On Gehenna; Or the Hell Outside MLS’ Expansion Gates

by on 2 February 2017

The recent fury of MLS Expansion activity has drawn quite a bit of excited comment. However, a troubling question lingers in the background: what happens when MLS has finished expanding?

In Hebrew, the word is “Gehenna.” Eventually, it turned into hell, but the place of suffering was also a real, geographic place: the Valley of Hinnom. It was the wilderness, the chaos; a foil for the orderly city of God, Jerusalem. And to be cast outside the gates of the city was to be condemned to the place of “weeping and gnashing of teeth.”

Twelve clubs submitted bids this week for the “final” four expansion spots that will be awarded in MLS. The chosen bids will pay their $150-200 million toll and be rewarded with the safety of being inside MLS’ city gates.

Modern soccer is the thing of billionaires and the price that American soccer fans pay for being able to see the highest quality of soccer possible is accepting this fact.

What’s inside those gates is not the problem; modern soccer is the thing of billionaires and the price that American soccer fans pay for being able to see the highest quality of soccer possible is accepting this fact. That other rich men and owners of existing teams want to be part of the MLS juggernaut is not surprising in the least.

There will come a time in the near future, however, when the gates of MLS’ Jerusalem will have filled to the brim. Moving beyond 28 teams will strain the league’s momentum by diluting media attention spans and creating more and more schedule work-arounds that will fail to get anywhere near balanced schedules.

But what will become of those clubs left on the outside? Rich owners have swept into some of these markets, promising stadiums and the highest level of soccer. Will they simply walk away from their clubs when they find themselves stuck in the USL? Will NASL become a haven for these disgruntled owners, leading to another era of seeking to challenge MLS to force a merger?

American soccer is in an impossible bind right now. We owe a great deal of the sport’s explosion in popularity to MLS. The cartel tactics of working together and pooling risk has created a top league in a matter of two decades, something almost completely unheard of. Teams and owners may lose money in MLS, but team value grows amidst the red ink. There are elements of the business model that can and should change, but owners want in because it is the first truly stable and dominant soccer league in the US and Canada.

As for the other leagues? The NASL is just lifting itself off the mat, but it has been pulled at the seams by its chief asset: its teams’ independence. The league will tout the freedom of its owners to spend and act as they choose, but this leads to teams spending wildly and irresponsibly as other teams scrape by in survival. The USL has grown exponentially, boosted in part by reserve teams and owners who see it as a stepping stone to MLS.

In some cases, crowds have been sold on the promise of MLS: Sacramento, Cincinnati, and San Antonio have all, at times, put their path toward MLS front-and-center as part of their appeal to fans. Will those fans disappear? Or, as in the case of Sacramento, will we see the vital fan bases cannibalized and exploited once the MLS prize is in sight?

What, then, do we do to avert the coming disaster? There are no easy solutions, that much is sure, so ignore your local bedsheet pro/rel warriors. Peter Wilt’s remarkably exhaustive discussion on promotion and relegation offers some ways out. Others have floated the idea of MLS expanding to 40 teams and creating two leagues with promotion and relegation between them.

In 2010, the USSF attempted to solve one of the largest problems with American soccer by instituting rigid guidelines for ownership. Something like 80% of lower division clubs failed and went out of existence in the two decades prior. Those new guidelines ensured that owners had a certain amount of financial backing so they were fully prepared to absorb the inevitable annual losses.

While the fail-rate of lower-division clubs has waned, there continues to be annual upheaval among owners who fail to pay bills or who tuck and run at the first sign of red ink.

But this has simply not worked. While the fail-rate of lower-division clubs has waned, there continues to be annual upheaval among owners who fail to pay bills or who tuck and run at the first sign of red ink. Take the Ottawa Fury, for example, whose annual losses ended up being less than originally projected, but still decamped to the USL to save money.

What is clear, though, is that the USSF has been woefully absent in the process of shoring up the security and future of American soccer. Sunil Gulati and the federation helped secure the temporary futures of the NASL and USL last December. However, their solution was remarkably short-sighted. Neither league will likely enter 2018 without needing some sort of waiver for Division Two status and the USSF seems unwilling to hold anyone accountable. Moreover, how long will there simply be two second divisions? Is this really a sustainable solution?

This essay can offer no real solutions, because, to be honest, it’s a problem too large for one brain. The USSF needs to put together a comprehensive plan for the future and it will have to include twisting arms, even that of MLS. The federation needs to find a way to begin actual cooperation between the leagues and that includes eventual revenue sharing with SUM.

When the NASL seemed on its deathbed, some observers cheered its passing, believing that we might move into some Fukuyamian “End of History” era for US and Canadian soccer.

