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the barometer

THINKING ABOUT MONEY EDITION

I check my email and there is a link to an article by Jack Bell about rookie salaries being a pittance in MLS. More or less a time marker: nothing has changed substantially on this topic in years I think to myself. Then I start thinking about the reported fee for the next expansion franchise: $40 million. So I start thinking about money. Who makes what, where does it come from, who is making out, who is getting the short stack? Then Steve Morrow gets fired…

The internet was abuzz, everybody racing to get the scoop. But the thing was, as Andrea Canalas pointed out, there was no scoop, because the official FC Dallas blog released the information. Taking a page from the book I believe written by Tiger Woods, the team got out in front, publishing fresh and newsworthy information through not just an official website, but gasp! a blog.

If you’ve read TIAS for any length of time you know this makes me secretly happy. On the surface this could be bad for journalists, and it could be for reporters, but not writers. A good writer doesn’t need a scoop, which is not to say that reporters can’t be great writers or that good writers don’t get scoops—they often are, and they often do—its just that if less time is spent news-gathering and scoop-chasing the news cycle of a journalism outlet can be slowed, maybe opening up more time for in depth researching, reporting, writing, and editing. New Yorkers for everyone!!!

So yeah, Steve Morrow got fired. Soccer is a fickle game with fickle players, puzzle pieces that actually need to fit together unlike the more independent parts of a sport like baseball or football. It’s a tough gig, making Alex Ferguson and Avram Grant all the more impressive (no matter the money they get to spend and no matter how much I dislike their Champions League final/EPL title dueling teams).

So yeah, Dallas has had more than a rough start so Steve Morrow got the door. And coaches who were about to get the boot last year are now comfortable on top of the league (as USA Today’s Beau Dure pointed out to me while referencing Dan Loney).

Back to my email in-box. Subject: Morrow fired. Delete. FC Dallas dismiss coach. Delete. Tickets sold out for Mexico vs. Argentinal; Unique Ultimate Fan Packages are Last Option to Attend Match. Hmmm, save for later. Venezuela Announces Roster for June 6 Game Against Brazil in Foxboro. Two emails from Soccer United Marketing (SUM).

I head over the SUM website. The banner reads: One Sport. One Company. “Official SUM Properties” include MLS, U.S. Soccer, the Gold Cup, Superliga, Interliga, Mexican National Team, Club Deportivo Guadalajara, the Pan-Pacific Championship.

Is the security and exchange commission following this?

I try to follow the connections between SUM and MLS. SUM is a marketing and production company that owns the rights to stage, broadcast, or produce certain events and at least partly owns a few tournaments. They make money, but it’s a private company so no one knows exactly how much.

The closest I could find to a reported profit was a quote from D.C. United president and general manager Kevin Payne in an article from Soccer America which I linked to last year regarding SUM’s cornering the Hispanic market in the United States:

“Forming SUM was very smart. The idea of aggregating as much of the soccer content as possible under one roof, our roof, was a smart idea.”

Is SUM MLS? MLS, SUM? I start thinking about money again. Who makes what, where does it come from, who is making out, who is getting the short stack?

In that same piece, SUM President Doug Quinn said that “the objective of securing that property (World Cup English-language broadcast rights) was to secure the stability of soccer in the United States and to assure that English-language television was available for the soccer fan. Hopefully, the benefits of the U.S. national team and frankly, the growth of soccer in the country would then impact the development of Major League Soccer. That’s why we do anything and everything.”

So everything SUM does is to impact the development of MLS. Hmmm. MLS profitability isn’t public either. No surprise a Google search for “MLS profits” comes up with Wikipedia and Big Soccer chat rooms first. The only thing we really know is player salaries, and those are made public by the player’s union (collective bargaining agreement coming up!!!). How much each MLS team is making or losing is an unknown, but various reports talk about which teams are profitable.

If SUM includes “MLS investor-operators”–that term given to what are essentially franchise owners under the MLS single entity structure–than besides being able to apply for jobs at both places on one website, this means that a franchise expansion fee goes at least in part to the purchasing of some share of SUM. According to MLS, each group of MLS investor-operators has a seat/seats on the Board of Governors and a share in SUM and SUM’s profits.

SUM is thought to be doing very well. Hence the expansion fee’s reported increase? Is SUM a crutch for MLS? Whereby investors see an immediate return as MLS products continue to be described as “fledgling” in newspapers. It is a brilliant crutch if that is indeed what it is.

I’ve always disliked that word choice–fledgling–and I wanted to write more about how it is not fledgling (thanks to SUM?), but until the numbers are known–added to those from the increased television revenue and sponsorships–no one will know how big pockets are, and just how short the share sitting in front of rookies. So every year it will be noted in some article, and rightfully so.

And then a wise man said: MLS has a ready pool of hundreds of college kids ready, willing, and able to play for peanuts so why change things?

Indeed, its always better not to show your hand. Kenny Rogers knows that much.

—-

album cover for The Essential Eddie Money found at freecovers.net. Why I referenced two musicians I don’t care for is a mystery even to me.

here is some music i actually like: love_in_the_bottom_end.pdf

Alex
on May 25th, 2008 - 8:47am

Now we are getting to the heart of the equation…how do the dollars flow? MLS/SUM has a mighty close association with US Soccer too (Gulati (accountant) - Revs/USSF/SUM advisor). I don’t think you can leave them out of the equation. I’ve always wondered about the MLS players chosen for the US team and are subsequently sold to English teams. Why DID EJ get all those starts? Thats a side question, but the fact remains that the MLS/SUM financials are very hidden. Look at the new investors - very deep pocketed and smart guys. They’ve seen the real numbers. There is a certain “Carlyle Group” feel to the whole thing no? Keep going on this - there is a very interesting story in here waiting to get out. http://en.wikipedia.org/wiki/Carlyle_Group .

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