It's for that reason I don't want to write five long posts on the mechanics of MLS single-entity ownership. Major League Soccer bloggers have all written yards on it; hell, even I've written extensively on it in the past. If you don't know how it works, and very few of us can say with confidence we entirely do, as a starter you might go here for a very simple overview, and then here for Fake Sigi's excellent two-parter on the MLS single-entity structure.
For the nutshell, over to Fake Sigi:
MLS LLC is a limited liability company with single taxation and partners that own it who are a mixture of corporations, partnerships and individuals. MLS owns all of the teams that play in the league (a total of 12 prior to the start of 2002), as well as all intellectual property rights, tickets, supplied equipment, and broadcast rights. At the same time, MLS contracts with owners to operate the teams it owns. These contractors retain a portion of ticket sales and other revenue, and must pay a portion of operation expenses. Contractors have a right to operate the teams they contract for and can sell a percentage of that right to other investors who may not be investors in MLS LLC.In response to which Kenn Tomasch over at the aptly-named kenn.com, countering the commonly-held assumption that MLS owns 51% of its clubs (perhaps pilfered from the Bundesliga?), clarifies :
MLS controls its franchises. MLS ultimately decides what happens to its franchises. The “owners” (investor/operators) of MLS clubs own stakes in MLS, LLC, which, in its single-entity model, controls player contracts and league-wide marketing and media deals.So basically replace the word "own" with "control" in FS's paragraph and you've got it. I think. MLS runs the show and gives local owners a piece of the action.
So why single-entity? Well, it's careful. MLS employs a salary cap so that the sort of transfer fee and player wage inflation that has bankrupted many a European club doesn't wreck a league promoting an immensely popular global sport in a fickle-but-wildly-wealthy North American market. The league offers a bit of a way round with the designated player rule, essentially allowing franchise investor/operators to use their own money to make a marquee signing. But the emphasis is on a centrally-controlled approach to prevent any runaway spending that might threaten the league as a whole.
I'm not going to get into the pro/con debate, except to say that it's raging and it forms a clear ideological fault-line among fans of MLS. Critics believe that the centrally-enforced salary cap (currently $2.3 million per team) and single DP allowance are preventing the league from getting better players and improving the quality of play, getting asses in the seats, and allowing the league to negotiate better TV deals. Competitively, they point out league parity is balanced to the point of absurdity. They also point out that single-entity is propping up successful-yet-money-losing and poorly-attended clubs like the Columbus Crew.
Defenders point out the sort of money required to improve the quality of play in MLS to the extend more people watched/attended would bankrupt the league. They also believe allowing profitable teams the right to spend whatever they make on players would lead to the sort of problems that led to the demise of the NASL. My own view is 100% non-committal either way.
But that's because I have about a million unanswered questions about MLS single-entity system. And I'm not alone; it seems everyone has endless reams of "stupid questions" on that front, from players to fans to pundits to whomever. I'm not always convinced people writing/commenting about single-entity are really entertaining or acknowledging these questions in good faith, but project their own view and sort of leave it at that.
My stupid questions are fairly simple but infuriatingly broad: does single-entity make it harder for less profitable teams to move to a more profitable market or disappear altogether? In a league where championship clubs don't sell out at home, what sort of leverage do fans have in participating in the operation of their club? Is there a way to improve the quality of play in MLS without spending more on player transfers and wages? Would an improved on-field product even be enough to convince a European soccer-loving American to purchase an MLS season ticket? Would profit margins dramatically improve if they all decided to buy MLS season tickets tomorrow? Under what circumstances would an American who doesn't watch soccer start going to MLS games? Would they even watch MLS if it became the best league in the world? Or is there something about MLS sporting culture that's preventing the league from selling more tickets and getting better TV deals? Is there any research or precedent to support the argument that the league just "needs to be around longer" to get more fans? And is single-entity a good platform to build wider support for soccer in North America? Does wider support for MLS or soccer in general in North America even matter?
I have many, many more questions besides. I'm not sure I'm willing to dedicate a several part series on them, but I will try to answer these questions in relation to the problems currently experienced in the wildly popular/profitable Premier League, to see whether single-entity should either be a bridge to something else, or the status quo for North American soccer.