When the NASL seemed on its deathbed, some observers cheered its passing, believing that we might move into some Fukuyamian “End of History” era for US and Canadian soccer. These people saw the NASL as a gadfly, making trouble where there could be peace and cooperation. And if USSF believes NASL can’t play nice, then so be it, but eventually USL owners who saw the league as a stepping stone to MLS will cease kowtowing to the first division and the USL may become oppositional.

There is no utopian peace as long as those outside the MLS gates want to get in. MLS has conducted its expansion smartly and effectively in the last few years. However, it’s time that the USSF convenes a committee to avert the coming disaster. Whatever plan they come up with may not be implemented for another decade, but without a top-down diktat from the federation we will start to see a quick return to the days of lower division teams failing at ridiculous rates. The weeping and gnashing of teeth will see these rich owners in the lower divisions either continue to use leagues as battlegrounds against MLS or simply walk away from these communities, leaving them without teams.

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  • Jon

    Experience from other sports tells us that we will see two things, when MLS shuts the expansion door.

    1) Rival leagues that briefly burn brightly before flaming out spectacularly. Arguably, this has already happened with the NASL, depending on whether you believe that Aaron Davidson talked Seamus O’Brien into trying to force his way into MLS by making the NASL so popular that MLS was forced to absorb it. At this point, it seems impossible that any rival league would be able to force MLS’s hand; it would require immensely deep-pocketed ownership that was committed to out-spending MLS and doing so for long enough a period that the league would be taken seriously by broadcasters / sponsors / advertisers / local governments. We’re talking a decade or more of losing vast, vast sums of money, going it alone without dedicated revenue streams from stadiums or television deals or sponsorships, driven only by the desire to smash the MLS cartel. At this point, that seems SO unlikely, especially given the other option:

    2) A period of franchise upheaval, with teams hopping around the map. This is coming, no matter what. MLS smartly made soccer-specific stadiums a cornerstone of its expansion strategy, betting that having physical stadium anchors (and the attendant committed local government partners) would help the league exist from year to year. Now that the league is out of the woods, so to speak, there are at least a handful of teams stuck in places they’d rather not be. No matter how new their stadiums, experience from other sports tells us that it won’t be long before those teams are seeking better stadium deals. Look at Atlanta, which built two new stadiums in the 1990s for football and baseball, and yet has both local squads headed for new digs in the next year. List every team that’s playing in a far-flung suburb, and you’ve made a list of your relocation candidates.

    At some point, MLS is going to decide how big of a league it wants. It’s already one of the biggest (maybe even the biggest?) top-division soccer league in the world, but until it gets to 30 teams, it’ll still be the smallest of the American pro sports leagues.

    When that door closes, the franchise carousel will begin.

    • BJ

      MLS at 40 teams, unlike Peters version, 20 team east and 20 team west. Top 5-6 (10) teams Play against each other in a champions league of sorts for MLS cup the following year.

    • Wes

      Yes. And one of the chief differences between soccer and those other sports is the emphasis upon tying the club to that community. If we start going the route of moving franchises around. Ugh…

      • Jon

        It’s going to happen, Wes. Soccer’s not different than the others, not in America; they are franchises, not community teams. There will be many more Houston Earthquakes.

        • Wes

          I know, I know. Don’t mess with all this sand around my head, Jon.

  • Bruce J McGuire

    Argentina top league is 30 teams.

    • Jon

      Good info – do you know of others that are bigger than 24 teams or so?

    • David Fellerath

      Yes, but that expansion occurred a couple years ago to prevent River Plate from being relegated. They’ve since recognized that 30 teams is too big. They are contracting to 24 over the next couple of seasons.

      • Wes

        I didn’t know this. Fascinating.

  • Robert

    As a soccer observer since 1967 when we had 2 leagues[ not counting the ASL] instead of one it appears we are headed into the same over expansion mania that nearly collapsed the NASL after the 1968 season and then did in 1984.

    • Caxamarca

      I started following NASL in ’75, so several years behind you. I would take an completely opposite view of where we are headed. Though I thought that soccer “had arrived” in ’76 when Pele came, or when my Earthquakes played before 50,000 in the Oakland Coliseum vs. the Stompers, i had no understanding of how fly by night much of the league was being ran. In hindsight, we all now know that the NASL demise was inevitable. The MLS is being built to last, structurally sound, and in my mind, poised for great things. I’ll comment to the writer elsewhere, but was interested in your post because you have the first-hand historical knowledge of where soccer has been in the US.

