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New York Cosmos: Why MLS may not be the endgame

The news of Eric Cantona's hiring by the New York Cosmos to become their new Director of Soccer has sent a ripple through the soccer world and has the famous old North American Soccer League team name in the news again.  Brian Straus has a great lead to his story for Fanhouse.com.

Members of the New York Cosmos' office staff -- the only people currently employed by the soccer club without a team -- began arriving at their Manhattan headquarters at 4 a.m. Wednesday.

Selling a product that doesn't exist is mighty hard work.

By that time, the British media already was in a lather over the late-night announcement that the company/logo had hired former Manchester United forward, Nike pitchman, occasional actor and dime-store philosopher Eric Cantona as director of soccer.

Straus goes on to talk about how this is a validation of how far MLS has come.  Indeed stories from all over the world on this topic tend to focus on the rise of the MLS and how the recent hires of Eric Cantona and former Los Angeles Galaxy pro Cobi Jones show just how hard it is to get a club these days and just how serious the New York Cosmos are dedicated to being the 20th MLS team after Montreal joins in 2012.  One thing I don't see anyone discussing has seemed like a very distinct option to me with every new celebrity hire and every new glitzy ad blast: Perhaps the goal of the New York Cosmos isn't to play in Major League Soccer at all...

Star-divide

Last Halloween, I wrote three parts to a series that I'm keeping open called 'MLS Nightmare'.  You can read Part 1, Part 2, and Part 3 at their respective links.  Basically the story is a fictionalized me covering 2011 MLS Cup weekend where Donald Trump has bought the New York Cosmos and everyone thinks he is going to then announce that the Cosmos are the 20th team in Major League Soccer or affectionately referred to as 'MLS20'.  What he does instead is announce that the New York Cosmos are re-launching the North American Soccer League and setting up a direct challenge to Major League Soccer.  Sound ridiculous?  Allow me to potentially change your mind.

1. Every major sport in the United States has faced a direct challenge at one point in time

In 1972, The World Hockey Association launched to challenge the National Hockey League.  The NHL had been around since 1917 but it wasn't until 1967 that the league expanded from 6 teams to 12 teams.  The WHA took advantage of the fact that the NHL was not in all of the major markets, was missing some Canadian markets, and put teams in very large markets like my hometown of Chicago.  Yes Chi-town readers, the Chicago Cougars are not only to be found on Rush Street and in Lincoln Park, they exist in the WHA history books as well.  The WHA had seven seasons before some of the franchises were folded into the NHL (Edmonton Oilers, Winnipeg Jets, New England Whalers, and the Quebec Nordiques) and the league ceased operations in 1979.

In 1967, the American Basketball Association set up shop to go up against the National Basketball League.  The ABA had 11 teams while the NBA had 12.  The ABA never came to Chicago although Joliet born, DePaul alum and NBA Hall of Famer George Mikan was the first commissioner of the ABA.  The ABA popularized the three-point shot but also the New Jersey Nets and inspired the movie Semi-Pro so it's a mixed bag for sure.  Eventually the aforementioned New Jersey Nets, Denver Nuggets, San Antonio Spurs, and Indiana Pacers joined the NBA and the ABA ceased operations after 9 seasons in 1976.

For a challenge to Major League Baseball, we have to go way back to the 1915 Federal League, but don't forget that the National League and the American League worked jointly together rather than being one official league all the way up until 2000.  History could be very different if the WHA and the NHL and/or the ABA and the NBA worked jointly instead of partially merging.  You can't argue that the jointly together and then merge after 100 years was unsuccessful for the MLB.  Chicago history time, Wrigley Field was originally built for the Federal League's Chicago Whales in 1914, and the Chicago Whales won the championship in 1915 meaning that the Whales, Chicago Sting and Chicago Bears have all won championships while calling Wrigley Field home.  As a Cubs fan, I'll let you finish the thought yourself.

