11317_isi_garber_mlspm10232017_005 Perry McIntyre/isiphotos.com
Critical Analysis

To Improve Development, MLS Must Rethink its Governing Philosophy

MLS has invested a lot of money in youth development but its own archaic rules have severely hurt the league's ability to compete and even thrive in the modern global landscape. ASN's Jamie Hill offers a detailed analysis of the problem and provides ways to fix it. 
BY Jamie Hill Posted
January 03, 2018
10:30 AM
IN THE RECRIMINATIONS that followed the US national team’s failure to qualify for the 2018 World Cup, nobody escaped blame.

First, Bruce Arena met the same fate as his predecessor. Soon after, Sunil Gulati faced an unprecedented level of pressure from fans and the media, which culminated in his decision to drop out of the upcoming USSF presidential election. Michael Bradley and Jozy Altidore were booed mercilessly for the rest of the MLS season by all but Toronto FC’s legions of Canadian supporters. Fans and columnists alike lamented the need for investment in youth coaching and the high cost of youth soccer.

Major League Soccer certainly did not escape the line of fire. The league has invested heavily in youth development but it cannot be ignored that top American and Canadian teenagers have found minutes in the league extraordinarily hard to come by.

For their part, in the aftermath of the USMNT failure the league put out a statement proclaiming its intent to continue investing in player development and that MLS would “take stock” and “work to determine” how it can help the USMNT.

Now as the calendar year hits 2018, there has not yet been a sign of change - which is disappointing. There still needs to be desperate reform at two different levels

First, at the club level, there needs to be added investments in youth coaching, expansion of scouting and recruitment, formation of local partnerships with independent clubs, and investments in training facilities and other infrastructure. Certainly, some MLS teams have already taken significant steps in this regard but the changes need to be more profound and widespread among the league’s teams.

Second, however, several structural changes that the league itself could implement to better facilitate youth development in the United States. Unlike continued investment, this would represent a deeper sea change because it would take significant philosophical shifts in how the league was founded and the league is run. The benefits, however, could be enormous. 

Acknowledge What Players Want

Don Garber has frequently articulated MLS’ vision to be a “league of choice” for players. While MLS has become a league of choice for an increasingly higher caliber of veteran players and a new wave of young South American players, the best young American players hold ambitions to play in the top leagues of Europe.

This leaves MLS with two options. Garber and the team’s owners can maintain the status quo and rigidly insist on being a “league of choice” and watch more and more top prospects slip through their fingers. Players like Weston McKennie and now Taylor Booth have spent significant time developing in the academies of various MLS teams, only to leave for free.

But there is an alternative. MLS can choose to accept its current place in the global pecking order and provide young Americans with a clear path to Europe’s elite leagues that runs through MLS. Teams can then profit from transfer proceeds and benefit from the excitement of having budding stars in the league.

MLS has taken steps towards improving youth development and it is clearly paying off. Academies are now churning out very good players that are capable of playing at a very high level and who are attracting interest from clubs in top European leagues.

But the league’s rules and philosophies have not caught up to the global landscape of how the sport operates throughout the world. Once players reach the point of receiving an offer to sign with the MLS club that actually developed them, clubs are increasingly coming away empty handed from their hard work in development. They are losing out because of a failure to understand the global landscape, denying the obvious reality that all leagues that are not top leagues are feeders to those top leagues. In fact, many clubs even within top leagues often feed to bigger clubs further up the chain. Among the thousands of professional teams in the world, there are only a few that insulated from the concept of selling their best players.

Young American players, however, understand the landscape. In an interview with ASN’s Brian Sciaretta, Josh Sargent pointedly referenced the lack of teenagers playing in MLS in discussing his decision to sign abroad. In an interview published on the Bundesliga’s website, Weston McKennie encouraged young Americans to sign abroad, saying “You don't want to start in MLS and always have the question in the back of your head if you could have made it over there?”

McKennie’s statement rests on his unstated assumption that if a player starts in MLS, the opportunity to play abroad in a top league may well never come.

McKennie and Sargent are not anomalies; the next wave of prized potential homegrown players like Taylor Booth, Chris Gloster, and many others are eyeing moves abroad as well. 
MLS clubs will continue to sign academy players to homegrown contracts, but losing out on the most elite players will disproportionately harm the return on investment into academies and development. 

Salary Budget Rules Disincentivize Transfers

The Rube Goldberg-esque MLS salary budget rules offer more roadblocks to the creation of a developmental conveyor belt. As a league with a salary cap, roster building must be approached in a different way than what is done throughout most of the world.

The limitations and restrictions on spending mean that when constructing a roster, a huge premium is placed on the value a player provides for his salary. This ultimately creates a perverse incentive around outgoing player transfers: a high-quality young player on a relatively low salary is simply not replaceable at the same cost.

As a result, clubs may be reluctant to sell even if they receive a reasonable offer, knowing they can’t go out and buy a replacement that fits within their salary budget.