      • Robert

        Have been a Crew fan since day one. MLS has had past hiccups: TB Mutiny/Miami Fusion. There are a few weak links today when you examine attendance numbers. Favor fewer strong teams although hard to foretell who those teams might be. Single entity structure has helped MLS avoid past NASL mistakes.

        • Caxamarca

          I’m with you, became of a fan of the MLS Quakes in ’96 (they have a true unbroken connection with my NASL Quakes) kept supporting them as Houston Dynamo but when the expansion Quakes came into being my heart turned to them. If you get a chance look at my comment below, as you have seen a lot of the turbulent years I would like your comments/views.

    • Deej

      The difference was that soccer wasn’t popular at all back then in the states. Totally different today.

      • Robert

        The ASL in 1920’s was more popular than NFL pro basketball hockey. Only baseball more popular. Soccer relatively speaking is more popular today yet it still trails football basketball baseball and hockey in some markets. Sports have cycles. Does anyone follow pro boxing since MMA? Yes I am generalizing but my point is over expansion in all levels MLS NASL USL NPSL new ASL Premier League of America is not helpful. Google defunct soccer teams in US. I want soccer to succeed without repeating its long history of mistakes.

  • Dave Benhart

    You’re putting that English Doctorate to good use I see. Are you angling for a writing gig with The New Yorker? Or just trying to raise the average reading level of the American Sports Fan above 3rd grade?

    I’m not saying you’re not making good and valid points. It’s just buried behind a lot of, shall we say, “flowery language.”

    • Wes

      I mean, I could use words like “clutch” if that helps.

  • Dave Benhart

    So the MLS is the biggest soccer league at 22/24/28 teams. What are the populations of those other countries? What about land area? The US & Canada (most of whom live within 100 miles of the US border) have both larger population and are more spread out population centers than most other countries. Is having two “divisions” in one “league” out of line for this land mass or population?

    • Dave Benhart

      Not too mention all the other sports league competing for the sport entertainment dollar. The US (and Canada by association) is a unique sporting environment in the world.

    • Tim Reppe

      You mean 2 divisions within each conference? Yeah, why not? Like every other sport league.

  • Offensive Loons Fan

    I’m reminded of how much of an aberration MNUFC was, only coming to MLS reluctantly and, at times, seeming like it was about to prefer an inevitable death than meaningfully attempting to secure a spot in MLS. Compare that to other markets, which either just organically deserve such a spot or had white knights ride into town promising to deliver it but in any case with fans and owners practically begging for it, and MNUFC’s story genuinely stands alone.

    • Wes

      I think the Rowdies are comparable. Bill Edwards was one of the leaders of the anti-MLS crowd in NASL and then, well, if you can’t beat em…

      • Offensive Loons Fan

        Good point, I’d say they are in that mix. I suppose the Railhawks weren’t exactly begging for MLS either, but they’ve been spurred perhaps by the obvious unsustainability of lower league soccer right now.

  • Dave Laidig

    Many people get involved with the sport for the love of the game. And I can understand the thought. Why not make your job something you love to do; and if you love soccer…

    However, the past few decades are filled with well-meaning people getting into the sport for the love of the game, and then being crushed by the business demands. Teams cannot survive on panenkas alone. It’s expensive to put together a professional staff. Players need to be paid. Practice fields must be maintained. A stadium needs to be paid for. Getting an entire team to travel to a road game a 1000 miles away isn’t easy. Ads need to be sold, someone needs to engage the community to sell out games. A successful team requires TV broadcasts, and maybe radio. And there is no firehose spewing money that teams can tap into to keep themselves afloat. Fans of the game aren’t necessarily the best people to manage these tasks. And the revenue makes it hard to staff an entire organization in the way it needs.

    The only way to build a solvent lower division, is to actually focus on the tedious painstaking work of building the enterprise. It seems ordinarily smart people, successful business owners in their own right, seem to think that these fundamental obstacles don’t apply to them. The Cosmos have a “brand” – thus they can pull in revenue. Nope. Ownership by a long-standing foreign club. Nope. Simply having the money required by the USSF: not good enough.

    Any club plan that does not realistically reflect the need for controlling its field (through lease or ownership), ownership’s financial resources willing to be invested, and building relationships with its community is doomed to fail. I don’t believe the path to long-term success is simply allowing a variety of teams some time in a successful league. Each individual club must be independently stable on its on terms. And this focus isn’t going to happen without an external push.

    I think it’s time for USSF to micromanage the leagues. Tie spending to club revenues (similar to the UEFA Financial Fair Play rule). Require bonds for player salaries (not just for the clubs showing up at games). Facilitate arrangements that lighten the burden of travel costs. Support collective (league-wide) business arrangements for sponsorship and marketing efforts. And in exchange for this micromanagement, USSF revenues can be more broadly dispersed. While even this is not a shortcut to the work needed to be done, I think this would help put the focus on where it needs to be for sustainable growth.

