MLS keeps US players close to home with cap-exempt pay
This story appears in ESPN The Magazine's Sept. 2 NFL Preview issue. Subscribe today!
WHEN SPORTING KANSAS CITY defender Matt Besler hit free agency last December, his dream was to sign with a team in England's cash-flush Premier League. But interest from EPL struggler QPR waned, and a harsh reality set in: Big league money wasn't available for a then-25-year-old who'd yet to play with the U.S. national team.
"So if I did go to Europe," Besler says, "it would have been to a club in Belgium or in England's [second-tier] Championship." Even then, those teams weren't willing to make a concrete offer without a tryout, and Besler would have made about $350,000 at best, likely on a one-year deal.
After factoring in higher tax rates and the cost of living abroad, accepting SKC's three-year, $600,000 offer -- more than twice what Besler made during his first four pro seasons -- was a no-brainer.
Despite nearly doubling in size over the last decade, MLS still isn't profitable. It takes home about $28M per season in broadcast rights (compared with the NFL's $1.9B payday), forcing each of its 19 teams to operate within a $2.95M payroll. Owners do get three cap exemptions, which allow them to pay big stars out of their own pockets (Clint Dempsey will earn a league high of $5M this year on a four-season contract with Seattle Sounders FC), but most rosters are filled out by NCAA draftees with little leverage -- and an average rookie salary of $46,500.
Problem was, some of those players, including goalkeeper Troy Perkins, developed into solid contributors and sought more money in low-profile foreign circuits. Perkins played in Norway in 2008 and 2009 and made three times his MLS salary of $85,000. Now back in North America, he plays for Montreal and earns $225,000 a year.
MLS had no real plan for replacing veterans, and soon the talent drain on the pitch became evident. So this season, the league -- boosted in part by a nine-figure windfall from an investment firm -- began allowing teams to spend an extra cap-exempt $225,000 on homegrown players. In Besler's case, those retention funds made the difference between staying and going and kept him in MLS's middle class. "Now players are thinking that unless it's the Premier League or La Liga," says MLS VP Todd Durbin, "staying in MLS is as good as playing anywhere else."
Keeping talent at home doesn't only increase depth and improve the product. It's also a good investment.
Since re-upping, Besler has established himself as a starter with the national team -- an opportunity that might not have come had he been toiling in obscurity overseas. And if the Yanks advance at next summer's World Cup, Besler stands to make an additional $300,000 in bonuses from U.S. Soccer. Premier League offers surely would follow, giving SKC a chance to parlay its relatively paltry investment into a seven-figure transfer fee.
That's a good return in more ways than one.