Commentary

On the current USL league meetings

The United Soccer League meetings reportedly occurring in Chicago during the Major League Soccer All-Star Game interval have been characterized as focused on the so-called MLS2 teams in the league.

The apparent intent, as presented by James Poling of News OK (see Steven Whisler’s Daily News Roundup link under USL for Tuesday August 1), is to remove them from division two.

The player-development-side parent clubs are not investing heavily enough to please owners of independent ones, judging by a comment Poling quotes from USL President Jake Edwards. There are not enough butts in the MLS2 stadium seats, and the poor imagery devalues the independent franchises’ investments, among other things.

Usually, a negotiation has both public initial positions and closely-held fall backs, and the fall backs are often the real goals. Considering facts can disperse hype and smokescreens.

Background recap

The first so-called MLS2 wholly-owned affiliate team entered the United Soccer League in 2014, the Los Angeles Galaxy II better known as “Los Dos,” who are owned by the Galaxy itself. Several others entered the next year, followed by a few more in 2016 — including Bethlehem Steel FC — so that there are now eleven (I miscounted, there are ten in 2017. My error. -Tim Jones), since FC Montreal folded at the end of 2016. 2017’s USL expansion sides were not wholly-owned affiliates of MLS parents.

These MLS2 teams are out-and-out player development sides. No two do it exactly the same, but the basic template is clear. That means their goals are different from the other league teams, the independent franchises whose conventional goals are profits.

A fair question to consider is how each group has benefited the other since 2014.

What do the independents give the player-developments?

The answer is ready-made, tough, frequent, on-the-pitch competition.

Steel head coach Brendan Burke stated in February that pressure makes diamonds. The adult professionals of USL put considerable pressure on the Academy teenagers, college graduates and first-team reserves fielded by most of the player development teams, as evidenced by Bethlehem Steel’s recent 0-4 match hosting the Charlotte Independence.

The independents also present a much greater variety of tactical schemes, climate differences and travel challenges than did the lame old MLS reserve league. And they give the teams more minutes. This season has thirty-two games instead of fewer than ten.

Further, the veteran wisdom and hard-won guile of some of the older USL coaches, for example Bob Lilley, Bill Becher and Mike Jeffries, provide meaningful growth opportunities to the players and coaches of the wholly-owned affiliates.

The independents get a lot in return

In the manner mentioned above, the independents also get variety that has entertainment value.  And MLS2 almost doubled the size of the league’s teams, overnight — figuratively speaking.  The number of games has therefore expanded, and the quality of players has improved.

Economies of scale are now possible that were not before.  For instance, there is a level of media coverage that previously did not exist. Its quality remains uneven, but it is not as uneven as it used to be, and the league head office is working toward further improvement.

USL now has media exposure beyond the merely local. YouTube, ESPN 3, — and for the championship an ESPN TV channel — are providing product.  The USL is now a presence, albeit a small one, in some of the larger media markets of the country.  And it did not have to develop that presence plodding from a single, new, hoping-for-success franchise to the next, all struggling to stay afloat.

Most importantly, the population available to the United Soccer League as a potential market has tripled, from very roughly 40 million people to 120 million. The data table below gives the details.

Prior to 2014, USL survived from year to year as a shoestring operation with considerable franchise turnover. The MLS2 sides’ accession created a growth explosion. The United Soccer League no longer ranks with backwoods country fair carnivals. It has become serious, credible, not yet DisneyWorld but Kings Island and Kings Dominion.

Expulsion would lose the independents a great deal

If the MLS2 sides are expelled, the independents lose exposure to greater New York and greater Los Angeles, the first and third largest markets in continental North America, as many as 42 million people.

Further, six of the largest seven markets in that space are MLS2 sides that total almost 60 million people of potential availability. That’s roughly half the current market.

Expulsion has to be a smokescreen, the initial negotiating position designed to make the real goal acceptable by comparison.

What is really going on?

Assuming successful businesspersons do not deliberately cut their markets in half overnight, we conclude the real purpose of these meetings is to pressure MLS2 sides into investing more, a lot more, to sell tickets to their markets. Most likely, grumpy USL owners are targeting MLS2 club owners New York Red Bulls, Los Angeles Galaxy, Toronto FC, Seattle Sounders, and Orlando City to do the spending, since they provide the half of the market referenced above.

USL is saying to MLS, “Increase my profits by spending your money!”

Data Appendix

In the comparative table below in the 2017 portion, statistically speaking, U. S. Macintosh apples are being compared to U. S. Grimes Goldens to Canadian Red Delicious.

The U. S. Census Bureau’s Combined Statistical Area is different from its Metropolitan Statistical Area, and their compilation techniques undoubtedly differ somewhat from those of Statistics Canada. All U.S. data throughout both parts of the table are estimates for 2016, save for Charleston SC which is 2015. Canadian numbers are from the 2016 census. Antigua is from 2011.

