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The Dog in the Single Entity Crate

August, 2010

 

 

1996 was a banner year for American club soccer - and a high point for MLS. Our top-flight club game returned after 11 years in the wilderness. New US Soccer President Alan Rothenberg had skillfully met FIFA demands for the construction of a functioning first division atop a proper pyramid of working lower divisions. Under our enterprising new leader, average Division 1 (MLS) attendance hit an all time high of 17,000. Regular season TV viewership sprang from nothing into the hundreds of thousands.

 

For the first time in our tortured soccer history, we had a functional set of properly sanctioned lower divisions. A century of league infighting and federation paralysis seemed over. The deep-pocketed US pro sports owner establishment were finally in charge again, bringing us the legitimacy we craved. Despite paws still muddied from the NASL adventure, they graciously allowed the precocious soccer pup back into the American sports family home, never to be banished to an old mattress in the shed with lacrosse and the X Games again.

 

Two years later, the precocious league would land no fewer than 22 players on World Cup rosters.

 

2010 was a different kind of year. Despite the growing popularity of the game in the USA, renewed marketing efforts, reincarnation of NASL team names in mock promotions, and the expansion of the designated player rule, MLS average attendance still couldnít reach 1996 levels. Worse, their tv ratings dipped below the WNBA, and sat at a dismal .2 for regular season matches on cable. The USMNT was eliminated by Ghana in the second consecutive World Cup, and MLS was only able to field 5 players in the entire tournament. Most of the lower division clubs that were up and running fourteen years before were dead and buried.

 

What happened to the precocious puppy?

 

Obedience School

 

Rambunctious puppies prone to misadventure must learn the harsh lessons of subordination to their masters. They canít be allowed to run wild. It would be an unmitigated disaster for our privileged professional sports owners if soccer, with its lack of regular pay-by-the-second commercial breaks - and less than predictable revenue streams - leapfrogged to the head of the line in American sports like the Cosmos did in the late 70s. The game seemed to thrive on a heretical system that didnít even guarantee owners major league status, and the adoption of that crazy promotion and relegation system might actually turn their entitled world completely upside down.

 

In the eyes of our pro sports robber barons, soccer was a wild beast in comparison to our domesticated professional sports. It would need an intensive obedience program in order to hold it harmless to their pocketbooks and the entitlements on which filling them depended. By 1994, the average American sports owner knew that, like it or not, soccer was going to break through in the United States. They noticed that no matter how many Americans loudly bashed it, a silent majority maintained a curious, closeted, and perverse attraction to the worldís game. Massive US television audiences for the 1966 World Cup alerted them to this phenomenon, but despite their best efforts, they could never quite domesticate it.

 

Much to their chagrin, after a half-century full of repeated failures to foist our closed, domestic sports model onto soccer, millions of people were still watching. Why couldn't it just die already? According to common knowledge, we didn't like the game. Their failures proved it, right?

 

The annoying potential of the game was on full public display in the late 1970s, when the NASLís Cosmos were drawing more fans than either the Giants or the Yankees, and crowds of 70,000 turned up for top league matches. By 1980, national NASL appearances on American TV sets could be measured in full percentage points. Even at the Mary Lou Retton/LA Olympics of 1984, with NASL in its death throes, demand for Olympic match tickets dwarfed expectations.

 

So, when FIFA demanded for a functioning first division as a prerequisite for hosting World Cup í94 it left our pro sports establishment one option: Control it. If professional soccer was going to be foisted upon us, it should fall under their complete control. It needed intense obedience training to play the subordinate to our established pro sports. It would need to fit into the constricting harness of the American pro sports model without complaint. It could no longer be allowed to pee on the rugs of our more profitable, established, and entitled pro sports like the Cosmos did a decade before.

 

Submissiveness would be instilled in the soccer pup within the confines of a single entity crate. USSFís gift to the American sports owner was a masterpiece of risk abatements and a revolution in owner entitlements. It was both on the far frontier of sports team micromanagement, and a nostalgic nod to the legendary powers that US owners wielded over teams and players in the early 1900s. It featured the tightest controls on major professional sports team autonomy that any league - outside of pro-wrestling - had ever attempted.

 

MLS was as ďleagueĒ in the loosest of definitions: It did not meld a group of clubs into a structure in which they could freely compete. Instead, it was a company from which a matrix of teams were spawned - like WWE spawned wrestlers. Players would receive paychecks direct from the league - not the club they played for.

 

Whiny Eurosnobs and Disloyal Activists

 

A few critics protested that Rothenberg would trade away virtually all club autonomy to meet the demands of the privileged US pro-sports establishment. They disagreed with the crating of the game into a single entity like Petco or Pet Smart. They moaned that we wouldnít be adopting the system of free range, unchained and independent clubs - the kind with promotion and relegation between leagues. The one that dominated the rest of the soccer world. The one in which the game thrived.

 

They argued that the league and its executives were granted more power over players and their salaries than their predecessors in the days of Shoeless Joe Jackson. A few even suggested that our unique closed model might work in dominant leagues in more domestic sports, but that itís protections were ill suited for a global game like soccer, and a subordinate league like MLS.