    • Dave Laidig

      PS I like Wes’s flowery language. It’s pretty and spring-like.

  • Jay H.

    MLS is nothing more than a glorified money franchise league like other American sports leagues. Not loyal to it’s fans, not caring of the national growth of the sport and see it’s local community simply as temporary host. The number MLS want to expand to can be costly when considering most of our top American leagues got those large club numbers through mergers. Growing pass 22 clubs have lead two of our clubs in the mid 80’s through financial problems that lead to both folding from over expansion. MLS is hoping to grow large from scratch while trying to keep up with better league within our own continent and around the world. MLS need to realize that soccer can not grow like other American leagues that have 0 world competitions (for TV deals, players, best coaches, ect). They think they can be a successful league JUST because they are a American league only. That won’t be enough in the end when the majority of American soccer fans and casuals already rather watch foreign soccer than MLS. This country never had a first division soccer league stop expansion in it’s history simply because they all folded before they finished.

    The way our soccer pyramid looks shows all the signs of disaster ahead and that the USSF still don’t know how to build, stabilize, organize, equally manage and financially get American soccer on the right track from top to bottom.

    • Deej

      And European soccer is just a glorified money pit that is controlled by a handful of clubs lucky enough to be owned by sugar daddies that throw endless amounts of cash at overpaid players. Most of the clubs are in debt, It is a total have/have not system. Care to counter?

    • Wes

      Anytime I hear someone talk about how sold out MLS is, I feel the need to show them the AC Milan sponsored halftime “Haka” show. Every soccer league is a sold out money machine.

  • Caxamarca

    Great article Wes. I would take an opposing view. I believe soccer in America, the MLS as a world league and even the lower divisions are poised for greatness:

    Demographics- favorable to soccer through immigration, 12-24 age group, exposure to the game on TV that my generation did not have (the popularity of the summer soccer tours show how this is complimentary)

    MLS- through expansion will generate approximately $1.7b to $2b over the next several years (I get to this number assuming growth to 32 and franchise fees rising with each phase of expansion) this money shared with the Owner-Operators in the single entity system allows for more investment in player development, buying players and marketing the game. We then get to the next TV contract with a league that has a national footprint filled in, with better players and play and can command more dollars which then continues the aforementioned. This will result in a better level of play=more attractive product=bringing in the fans of the European leagues, Liga MX and perhaps more casuals, and that 12-24 demographic is really coming of age at this point

    The NASL and USL (and some PDL, NPSL etc.) are showing that there is a soccer club supporter culture that does not “need” to be in MLS to feel accomplished. As soccer becomes stronger and ingrained in the US these leagues will begin to thrive because A. fans will be there and this is always the most important factor for the success of a sports league as every other decision ultimately is dependent on this factor and B. It will be in the best interest of the MLS to have a thriving lower division system=investment, partnership, competition.

    • Caxamarca

      Another point with expansion of the MLS in mind- some have commented on MLS 1.0 MLS 2.0, and where it is going in terms of stadium locations. It seems that yes, in some cases a downtown city that taps into the life of the city is what works and is desirable, but this is not true in every case, SKC has been wildly successful and that stadium is nowhere near a city center. Other suburban sites have not taken off, FC Dallas in Frisco. I’ve been there and the Dallas-FtWorth area is spread out but MLS growth and strength buys these situations time to figure out how to get the fans out.

    • Wes

      I agree with you on the first part. Absolutely, MLS can grow in quality as more and more money comes into it. But I disagree completely with the idea that you have successful markets that don’t “need” to be MLS. Detroit City do this, yes, but they are not a fully professional team. And you have amazing success stories like Cincy or Sacramento, but all of them are still very, very new and all of them have offered the promises of MLS. What happens in 10 years when those fans are still watching lower division teams? Rochester Rhinos redux.

      • Caxamarca

        Just re-read, and I should have been more mindful of your praise of the MLS’ success to this point. Of course you and I do take differing views on the sustainability of the lower division under the current structures. Thinking of different models in the US of minor leagues, farm teams, developmental leagues, whether it is the NFL, NBA, NHL or MLB a major difference that exists vs. the soccer model is the passion and identify of soccer supporters of lower division clubs. I believe that the coming soccer dominance and distinct soccer culture will allow for thriving lower divisions. Though I agree some instability will occur with ownership, ultimately the demand will make it viable and sustainable.

  • Wes

    I just don’t see a way for American soccer teams to compete for players like Giovinco without acting exactly like every other big global team. That is, rich people spending money. Right?