2013
Team Market
Los Angeles Blues     18,688,022
Phoenix FC       4,661,537
Orlando City SC       3,202,927
VSI Tampa Bay FC       3,032,171
Pittsburgh Riverhounds      2,635,228
Charlotte Eagles      2,632,249
Richmond Kickers       1,281,708
Harrisburg City Islanders       1,252,820
Rochester Rhinos       1,172,138
Dayton Dutch Lions FC       1,074,617
Charleston Battery          744,526
Wilmington Hammerheads FC          282,573
Antigua Barracuda FC            80,161
Total 40,740,677
2017
Team Market
Eastern Conference
New York Red Bulls II*    23,689,255
Toronto FC II*      5,928,040
Orlando City B*      3,202,927
Tampa Bay Rowdies      3,032,171
Saint Louis FC      2,911,769
Pittsburgh Riverhounds      2,635,228
Charlotte Independence      2,632,249
FC Cincinnati      2,224,231
Louisville City FC      1,510,945
Ottawa Fury FC      1,323,783
Richmond Kickers      1,281,708
Harrisburg City Islanders      1,252,820
Rochester Rhinos      1,172,138
Bethlehem Steel FC*         835,652
Charleston Battery         744,526
Western Conference
LA Galaxy II*    18,688,022
Orange County SC*    18,688,022
Seattle Sounders FC 2*      4,684,516
Phoenix Rising FC      4,661,537
Portland Timbers 2*      3,160,488
Sacramento Republic FC      2,567,451
Real Monarchs SLC*      2,514,748
Vancouver Whitecaps FC 2*      2,463,431
Swope Park Rangers*      2,446,396
San Antonio FC      2,429,609
OKC Energy FC      1,445,501
Tulsa Roughnecks FC      1,157,465
Rio Grande Valley FC         913,965
Colorado Springs Switchbacks FC         712,327
Reno 1868 FC         613,608
Total 121,524,528

An asterisk indicates a wholly-owned MLS affiliate

To wrap up

Expelling 11 of 30 teams from a young, growing league, virtually three teams out of every eight, cannot be the real goal.  The real goal has to be to leverage the affiliates’ parent clubs to improve their business profitability.

MLS owners are used to working within the collective single-entity structure that is their expensive major league. But they also made their money as individuals succeeding in the free market. They understand entrepreneurship.

Jake Edwards’ comment cited above reminded his own ownership how much money the MLS investors had already spent to get where they are. It is a considerable sum when you add entrance fees for a stadium, a technical roster, a business organization, and the minimum-mandated reserve wealth. All five are each larger than the corresponding expenses for starting in the USL because MLS is Division One, not Division Two and U. S. Soccer requires more.

Independent USL owners have leaked a threat as their initial negotiating position. Good sense would suggest that the privately-held fall back be a carrot to incentivize MLS ownership to improve business performance among their wholly-owned affiliates.

As a hypothetical example of such, a matching offer of whatever variety would put the USL’s money where its mouth is. It would indicate serious cooperative intent, and it would acknowledge the heavy financial commitments of the other side.

12 Comments

  1. Good stuff, Tim, thanks.
    .
    Do you have any numbers to show home game attendance for the USL? I know Cincinnati is selling out 30,000 for some of its games, but how does that compare to the number of fans that show up for a home game for independent teams versus MLS affiliates like the Steel, Liz Dos, Red Bull II, etc? I think those numbers may support your point of trying to get MLS to improve its investment at the USL level.

    • Unfortunately, Mark, I don’t. You’re right that data would help clarify. The article James Poling wrote for NewsOK sounds as though he might have had such data, but he did not provide it.

      • Thanks, Tim

      • I found the 2017 USL attendance numbers at http://soccerstadiumdigest.com/2017-usl-attendance/
        .
        Some observations:
        .
        The top 15 teams in terms of home attendance are all independently owned.
        .
        The top MLS-affiliate for home attendance is Bethlehem Steel at #16, with an average of 3,056.
        .
        The worst 7 teams in terms of attendance are all MLS-affiliates, averaging fewer than 1,500.
        .
        And, just to rub it in, the worst attendance is for New York Red Bull II averaging 563.

    • Attendance for the season’s being tracked here: https://en.wikipedia.org/wiki/2017_USL_season
      Lowest average home attendance figures in the league are, in order from the bottom, NYRBII, Vancouver, Swope Park, Seattle, Toronto, LA, Orlando. The only independent averaging less than 2,000 per home game is Charlotte.
      I think a lot of people would like to see the MLS2 sides stick around but follow something more like the models Philadelphia and Houston have pursued: keep them close by, but not in the same market, and maybe, like in Houston’s case, have independent management. Bethlehem Steel’s averaging about 3,000 per home game, and Rio Grande Valley’s about 7,000.

