The document discusses strategies for controlling rising costs in Major League Soccer (MLS) through implementing a performance-based pay model and retaining homegrown talent. It provides data on wage bills and salaries in the English Premier League (EPL) and MLS, analyzes player performance metrics in MLS, and proposes a performance pay model and targets for salary increases based on production. It also evaluates the top MLS targets for transfers to Europe based on goals scored and estimated transfer fees.
1. How to Control Rising Costs With
Performance Pay Model and Retain
Home Grown Talent in the MLS
2. Contents
1. Cost Analysis EPL
2. Cost Analysis MLS
3. Performance Review MLS
4. Defining Performance Model
5. Top MLS Targets for Europe
6. Model for International Players
7. Model for Home Grown Talent
3. EPL COST ANALYSIS HIGHLIGHTS
• The Total Wage Bill for the EPL 16/17 season will be
£1.7b/$2.2b with the club Average at £98m/ $127m
• 4 Clubs have Wage bills in excess of £200m/ $260m
with Man City the highest at £225m/ $290m
• 2 Clubs have Wage bills in excess of £100m/ $130m
with Liverpool the highest at £165m/ $214m
• 9 clubs have Wage Bills in excess of £50m/ $65m with
Everton the highest at £83m/ $108m
• 5 clubs have Wage Bills less that £50m/ $65m with Hull
City the lowest at £25m/ $33m
• For the 16/17 Season clubs have increased their Wage
bills by an average of 12% per club with the Champions
Leicester City experiencing the highest increase at 37%
from £48m/$62m to £66m/$86m
• The average player salary is now £3.2m/$4.1m with
Paul Pogba at £15m/$19m and Marcus Rashford at
£1m/$1.3m notable highest international and home
grown comparative examples with Manchester United
• The value of a Premiership goal is £900k/ $1.2m worth
0.97 points and a Game Winning Goal is £1.2m/1.6m
.
4. EPL WAGE BILL DATA (millions)
Premier League Clubs Wage Bill For 2016-17 Season
NO# CLUB 2013-14 2014-15 2015-16 2016-17
1 Manchester City 216 205 193.8 225
2 Manchester United 187 215 203 220.8
3 Chelsea 190 192.7 215 218
4 Arsenal 166 180.4 192 200.5
5 Liverpool 140 144 152 165.6
6 Tottenham 112 100.4 110.5 121.5
7 Everton 66 69.3 74.7 83
8 West Ham United 60 63.9 69.5 79.8
9 Stoke City 55 60.6 72.3 75.9
10 Sunderland 55 69.5 71 68.3
11 Leicester City 30 36.6 48.2 66
12 West Bromwich 49 65.4 68.5 65
13 Southampton 47 55.2 59.5 63.6
14 Swansea City 55 48.1 51 59
15 Crystal Palace 30 45.7 54.3 55
16 Watford 30 30 29 41
17 Bournemouth 30 30 25 34
18 Middlesbrough 30 30 30 34
19 Burnley 30 29 30 33
20 Hull City 30 34 30 25
30** Estimated as not in EPL that year
5. MLS COST ANALYSIS HIGHLIGHTS
• The Total Wage Bill for the MLS 15/16 season was
£128m with the club Average at $6.4m
• The average player salary was $226,000 7x less than
the EPL average with the median salary at $92,000
• The highest wage for Kaka of $7.1m accounted for
5.5% of the total league wage bill for 2015.
• For 2017 NYCFC has the highest wage bill at $20.5m
with 84% of the total bill spend on Designated players
and with a 15% overall wage bill increase from 2015.
• The 2015 MLS Champions Portland Timbers Increased
their wage bill by 10% to $6.1m for the 2015 season.
• The 2014 MLS Champions LA Galaxy Increased their
wage bill by 25% to $13.1m for the 2014 season.
