Monday, July 31, 2017

Promotion Relegation and the Stadium Scam - Jake Steinberg Guest Post

(Note: Today's guest author Jake Steinberg wrote a great piece featured by the Economist make sure you READ IT HERE)

Promotion Relegation and the Stadium Scam             

Advocates for promotion and relegation in the United States spend a lot of time debunking speculative defenses of the existing order. One of the more common tropes is MLS simply won’t allow it to happen. I don’t have a ton of patience for that argument—for one thing, it’s self-fulfilling and thus uninteresting—but at least one part of it needs to be taken seriously. Because while pro/rel advocates can point to the fact that it’s not entirely MLS’s decision, it is obvious that pro/rel would be easier to achieve if MLS agreed to it.

    Others have pointed out reasons why MLS is unlikely to be a full-throated pro/rel backer but the point of this post is not to wade into the general morass of that question or to examine the ability or general willingness of monopolistic entities to give up control, but instead to highlight a particular reason why MLS fights against pro/rel, which also happens to be a very good argument in favor of an open system. MLS wants to expand its access to the lucrative stadium scam that the four major sports (1), particularly the NFL and MLB, have been running for years, and it can only do that if it remains a closed league. 

Everyone knows that stadiums (2) are a bad deal for municipalities. Teams usually trot out the same shill to defend their deals, but virtually every serious source that has addressed the topic has found that these deals are bad for cities. The owners, like all snake-oil salesmen, push grandiose promises about the benefits of a new stadium, and the motivated thinkers in the political class lap them up like homeopathic remedies, despite all available evidence. Even leaving aside the impropriety of handing massive tax breaks and subsidies to some of the richest people and entities in the world, heavily subsidized sports arenas are just, on balance, not good deals for their locations. 

It’s clear why a league and its owners want tax breaks and subsidies and it’s not a huge mystery why politicians keep giving them out: they want to keep their teams or attract teams from other cities. (3) Knowing this, teams demand increasingly lavish benefits from cities and threaten to pull up stakes and move somewhere else if they don’t get their way. This has most recently affected fans of the Oakland (soon-to-be Las Vegas) Raiders, (4) but it’s also been pulled by the St. Louis (formerly and currently Los Angeles) Rams, (5) Texas Rangers, and Milwaukee Bucks. (6)

Here’s the catch: this extortionist swindle only works if there is a credible threat to leave, and there is only a credible threat to leave when you artificially constrain the number of teams that have access to the top division. As long as cities are permanently frozen out of the top division absent expansion or taking a team from elsewhere, some of those cities will be willing to heavily subsidize the construction of stadiums. 

An open system changes this dynamic. If you have an open system, teams will invest in accordance with what their market can bear. (7) If supporters have a hope that their club can one day enter the top division, those fans aren’t likely to trade in their existing loyalties for a shiny new MLS club. (8) In other words, they won’t need to approve massive expenditures to lure a team from elsewhere if they can help build up an existing team in their own market, which would eliminate the threat to move. And taking away the threat to move means that those municipalities have a much better negotiating position against their existing teams. Simply, without the threat to move, teams would not be able to shake down cities for lucrative public expenditures. 

    The MLS apologists will say that this impedes the growth of the game, because it hinders investment in top-flight facilities. That is only true if you think that the burden of creating those facilities should be with the public fisc, rather than the owners and governing structures of US Soccer. Even to the extent that owners would pass along costs to supporters, it is far more equitable for those of us who either like soccer or who stand to profit from it to bear the majority of those costs. Moreover, shifting the burden of these costs onto owners in an open system would match stadium investment to a club’s ambition. 

    MLS  has already taken advantage of public financing for stadiums, like the white elephant of Bridgeview, Illinois, where the Chicago Fire play. The league wants more of this money. Don Garber has explicitly said as much, defending the closed league by asking: “What do you tell a municipality who invests in a public stadium and expects to have the revenue streams that come from being in the First Division?” That question is dishonest in two ways. First, it assumes that the municipality will see revenues from the stadium, which is demonstrably false, as stadiums tend to cost cities money and generate small or no extrinsic economic advantages, while owners capture whatever benefits there are. Second, it is question-begging, insofar as it presumes that leagues should be deciding which cities are worthy of a top-division club, rather than having the market determine what an appropriate level of investment would be for a given city. 

