Open wide for some soccer arguments.


Opinion: Deloitte’s Pro/Rel Study is Useless

by on 21 November 2016

Promotion and Relegation Is A Thing, Say Consultants Paid To Say So

At midnight Eastern time, on Monday the 21st of November, the English consulting firm Deloitte released a summary of a study — commissioned by Miami FC owner Riccardo Silva — on the topic of promotion and relegation in US Soccer. It’s hard to convey in writing the absurdity of the whispered buzz that this embargoed report generated after its existence was leaked to the general public on Saturday. Suffice to say, if you knew nothing about it until now, your life was better for it because it is a hypeburger packed with empty calories.

The summary report mainly catalogs the common arguments for and against promotion and relegation (from here on out, referred to as “pro/rel”), proposes the obvious remedies to the challenges of implementation, and displays the results of a survey of 1,000 American soccer fans through a collage of cheaply made infographics. (As a student in a design school, understand that I am an authority on cheaply made infographics.) It’s as if the study authors had never encountered the pro/rel debate before and believe what they’ve uncovered is new.

What is missing from the document is any kind of hard-won knowledge or analysis. Perhaps that can be found in the full report itself, which may not be released, but there’s no indication from the summary that the rest of the study goes much deeper. Even low-hanging fruit goes unpicked. Consider the canard — regurgitated in the executive summary — that “Promotion and relegation introduces competition at the top and the bottom of leagues, increasing the number of matches in a season with something ‘at stake’.”

The idea that leagues with pro/rel contain more meaningful games is dubious and is a great example of something that could use some clarification by paid consultants. In MLS, much of the league is still in playoff contention in the final weeks of the season. Further up, the top group of teams are maneuvering for a first-round bye and the best in the league are competing for the Supporters Shield. In contrast, over in England, teams like Stoke might enter March or April with a rough idea that they will finish out of the European places but clear of relegation and thus have nothing to play for. In MLS, they’d be battling for playoffs. Is it so cut and dry that leagues with pro/rel produce more meaningful contests down the stretch? Perhaps, but perhaps not, and this study doesn’t attempt to lay some ground-rules, total up the matches, and find an answer.

More egregious is the study’s lack of curiosity about some of the central claims of the pro/rel argument.

More egregious is the study’s lack of curiosity about some of the central claims of the pro/rel argument. To pick just one and attach no added importance to it, the study suggests that pro/rel could aid in youth development because; “Ambitious ownership at all levels may improve facility and coaching provision at a larger number of clubs.”

This strikes me as precisely the opposite of what would occur. In a pro/rel system, the overarching incentive for owners becomes the current first team and its success in staying clear of the drop. If pro/rel were suddenly instituted, would a bottom feeding MLS team like the Chicago Fire or an ambitious NASL team like the New York Cosmos invest each marginal dollar in an academy? Of course not! Investing in long-term benefits like an academy structure or training facilities requires stability. It may take five years for the first players truly incubated in your academy to come of age. If investing in the uncertain gains of an academy would jeopardize your first division status, no club would do it.

“This is not intended in any way to be a polemic or the final word…it’s very much intended to be a piece that helps inform the discussion around this topic.” – Dan Jones,
Head of Deloitte’s Sports Business Group

The Deloitte study was an opportunity to plumb the depths of questions like this one, where crucial insight could be gleaned by a study of English academy expenditures and production, or research from the field of behavioral economics. One of the critical flaws of the pro/rel discussion is that it is nearly impossible to develop good research design to test the effects of a pro/rel system against a closed system. To the extent that it is possible, you’d suspect that an international consulting firm would be the ones to do it. Instead, the consultants were content to merely reproduce talking points and proceed as if they were self-evident. On Neil Morris’ excellent Inverted Triangle Podcast (listen to this), Dan Jones, the head of Deloitte’s sports business group, says “this is not intended in any way to be a polemic or the final word…it’s very much intended to be a piece that helps inform the discussion around this topic.”

In what way to does this study inform the discussion?

Would pro/rel result in higher match attendance and TV audiences? Would pro/rel raise the profile of the league in the United States? Would pro/rel help professionalize the front offices in lower divisions? Would pro/rel attract more stable and committed ownership in lower divisions? Would pro/rel lead to more investment, overall, in the sport? Would it lead to less? What would pro/rel do to player salaries? Would pro/rel lead to a higher standard of play? Could pro/rel be compatible with a salary cap and, if not, what could be done to prevent the dominance of New York, Los Angeles, and other big markets? Why is pro/rel important to soccer’s success in the US and Canada when it has not inhibited the growth of professional football, baseball, basketball, and hockey?

I don’t want to suggest in this piece that I have a better handle on sports business than the Deloitte consultants. I certainly understand that they did not have access to the kind of data (from MLS teams, for instance) that would have aided a deeper analysis. And not all of these questions may be possible to answer. Certainly few can be answered with anything approaching certainty. Many of these questions may be answered favorably for the pro/rel system and many may have negative implications. But this much-touted study answers precisely none of them and, as a result, it does a disservice to us all.

The one thing it does do is provide us with the results of a survey of slightly more than 1,000 American soccer fans. This survey is interesting, but it’s also not very useful. Respondents, for example, report that they would be seven times more likely to watch more club soccer games on TV if pro/rel were introduced than they would be to watch less club soccer games on TV. What does this mean? What do we gain from this survey result? How would someone even say with any confidence what they would do, as a consumer, if pro/rel were implemented in the United States? I certainly have no idea how my soccer watching habits would change — do you? As a review of broad sentiments to the topic of pro/rel, the study is telling. But as an article that enriches the raging debate on the topic, it provides little.

To cut through American soccer’s byzantine pro/rel debate, what we need is a serious economic analysis from an impartial source. There exist ways to conduct original research on the subject. There can be no meaningful discussion of the topic without someone actually sitting down and doing the research. In that process, trade-offs may become clear. Do Americans want an open system if it stifles youth development and reduces the league to a system where the title is contested between four to five teams each year? Do Americans want a closed system if it perennially is killing off lower divisions and MLS increasingly resembles the no-fun NFL?

To arrive at these honest reckonings, we need some real analysis to build on. This isn’t it.

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