Saturday, 2 February 2013

MLS Salary Analysis

Football is often a game of speculation. Whether it’s who’s signing for who, who’s getting sacked in the morning or what tactics a manager will use in the next game. One thing constantly rumoured in the papers is ‘player X to sign contract for X thousand pounds a week’ but one thing football clubs are very good at is keeping all official wages, and more recently transfer fees, undisclosed. One country that doesn’t however is the Major League Soccer in the USA. Twice a year they publish a detailed list of all the Base Salaries and the Compensation Costs required for every player in the MLS, giving full access for people like me to delve into this!

Using an idea on a post I’d seen by Sporting Intelligence which theorised that the best teams in the world won their leagues by paying the most in wages and not by spending the most on transfers (although these are often interlinked), I decided to look at an example using the info provided by the MLS. Would the team that paid the most ultimately win the championship?

The MLS is a slightly more complicated league than most traditional European leagues in that the governing body sets strict rules around designated players, wage caps and the ability to veto proposed transfers (as seen recently in the case of Brek Shea of FC Dallas). However clubs are free to pay the ‘designated players’ whatever they can afford (this is obviously down to several factors including having a rich chairman, global fanbase or the location of the club in question – for example it’s probably easier to attract a world renowned superstar to LA or New York than it is to Kansas or Portland!). Also the figures given are Base Salaries so will not take account factors like bonuses.

Note: Click on all graphs to show an enlarged version

Total Salaries of MLS clubs from the 2012 season

The graph shows the clear discrepancies between the New York Red Bulls and LA Galaxy compared to almost every other team in the league. By paying the salaries of players like David Beckham and Thierry Henry, these two teams dwarfed every other team in the league in terms of the total cost of salaries paid to the squad. In fact the $5,000,000 per year base salary paid to Henry is greater than 16 of the 19 clubs in the entire league!

The Median for all the clubs is just over $3.4million meaning DC United would be the prime example of a mid-range club. It would be easy to say Galaxy & Red Bulls pay the most therefore they should win but we’ll look a little more in depth.

Average Salary per player of MLS Clubs 2012 Season

Due to most clubs having a similar size squad (between 26 & 32 players) there was not a lot of difference between the average salary per player graph and the total salary per club graph. The average salary of the Red Bulls players of over $565,000 and LA Galaxy with $349,000 although again these are massively skewed with the designated players. I'll investigate this further on. 

Average Cost per Point

Ultimately all clubs want to accrue the most points over the season. The MLS works in a different method to most traditional European league systems in that they adopt the American format of having a league structure which then feeds into a playoff system. This takes precedence so although San Jose Earthquakes won the MLS Shield by racking up 66 points over the season, LA Galaxy’s MLS Cup win (by winning the play offs despite finishing with the 6th most points) is seen as the greater achievement. The club that stands out is Toronto FC as despite spending a considerable amount compared to some other teams they finished with a paltry 23 points, which resulted in Aaron Winter getting the sack part way through the season.

So, even though NYRB and LA Galaxy qualified for the play offs as the ultimate aim they spent $277,000 and $253,000 per point respectively to get there, compare this to San Jose ($43,000) and Sporting Kansas City ($46,000) and it’s clear to see who is getting better value for money.

Players paid over $1,000,000 per year

To take out some of the outliers in terms of overall wages I wanted to look at the average salaries when taking out the players who were highly paid. I chose to take out the players paid over $1,000,000 (there were 12 players across the 19 clubs paid $1,000,000 with the next highest paid after this being $790,000 – quite a big gap) and this reveals some quite significant findings. I initially thought I must have made a miscalculation with Portland Timbers but their average is actually $79,552 per player when Kris Boyd is removed (he is paid 33.6% of the clubs total Salary) but it’s also quite revealing that New York Red Bulls drop to 7th and LA Galaxy drop to 17th the third lowest average salary paid per player.
This indicates that some clubs are excessively paying 1 or 2 players a massive amount compared to the rest of the team. While this might be necessary to get the better players, does it create an imbalance in the dressing room? If somebody was getting paid a minimum amount to play and another player is getting millions the lower paid player would be within their rights to ask for a raise if they feel they do as much or more for the team.