Last but not least we have the National Football League who not only had the American Football League to deal with between 1960 to 1969 but also the United States Football League between 1983 and 1986.  At the time the AFL launched in 1960, the NFL had 13 teams.  The leagues announced they were going to have a merger in 1966 and that cultivated in the Super Bowl where the winner of the AFL played the winner of the NFL even though the leagues would not officially merge until 1970.  By the USFL's arrival in 1983, a merger was totally out of the question as the NFL had 28 teams.  While the AFL stayed between 8-10 teams, the USFL had 18 teams at its high point in 1984.  Owners eventually spent themselves out of business and the unsustainable growth of the USFL went away after 4 seasons.  Of course, I must mention that the Chicago Blitz existed for two seasons with mixed success. 

Since every league has seen a challenge, it would only make sense if Major League Soccer got one too. 

2. Major League Soccer does not exist in all of the major population centers or urban areas in North America

Major League Soccer only has 6 teams with stadiums in the urban city that makes up the heart of the top 50 metropolitan areas in the United States of America.  The New York team is based in Harrison, New Jersey.  Chicago is in Bridgeview, IL. The two Los Angeles teams are in Carson City, CA.  The Dallas team is so far north it is faster to get to Okalahoma from the stadium than it is to get to downtown Dallas in traffic.  Philadelphia's team plays in Chester, PA.  The Boston team is closer to Providence, RI.  The reigning MLS champions play in the historic city of Commerce City, Colorado. San Jose plays in Santa Clara. Tiny Salt Lake City even plays in Sandy, UT.  The 6 teams in the United States with stadiums inside the city limits are Houston (6th), Washington D.C. (8th), Seattle (15th), Portland (23rd), Kansas City (29th), and Columbus (32nd).  To MLS' credit, the Canadian metro areas/cities of Toronto and Vancouver have stadiums located in the city borders and their metro areas would be placed 9th and 25th respectively if they were US cities.  Montreal will join the league in 2012 with a city stadium and they would rank 15th among U.S. metro areas, just above Seattle.  Canadian expansion has served MLS well (at least Toronto ticket sales are very strong and Vancouver pre-season season ticket sales are going quite well) but the population fall between Vancouver to the next big Canadian metro area, Ottawa, is like going from Portland, OR to Birmingham, AL except for the fact that Ottawa already has the Ottawa Senators and is getting a Canadian Football League team in 2013.  As they say, that well has been tapped out.

That would suit a new league just fine as they could focus on being a truly American league.  Start with the New York Cosmos, aim for a team in the No. 2 through No. 5 metro areas (Los Angeles, Chicago, Dallas and Philadelphia) and be located near public transportation.  It would not be hard to siphon off fans who like accessibility or don't make it to as many games because they don't like trekking out to Bridgeview, Chester, or Oklahoma for matches.  In addition, while MLS has arrived at the point where draft picks now talk about their favorite MLS teams and players while they were growing up, some of the teams have also had time to alienate certain groups of fans.  Some clubs are worse than others but quite frankly it is a cost of doing business in anything.  Disenfranchised fans are not numerous enough to run a second club in a soccer city but it is possible to quickly get some die hard supporters who like soccer but just don't like team X anymore. 

After getting into the biggest cities, the trick would be to find 5 or 6 owners who would from other top markets that have been left out of MLS with perhaps an exception being made for Seattle.  I mean they love soccer so much who says they couldn't support the Seattle Aces?  Top targets would be Detroit who already have a group positioning for a MLS team.  Boston, a city that has half of its population as students and again the Revolution play closer to Providence than they do Fenway Park.  San Diego, the largest two-sport area, Cincinnati another two sport metro area, San Antonio the largest one-sport town, and Las Vegas which is the largest no sport town.  In between you have cities like Miami, Atlanta, Phoenix, San Francisco, Minneapolis, all sorts of cities to draw from for a ten team league.

3. Major League Soccer is pricing themselves out of expansion

Now why would a team like the New York Cosmos go on the absolute insane route of starting their own league?  Well how about saving $75M?  From a recent article by Mark Ogden of the The Telegraph:

Stiff competition from the New York Mets baseball team, who are also pursuing the MLS licence, and a fee approaching $75 million to secure the franchise are initial obstacles for Kemsley and Cantona to overcome. 

