Is MLS a Ponzi Scheme?

Several articles have hit the internet recently asking some very serious questions about the MLS business model.

Like, is MLS a Ponzi scheme?

READ THE DEADSPIN ARTICLE HERE

That business model and this financial trajectory suggests that MLS’s sea of red ink is either a loss leader or a Ponzi scheme, and it’s not always easy to tell the difference between the two until it’s too late. Several sports economists, though, aren’t optimistic

READ THE REASON ARTICLE HERE

But before Cincinnati—or Charlotte, Detroit, Nashville, Phoenix, or any of the other cities bidding to join MLS—agrees to put-up public financing for a new stadium, officials there might want to take a good, hard look at the financial health of the league they are attempting to join. Because, right now, MLS resembles something a little like a Ponzi scheme

It appears politicians are doing just that very thing...

Listening to last night's Nashville Metro Council on MLS stadium. Three council questions already about Deadspin MLS "ponzi scheme" article.

— Paul Kennedy (@pkedit) August 15, 2017

Newspaper sports writers nationwide are also starting to ask these questions in potential MLS markets... 

 READ THE SAN ANTIONIO EXPRESS ARTICLE HERE

Major League Soccer is a lot like The Royal Nonesuch.

You may hate soccer, but this topic is important. If the city lands one of Major League Soccer’s four expansion teams, it could cost $240 million and taxpayers will be on the hook for about a third of that. And there’s no promise the league will succeed.

That wouldn’t be a reflection on San Antonio, which has proven itself to be a great soccer city, but rather on the voodoo economics of MLS.

Now economist Stephen Szymanski is hitting the airwaves of NPR asking tough questions about the MLS business model.

“That’s a fairly serious accusation since Ponzi schemes are illegal,” Szymanski said. “But what it is hard to understand is how Major League Soccer can, at the same time, say that they are losing money, and then say that they can sell franchises for $150 million each. It seems like some kind of pyramid scheme and it’s really hard to see how this is ultimately going to make money for the owners.”

LISTEN TO THE INTERVIEW HERE