MLS turns 30: Will pro/rel, big spending fuel next 30 years?

MLS turns 30: Will pro/rel, big spending fuel next 30 years?

When the 2025 MLS regular season kicks off on Saturday, the league will have reached an impressive milestone in that it will begin the 30th season in its history.

That MLS has lasted this long – more than any other top-flight professional soccer league in the U.S. and Canada in the modern era – highlights its strongest attribute, namely its resilience. MLS nearly went out of business in the early 2000s, and in 2001 it contracted the Miami Fusion and Tampa Bay Mutiny. Since then, though, thanks to some savvy business decisions by its owners in terms of expansion, stadium construction and youth academy development, the league is on firmer footing. MLS boasts the world’s most recognizable player in Inter Miami‘s Lionel Messi and its 30th team, San Diego FC, begins play this season.

Given where the league sits, ESPN wanted to understand what MLS might look like in another 30 years. Will it have reached its oft-stated goal of being one of the top leagues in the world? Can MLS make more inroads against American leagues in other sports? If so, how will it get there? Will it have cracked the code on its broadcast rights deals by then? Will promotion/relegation be part of the conversation? And will MLS be following the rest of the world, or will the world’s leagues borrow some practices from MLS?

To answer those questions, and more, ESPN talked to double-digit sources from a variety of backgrounds in the game, to get a sense of where they think MLS is headed and how it might reach its ultimate destination.

How high can MLS go?

In terms of MLS’s current standing in the world, ESPN colleague Bill Connelly took a stab at that topic, and concluded that MLS is currently the “10th-best (or so)” league in the world. With that as a baseline, how possible is it that MLS can continue to climb that ladder? Suffice it to say, opinions vary.

“I would expect in 30 years’ time for MLS to be the league of choice,” said MLS executive vice-president of sporting and competition Nelson Rodriguez. When pressed, he confirmed that meant being better than the English Premier League. He added that MLS is improving every year, and continues to benefit from being a full generation that has grown up with the league, thus providing a “renewable supply” of fans. “I believe that the infrastructure that exists, not just physical, is the start of the cultural shift that is required to become the league of choice,” he said.

Jordan Gardner, the former chairman of Danish side FC Helsingor, and currently with soccer consultancy Twenty First Group, is more skeptical.

“I think MLS is going to continue to grow,” he said. “I don’t think they will ever compete with the top three to five leagues in the world. I think those leagues are just too far ahead in terms of many revenue metrics.”

Where there is agreement, however, is that if MLS is going to get to the promised land of “world’s top leagues,” it will need to evolve – significantly in some respects.

“I think it can be a top-six league. I think it could be even better than that,” said Atlanta United president Garth Lagerwey, who played in the league and has been a team executive for more than 17 years. “But at some point, we’ll have to take the risk of, are we going to go forward or not? Are we going to stay where we are in the kind of 10 to 20 range or are we going to make a big push and try to get into that top six? You have to have the ratings, the business metrics that support that. And I think there are things we can do to achieve that.”

To spend or not to spend?

If MLS is really going to rise up the ranks, at some point it is going to have to increase spending on players. Connelly’s piece noted that according to Transfermarkt, the Premier League‘s collective roster is worth approximately 10 times more than Major League Soccer’s, and the rosters in the second-tier English Championship are about 1.4 times more valuable despite both English leagues having fewer teams than MLS’ 30.

In terms of salary, the differences are stark as well. According to data published by the MLS Player Association (MLSPA) last September, Inter Miami had the highest annual payroll at little more than $39 million. Toronto FC was second at $32 million. Even Toronto’s spend doesn’t compare favorably with the top European leagues.

Marco Ottolini, the sporting director of Serie A side Genoa, said, “With this kind of budget, like $30 million, $25 million, [in Italy] you’re fighting against relegation.”

So how might MLS close this gap? Increased transfer activity will be part of the solution, as MLS has gradually upped its presence in the market throughout the years. According to Soccer America, the recently closed winter transfer window in Europe and South America saw MLS make 30 outbound transfers compared to 15 a year ago. That outbound activity allows MLS teams to increase their coffers and make a play for pricier players.

“I think the rules are a bit too complicated and there are some limitations for the market to compete with European or South America or top clubs around the world,” he said. “So I think this is the main obstacle in this moment, and probably if these rules will be more open in the future, the league can become stronger in terms of average level.”

Not everyone shares that opinion.

“I recognize I’m in the minority on this, but I don’t think that MLS teams should spend more on players,” said Bobby Warshaw, a former player in the league and now the director of North America at Bloom Sports Partners, a sports advisory company specializing in strategy and recruitment. “I have not seen a financial model where it brings enough dollars back. And we’re in a world where that financial return on sports investment matters.

“There’s a lot of positive buzz around this idea of sports finally arriving as an ‘asset class’ … Everyone wants MLS to invest more to capitalize on the Messi effect, but it’s a hard financial model to build. Sports investors are happy to spend money to make money. If there was an equation that showed that spending more on their team could make more money in cash flow or enterprise value, they would do it.”

Ultimately, any change will have to come from MLS’ owners. Sources from around the league paint a picture of how newer ownership groups, like Miami’s, are pushing to have rules relaxed, while some of the longer-time owners, who witnessed the league’s near demise, are more conservative.

“I think the roster rules grew this way for a reason, which is to say that we were trying to figure out how to optimize ourselves with a limited capital,” Berg said. “And every year when capital gets a little bit less limited, the roster rules evolve and they’ll continue to evolve. Someday, do we get rid of most of the rules and just make it one big pool and get rid of all the acronyms? That’s certainly possible. It’s going to be tied to business performance. Sustainability is very important.”

MLS is clearly banking on the 2026 World Cup, which the U.S. is co-hosting with Canada and Mexico, to boost its business performance and accelerate growth, but there is concern that not enough is being done to maximize the tournament’s presence on American soil. It’s why more than one person ESPN spoke with for this story thinks that it’s the next few years that will determine whether MLS reaches most of its goals by Year 60.

“I’ve been disappointed in how little has been done so far to build on that momentum internally,” Foose said in relation to the World Cup. “There’s still some time, but in my opinion, there should have been significant moves made over the last 12 to 18 months and then continuing up through the World Cup.

“Candidly, we have to invest more. We will invest more,” he said. “We the league, we will continue to work with Apple so that it uses its channels to highlight and promote MLS, I think more shoulder programming. So it’s not sexy or glamorous, but it is more focused and widespread marketing.”

Does promotion/relegation fit into the picture?

The question of whether promotion/relegation can be implemented in MLS usually begins and ends with the following argument: MLS owners have invested billions of dollars in expansion fees, first-team players, infrastructure and academies, and its closed system has yielded hefty franchise valuations. According to Forbes, LAFC and Inter Miami lead the way with valuations of more $1 billion. Why would those same owners – some of whom paid expansion fees of more than $300 million – risk devaluing their asset by agreeing to promotion/relegation and possibly finding themselves playing in a lower division with plummeting revenues?

It also makes it difficult to plan long term.

“Any executive [who worked in Europe] would tell you privately, off the record, that promotion and relegation makes for bad decisions because you make bad short-term decisions based on what’s going to happen over a couple of months as opposed to what’s going to happen over a couple of years,” Lagerwey said.

Ottolini needed no such anonymity.

“If you start the season and you know that you don’t go down, you can plan better in every respect, every respect,” he said.

Yet one area where promotion/relegation has an advantage is in the drama it creates throughout the season, especially at the bottom end of the table. It would certainly add more meaning to a regular season that stretches from February through October, and make for compelling viewing. It may well be the catalyst for increasing broadcast revenue.

“I have a general view that whoever does pro/rel first gets a pretty big check from somebody on the TV rights,” Warshaw said. “I think the American public’s going to be pretty interested in those high-stakes games in pro/rel.”

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Why 32 teams will be the ‘sweet spot’ for MLS

Jeff Carlisle explains why he thinks MLS will eventually increase to 32 teams.

Will it happen in MLS? It seems unlikely, except last week, the United Soccer League not only announced plans for a Division 1 league, but that it continues to look at promotion/relegation. The fine details have yet to be spelled out, but it could make it for an interesting twist in how the game evolves in this country.

The possibility also leads to another question: What if MLS governed multiple tiers and allowed promotion/relegation? While most people interviewed for this story think that MLS will top out at 32 teams, having multiple divisions would allow the league to add even more. It would also allow MLS to continue to collect expansion fees, which one source said was proving addictive for a league in which many teams continues to lose money.

Will MLS lead or follow?

Because MLS doesn’t carry with it some of the historical baggage that its European and South American counterparts do, it has been given room to innovate in some areas, whether that’s using a salary cap, VAR and concussion protocols.

There are certainly instances where other leagues are taking cues from MLS. Promotion/relegation seems to be in deep hibernation in Liga MX, while UEFA is considering a salary cap that would limit clubs to spending 70% of their revenue on player salaries and transfers by 2025.

“Now you’re seeing the federations put in place soft salary caps and [profit and sustainability rules] and squad class ratios,” Bezbatchenko said. “That’s not quite akin to a salary cap, but it serves relatively the same purpose. Maybe not parity or equal opportunity, but the idea is just to create some sustainability for clubs.”

It isn’t all one-way traffic however. MLS is pondering moving to a European calendar, the better to conduct transfer business with the same cadence that European clubs do, and not have to break teams up in the middle of the season. Free agency remains a hot-button issue for the MLSPA, even as restrictions have loosened in the last decade.

“Without [free agency], I do not think MLS will ever compete with the best leagues in the world,” Foose said. “It’s too much of a negative drag on players’ desire to play in the league. Why would the best players in the world want to come to a league where they have significantly fewer rights than they do elsewhere? It’s very simple. It’s very logical. If you’re going to compete, everything doesn’t have to be exactly the same, but you can’t be dramatically different than other leagues. It’s too attractive to be elsewhere when you have a system that’s this restrictive.”

The opportunity for MLS is immense, but so are the challenges. The next 30 years stand to be as intriguing and dramatic as the first 30.