The bolding is mine.  Explain to me why the New York Cosmos would want to pay close to $75M before paying anything else, especially when MLS teams are consistently rumored to be losing money.  Wouldn't that money be better spent on your own team?  What about an insurance pool to attract new investors into a new league?  That brings me to another point that once you join MLS, you are bound by their rules because it's a single entity company.  Most MLS fans who read this will know this already but it's an important part of the argument.  The limitations of joining a single entity company should be obvious and are all laid out very well in this article on Fake Sigi.  In fairness, Fake Sigi also lays out the benefits of single entity status and that deserves a look too.  Single entity has almost surely allowed MLS to get to where it is today.  However, I'm more in agreement with MLS Player Union President Bob Foose when he says

We believe it's now time to take the training wheels off and give MLS clubs the freedom to truly compete against each other and other clubs outside of the league in a manner that is consistent with what occurs everywhere else in the world.   

Some teams may fail or fold but I think that would make the league stronger in the end.  If you look at the other major sports leagues around the United States - indeed around the world, it is better when the strong teams survive and teams that are managed through incompetence either go bankrupt or get relegated to a different level.  One of the main critiques I'm sure this will open up is that there isn't enough money and interested owners out there to put teams in all of the cities that I'm mentioning.  I'm making teams out of thin air.  Who would put a team in Cincinnati for example?

Well Chad Ochocinco probably but his potential for interested investment partners would be limited.  Do you think Mark Cuban wants to pay $75M to fold into a league where the commissioner's office directly dictates his overall team finances and sharply ties up his player signings?  He barely gets along in the fairly open structure of the NBA.  I think potential owners like Mark Cuban would be much more willing to join a league where they had more control over the finances for their team and didn't have to worry about over a dozen different ways of acquiring a player based on the year he was born in, the country he plays for internationally or the college he did or did not attend.  The ability to have total freedom over player acquisitions is a crucial part of the business especially when the talent pool is so vast around the world.  Plus those are the rules we think are in place.  If you would notice that at the top of this link:

* The 2010 roster regulations are still being finalized by the MLS Competition Committee. The following information pertains to 2009 only and will be updated as soon as possible.

The 2010 season came and went without that page being updated.  That's how much they appear to be worried about complying with their own rules.  That's how vulnerable they leave themselves to a competing league that would promise transparency.  'As soon as possible' in MLS speak for 'Give a couple of years and we'll keep you posted'.  Open books and fair player guidelines should not even be an issue in this day and age of instant news but there it is 'The following information pertains to 2009 only'.  At the end of the day, how do you get even a tiny fraction of potential owners out there interested in joining the game when they don't even know the rules of how to play?

4. The New York Cosmos are making quite a splash just to get a MLS team

Does it strike anyone else as odd that the New York Cosmos bought all that advertisement space in Times Square?  Even just a little bit?  Doesn't it seem strange that Eric Cantona's return to conventional soccer since 1997 is to be the Director of Soccer for an organization that doesn't even have a soccer team?  Have you wondered why Cobi Jones would leave the Los Angeles Galaxy, the only American club he has ever known, after 13 years with the team to join an organization that doesn't have any professional players? 

Is it that the people behind the New York Cosmos are just making sure this happens beyond a doubt?  I can admire that.  The ultimate professionals who leave no risk that they won't get the job done always deserve high praise.  However, Major League Soccer Commissioner Don Garber has leaned so hard towards MLS20 being in New York, he's practically fallen over.  It seems to me it would be enough to make professional hires, find a stadium, and build up the academies.  That would trump anything the New York Mets group seems to be bringing to the table and you could save your advertising splash money for a later date.  Instead, the New York Cosmos managed to get mentioned on MLSSoccer.com's Morning Kickoff, get a full feature on the MLS website and the MLS Facebook page put the Times Square photos in front of their almost 125,000 followers.  This is not to mention the numerous articles, photos, videos, and other media impressions created throughout the world from the Cosmos ambitious moves.  All that just to enter 42nd Ranked League in the World?  I'm not sold.  As the second Broadway run of New York Cosmos continues to unfold it seems the cast that is being brought in would only do so if grander intentions were at all and the producers are making Hollywood moves instead of Vaudeville.

In conclusion, I admit math was never my strong suit way back when I was in school.  It is very possible that I am underestimating what it takes to get into Major League Soccer while adding up things to equal a sum that isn't there.  Blame the Chicago way of 'Make No Little Plans' for living eternally in this city's citizens' hearts and souls... but I think it could happen and maybe most crazy of all, it could work.  There would be many mountains to climb and the argument isn't quite complete but let's hear criticism if you've got it.  It wouldn't be the first time I've been marked down for not showing my work.

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Read through your three parts and the big telling part is in part 2 where they say they’re not going to be USSF sanctioned. Not being a part of the USSF means death to soccer leagues, not being part of USSF means not being part of FIFA. Not being part of FIFA means getting players is going to be about more than paying the players. Because playing in a non-FIFA league means no national team looks for any of these players.

by downthebyline on Jan 22, 2011 9:04 AM CST reply actions  

It would be a big hurdle

It might be too big of a hurdle but this piece was already too long. I’ll have something up on that in a couple of days.

Hot Time In Old Town SB Nation's blog for Chicago Fire, Soccer, & Chicago History

by Tweed Thornton on Jan 22, 2011 12:06 PM CST up reply actions  

The Cosmos will not create a competitor league. Downbytheline’s comments about sanctioning are correct. No soccer player with higher aspirations is going to play in a non-sanctioned league.

American soccer fans are also invested in MLS. They know a competitor league could hurt the US national team by hurting MLS and all the investments MLS has made in player development.

The same goes for advertisers and networks. Adidas has invested hundreds of millions in MLS. They would not support a competitor league. Nike has invested lots of money in the U.S. national team, which means they deal with the USSF, who would be incredibly opposed to a competitor league. Networks that ever hope to show US national team games, like ESPN, would shun a new league.

There’s a reason expansion fees have gotten so high. MLS teams have value. If you let people join the league for free, they could turn around a flip them for a profit instantly. Also, with TV contracts and other shared revenue, adding another team means splitting the pie further, so new teams have to buy their way in. Finally, limiting new ownership groups to those that can pay hefty fees means MLS gets owners that are serious and have the necessary resources.

Every other soccer league in US history has seen constant turnover as teams go out of business and are replaced by new ones. MLS has only contracted 2 teams. As such, any person serious about investing in soccer would invest in MLS, not waste their money on a fool’s errand.

As for MLS’s profitability, it’s definitely getting there. Besides, teams with soccer specific stadiums also get to control revenue for non-MLS events hosted at the stadiums, like concerts. So even if MLS is losing money, by owning an MLS team you can have access to revenue streams that make you profitable overall.

Also, you say the new NASL teams should put teams inside city limits near public transportation. If that were so easy, MLS would’ve done it in more markets.

As it, MLS has been here for 15 years now. They have their own stadiums. They have development academies. There’s a small but stable and growing following. There are relationships with advertisers and TV networks.

A new league would have none of that, and thus either would put on a far inferior product and lose lots of money.

Next time, I recommend doing more research rather than letting your imagination run away with you. You certainly have your logic and did some background research, but your limited understanding of the nature of soccer leagues shows why you think this could be possible, but it’s not.

by FlipLikeAPancake on Jan 22, 2011 10:50 AM CST reply actions  

I thought of all of those things. The October pieces I wrote that I linked to in the above article address everything you mentioned. Not full on because it was a piece of fiction, not an essay of some kind, but it’s all there.

I think you are right to bring all of these points up too because I didn’t present a full argument but I acted like I was done. I shouldn’t have said ‘in conclusion’ because I’m not done. These are are very valid points I will address and any future owners in a future league would have to be willing to go up against.

Hot Time In Old Town SB Nation's blog for Chicago Fire, Soccer, & Chicago History

by Tweed Thornton on Jan 22, 2011 12:25 PM CST up reply actions  

Why not just get sanctioned as USSF D2?

There is no fucntional difference between being in D1 or D2. The only requirements for D2 are minimums. No mention of maximums.

A league could be started up in D2 that has the quality of MLS players. No rule prevents it.

Sanctioned league that way.

I am not a Supporter | I am not a Fan | I am a Sounder
Sounder At Heart

by Dave Clark on Jan 22, 2011 11:50 AM CST reply actions  

That's possible too.

However, there’s even more freedom to do things outside of the USSF IMO and the splash of a direct challenge would bring more media attention, something ambitious owners would be looking for.

Hot Time In Old Town SB Nation's blog for Chicago Fire, Soccer, & Chicago History

by Tweed Thornton on Jan 22, 2011 12:32 PM CST up reply actions  

The globetrotters of soccer

Remember when all this talk started one of the thoughts was that they were simply going to put together an All Star team like the Harlem Globetrotters have done and travel the world with a few big names and some young talented kids. I think that is still a real possibility, but I think they will try to get a MLS side, then use their brand as a bully pulpit to change the league in ways that will probably make MLS a victim like the NASL was so many years ago.

This is the US and while we support sports with more money than any nation on the planet, that money is spread across a number of leagues that all take a big chunk of the pie, MLS gets a much, much smaller slice and the likelihood of that changing with or without the Cosmos is unlikely.

by denz on Jan 22, 2011 12:49 PM CST reply actions  

Sanctioning and the bigger hurdle.

USSF would be forced, if a new league were to arise, to devise a merit-based way of sanctioning leagues that doesn’t ‘play favorites.’ That’s what they had to do at the D2 level as well.

The bigger hurdle to me is that such a hypothetical league may have missed its window to challenge MLS. MLS has now gotten to 19 teams, which is more than most established leagues had when they faced their first major competition (and the first wave of competition is usually the only one with a real shot at success).

And MLS has taken too many of the good markets off the table (the Pac-NW, all the Canadian large markets, much of the Northeastern Seabord). It’s true that a new league could get an edge by putting in a stronger NY franchise, but could they compete in LA? In Chicago?

Elsewise, could a league base itself on the areas, like the Midwest and the South, that MLS has not established a beachhead? For a soccer league, I doubt it.

'Gentlemen' he said,
'I don't need your organization,
I've shined your shoes,
moved your mountains and marked your cards,
but Eden is burning.
Either get ready for elimination,
or else your heart must have the courage,
for the changing of the guards.'

by Sgc on Jan 22, 2011 1:29 PM CST reply actions  

I like what Sounder at Heart says

Yes, if someone wanted to compete with MLS, then the way to do it would be to join in the division 2 position, but buy world class talent and recruit like minded owners to expand into non-MLS markets or compete head to head. There is no reason that the “div. 2” couldn’t eventually usurp MLS as the best division. You could still compete in the CONCACAF CL as well.

Having said that, I would be very leary about supporting a rival league, as I don’t want soccer to implode and disappear.

by chicagofire1871 on Jan 22, 2011 5:15 PM CST reply actions  

Intriguing

I am of the opinion that the Cosmos organization wants to get into MLS and change the game from the inside. However, your points are generally well taken.

With Sgc, I think the boat for a true challenge to MLS has passed, but not by that much. When MLS snagged not only the Pacific Northwest and Canadian markets, but the legitimate and successful brands in those cities (Sounders, Timbers, Whitecaps especially), it took most of the established markets, teams, and fans that the Cosmos could have mounted a challenge with. MLS may have been expanding into new markets as much as closing the door behind them over the last few years. Montreal all but seals it in my mind. With the great debate in the Portland/Vancouver/St. Louis/Miami expansion cycle, there may have been a whole bunch of scenarios going on that we, as fans, weren’t really focused on.

Yet, the Cosmos could take a circuitous route be successful. Throwing in their lot temporarily with the existing NASL bunch would not only provide them a base of players with no salary cap to limit their acquisitions, but provide them a stronger place from which to negotiate with MLS. If NASL makes great strides over a short time frame, which is possible but unlikely, they may ultimately be better off staying there anyway.

No matter what happens, I think the Cosmos can push the envelope for soccer in this country. The speculation throughout this season should be interesting.

by PSPTim on Jan 22, 2011 7:13 PM CST reply actions  

Huge point being missed about profitability

When you buy an MLS team you also get a share of Soccer United Marketing.