Garber’s argument makes another dubious assumption: that there will be the same level of interest in the lower divisions in an open system as there is now. It’s fair to point out that average division 2 attendance (especially when we leave out the occasional outliers on the high side, like FC Cincinnati, and the low end, like the MLS2 squads) wouldn’t justify stadium construction on the scale that a top-division league deserves. But is there anyone who seriously doubts that interest in the second division would be higher if there were promotion? 

    Franchises threatening to leave their homes unless the taxpayers buy them a shiny new stadium has become a familiar story. It’s also easy to understand why politicians and voters still fall for the threat; no one wants to lose their access to the highest level of play in the country. An open system would eliminate this threat and the lucrative subsidies teams can extract with it,  which is why MLS will continue to fight for its closed system.

-Jake Steinberg is the chairperson of San Francisco City FC's members' board. His work on soccer has also appeared on The Economist's Game Theory blog. He sporadically tweets, mostly about SF City but occasionally about basketball, law, and his dog under the handle @SFJoachim

1. Culturally, I think you could probably argue that soccer is already a bigger deal than hockey in much of the country. Regardless, when people use the phrase “big four” in reference to sports in the US, they typically exclude MLS. 

2. Yes, I know the plural of “stadium” should be “stadia.” Stop being so pretentious. 

3. You could make this story more complicated and talk about politicians reflecting constituent demand, wanting legacy projects, and simple corruption, but for our purposes, these all amount to the same thing, wanting their team to stay put or wanting to attract a team from another city. 

4. Ironically, Major League Baseball’s antitrust exemption has helped keep the A’s in Oakland

5. The Rams are a particularly egregious example, because they pulled this scam twice, once convincing St. Louis to build them a stadium, and then, while the citizens of St. Louis still owed millions on the stadium, moved back to Los Angeles when St. Louis refused to build them a new one. The Rams defended the move by claiming the team didn’t take public money in LA, conveniently omitting the millions in tax breaks they got. The Rams owner, Stan Kroenke, became the majority owner of Arsenal sometime after the club built Emirates Stadium with no public money. He also owns the Colorado Rapids and if you don’t think he intends to pull this again, then I have a soccer-specific stadium to sell you. 

6. These teams all made explicit threats to leave, but even teams that haven’t done that have the implicit threat that they will relocate. 

7. Public financing of stadiums occasionally happens in open systems, but it’s less frequent, and usually requires some other catalyst, like an Olympics hosting bid. Even then it can be controversial. West Ham’s stadium deal, which was a much better deal (at least on paper) for taxpayers than the typical American one, still led to a government inquiry and public outrage.

8. I don’t know that it is fair to blame fans, particularly less obsessive ones, for preferring the highest level of play available to them, even if I also think that pro/rel would raise that level of play across the country. That said, I hope the people of Detroit ignore Dan Gilbert’s latest insult to decency and continue supporting Detroit City FC.

Tuesday, July 25, 2017

Let's speculate about a #ProRelForUSA timeline

Since yesterdays $4B media rights offer from MP and Silva discussions about opening the American pyramid have been happening like never before. As can be expected with such a hot topic, sources are starting to leak more information about the deal.

As Bob Williams explains in this series of tweets...

He goes on to explain that of the $4B over 10 years he is being told that $80m per year could make its way to lower division teams and the inclusion of solidarity and parachute payments would be included in this new way to structure the American pyramid. 
His sources are also saying that the offer was most assuredly serious and that this offer is just the beginning of a path to an open pyramid not the final offer. One of the most intriguing pieces of these leaks to Mr. Williams is that teams from up and down the current pyramid are already showing interest in finding out more.

This was obviously a play by Ricardo Silva to make the best case scenario happen. Unite the entire pyramid under one umbrella, MLS included. This would also be the end of Co-D2 and the future Co-D3 sanctioned leagues during this creation of one unified pyramid. This bid was dismissed out of hand by MLS

So what possibly is next? 

