MLS 3.0 Series: MLS History 2.0 (2006-Present)

The story of Major League Soccer is the story of the growth of association football in the United States in the years after the United States Soccer Federation was awarded the right to host the 1994 FIFA World Cup. In the years since the league’s inception the sport has grown to a level never before imagined, besting average live attendance numbers for both the National Basketball Association and National Hockey League and approaching the realization of a twenty-four-team league by the year 2020.

Once that dream has been achieved American soccer must make yet another giant leap. This Last Word on Sports series seeks to spell out how Major League Soccer must adapt after expansion, and profiles many of our writers’ varying opinions on where the league will spend most of its resources to continue its growth in recognition, talent, and renown. Last Word on Sports will also take a brief look back at the two major periods in the league’s history; the juxtaposition between these periods marks an important milestone in American soccer and helps set the stage for what Major League soccer will seek to become in MLS 3.0.

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Major League Soccer (MLS) would take the resurgence after the Korea/Japan 2002 World Cup success of the US Men’s National Team and push to expand on it in the 2006 Germany edition.  MLS 2.0 is a phase of rapid expansion, league stability, and an influx of high quality player talent.  To read more on Major League Soccer’s history from 1996-2006 click here.  In this era, owning a soccer team in North America suddenly become a viable, money-making option; ownership groups have flocked to get into the action.  But in order for the league to be successful, it had to become financially competitive in the international market.

In November 2006 the Designated Player Rule was implemented by the various MLS ownership groups.  Under that rule teams had one Designated Player slot and could trade for a second from other teams.  The rule stated that $400,000 of that designated players salary would count towards the salary cap.  Teams were able to spend as much as they would like on these players to compete with the salaries being offered by other big international clubs.  This rule was immediately dubbed “The Beckham Rule” by media outlets because rumors were swirling that David Beckham was interested in signing with one of two clubs; the newly re-branded New York Red Bulls, or the LA Galaxy.[1]

Out of Darkness There Is Light

David Beckham is a world renowned soccer star and his reputation precedes him; at age 32 he had already won 6 league trophies with Manchester United as well as one Champions League Trophy, and one with Real Madrid, and that’s only the major trophies.  In 2007 he decided to join the LA Galaxy at a fee of $32.5 Million Dollars over 5 years, unheard of in MLS.  He would go on to win two MLS Cups with the Galaxy in 2011 and 2012, and boost attendance in the league wherever he played.

World Class players could now make a living playing in the US or Canada, and the appeal of living here would draw them from all over the world.  Major League Soccer was now climbing the ladder in terms of being able to acquire the best in the world.  The better the talent on the field, the more butts in the seats; the more fans you could attract to game, the more revenue made by the ownership groups.  And when others saw what kind of money could be made by owning a soccer franchise, the bids started flying in to expand into markets across the continent.

Players such as Cuauhtémoc Blanco (an infamous Mexican National Team player), Juan Pablo Ángel of Colombia, and even American stalwart Claudio Reyna were all added as designated players in 2007.  As more players began to make the journey to North America to play in the league the quality of play increased, as did the interest in the sport.  David Beckham’s legacy shines just as bright now as it did in 2007 when he entered the league, and it can’t be denied that his move to MLS changed America’s soccer scenary permanently.

Northern Exposure

While David Beckham was signing his lucrative contract out west, MLS was expanding into Canada with the creation of Toronto FC.  The Maple Leaf Sports & Entertainment Group plopped down $10 million for the rights to enter the league in 2005, and in 2007 the Reds would take the field.  Finishing with a record of 6-17-7 their first year with the league would be a tough one, but fans came out in droves, buying 14,000 season tickets that year alone.  The market was there, and the framework had been built.

But not just anyone can buy an MLS team and enter the league, you have to meet the desires of the Expansion Committee. Expansion into MLS is a funny thing, potential ownership groups have to meet various criteria of the MLS Expansion Committee:

  1. They have to pony up the expansion fee to the league.  Toronto got in with a $10 million fee, but today, they need about $70 million to secure an expansion team.
  2. They need to show that they can build a soccer specific stadium; one that can house a field that measures 120 x 80 yards and hold at least 16,000 fans.  A few teams have gotten away with sharing stadiums with other sports teams, but all of those have separate locker rooms for MLS teams and many have ways to modify the stands to accommodate a smaller attendance.[2]

Few are willing to pay the expansion fee if they can’t guarantee that they will be profitable; owning a team is a business after all.  A passionate and large fan base is always a good sign that soccer can succeed in the area, and usually a large television market shows that those passionate fans exist.  If the committee approves the expansion, a date is set for introduction into the league.

Eureka!  We Found It!

The real challenge was seeing if other markets would pan out.  With the contraction of the Tampa Bay Mutiny and Miami Fusion just in the rear-view mirror, MLS Commissioner Don Garber couldn’t afford any more disasters that would send the league spiraling back down from where it was just 6 years prior.  The best place to start was a market that had already proven viable: San Jose.  With the San Jose Earthquakes relocating to Houston in 2006 and rebranding as the Dynamo, San Jose was desperate to fill the void left by the departure.[3]

In the past when the league was struggling, most of the teams were owned and operated by either Lamar Hunt or Philip Anshutz and his group, AEG.  In San Jose’s case it was AEG who owned and operated the team prior to 2006, as well as 5 other MLS franchises.  When AEG failed to secure a soccer-specific stadium in San Jose, the team was moved to Houston and rebranded, leaving a void in the Northern California soccer scene.  But now, with resurgence in popularity in the sport, San Jose was ready to show they could carry on the tradition of the Earthquakes.  The principal owners of the Oakland Athletics baseball team ponied up the funds to secure an expansion franchise, and San Jose began play in 2008.