• The predicted ideal salary weighting based on
performance would be Def 32% Mid 36% Fwd 32%
• The increasing team wage bill disparity, the blend of
DP/Non DP performance coupled with spend/area
results in a recommended wage bill for FCD for a 2017
championship winning team of $5.05m a 17.5%
overall increase and Target DP effectiveness of 32%
6. MLS Wage Bill Data
Function LA Galaxy Sporting Kansas FC Dallas Portland Timbers New York City FC
Total Salary 2013 $9,800,000 $3,500,000 $4,760,000 $3,580,000
Total Salary 2014 $13,100,000 $3,800,000 $4,540,000 $5,500,000
Total Salary 2015 $19,500,000 $5,700,000 $4,280,000 $6,100,000 $17,510,000
Total Salary 2016 $17,900,000 $6,900,000 $4,300,000 $6,780,000 $20,570,000
Non- DP Salary 2016 $4,200,000 $5,200,000 $2,800,000 $4,200,000 $3,300,000
DP Salary 2016 $13,700,000 $1,700,000 $1,500,000 $2,580,000 $17,270,000
% Non-DP Salary 23.5% 75.4% 65.1% 61.9% 16.0%
% DP Salary 76.5% 24.6% 34.9% 38.1% 84.0%
Total Goals* 53 39 47 46 57
Goals Scored Non-DP 26 37 42 29 23
Goals Scored DP 27 2 5 17 34
Goals % Non-DP 49.1% 94.9% 89.4% 63.0% 40.4%
Goals % DP 50.9% 5.1% 10.6% 37.0% 59.6%
Total Assists* 59 43 38 32 59
Assists Non-DP 34 34 26 20 44
Assist DP 25 9 12 12 15
Assist % Non-DP 57.6% 79.1% 68.4% 62.5% 74.6%
Assist % DP 42.4% 20.9% 31.6% 37.5% 25.4%
Non-DP Effective 50.8% 91.7% 85.2% 62.9% 47.2%
DP Effective 49.2% 8.3% 14.8% 37.1% 52.8%
* MLS stats as of October 1st
7. MLS PERFORMANCE HIGHLIGHTS
• Sebastian Giovinco is the current top performer in the MLS
with a comparative performance total of 86%
• Jordan Morris is the best performance value player in the
MLS with a comparative VFM total of 74%.
• The comparative average cost per goal scored is $96k.
• The comparative average cost per assist made is $329k
• The comparative average cost per point won is $171k
• The comparative average cost per goal/assist is $213k
• Michael Barrios is the best value cost/goal at $7.8k.
• Jack Harrison is the best value cost/assist at $25k.
• Jordan Morris is the best value cost/ point won at $9.9k.
• Michael Barrios is the best overall cost/ value at $21.3k
• Based on performance related the Top 5 MLS player
recommended salary increases would be the following:
• 1. Jordan Morris + $568k
• 2. Bradley Wright-Phillips + $183k
• 3. Michael Barrios + $171k
• 4. Diego Valeri + $141k
• 5. Cyle Larin + $105k
9. 4D Performance Model
• 30% Weighting
• No X MLS COST
AVE $133k
• 20% Weighting
• Total/30 X MLS
COST AVE $25k
• 20%
Weighting
• No X MLS
COST AVE
$130k
• 30%
Weighting
• No/3 X by
MLS COST
AVE $97k
Goals Assists
GWGPoints
10. Working Model for FC Dallas
Name Club Salary Goals Assists Tpoints GWG $ Goals $ Assists $ Tpoints $ GWG $TOTAL Salary Diff
MICHAEL BARRIOS FCD $70,000 9 2 1.77 2 $87,300 $52,000 $8,833 $79,800 $227,933 $157,933
MAXI URRUTI FCD $250,000 8 4 1.77 1 $77,600 $104,000 $8,833 $39,900 $230,333 -$19,667
KELLY ACOSTA FCD $220,000 2 5 1.77 2 $19,400 $130,000 $8,833 $79,800 $238,033 $18,033
MAURO DIAZ FCD $466,000 5 11 1.77 3 $48,500 $286,000 $8,833 $119,700 $463,033 -$2,967
*Once a working model is established then individual targets can then be set for the
season with expectations based on agreed salary and performance value basis criteria
11. Top MLS Targets for Europe
• MLS Targets were assessed utilizing the following criteria:
• MLS goals converted to EPL with factor 0.65.