Before we get to that, let's think back to everything that has already happened. 

1. NPSL begins public discussions of creating a full season league. 
5. NISA league is created. 
7. MP and Silva make $4B bid for media rights to a fully restructured American pyramid. 

Thats where we are today. So now lets do the fun part and speculate about the future for a minute... 

8. NISA releases teams for it's inaugural season.
9. USASA releases D4/5/6 standards and multiple state associations create D5/6 state leagues. 
10. USSF funded DoublePASS development system audit is released that supports claims that an Open Pyramid will help immensely with player development long term. This would be another huge public relations win for the open pyramid movement.
11. Alternate D1/2/3/4/5/6 pyramid is officially mentioned by stakeholders.
12. NASL, NISA, USASA, and USSF begin official work and hammer out the details for a new D6 > D1 open pyramid structure. 
13. A plethora of USL and PDL club owners express interest in participating in new structure. 
14. MP and Silva offers media rights deal to new Alternate Open US Pyramid and US Open Cup. 
15. Media rights offer is extended to USSF to include USMNT, USWNT and USYNT media rights when their current deal with SUM expires as well. 

An infusion of cash (even one not as large as the $4B offered to a pyramid that includes MLS) like what is possible in this scenario radically changes soccer in this country.

A question that needs answered right now is have we gotten through these first 7 steps randomly or is there discussions by many of the stakeholders trying to create this alternate pyramid?

I don't know for sure... but it sure seems that with some collaboration these next 8 can happen and happen much more quickly than many assume.

I would love to hear your opinion on this speculation in the comments or on social media. Make sure you continue to tag all of your open pyramid conversations with the #ProRelForUSA hashtag on all your social media platforms (yesterday was a HUGE day on Twitter for its use by the way!!!).

Monday, July 24, 2017

Interesting MLS quote about the $4B media rights #ProRelForUSA offer

Multiple reports have circulated today stating that MLS has turned down a $4B media rights offer from Ricardo Silva's international media company MP & Silva that included a stipulation that #ProRelForUSA was started in the United States.


READ HERE - Sports Business Daily



MLS Executive VP of Communications is quoted by Jeff Carlisle of ESPN as saying:

This quote says something very intriguing to me. MLS deals directly with its broadcast partners because it, for various reasons, is "required for a successful partnership".

Why does USSF not directly deal with its broadcast partners but use the MLS subsidiary company Soccer United Marketing (SUM) to negotiate its broadcast deals? We've asked questions before about USSF offering a subsidy to MLS that it does not to other leagues in the US pyramid. Today we have MLS coming out and stating that not negotiating directly with your broadcast partners is just plain old bad business.

Maybe it is time for our American soccer media to really start to ask the tough questions about this USSF/MLS/SUM relationship.

Even MLS is now on record saying that they think its crazy to use an intermediary to negotiate a media deal.

Let us know in the comment section or on social media what you think about this media rights deal offer and MLS's response to it. Make sure you tag all of your conversations with the #ProRelForUSA hashtag!

Friday, July 21, 2017

NPSL playoff fan engagement poll

Yesterday our friends at Supporter Groups for Promotion and Relegation ran a poll asking about fan engagement concerning the NPSL playoffs and promotion to NISA.

Very simply.

Would you pay more attention to NSPL playoff matches if NISA promotion was on the line?

The results (while unscientific) show that many people would pay even more attention to the matches during the playoffs if more than a trophy was on the line. This results goes hand in hand with what many people have speculated about fan involvement in lower division soccer and #ProRelForUSA.

If the clubs are playing to move up the pyramid... a vast majority of fans will care more and pay more attention to these games "that matter" not just the fans of the specific club playing for the trophy.

Polling data like this suggests that it is in the best interests of lower division club owners to put their league loyalty aside and create a unified pyramid of regional leagues featuring #ProRelForUSA. The more engaged fans of lower division soccer are... the better off everybody in lower division soccer will be. As the saying goes, "A rising tide lifts all boats".

Would love to hear your opinion in the comments or on social media. Make sure you tag the conversation with the #ProRelForUSA hashtag!

Wednesday, July 19, 2017

What anti-#ProRelForUSA topic has not been debunked?

In the over 100 posts that I've been writing this blog I've touched on quite a few topics...

We've seen some of them be shared enough that they've nearly stopped several items from being used as arguments against the opening of the pyramid. We've seen huge growth of those advocating for an opening of the pyramid. We've even had the pleasure of having a sitting USSF Board member comment on one of our articles on Facebook and in a podcast interview.

Now I need your help though. NO... this is not a post begging for money. I just need your help in continuing to keep writing about the topics that most often pop up.

During your discussions online and in person what topic do you hear the most often that you have not seen addressed by either this blog or by another site?

Hit the comments up and let me know what you would like to see written about!

Continue to use the #ProRelForUSA hashtag on all your social media platforms. Join one of the several Facebook Promotion and Relegation groups out there and follow some of our favorite Twitter people.

Thursday, July 13, 2017

Who is challenging those in power?

Jorge Ramos recently did a TED Talk titled "Why Journalists Have An Obligation To Challenge Power". One of the first statements he made struck a chord with me.

I was born in Mexico, but I've spent more than half my life reporting in the United States, a country which was itself created by immigrants. As a reporter and as a foreigner, I've learned that neutrality, silence and fear aren't the best options — not in journalism, nor in life. Neutrality is often an excuse that we journalists use to hide from our true responsibility. What is that responsibility? It is to question and to challenge those in positions of power. That's what journalism is for.

Last night the USMNT squeaked by with a win over Martinique in Gold Cup group stage play. The same Martinique that features a very small 4 tier 57 team pyramid with even its top division being amateur/semi-pro. The same Martinique NT that only has 4 players who do not play in that same top division league as this Bleacher Report Info-graphic points out.

Jordy Delem who has a total of 7 starts in MLS after playing only 16 games in USL last season. Antoine Jean-Bapitste who plays for Villefranche in the 4th Tier of the French pyramid. Anthony Angely who plays for Poitiers in the 2nd Division in France, and Steven Langil who played 6 games last season for Polish 1st Division power Legia Warsaw before being sent back out on loan to his previous club Waasland-Beveren of the Belgian 1st Division.

I saw plenty of hand wringing and worry coming from fans on social media over the way the national team played versus obviously inferior competition regardless of if it was the 'A', 'B', or 'C' team Bruce Arena ran out there to play.

But I also saw Tweets like this from media members.

I also saw a halftime analysis that claims that this "Pressure" was causing problems for the back line of the #USMNT. No questioning of the Bruce Arena installed tactical play of the entire team when under this light pressure.

USMNT Head Coach Bruce Arena was able to make this statement at a Gold Cup press conference...

He was not immediately inundated with follow up questions about players such as Miguel Ibarra who was called up from NASL and performed admirably in his action and last nights savior Jordan Morris who was called up directly from college play at Stanford University. With the tiers of American soccer not being merit based... how can any of us and him especially... act as if lower tier teams can not hold top level players? Why was he not pressured on this topic? Why was he not asked if the lower tiers of US soccer are even being scouted?

Let's add this "MLS Only" way of Bruce Arena thinking to this quote from  Johan Cruyffs' book "My Turn"...

At some point Jurgen Klinsmann was pressured by those in power at USSF to included players from as many franchises in MLS as possible. Klinsmann imploring the best and brightest of young American soccer players to play in top leagues in Europe elicited the ire of MLS Commissioner and USSF Board member Don Garber.

Is Bruce Arena under the same pressure to pick MLS players?

Has anyone asked?

Why has only Jurgen Klinsmann, in the recent history of high level soccer people in this country, put under immense pressure by the media? Was it because he didn't play along with MLS wishes? Was it because he put USSF under pressure with his statements about reforming the entire pyramid in the US? For his wishes to fix the development system? To end Pay to Play?

Every day we can find a new topic to question those in power over American soccer with. When the media fails to ask these deeper more meaningful questions that absolutely need asked, they become willing accomplices to whatever plan those in power have put in place.

Currently it seems that nowhere in the entire ecosystem of soccer in the United States is there being pressure applied to the leaders of the game.

The question I have today is...