 

These namby pamby soccer rights activists were widely dismissed as euro wannabees who didnít understand the nature of American sports. Why couldnít they acknowledge the obvious strengths of our special system, as exemplified by the almighty NFL? Why couldnít they celebrate our collective success in recruiting mainstream American sports and entertainment moguls to be the new masters of soccer? Why didnít they believe these generous men would legitimize American club soccer once and for all? Why didnít they accept the fact that the American sports fan couldnít even comprehend the complex calculi of promotion and relegation? Why couldnít they grasp that soccer would never be a popular sport in the USA anyway, and be content with itís existence in a small pre-ordained niche? It was better than nothing, right?

 

On top of that, criticís pockets never seemed deep enough to put their money where their mouths were. What right did drooling myriad supporters and stakeholders have to dictate the terms of the game to wealthy megalomonopolist owners? Arguments against adopting the euro model seemed sober enough. Our staunch allies in the American sports establishment seemed rightly terrified by the spending spree that they collectively blamed for the demise of NASL 1, and their poster child for the evils of overspending: the New York Cosmos.

 

After all, we were coming out of a club soccer nuclear winter following the nearly simultaneous collapse of NASL and ASL in the mid 1980s. That armageddon left us with fewer professional outdoor soccer clubs than at any time since the early 1900s. In the early 1990s, there simply werenít enough high functioning clubs to consider connecting leagues through a system of promotion and relegation.

 

Under these circumstances, in the early 1990s, it was easy to paint anyone who fought vast single entity control as an out-of-the-mainstream-Euro-wannabe-purist out of touch with American reality. So, the single entity crate was welded together.

 

They Called It Puppy Love

 

Initially, it looked like the US sports establishment got it right. The euro copycat naysayers appeared to be yammering from a hash den in Amsterdam. The future of US club soccer seemed both unlimited, and in capable hands. Season one marked the beginning era of good feeling and back slapping for MLS. The league set an average attendance record that still stands. TV ratings hit a peak in 1997. As Y2K approached, the honeymoon intensified. In 1998, no fewer than 22 MLS players would land on World Cup rosters worldwide.

 

Although the USMNT failed to reach the knockout rounds, 1998 went out like a lion for US Soccer. In December, CONCACAF Cup champs DC United defeated storied Brazilian side Vasco De Gama in a home and away series to become the first - and only - Interamerican Cup winners in US Soccer history. In 1999, the LA Galaxy repeated the DC Unitedís Champions Cup feat, marking the second highest level of MLS international accomplishment. Still, the league reportedly lost $250 million in its first four years. Instead of questioning the unique business model under which the first division chafed, MLS and US Soccer decided the crate was too big.

 

Dogcatcher Don

 

When MLS reached itís third birthday, it already appeared to owners to be in decline. Despite bold forays in international competitions, attendance dropped for our micromanaged league, and ownership shrank to a few dogged moguls desperate to keep the genie of soccer in their bottle. MLS commissioner Doug Logan, the man who presided over the highest performing clubs in US soccer history, fell out of favor with MLS owners. Instead of examining the restrictive business model under which American club soccer toiled, MLS owners chose to tighten the collar. They needed a commissioner whose commitment to the American sports model was unquestionable.

 

On August 4, 1999, they got it in the shape of former NFL executive Don Garber. Fresh off of the failed attempt to export the NFL to Europe in the form of the World League of American Football - under a strict single entity model - he met the allegiance litmus test. If anyone could keep a closed soccer league alive, while keeping their single entity cork on it, he was the man.

 

In his first year, MLS average attendance hit an all time low. In 2001, the league folded two clubs to save cash. Don Garberís attentions were focused elsewhere. If MLS couldnít remain stable by itself, heíd corner the market on American soccer, and then worry about the league. So, in the dark days of 2001, Garber assembled MLS owners into a new venture, Soccer United Marketing. By 2002, SUM was on the books, armed with full marketing rights for MLS. He immediately leveraged that power to gobble up the marketing rights for US Soccer, the Mexican National Team, Chivas de Guadalajara, Superliga, and Interliga, amongst others.

 

If you attend a high profile soccer event in the United States of America today, chances are, Don Garber and MLS owners are getting a cut. MLS investors loved The Soccer Don. In one fell swoop - he saved the league by insulating owners even further from market forces, uninterested supporters and international pressures. In short, Garber enabled MLS to run at whatever level was in their best interest, while they sat back and gleaned profits from higher profile soccer events. Division 1 US club soccer could now survive indefinitely on USSF entitlements and limited kibble, while MLS owners pulled in cash from competitions in which their teams didnít even compete.

 

On top of that bit of dark marketing genius, Garber began accepting additional teams into MLS at franchise fees reportedly in the $20 to $40 million range Ė providing even more cash to keep the league up and running in whatever form, at whatever level of play the owners collectively chose. In perhaps his most amazing feat, Garber convinced a small cult following of supporters that they were getting the soccer they deserve, that his league should be congratulated for merely surviving, and that matches should be attended for the good of the American game.