Currently, MLS clubs receive a maximum of $650,000 in General Allocation Money when a player is sold - even if a player is sold for multi-millions. MLS should raise this cap so that clubs feel that they have the flexibility to accept reasonable transfer offers knowing they’ll be able to reinvest enough of the proceeds in player salaries so that the outgoing player can be adequately replaced.

For example, the New York Red Bulls face a coming decision about whether to sell top American teenager Tyler Adams. Adams, 18, was developed nearly entirely by the Red Bulls and last year was a regular starter who impressed to the point where he is now on the U.S. national team. 

But Adams’ success was also matched with a paltry salary that is less than $100,000 according to the players’ union. Could the on-field value the Red Bulls received for Adams at that salary be replaced for $750,000? Keep in mind that the “Salary Budget Charge” of Adams’ hypothetical replacement includes not just his salary, but his transfer fee.  Players of Adams’ quality are not often available on free transfers, especially in the winter, so NYRB would need to replace him within their salary structure by bargain-hunting in Latin America, which can be a gamble.

Offer Carrots, Not Sticks

MLS should ignore calls to adopt a rule mandating every club give a certain number of minutes to young players. The clubs that are best at development already have a culture oriented towards development from the very top to the very bottom of their organization.

Enforcing a rule requiring reluctant clubs to play young players will not benefit the club or the player. Additionally, such a rule holds the potential to create messy situations for the league. What happens if a club’s teenagers are injured? South of the border, Liga MX adopted “Regla 20/11” in 2005, mandating at least 1000 minutes be given to U21 players, but abandoned the concept in 2011. Meanwhile, countries hailed as leaders in player development like Spain, France, Germany, Brazil, and Argentina have no such rules.

Instead, MLS should tweak additional components of its salary budget rules to encourage development and the growth of development-oriented culture within its clubs. Allow clubs to recoup 100% of the transfer proceeds for homegrown players instead of the current 75%. Carve out more generous salary budget exemptions for homegrown players than what currently exist.

Be Creative/Flexibile with Contracts

In order to survive the lean years of the league’s early existence, MLS designed league rules and enforced norms that were intended to limit player negotiation leverage. That is the primary reason why MLS player movement mechanisms are so complex and it is also why contracts are structured in a very club-friendly way, often filled with years of club options.

These club-friendly rules and contract structures have remained largely unchanged in part because of the legal barriers of entry into most European leagues (as well as Liga MX) for the vast majority of American players. These barriers artificially limit most Americans’ foreign options and further decrease their leverage when negotiating with the league on an individual and collective basis.  In 2017, MLS has essentially become a victim of its own success. With better players entering into the league both from abroad and from club academies, the barriers between MLS and the world’s best leagues are crumbling. Global competition has entered into the equation for elite youth talent and the league’s rules are hurting its own teams from competing on the large scale. 

After decades of success in achieving their goals with labor costs, MLS owners will be philosophically and culturally opposed to making concessions and establishing unwanted precedents with contracts. However, in order to win recruiting battles for their own academy prospects, MLS owners should offer the best academy players contracts with reasonable transfer release clauses.

This would give players the assurance that they would be sold if a foreign club made an acceptable transfer offer. These are key assurances that players currently lack and increasingly drive them away from the league at the start of their careers.  Players must feel confident that signing with an MLS club will not just further their immediate development, but that they will ultimately be able to move to the world’s biggest leagues if their play merits a reasonable transfer offer.

Outsourcing Development Is a Makeshift Solution

It is clear that young players like Christian Pulisic, Weston McKennie, and Jonathan Gonzalez have found their way to good developmental environments abroad. However, it is a mistake to think that the US can rely on foreign academies to handle development of American players en masse.

While some players will always go abroad, there are too many good American players who either lack the right passport to go to many foreign leagues or who simply do not have the connections. There are also many good American players who are simply not ready to move abroad at such an early age. Players are human beings; emotional maturity matters.

That will always leave a huge role for MLS and one where it desperately needs to improve.

What is important to keep in mind is that no serious soccer nation can ever outsource its youth development. A successful internal development pipeline is the hallmark of any successful soccer program.

There are no examples of great national teams who outsource their development at age 16 or age 18. There are examples of great national teams who sign their best young players to professional contracts, develop them, provide them with first team minutes at young ages, and then sell them in their late teens or early 20’s.

The long-term goal of MLS is to be a top league, not a selling league. That is a worthy goal, but it is a mistake to think that MLS has arrived as a truly elite league or that the league can simply will itself into elite status. MLS cannot skip stages in its own developmental growth as a league. To accomplish this long-term goal of becoming an elite league, MLS must both spend more on foreign players and improve the quality of domestic players. Refusing to be a league willing to sell its best young talent in the interim period will, ironically, impede the league’s ability to accomplish long-term goals by hindering the progress of player development in the United States.

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