{"id":65462,"date":"2017-12-19T06:32:32","date_gmt":"2017-12-19T12:32:32","guid":{"rendered":"http:\/\/www.shotinthedark.info\/wp\/?p=65462"},"modified":"2017-12-17T09:34:43","modified_gmt":"2017-12-17T15:34:43","slug":"who-could-have-predicted-such-a-thing","status":"publish","type":"post","link":"http:\/\/www.shotinthedark.info\/wp\/?p=65462","title":{"rendered":"Who Could Have Predicted Such A Thing?"},"content":{"rendered":"

Is it just hypothetically possible that Saint Paul – a city run by people whose only experience with business is working for non-profits that\u00a0harass actual productive businesspeople – has gotten the city into an epic Ponzi scheme?\u00a0\u00a0

Neil DeMause at Deadspin\u00a0\u00a0talks with a group of sports economists that aren\u2019t especially bullish on this year\u2019s\u00a0hipster diversion, the MLS<\/a>:<\/p>\n

“When Forbes last looked at MLS finances, it had to perform mathematical contortions to\u00a0explain why\u00a0franchise values are\u00a0rising even as\u00a0annual losses continue to mount.\u201d

“That business model and this financial trajectory suggests that MLS\u2019s sea of red ink\u00a0is either a loss leader or a Ponzi scheme, and it\u2019s\u00a0not always easy to tell the difference\u00a0between the two until it\u2019s too late. Several sports economists, though, aren\u2019t\u00a0optimistic.”

\u201cThe best indicator of expansion franchise worth is success at the bottom of the\u00a0league\u201d in revenues, says Stanford economist Roger\u00a0Noll. For MLS, \u201cthat still looks\u00a0more like AAA baseball except for a few million per year more in TV revenue.\u201d<\/p><\/blockquote>\n

But as DeMause explains, the TV revenue isn\u2019t going to happen – not the way the league is currently run – because there are already better leagues on the TV. \u00a0Mexican \u201cLiga\u00a0MX\u201d games get better ratings; English Premiere League games on Saturday mornings get better numbers than MLS games in prime\u00a0time.\u00a0\u00a0

Why?\u00a0

Because they have better soccer.\u00a0\u00a0

But won\u2019t the MLS improve?\u00a0\u00a0

Not the way it\u2019s currently set up. \u00a0Unlike *every* successful sports league, all MLS players get paid by the league – not their teams.\u00a0\u00a0Instead of teams competing with teams around the US and world for talent that\u2019ll make actual soccer fans interested, the league as a\u00a0whole competes with leagues that are made up of teams that are competing with each other, and the whole world, for talent. \u00a0 As a\u00a0result, the payroll for the *entire MLS league* is lower than the *average* payroll for a single Premiere League team. \u00a0MLS spends at about the same rate as the Bulgarian national league . \u00a0 The MLS model is\u00a0designed to *control espenses*, not foster the competition that creates a watchable product.\u00a0\u00a0

So all those new immigrants that are supposed to keep MLS afloat? \u00a0They\u2019ve already got *good* leagues to watch. \u00a0MLS is to Premier or the German Bundesliga or even Liga MX as the Saint Paul Saints are to the Twins, in terms of talent. \u00a0 Why would people from parts of the world were soccer is the main sport bother with a product that\u2019s not only inferior, but *designed to stay that way*?<\/p>\n

As the current TV ratings show – they\u2019re not. \u00a0Not outside of New York or LA, anyway.\u00a0

And yet the cost for an MLS franchise has grown from $10M at the turn of the century to $150M today – a price tag that currently gets the owner a\u00a0piece of $100M in losses, in a businesss that is structurally incapable of improving, and doesn\u2019t even have the level of competition that\u00a0\u201cpromotion and relegation\u201d – moving the worst major league teams down to the minors, and promoting the better minor league teams to\u00a0the majors, like in every major Euro league – brings.<\/p>\n
<\/div>\n
DeMause:<\/div>\n
\n

“Whether current MLS honchos actually have this in mind now, or are still guzzling their own\u00a0Kool-Aid, is tough to say. But for most big-market teams and early adopters, even if the expand-o-ganza goes south, it\u2019s a fair bet\u00a0they\u2019ll\u00a0be left with a chair when the music stops\u2014franchises like\u00a0New York and Los Angeles should be safe and potentially profitable, even if the likes of Raleigh\u00a0or Nashville might be screwed.\u201d<\/div>\n<\/blockquote>\n
<\/div>\n
I gave the Minnesota franchise five years from the opening kickoff before it folds. \u00a0I\u2019m feeling more optimistic about my prediction – if not about the \u201cinvestment\u201d the DFL forced me to make via my tax dollars – every day.<\/div>\n<\/div>\n","protected":false},"excerpt":{"rendered":"

Is it just hypothetically possible that Saint Paul – a city run by people whose only experience with business is working for non-profits that\u00a0harass actual productive businesspeople – has gotten the city into an epic Ponzi scheme?\u00a0\u00a0Neil DeMause at Deadspin\u00a0\u00a0talks with a group of sports economists that aren\u2019t especially bullish on this year\u2019s\u00a0hipster diversion, the […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[320,28,255],"tags":[],"class_list":["post-65462","post","type-post","status-publish","format-standard","hentry","category-mndfl","category-st-paul","category-the-racket"],"_links":{"self":[{"href":"http:\/\/www.shotinthedark.info\/wp\/index.php?rest_route=\/wp\/v2\/posts\/65462","targetHints":{"allow":["GET"]}}],"collection":[{"href":"http:\/\/www.shotinthedark.info\/wp\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"http:\/\/www.shotinthedark.info\/wp\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"http:\/\/www.shotinthedark.info\/wp\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"http:\/\/www.shotinthedark.info\/wp\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=65462"}],"version-history":[{"count":1,"href":"http:\/\/www.shotinthedark.info\/wp\/index.php?rest_route=\/wp\/v2\/posts\/65462\/revisions"}],"predecessor-version":[{"id":65463,"href":"http:\/\/www.shotinthedark.info\/wp\/index.php?rest_route=\/wp\/v2\/posts\/65462\/revisions\/65463"}],"wp:attachment":[{"href":"http:\/\/www.shotinthedark.info\/wp\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=65462"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"http:\/\/www.shotinthedark.info\/wp\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=65462"},{"taxonomy":"post_tag","embeddable":true,"href":"http:\/\/www.shotinthedark.info\/wp\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=65462"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}