 

Dog Whisperer Gulati

 

As vast as Don Garberís successes were in the eyes of MLS owners, they still harbored a gnawing fear that an independent USSF President could wake up one day, feel his oats, and sign away the entitlements to first division control on which their revenue stream depended.

 

Nothing pleased them more in the spring of 2006 than the installation of new USSF President, Sunil Gulati. Garber kept the closed league leash on the game, didnít allow the soccer to trample on the entitlements of the average billionaire American sports owner and upset the apple cart like the Cosmos did.

 

Gulati cinched the choker.

 

The MLS empire could still be overturned at the stroke of a pen from USSF President who put the interest of the game in front of the interests of MLS speculators. Thatís why their move to install Sunil Gulati into the oval office of US Soccer settled more MLS owner stomachs than Maalox and Tums combined.

 

Gulati was one of them. He had ascended to President of Kraft Soccer/NE Revolution in 2002. Four years later, the single entity die-hard was also firmly installed in the oval office at USSF. The dynamic duo of Don Garber and President(s) Gulati gave MLS had the best hedge against promotion and relegation that money could buy. As long as Sunil heads US Soccer, the single entity crate remains safely sealed. Owners can be confident that their interests and entitlements being protected at the highest levels. They were sure the spunky pup of American soccer would remain under MLS lock and key. Add to that Sunil's long time buddy Chuck Blazer wrangling FIFA itself, and they became the three biggest soccer amigos US pro sports monopolists had ever seen.

 

Lower Division Mongrels

 

By 2007, MLS was insulated more than ever before from the vagaries of open competition and the stresses of the everyday global soccer market. The SUM ATM was providing a healthy revenue stream from international matches, foreign competitions and club friendlies. Garber and Gulati could often be found on international junkets, extolling the virtues of their single entity soccer owner protection plan. By the spring of 2010, control was being applied so completely that Don Garber pronounced MLS unconcerned over flat TV ratings, which were dipping below those of the WNBA.

 

Everything appeared stable in MLS. Market forces no longer applied. Their single entity seemed bulletproof. To the glee of privileged owners, no amount of disinterest could sink the league.

 

For our lower divisions, it was a different story. Despite the fact that MLS had established practical control over the pyramid, a curious phenomenon had developed. Damning the torpedoes of MLS hegemony and imposed mediocrity, ignoring the inherent limitations of the caste system that Garber and Gulati had so successfully defended, and closing their eyes to a 75% failure rate among lower division clubs, a series of crazy investors were still forming clubs at a rapid clip.

 

Kamikaze efforts to found clubs - despite dubious chances of success in a system which offered less upward mobility than a Moscow bakery had in had in 1975 - were making MLS single entity justifications appear frailer than ever. Obscene D2 owners had the cajones to make it look like an entrepreneurial system that rewarded innovation and accomplishment might actually work in US Soccer, just as it had worked to bring the game to global dominance.

 

Gulati could not risk allowing entrepreneurs into high-level soccer ownership who let their love of the game obscure pure profit motives. After fourteen years of confinement, the pesky canine is still trying to escape. He had to stop the madness.

 

Garber agreed: Anyone who doesnít adhere to his version of profit motive must be stopped. So, USSF tightened the collar again, while MLS yanked on the leash. Another chance to examine the restrictive nature of their system vanished. Gulati, predictable as death and taxes, was determined to crush this insurrection of innovation. He announced a means test for D2 owners. He decided that majority owners must be worth $20 million to maintain D2 status.

 

Entrepreneurial spirit would not be allowed to sink this pyramid scheme. Ownership must be restricted to the upper echelons of American and Canadian society in order for his system to survive. It might have been coincidence that Gulatiís efforts were announced hours after the Puerto Rico Islanders dispatched the LA Galaxy and their returning USMNT players in the second leg of their CONCACAF Champions League series. The successful D2 side was community owned, and did not possess a majority owner of the caliber that Gulati would require for them to maintain their D2 status. One thing was for sure Ė the Islanders would saw what happens to those who mess with MLS.

 

Cujo or Benji?

 

Whatís happening in the crate now? Have Garber, Gulati and their attendant scribes succeeded in neutering soccer in the United States by holding it harmless to the pocketbooks of MLS owners and our established pro-sports hierarchy? Has the spirit of the game been broken? Are stakeholders content with pre-ordained status as a niche sport? Has their single entity choker cut to the bone?

 

Comfortable in the control they have exerted on our first division, Sunil Gulati and Don Garber have begun to loosen a few screws. They have opened three DP slots have to every MLS team, which allows owners to pay unlimited monies to up to three players Ė as long as average salaries for the rest of the guys are kept at around 100k. Red Bull New York has taken full advantage and is already paying three starting players an average of 30x more than the other eight.

 

As they fiddle with the enclosure, and poke at the beast within, we might find out what breed is in there. Fifteen years in a crate can do funny things to any animal. Is it completely broken of precocious establishment challenging habits? Will the USMNT lay down, weakened from structural developmental disabilities? Will lower division clubs sit and shake hands with Garber and Gulati through the bars of the single entity enclosure?

 

Perhaps our game will break out of captivity, bite the hands of its captors, and run wild towards it's massive potential?

 

Weíll see.  

 

 

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