There are of course pros and cons for both sides of the argument, whilst a team of evenly paid players might have the team spirit and ability which carries them to a major championship, it can be counter argued that David Beckham has done more for the game in the states than anybody else. By raising the profile he has encouraged others to play in the MLS, increased crowd attendances and profile (resulting in a much better TV deal) and garnered interest from across the globe. He has also been very successful in his time at LA Galaxy, winning 2 MLS cups, Runner up once and reaching the Conference final once.

Difference in wages between Highest & Lowest paid players in each MLS Clubs 2012 most regular 11

I have used Soccerway's statistics for 2012 to work out the 11 players in each team who played the most (based on minutes in the regular season). Although not fool proof this usually gives an idea of a likely starting 11 which I have then used to work out the average salary costs.

The graph shows the difference between the highest paid and the lowest paid player from each teams regular starting 11, now if I played for the Red Bulls and somebody was getting paid $4.9million a season more than me to play in the same team I don’t know how happy I’d be! Many teams actually play at least 1 player in the starting 11 who is amongst the lowest paid in the entire league with 13 of the 19 clubs having a regular starter earning less than $50,000 a year which is probably less than what most League Two players get (again, speculation!!!).

The main problem behind this is the scenario of putting all your eggs in one basket. For example if you look at Portland Timbers who are gambling heavily on Kris Boyd being the focal point of the team, if he gets injured/suspended or does not hit his top form (he actually scored 7 in 22 starts + 4 sub appearances – not a bad strike rate but not worth spending 1/3 of the teams wages on). Portland finished 8thin the Western Conference, perhaps if they had signed 2 players on $500,000 each they may have got better value for money.

There were several players who were paid a lot of money who were not regulars. Of these many were Summer signings such as Tim Cahill, who is the 3rd highest paid player in the MLS but only joined from Everton in July and has been a regular since then.

Several others have been at their clubs for the full season and haven’t been regulars. Rafa Marquez is amongst the high profile players who did not feature in the 11 most regular players. Danny Koevermans suffered an ACL injury for Toronto in July ruling him out for the season. Freddy Adu fell out of favour with Philadelphia who are now looking to trade him. All these are examples of when higher paid players are not necessarily the best way forward.

Average Salary for each MLS Clubs 2012 most regular 11

The average salaries for each regular starting 11 is still weighted heavily in favour of LA Galaxy & New York Red Bulls, despite Red Bulls missing both Marquez & Cahill. However 3 of the next 4 teams in the list did not make the end of season play offs, with only Real Salt Lake having a good season.

Cost per Point for each MLS Clubs 2012 most regular 11

Again, while not fool proof the graph looking at the cost per point based on the regular 11’s starting salary also shows some surprising trends, with 5 of the 6 lowest paid regular 11’s making at least the final series play off to enter the MLS cup. Does this mean that the Sporting Intelligence theory is wrong?

Not necessarily. As I mentioned LA Galaxy eventually won the MLS Cup. Given that this is the more prestigious tournament it speaks volumes that the team with higher profile players came through what is essentially a 4 game cup competition. The higher profile the player you would expect them to be used to playing under the pressure of a high stakes game, many of them having played in World Cups and the later stages of the Champions League.

Does a team like LA Galaxy just do enough over the course of the season to make sure it can make the Play Offs and then “go for it” in the MLS Cup? Once LA knew they had secured a playoff place they had little to play for until the MLS Cup started as they were way too far behind to challenge for the Shield, so they were able to rest players. On the other hand San Jose & Sporting Kansas City for example were challenging for the MLS Shield right until the end of the season thereby being at a disadvantage when they entered the Play Offs. While this is not a factor on its own it probably had some level of influence.


Hopefully this blog has provided some insight into the different levels of spend of MLS clubs, and the different factors that come into play. Due to the style of the cup competition it’s difficult to completely agree with the Social Intelligence theory as San Jose were one of the lowest spenders and got the most points over the season, but it is ultimately LA Galaxy that will be remembered as the winners overall and they did spend excessively more than most other teams.

For further info about the MLS salary data Howard Hamilton has provided some more in depth analysis on his Soccermetrics website.

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