      • Scott of Nazareth says:

        ^^^THIS^^^

        While I am sure its convenient and cheaper to the MLS clubs to have their USL affiliates nearby and sharing facilities, soccer has not yet reached a point in this country where a minor league team will be supported with $ and attendance in the same market.

        Union & Steel are a perfect arrangement distance wise – close enough to train together, but playing for crowds that are generally an hour or more from each other.

      • Agreed

      • Completely agree with I and Scott. Those models seem to work and think they have the most potential to benefit both MLS and USL.

      • Interestingly, In their first season in USL, Orlando did try that model. Playing where I live in Melbourne, FL which is about an hour drive from Orlando- very similar to the Philly-Bethlehem drive. There was somewhat of a local big to-do when they announced the city they would play in…and it lasted all of one year. Averaged 950/gm. Even as a big MLS fan, I pretty much forgot they were here. So it’s not a definite the model will work everywhere. Pretty impressed with Rio Grande Valley as they averaged about 2,000 first year and now 7,000 this year. Whatever they are doing, the other MLS2 teams ought to take a look and copy them.

  2. In my completely arbitrary opinion, keeping MLS B sides in the USL is very, very important to the development of soccer here.

    It is 1000% more important to give back ups/young players on a MLS teams’ payroll valid competitive opportunities. That will make MLS better in the long run.

    And yes, making the MLS better is the most important way to make Soccer in America better. For now.

  3. PSP’s readers prove yet again the value of open, civil, informed public discussion. Civil society, illustrated perfectly and positively.
    .
    My own opinion is that over time soccer’s minor league, or in the future perhaps leagues, will come to approximate the structure of affiliated minor league baseball.
    .
    the hybrid affiliate pattern points in that direction.
    .
    U. S. Soccer would likely have to alter some of the details of its lower division ownership criteria to accommodate the pattern I would guess.
    .
    And I would think something akin to baseball’s 40-man roster-with-option-system would need to emerge.
    .
    for Philadelphia-Bethlehem, if a local ABE business person with sufficient wealth and entrepreneurial skill were to see the Steel as an opportunity to make money, and were to join Keystone LLC as a minority owner focused on the Steel the way Mr. Graham seems to be for the Academy, they would stay a wholly-owned affiliate.
    .
    Full marks, gratitude and kudos for the links to USL attendance numbers above. I owe you gentlemen an intellectual debt that I hope my editors will allow me to acknowledge, even though such is not as usual in journalism as it is in Academia.

  4. Here is where US Soccer almost needs to step up and, as Darth Vader would say, restore order to the galaxy (and I don’t mean the team in LA). Now here’s the problem. In the US, US Soccer or any other entity can’t just impose order in the galaxy (unless US Soccer got an exemption from anti-trust laws, and only MLB has one of those).
    I, however, am free to play emperor and give you my plan.
    I would force a merger between USL and NASL and cut out the dead wood and the financial non-hackers. While there are some between the two organizations who still don’t play nice together in the sand box, most people don’t remember why the two leagues split in the first place (dissatisfaction with the USL after Nike sold it’s interest). That’s ancient history by now.
    After merging the two groups, split them into a Div. II (you could even call it the NASL if you wanted to just to preserve the historic name) and a Div. III (Your USL as it were, or rebrand it the ASL to preserve another historic name).
    I would split off the MLS Reserve teams (or keep them as a separate conference or division of Div. III), but allow them to play the Div. III teams that would count in the standings of the Reserve League and the USL. The MLS Reserve would have its own post-season playoffs.
    The Div. II league would be capped at about 20 to 24 teams with a double-round robin schedule, no separate playoffs, but have a league cup.
    The Div. III league would be regional, membership not capped with a league cup and a playoff system.
    Finally, to satisfy those home and abroad and the purists and the MLS investor-operator groups:
    I would expand the MLS to between 36 and 40 teams. Then I would split them in two — MLS Premier and MLS Championship. The MLS would have no regional split and play a double-round-robin schedule. The MLS Premier would have a four-team playoff for the MLS Cup. MLS Championship would have a eight-team playoff (two through six from Championship and the bottom from Premier, except for the last-place team (the first place team from championship gets automatic promotion and the last place team from Premier gets automatic relegation). The top four teams from the tournament are promoted or hold their spot. The bottom four from the tournament go to Championship.
    I also would have an MLS-wide league cup.
    I would not impose promotion/relegation from the USL or NASL with the MLS, because MLS investors would fear their franchises losing value with relegation, would cash out their investments and the MLS would fold and fold rather quickly.

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