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Dempsey deal and the big picture
by Paul Kennedy, August 5th, 2013 7:44PM
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TAGS:  mls, seattle sounders, soccer business, television


By Paul Kennedy

The motivation of the Seattle Sounders' owners, Joe Roth, Adrian Hanauer, Drew Carey and Paul Allen, for signing Clint Dempsey was always clear. They have the money to pay him and the desire to add an established star to help take the Sounders over the top after four failed postseasons.

But just what is the motivation of the other 18 owners in MLS in chipping together the $9 million transfer fee to pay Tottenham so Dempsey can return to MLS and beat their clubs playing for Seattle?

In Grant Wahl's superb account of how the Dempsey deal went down for, a source told him the Sounders are paying Dempsey his $24 million in salary over four seasons -- the highest annual salary in league history -- while MLS is paying the $9 transfer fee -- a characterization, Wahl reported, "a league official disputed without providing details."

It isn't like MLS has $9 million sitting in a bank account somewhere, waiting to spend it on a deal like Dempsey's. But MLS does have a capital fund available following the sale of a piece of Soccer United Marketing for strategic moves like MLS+, its new media company, and the retention of "core players" like national team starters Graham Zusi and Matt Besler, whose contracts were renegotiated to make it worth their while to remain in the league.

If the Dempsey deal was indeed underwritten by MLS, it fits into the category of strategic moves the league needs to make. It isn't a coincidence that Dempsey's signing was announced with 72 hours of Commissioner Don Garber's announcement that the league will expand from 20 to 24 teams by 2020.

It's all part of MLS's drive to show it is committed to building an even bigger league and attracting bigger stars as it enters critical negotiations this year with its media partners on new deals beginning with the 2015 season.

MLS is a growing business. Expansion news has been in the forefront for months now as NYCFC was announced as the league's 20th franchise, David Beckham toured South Florida in search of a home, and Orlando City lobbied to finalize its stadium deal. Just a week ago, the Hunt Sports Group announced the sale of the Columbus Crew to San Francisco energy investor Anthony Precourt for a figure of $68 million, Forbes reported. Committing to four more teams over seven years allows for managed growth and will get the league four quality expansion teams out of the dozen or so markets that are serious candidates.

The $68 million would be a league record for the sale of an existing club and just $2 million less than the reported $70 million Red Sox and Liverpool John Henry bought the Boston Globe for. But that would be on the lower end of valuations for MLS clubs, given the Crew ranks 14th out of 19 clubs in terms of its average attendance and the population of its metropolitan area and it plays in the oldest and cheapest of the soccer-specific stadiums built around the league.

Demographics are in MLS's favor. Those in the 18-to-35 demographics are the first generation to be big soccer fans but they aren't big television viewers and they certainly are not big on sitting around on a Saturday or Sunday afternoon and watching sports like their fathers might.

Television remains MLS's Achilles' heel. Roth said as much, telling Wahl:

"Listen, our [national] television ratings are not good. And any observer of any sport in this country knows television drives the ratings. The only two things that can drive the ratings are overall better play and star power. If you can get both, then our ratings will go up. It's not the networks' fault. They've gotta have something to sell. And I think this signing will be helpful to everybody in the league."

In this day and age, only the NFL can draw fans to watch a game simply for the sake of watching a game. Baseball ratings are on an inexorable decline, while the NBA finals drew well only because of the presence of an icon in Lebron James.

The lack of soccer icons, let alone big-name stars with national appeal, makes it impossible to pull in MLS fans on national television for games involving anything but their own teams. Will MLS's ratings double because Dempsey and the Sounders are playing on national television? Perhaps not, but Dempsey's presence won't hurt.

The problem, of course, is that there aren't many Clint Dempseys out there for MLS to lure back. The only other Americans abroad in his class are Jozy Altidore and perhaps Michael Bradley, and both won't be returning home for four or five more years. As Roth pointed out, Mexican Javier Hernandez would be the only other player who might fit the right makeup in terms of cost and appeal to attempt to lure to MLS. (No one sitting around MLS's board of governors is floating the idea of paying the $780 million Barcelona president Sandro Rosell says Lionel Messi is available for.)

Shelling out $9 million for Dempsey isn't going to trigger a run on the money in MLS's Providence Equity Partners fund because other deals don't make sense. Or look at it another way. Spread $9 million over 19 or 20 clubs over four years and we're talking about roughly $125,000 a year per club. That will only pay for a top reserve or perhaps a couple of academy coaches these days. That's a small investment if the Deuce deal is another chip MLS can bring to the bargaining table with its media partners.

And to the question of why let Dempsey go to the Sounders? Well, he had to go somewhere.

  1. Margaret Manning
    commented on: August 5, 2013 at 8:18 p.m.
    "Managed" growth? It's growing like topsy. Feels to me that the fun of knowing the opposing team is fading as we get more and more.
  1. Valerie Metzler
    commented on: August 5, 2013 at 10:15 p.m.
    "...television ratings are not good." Listen, I watch every single game that is ever on a station that I get! It is so disappointing to see the lineup of games in any given week but not be able to see any of them on a regular channel! How can you expect good ratings if people can't see them? I know I am counting the days until the Premier League season starts and all the games are finally available! Why can't we have that for MLS, too?
  1. Kent James
    commented on: August 5, 2013 at 11:59 p.m.
    Come on MLS, pony up the measly $780 million for Messi! You want impact? That'd be impact...
  1. Carl Walther
    commented on: August 6, 2013 at 12:14 p.m.
    So a former MLS player who went to England and now isn't wanted anymore by Tottenham, returns to the MLS---this is a big deal? He's one of the few players that I know of who got into fist fights with his own team members, and now he's a hero here?
  1. Gerald Lewis
    commented on: August 6, 2013 at 10:16 p.m.
    "well, he had to go somewhere" Mr Kennedy, apparently you've never watched the Sounders play at the CLINK. Oh, and the US Men are 5-0-0 playing in Seattle. Possibly the Deuce prefers to play for 40,000+ real FANS, rather the 6-8K that other MLS teams manage to drag out. Why don't you come to Seattle, and we'll give you one of our Season's tickets and you can sit with us for the game. And we'll buy you drinks if things are too frenetic for you.
  1. Gerald Lewis
    commented on: August 6, 2013 at 10:24 p.m.
    Mr Kennedy: Average game attendance last season - Tottenham: 36067 . Seattle: 43144 . He had to go somewhere in the MLS... for sure

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