-field product (an area where DPs have made little difference).

As has been noted previously in this space, our nation today has a sizeable population of passionate and knowledgeable soccer fans who have proven to be a hard sell for MLS, a fact not lost on Gazidis.

"The biggest area where the league needs to progress is in acceptance by the soccer community," he said. "There is a real soccer community in the USA that is vibrant and smart, and the challenge from day one has been developing bonds with that audience."

To date, a large portion of this community has ignored MLS, viewing its on-field product as substandard compared to the top circuits of Europe and Latin America. Drawing and keeping these fans will be vital to the league's future, as MLS has already largely tapped out the so-called "soccer family" demographic and learned that marketing itself to the often soccerphobic mainstream sports fan is a failed strategy.    

This being the case, the league's main mission – having achieved long-term stability – must now be improving the quality of its on-field product, a goal that can only be met by investing substantially greater sums in attracting outstanding talent.

Naturally (and unfortunately), this mission will need to remain on the back burner for a while yet, as MLS's owners are forced to batten down the hatches and ride out the global economic downturn just like everyone else. But once the storm clears, there might just be a better way to invest that money than splashing it on a measly one or two DPs per team.

Perhaps instead of having a system in which only one or two players can receive unlimited wages, MLS could create a new system in which owners could invest extra money up to a specified maximum if they wish in order to sign as many players as they want, so long as these players could be accommodated by the available number of roster spots, which will increase to 20 beginning next season.

This new system would feature not one salary cap, but two – a "soft" cap and a "hard" cap. The soft cap could be set at, say, $3 million, to be drawn from the league's coffers under MLS's single-entity structure. The hard cap, in which the balance would be funded solely by each team's owner, could be set at $10 million, allowing each team to beef up its roster by spending up to $7 million extra on players at each owner's discretion.

To see one clear advantage of such a cap system over the DP Rule, one need look no further than the Los Angeles Galaxy. Despite boasting Beckham and Landon Donovan, the Galaxy has missed the playoffs three years running, often playing poor soccer due to being forced to surround their two outstanding players with a cast composed largely of poorly paid players whose performances too often matched their paychecks.

With a two-tier cap system like that described above, teams would have far more leeway to build their rosters than under the DP Rule. If Galaxy chief Tim Leiweke wants to keep Beckham and his $6.5 million salary, for example, he can still do so, but he could also choose to offload Becks and instead use the $7 million of extra cap space to sign seven players at $1 million each, a move that would surely make his club far stronger.

Some would likely argue that such a two-tier cap system would introduce competitive imbalance into MLS, giving the wealthiest owners an unfair advantage. While this could indeed prove to be the case, there are a couple of counterpoints to consider as well.

First, given the cost of signing truly elite players, the competitive imbalance would not be excessive. It certainly would not be a situation like that of the old North American Soccer League, where the New York Cosmos outspent other teams by overwhelming margins, or of European football, where massive wealth routinely buys trophies while lesser teams are left to play the role of hapless victim.

Given that many top players earn $7 million or more, MLS teams would be left with the choice described above: sign one player like Becks or Thierry Henry, or raid strong South American clubs and snag several high-quality non-megastars. The latter team might be a bit more likely to defeat a less well-stocked team on a given day, but given the relatively minor wage discrepancies, the less pricey team would never be easy meat.

This being the case, owners of lesser means would not need to fear that their teams would be left with little chance; as such, they would not be overly tempted to spend foolishly in an attempt to keep up with the wealthier Joneses. Clubs with more modest rosters would still be able to make the playoffs, and they would therefore continue to have a legitimate shot at the title every season.   

Second, we encounter yet another valid question: Would having a bit of competitive imbalance in MLS be such a bad thing? For years, many have complained about the excessive parity engendered by the league's single-entity structure, which has spread the wealth so thoroughly that MLS has been left with a full stable of comparably mediocre teams.

To be sure, having a handful of teams willing to splash more cash on much better talent (within reasonable limits, as noted above) would undermine the trend toward mediocrity. Modest players with potential would be better able to maximize that potential by facing superior opponents every week, and the prospect of beating the richer clubs would help fuel rivalries and make each game matter more, a perennial problem for MLS.

All of this in turn would boost MLS's chances of drawing and keeping more of the nation's core of soccer-savvy fans, possibly the most valuable outcome of all. These fans, attracted by MLS's much-improved standard of play, would likely show up through thick and thin and add a new element of passionate support, growing the league's fan base and putting MLS on track to evolve into one of the world's top circuits.

As previously noted, all of this will understandably take time. Implementing such a scheme during troubled economic times would obviously be irresponsible and reckless, and MLS brass will be well aware of this fact. "[A]s an administrator," Gazidis pointed out, "you have to be very cognizant of your responsibilities – to be around not just next year but 10 years from now."

But when more booming times return, it would be just as irresponsible of MLS's movers and shakers not to do what needs to be done in order to take the next step. Like anything else, this cap-splitting idea is no panacea, but it would offer many advantages that could prove very helpful in moving the league toward elite status in the coming years.

And in the end, that's what it's really all about. 

HAVE YOUR SAY… 
What do you think of Snowden’s plan?  Would it work?  Should the league wait until they have completed expansion before changing how rosters are built?  Send your emails to Soccer 365 by CLICKING HERE.  Please include your first name and last initial and city with your emails.  Thanks.     

READER FEEDBACK

You are severely underestimating the competitive balance problem that would result from your plan. An MLS team signing seven players worth $1 mil apiece could walk to the MLS Cup without breaking a sweat - and probably still wouldn't garner as much attention as Beckham has brought to the league. A soft cap/hard cap system isn't a bad idea, but the way to do it is to keep the DP and set a hard cap ~$500k above the soft cap. Splitting that between two or three players wouldn't distance a team too much from the rest of the pack, but would certainly raise the quality of play noticeably.

Wamiq C
New York

I think the quickest intermediate step for MLS is to make the DP slots completely exempt from the salary cap.  Give each team 2 slots, perhaps with the ability to trade for a 3rd, and just let the team fill them anyway they wish.
 
Cheers,
 
Eric
Durham, NC

The article raises some strong arguments, that I think should be implemented, but I strongly disagree with one thing.  The writer, Richard Snowden feels they should not implement these changes due to the economic downturn.  I feel this is the perfect time.  Attendance may actually increase.  People who enjoy soccer as a "second sport" who might normally go to football, baseball, basketball and hockey games may chose instead to go to soccer games where the price of tickets are much more reasonable during these economic times.
 
I know I would rather take my family to a soccer game than a football game, to save a couple hundred bucks.
 
Andrew.  Tallahassee, FL

I think the split cap is a great idea, or at least better than the points deduction thing. I admire the attempt to replace relegation, but I just dont see relegation working in the US, maybe in baseball, because it has the history that soccer has overseas. Anyways, the split cap idea could really work, i think they have a roster bonus type situation in the NBA which may or may not be sort of close to what youve submitted for MLS. Also, maybe this idea could fix your first problem, and teams could qualify for a higher cap based on how they finish the season in the table. that would give non playoff teams, in both ownership and players, incentive to finish higher and thus play harder in july. The bosses will want more room to build a team, and players will know that if they perform well they can make room for higher salaries for themselves. It would give importance to the draft as well, because if you keep finishing at the bottom you'll need to draft well and le! t those players improve your team, and position, so you can pay them their due once they get good.

Clark H

9 years ago, I presented a similar idea to the MLS in a letter describing ways to improve the on-field product and off the field community relations.

Money motivates above all else. It won't be be relegation that will increase interest, it'll be the passion and the overall quality of the game itself. Below are some suggestions to accomplish that goal.

• Increase the cap 20% each year over 5 yrs, then raise the minimum wages to $32k for rookies, $64 for 3yr vets, and $84k for 5yr vets to help attract and retain the best talent. Do not count performance based incentives and bonuses against the cap number and allow for league based salary arbitration in disputes.
• Implement a soft cap like the NBA where owners can pay more to retain their best players up to a certain limit, and then pay a luxury percentage back into the pool when in excess of that amount.
• Expand the roster limit to 24 active players, and 16 inactive reserves that do not count against the cap.
• Do not count foreign players from CONCACAF origins as Senior Internationals, then limit the number of newly defined SI to 4 players.
• Allow each team to start with two designated player slots not to exceed 3, and if traded away, that originating team would expand cap space of $250k each.
• Develop partnerships with local youth clubs to provide a direct avenue for youth players and continuity in coaching methodology.
• Utilize websites to drive sales and attendance through advertising, build awareness, and promote ties to the e-community like Bigsoccer.com or Facebook.
• Play more games abroad to scout and poach foreigners, as well as to promote the product to potential consumers and investors.
• Pay team bonuses for reaching the playoffs, winning the most points overall, per division, and an accelerated spiff for winning the league title.
• Modify the single entity structure to allow for more individual creativity, innovation, and control.
• When the league reaches 18 teams, abandon divisions and follow the single table format to increase the spectacle of each match; thusly conforming with the desires of Eurocentric fans turned off by the present Americanized system.