Does American soccer media have a single writer, TV pundit, or even big time blogger who consistently challenges the power structure of American soccer?

Wednesday, July 12, 2017

If not now, when?

We all know American soccer needs to change. It seems that almost weekly the spotlight is being shown on a "new" problem (that has existed for years) somewhere in the American soccer structure/culture.

My questions is ... Why are so many people involved in American soccer scared of the deep and radical systemic change that is needed to address these issues?

Why do they keep pushing for small incremental change?

We all know that incremental change results in incremental results... Do we really want to wait "generations before we are literally playing at the level of the Premier League or Bundaliga"?

If you are fine with that... keep advocating for incremental change. For the status quo.

Unfortunately, for those of us who would like to see positive movement relatively quickly for American soccer, too many involved in the leadership of the sport, the media, and a multitude of very vocal (on social media) fans incorrectly believe that small incremental change will deliver radically different results.

Only sweeping reforms are going to deliver the kind of radically different results that all of us want to see in our lifetime.

Incremental change will never do this.

So why do these leaders, media members, and fans keep fighting against this sweeping reform?


The one thing we can stop being scared of ... that soccer as a "major" sport in the United States will go away. It is here to stay. Soccer is going to remain on TV. It is going to remain being played by millions of children and adults every week. It will remain a pro sport. It will remain in your city and town. It is not going away. We will not return to the "Dark Ages" so many are scared of.

If we change the way soccer is governed in this country. Soccer is not going away.

If we have an open and inclusive pyramid put in place. Soccer is not going away.

If clubs are paid Training Compensation and Solidarity Payments. Soccer is not going away.

If the youth soccer "travel and tournament" structure is affected by the addition of 100's of Adult clubs having academies that are free or very low cost. Soccer is not going away. 

If merit starts to decide which players play in the best academies not parental wallet size. Soccer is not going away.

If the entirety of the adult amateur soccer system in the country is restructured and able to move up and down on sporting merit and is connected to the pro game. Soccer is not going away.

If billionaire owners are no longer allowed to buy new spots in the 1st Division of the sport for $150M dollars. Soccer is not going away.

We can keep going with this list of things that if they are addressed in sweeping reform all at once... none of it will kill soccer.

Right now soccer is growing at every level even while being structurally choked off all the way from the top down. What will happen to the sport when proper leadership makes the changes that we all know are needed?

The sleeping giant that is US Soccer will awaken.

Keep speaking up. Use #ProRelForUSA on all of your social media platforms when talking about any of these issues and keep the pressure on those who can make the change.

Monday, July 3, 2017

When do they start to ask the hard questions?

Normally when I sit down to write a blog post I have a starting point perfectly worked out in my head. A stat, a document, some figures, an article I've read... something.

Today I have nothing but a feeling. The feeling that the soccer press in the US is failing the fans of the sport in this country.

I say this not to point an accusatory finger at any person in particular, any publication in general, or even broadly at the entirety of the media business. Just to say that at some point soccer in the US needs a media that is more than cheerleaders of the sport, reporters of game results, and prognosticators of future National Team lineups. We need a media that digs deep and finds out the "Why" behind all of the business dealings in the sport. The "Who" is behind those reasons. The "How" did these people make the decisions happen.

After my recent post about SUM valuation compared to MLS team worth a screen capture of the Soccer United Marketing Wikipedia page has started to float around Twitter.

Why has this series of relationships and manipulation of policy by USSF not been a much larger story concerning the business of soccer in the United States?

If this was going on at FIFA it would be the largest sports story in the world and would have reporters digging in to every relationship and business dealing by every board member of the Ex-Co. Why is this level of scrutiny not levied at USSF Board of Directors members and top level employees as well? What is it going to take before the effects of this collusive relationship by MLS/USSF are explored and we find out if it is actually having the negative ramifications on clubs outside of MLS that many USSF reformists think that it is?

CONCACAF was allowed free reign outside of media scrutiny on their multi million dollar deals right here in our backyard for decades and it gave us Chuck Blazer.

How long is our free press going to allow all of these USSF and MLS business dealings to remain cloaked in secrecy?

When do they start to ask the hard questions?