17.4.2005
MLS Monopoly?
What's you favorite MLS team? Ask Philip Anschutz the same question and you're sure to get an interesting answer. You may not know his name, but he owns 5 1/2 Major League Soccer teams. How is that possible? In contrast to most established sports leagues, MLS is a "single-entity" organization, in which the league (rather than individual teams) contracts directly with the players, in an effort to control spending, labor costs, share revenue and in general, ensure equality. Each team has an operator who owns a financial stake in the league. In a sense, the league is organized as a corporation and the team operators act like share holders.
In early 2000, MLS players challenged the single-entity structure of the league by filing a lawsuit claiming that MLS is an illegal monopoly. After losing the case, MLS players (supposedly encouraged by Bob Foose, head of the agency SportsNet, Inc) formed a union that would bargain their suppressed wages and controlled transfers.
The single-entity structure has nasty implications. For example, after the 2001 MLS season, the league was reduced by two teams (Tampa Bay Mutiny and Miami Fusion). The teams ceased operation not because of their results (Fusion finished first in their division) but based on their financial performance. These teams were just "bad investments" from MLS' standpoint.
| Single Entity | Separate Entities | |
| League and clubs are one single organization. The main goal is profit | League and clubs are separate entities. Clubs try to profit while the league is concerned with growth, popularization and long-term success | |
| Finances | Contracts are owned by the league and players are paid out of a central fund | Contracts are owned by clubs |
| Recruitment | Balance The MLS Draft distributes players to ensure balance |
Success vs failure Success brings in profit so better teams can buy better players |
| Competition | Parity over competition The league's primary concern is to ensure that none of the teams go bankrupt, not to produce real competition |
Real competition Demanding investors put high expectations on their teams |