• $1.2M Team value of EPL Goal.
• $300k additional boost for Game Winning Goal.
• The goal combination determining Team value.
• 20% increase on value for commercial revenues.
• $5.2m average EPL salary for wage differential.
• 5X Current salary for standard EPL player transfer value
• 30% transfer premium from MLS to EPL.
• Proposed Transfer fee based on Team Value – wage costs.
• Based on current performance the Top 5 MLS targets for
Europe and proposed transfer fee/ wage differential
would be the following:
• 1. Bradley Wright-Phillips $13m 8x
• 2. Jordan Morris $8.5m 30x
• 3. Ola Komara $8m 12x
• 4. Dom Dwyer $7.5m 11x
• 5. Fernando Ali $7.5m 8x
13. Model for International Players
• To effective control the influx of international players into the MLS and
counteract the agent/ player wage demands it is recommended to
introduce a historical performance salary evaluation with a scaled model
based on 8 key metrics:
• Comparative salaries between leagues and their revenues.
• Current Age relative to a typical playing career and performance.
• Historical Goals/ Games Ratio in the European top flight leagues.
• Historical scored Goals tally in the relevant league.
• Historical scored Goals tally in the Champions League.
• Historical scored Goals tally at the International level.
• Historical % of total games individual played to number of team games.
• Potential Commercial value/ injection of player to the MLS.
• Based on historical performance 5 of the World’s Best Players would
have the following recommended comparative MLS salaries:
• 1. Christian Ronaldo $18.2m
• 2. Lionel Messi $8.2m
• 3. Wayne Rooney $6.6m
• 4. Thomas Muller $2.7m
• 5. Francesco Totti $2.1m
*The average result was at 27% of current salary level*
15. HOMEGROWN PLAYER SNAPSHOT
• Since the introduction of MLS Homegrown contracts in
the 2009 season the following activities have taken place:
• 76+ Homegrown Player have been signed to date
• 32 Have been signed in the last 2 years alone
• 19 MLS Clubs have signed local Homegrown Players
• 15 Signed by FC Dallas is the highest by any single club
• $91,000 is the Average salary across all active MLS Players
• $51,500 is the Average starting salary for initial contracts
• The Three highest home grown salaries and year of first
contracts are as follows:
• 1. Gyasi Zardes (LA) $472,000 2013
• 2. Bill Hamid (DC) $370,000 2009
• 3. Kellyn Acosta (FCD) $240,000 2012
• There is currently no limit on the number of Home Grown
Players a team can sign and also considerable salary cap
advantages based on levels of compensation available.
• MLS clubs also receive a 75% premium on transfer fees of
any homegrown players for the MLS to any foreign teams.