SUM distributes money to each team. In 2008 it was a little less than $1 million. I would expect that number to go up with the very successful friendly attendance year had in 2009 and 2010. So your MLS team could be profitable but even if it isn’t you aren’t going to lose a ton of money due to the single entity status and the tight salary cap controls. This doesn’t even begin to address the room for growth for existing franchises and the success of recent expansion franchises.

That’s why smart rich people were willing to put $50 million down in expansion fees recently and why a second NY team should fetch $75 Mill.

In theory a free spending second division could work but frankly there is barely a functioning budget based version of the second division operating right now. I don’t see how it could realistically work.

by Gregg Mixdorf on Jan 23, 2011 8:52 PM CST reply actions  

Vancouver...

It is interesting to note that the owner of the Vancouver Canucks, who lost out to the Whitecaps ownership group in bidding for an MLS franchise, recently called the MLS a “B” league. He would definitely be interested in the possibility of expanding his sports empire with an NASL soccer franchise that gave him the freedom to exercise his financial clout as he has with the Canucks.

by Island Savage on Jan 28, 2011 1:37 PM CST reply actions  

Sanctioning

You don’t need USSF sanctioning to launch a D1 league in the US. FIFA’s rules state that you need an approved FA to sanction a league, but the teams and FA don’t have to be from the same country. Look at the English pyramid. Welsh clubs have been competing for years. Some even play in the FA Cup. This is totally fine. “Anti-MLS” could get D1 status from Canada, Puerto Rico, Bermuda, the Bahamas, etc…Why pay Robert Kraft $75M when you can use $75M in prize money to convince USL/NASL/CSL/PCSL/other teams to join your pyramid?

by ExtraMedium on Feb 13, 2011 9:33 AM CST reply actions  

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(I) denotes International player per MLS rules. Chicago Fire are currently allowed to sign up to 8 International players.

Players training with the team but not a part of the Chicago Fire roster:

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Chicago Fire 2012 Transactions

November 29, 2011

- Declined options on Jon Conway, Alec Dufty and Baggio Husidic

December 5, 2011

- Purchased the rights to Orr Barouch from Mexican club Tigres

- Traded first round selection in 2013 Supplemental Draft to Vancouver Whitecaps for Jay Nolly

December 6, 2011

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January 9, 2012

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January 11, 2012

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- Selected Lucky Mkosana with the #23 pick in the SuperDraft

- Selected Hunter Jumper with the #28 pick in the SuperDraft

January 15, 2012

- Parted ways with Diego Chaves

January 17, 2012

- Selected Evans Frimpong with the #9 pick in the Supplemental Draft

- Selected Carl Woszczynski with the #15 pick in the Supplemental Draft

- Selected Tony Walls with the #47 pick in the Supplemental Draft

- Selected Justin Chavez with the #66 pick in the Supplemental Draft

January 18, 2012

- Re-signed Pavel Pardo to two-year contract extension

January 23, 2012

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January 25, 2012

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The allocation ranking is the mechanism used to determine which MLS club has first priority to acquire a U.S. National Team player who signs with MLS after playing abroad, or a former MLS player who returns to the League after having gone to a club abroad for a transfer fee. The allocation rankings may also be used in the event two or more clubs file a request for the same player on the same day. The allocations will be ranked in reverse order of finish for the 2010 season, taking playoff performance into account.

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7. Portland Timbers

8. Chicago Fire

9. Columbus Crew

10. FC Dallas

11. New York Red Bulls

12. Philadelphia Union

13. Colorado Rapids

14. Seattle Sounders

15. Sporting KC

16. Real Salt Lake

17. Houston Dynamo

18. LA Galaxy

19. Montreal Impact (Eddie Johnson)


Chicago & cf97 Promoter

Cf97-fullcolor_2__small Tweed Thornton

Soccer Scribes

Hottimeinoldtown_small Ryan Sealock

Ad34hig996dhjryfpje9cyuaf4tqswkayc-92fuzia3gocit1knx4wpzhvehplpwjboh6rosf32vcor5mes6uwtpi8_autdub8ckhcoruax_t-yto0run1i_small Mark O'Rourke

Small Gregg Mixdorf

Small Stephen Piggott

James_coston_small James Coston

Mehat_small Nick Fedora

Small Rudy Gomez

Small Dili Yang