The standard of play in the MLS can improve to the level of the top 10 leagues in the world by implementing a few small changes without breaking the bank. There's no reason why MLS cant be the best league on this side of the ocean and a destination for highly-motivated impact players. The above will help teams flourish by expanding their capacity to find and keep the best talent, improve fan participation, and make each game matter more.

Kyle H

Another idea will be to allow the teams to sign the players from their development team out of the budget and have a direct contract with the club,this way will incentive the club to spend in there youth and maybe little by little the single entity will disappear since the clubs will have the players sign a contract with the club instead of MLS.

Luis C

allowing for an extra amount of owner money to be spent -- say $ 7 mill.-- is a very good idea; the league is ready for some extra ownership financial input-- and they have a growing list of wealthy owners so there not would be a 'poor' owner who couldn't keep up with the rest of the owners (like in the nasl days!!) -- the league is ready to go to the next level or they face slipping back in the media and fan consciousness

i would change 1 thing though-- part of the extra money would have to be directed towards aquiring usa or canadian players overseas and try and lure them back with higher salaries; or keep the good younger players from going overseas-- suggested amount 50-50% between the 2 groups- usa/canada and foreign players

good stimulating article-- thanks
 
David S

To erase the salary cap what could be done is by lowering the quality of the game and giving what the people want, what i mean by that is doing what was do before but more in the positive way. if a major city has Mexicans as majority give them Mexicans if its Italian bring saria A players. like with Campos & donadoni in LA & NYC but the new way is making it big like for example if you would get 2 players from El Salvador in LA galaxy a vet and youth player that's braking in, this would be a dream for their fans seeing one team having two of their own on the field it will be good on all of their league games (home and away) same would be said of the Guatemala, Costa Rica or Honduras and they don't have to be big names. the other step is getting either the California or Texas teams with multiple Mexican players but in this case it would be from the same club, the team will us for be Cruz Azul (example) getting 2 or maybe even 3, one no name and one name that's out in the minds of fans for what he did in the last 3 to 4 months, for this goal in the semi finals or the pass he did against cross town rivals and now with this you got a Houston/Cruz azul " tag team" against Dallas/America club. believe me that they will have to turn people back at the gates. just look at this format.

Red Bulls with 2 Italians and 2 Colombians
Rev's with 3 Irishmen
DC with 2 Salvadorians & 3 Argentineans
Earthquakes with 2 chines, koreans or Englishmen
FCD & Dynamo with 2 Mexicans or more.
Galaxy with 2 Mexicans & Guatemalans
Columbus with 4 to 5 great American players (with experience)
Chicago with a little bit off everything......

This would make MLS a mini World Cup every year every game and what do fans pay for does games? well allot of this $$$$$. and for that you do need the young Americans to jump on abroad to expose them self's to Europe and see what hard work could lead up to and that's why this is a big part of letting go which is only 3 country's export more players in America then the good old USA and that's Argentina, Brazil and Uruguay and to what I am getting to is the eye's of the young men out their will see that MLS is a stepping stone to even greater things and seeing the yank invasion in Europe will make them sign in. recall that from the Latin American countries (including Mexico) in the CONCACAF have less than 10 players playing their game outside the domestic league and some even less than 5 and like Guatemala not even one.

The money coming in would get MLS in 5 to 6 years from now to by the great players from does nations and 15 years from now most of our good American footballers will be coaches and train the clubs euro style. the truth is we give the people what they want and if its not caviar and Hamburgers is what they want well thats what they will have (or pizza, tacos, rice). One thing I think would help the league is to have 2 to 3 Cosmos like teams by the 20Th year. If we are going to have stars lets keep them together like in Spain (Barcelona, Real Madrid & Villarreal) or England (Big 4) instead of all over the place and this will give the none "super" star teams more to celebrate in a win. On Chivas USA if that's all the support CD Guadalajara is going to give them its time to move on and MLS should learn from this before we get another name like Barcelona USA and ask for more support of the parent club soccer wise. If this ever happens the issue now would be the stadiums not being big enough but that would be a positive thing right?
 
Juan L.
Los Angeles, Ca