16. Homegrown Player Data
Year Name Country Club Salary 2016 YRS HG
2009 Hamid, Bill USA D.C. United $370,500 8
2013 Zardes, Gyasi USA Los Angeles Galaxy $472,500 4
2015 Doody, Patrick USA Chicago Fire $53,471 2
2015 Swanson, Ben USA Columbus Crew $90,417 2
2015 Herivaux, Zachary HAI New England Revolution $62,500 2
2015 Davis, Sean USA New York Red Bulls $107,500 2
2015 Turner, Tyler USA Orlando City $63,000 2
2015 Redding, Tommy USA Orlando City $102,500 2
2015 Kavita, Phanuel COD Real Salt Lake $51,500 2
2015 Mansaray, Victor USA Seattle Sounders FC $66,000 2
2015 Jones, Darwin USA Seattle Sounders FC $68,750 2
2015 Chapman, Jay CAN Toronto FC $93,500 2
2015 McKendry, Ben CAN Vancouver Whitecaps FC $52,500 2
2016 Calistri, Joey USA Chicago Fire $51,500 1
2016 Conner, Drew USA Chicago Fire $62,500 1
2016 Durkin, Chris USA D.C. United ** $51,500 1
2016 Guillen, Aaron MEX FC Dallas $51,500 1
2016 Pomykal, Paxton USA FC Dallas ** $51,500 1
2016 Lucatero, Christian USA Houston Dynamo $51,750 1
2016 Choinière, David CAN Montreal Impact** $51,500 1
2016 Adams, Tyler USA New York Red Bulls $81,042 1
2016 Muyl, Alex USA New York Red Bulls $66,500 1
2016 Etienne, Derrick HAI New York Red Bulls $56,500 1
2016 Allen, Brandon USA New York Red Bulls $62,500 1
2016 Stajduhar, Mason USA Orlando City $51,500 1
2016 Jones, Derrick GHA Philadelphia Union** $51,500 1
2016 Trusty, Auston USA Philadelphia Union** $51,500 1
2016 Acosta, Danilo USA Real Salt Lake $62,500 1
2016 Velazco, Ricardo USA Real Salt Lake** $51,500 1
2016 Morris, Jordan USA Seattle Sounders FC $190,500 1
2016 Sallói, Dániel HUN Sporting Kansas City $51,500 1
2016 Babouli, Molham CAN Toronto FC $51,500 1
2017 Carleton, Andrew USA Atlanta United FC** $51,500 1
** Estimated Salary** $91,022
17. Strengths
• Allows clubs to sign local talent
rather than wait till college MLS draft
•Provides immediate career path for
academy prospects within MLS clubs
•Promotes development of local USA
players for long term careers
Opportunities
•Create a strong ongoing performance
development program that enhances
player long term club loyalty
•Develop a 5 year vested performance
rewards program to help ensure
“breakthrough” player retention
•Establish a trusted local intermediary
relationship in the clubs best interests
Threats
•Low introductory roster wages make
players vunerable to offers abroad
•Predatory international
intermediaries look to sign players
and lure them away from the club
•Lack of first team opportunities and
ongoing performance development
leads players to leave the club early
Weaknesses
• US players have limited first team
opportunities and also restricted
internationally due to nationality
• Lack of solidarity mechanism
provides no future player rewards
• Lower Domestic leagues have no
compelling need for MLS players
S W
TO
SWOT ANALYSIS HOMEGROWN PLAYERS
19. TECHNICAL
Enhance Skills with first
team training daily and
individual level regular
asessment
PHYSICAL
Consistent ly develop
and benchmarking
with Players
Performance Cards
TACTICAL
Aquire Experience
through playing time
on loans to other
leagues
PSYCHOLOGICAL
Increase Perception of
value to club with
personalized
development program
*PROGRESSIONVALUE
** LOYALTY RETENTION
PROFESSIONAL PERSONAL
*During the 5 year
development window of 17-
22 Years of Age HGP can be
constantly finetuned for
development and readiness
for MLS introduction.
**Players will increase their
loyalty to MLS clubs with a
clear development path and
constant activities to improve
their skills as a player.
LONG TERM DEVELOPMENT
20. Proposed Home Grown Player
Reward and Representation Model
Contract
Year
Player
Age
PRO4 Key
Performance Focus
Performance
Bonus
Agreed Local
Intermediary Fees
1 17 Physical 80%* 0%
2 18 Technical 80%* 1%
3 19 Tactical 90%* 1%
4 20 Psychological 90%* 2%
5 21 All 4 Areas 100% + ** 3%
**Vested Annual Performance Bonuses paid on Program Completion**
* Remaining % of 100% Balance retained annually for later payment *
21. Working Together
• Provide financial modeling projections
for ongoing salary cap planning activities.
• Define performance metrics and
financial compensation models to assist
with Club Player Salary Compensation.
• Create and manage a financial evaluation
model for “fair performance pricing” of
all international Player targets .
• Build a customized specific Pro4
performance program for Home Grown
Players continuous development.
• Develop a 5 year strategic reward and
retention plan for Home Grown Players.
• Offer local USSF registered Intermediary
services for long term Home Grown
Player Management and Success.
We Can: