A Magic Gini Lamp?
Professional sports leagues aspire to be the best in the world. Naturally, leagues are mindful of methods to improve their product and become (or remain) top tier. As a result, they can find themselves turning to other leagues and other sports for ideas – borrowing tactics that appear successful; avoiding those deemed as failures.
As professional football evolves and becomes even more globalized, could hanging on to previously successful league strategies ultimately backfire?
In 1996, Major League Soccer brought a new dynamic to an otherwise darwinistic world of football. Looking to protect its delicate ecosystem, the league borrowed the “salary cap” from its successful American counterpart leagues.
Through engineering competitive balance over the last 23 years, MLS has been able to introduce an impressive set of new franchises. The league’s original size of 10 clubs will soon reach 27.
Nearly a decade after MLS’s inception, Australia’s A-League kicked off and followed suit with their own salary cap model.
Both leagues have incrementally raised their caps year after year since initiation, slowly strengthening clubs’ purchasing power with the goal of improving quality and standing within the world. Yet budget constraints can create an artificially high imbalance within a team wage bill, particularly if a club is chasing big names or key talents.
Across all of professional football, measuring the level of pay equality within each club’s roster makes one fact abundantly clear – wage bills of salary-capped leagues are notably less equal. In fact the average club in MLS or A-League has a wage bill that is 75% more unequal than the “average club” around the rest of the world.
Let’s put aside the question regarding whether it is more or less appropriate for clubs to have balanced wage bills and consider unpacking this point in a broader philosophical debate. Instead note how salary-capped leagues sit in the middle of the pack when it comes to quality of play, measured by average World Super League ratings.
Within the broader context of world football, one could forgive MLS and A-League for falling short compared to leagues in countries where formal association football dates back to the late 1800s. Yet in the long term, any top-tier professional sports league will be striving to improve its product and be amongst the best.
MLS in particular has not been shy about its ambition to become a respected, top league in global football. Over the last six years, MLS has raised its clubs’ salary cap by more than 35% while introducing six new franchises into the mix.
However during that time, the average MLS club has witnessed a notable increase in wage inequality along with a notable drop in quality relative to the rest of the footballing world. This is not to say the league’s product is not improving – only that it appears to be slipping relative to the quality of the “Big Five”.
Assuming newfound leagues – or existing leagues looking to adjust their competitive model – have ambitions to reach football’s upper echelon, they may need to approach borrowing ideas with caution. Once self-protecting mechanisms, like the salary cap, might ultimately become damaging to a league’s core product.
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