The Times They Are A-Changin

This brings us to an interesting part of MLS history, a turning point in which the two men who financially floated the league in its toughest times were able to sell off some of their franchises. Lamar Hunt was one of the principle founders of the league back in 1996, and at one time owned three clubs, the Columbus Crew, Kansas City Wizards and the Dallas Burn. Philip Anschutz and AEG owned 6 different teams at one time, losing money every year while trying to keep the sport alive in a struggling market.  If these two men didn’t take the risk of believing in the league it wouldn’t have survived, hence the MLS Cup trophy being named after Anschutz.  Even the league itself owned three teams.  Things were not looking good before the year 2006.

Young ownership groups were vying to jump into MLS soccer scene, and Anschutz and Hunt knew that if the league was to grow it would need new ideas from fresh owners.  In 2006 Lamar Hunt sold the Kansas City Wizards to a six-man group of young IT entrepreneurs, followed by the Columbus Crew in 2013.  AEG also had begun to sell off their teams in 2007 starting with the Chicago Fire.  Over the years the teams would be sold off so that today, the Hunt Sports Group only owns F.C. Dallas, formerly the Dallas Burn.  AEG would slowly sell off its teams so that today they own only the LA Galaxy and 50% of the Houston Dynamo.  The proof is in the pudding, and by 2008 the demand for soccer was at an all time high.  The league had expanded to 14 teams, more than they had ever had.  But this was just the beginning; the bubble had burst and some familiar teams from previous North American soccer leagues were about to float to the surface once again.

The Pacific Northwest (and Philly)

Soccer in the Pacific Northwest has a long and storied history that dates back to 1974.  You can read more about the rivalry between the Portland Timbers, Seattle Sounders and Vancouver Whitecaps here.  But MLS had been trying to build a league that didn’t directly tie to the old North American Soccer League days of the 70’s and 80’s or even some of the American Soccer League teams from the first half of the 20th century.  All that changed with the introduction of the Seattle Sounders in 2009.

Microsoft co-founder Paul Allen, already owner of the NFL team the Seattle Seahawks, had been interested in soccer for a while. When he funded the building of a new stadium for the Seahawks in Seattle he made sure it could support a soccer team.  Hollywood producer Joe Roth, United Soccer League (USL) owner Adrian Hanauer of the minor league Seattle Sounders team, and television personality Drew Carey all joined forces to pay the $30 million expansion fee and bring top-tier professional soccer back to Seattle. A remarkable framework was put in place with the team, one different than any other North American sports team.  Drew Carey was an avid soccer fan and had seen how front offices were run in other large clubs.  FC Barcelona was a perfect example of this idea he wanted to bring to the U.S.  Gone were the days of a shadowy general manager making trades and moves behind the scenes.  The two things he wanted when he agreed to help fund the team was a marching band and a publically elected GM.  Every four years the season ticket holders would get together and vote on whether to retain the general manager or to replace him; public accountability at its finest.[4] Seattle would prove to be the new golden standard for expansion franchises, not just in MLS but in any sport.  22,000 season tickets were sold and they opened the 2009 season with a victory over the New York Red Bulls in front of 33,000 fans.  Seattle would go on to win the U.S. Open Cup in their first year, something only the Chicago Fire had accomplished.  They would go on to finish the season with a record of 12 wins, 7 losses and 11 ties and make the playoffs.

2010 brought the arrival of the Philadelphia Union, another expansion team with something to prove.  With a group of wealthy investors and an agreement to build a soccer-specific stadium near the Commodore Perry Bridge.  Philly was the largest metro area in the country without a soccer franchise, and with another well-funded ownership group and funding secured for the stadium it was a no-brainer for MLS to move in to the city of brotherly love, especially with the passionate fan base that had already made a name for itself . The Sons of Ben are a supporters group in Philadelphia that was formed by a group of friends in 2007.  Their goal was to work to get a professional soccer team brought to the city, and worked for 2 years to assemble over 1600 members to help convince the league that their city was ready for a team.  Named after American hero Benjamin Franklin, the group was on hand for the team’s announcement at Philadelphia’s City Hall in 2009 and in 2010 were in full voice when the Union won their home opener against D.C. United.  Although they wouldn’t make the playoffs that year, the Union drew large crowds and showed that Philadelphia could be a home to soccer.

In 2011 the Portland Timbers and Vancouver Whitecaps were brought into the fold, completing the Cascadia trifecta and carrying the intense rivalry into a top professional league for the first time since 1985.  Portland would play at a renovated small college football stadium in the heart of downtown, while Vancouver had a proposal for a 20,000 seat waterfront stadium. In announcing the acceptance of the Timbers into MLS, Commissioner Garber stated that “A city with such a storied soccer tradition deserves an MLS team, and we are proud to have Portland join the top level of professional soccer in our region.”  The place dubbed as “Soccer City, USA” in the 1980’s, would return. The Vancouver Whitecaps also had a long history dating back to 1974.  The pride the locals felt about their team led to the immergence of a strong ownership group, including NBA player Steve Nash.  The Whitecaps would move into newly renovated BC Place in 2012 and there they would stay, drawing huge crowds.  Having been the only team in the Cascadia region to have a championship trophy in their cabinet from 1979, they were adamant to get back to their winning roots.  But a few provinces over a Canadian rival was getting ready to make their big-league debut.

This would further solidify the idea that the league was open to accepting the history of soccer clubs across the nation instead of trying to do what it could to distance itself from the black eye that was the NASL.  Both teams’ home games opened to sellout crowds, although both suffered lackluster inaugural seasons.  The passion displayed by the two fan groups proved to be television gold and the league did everything it could to try and promote and display it on a national stage.  The Cascadia Cup, a competition designed by the supporters groups in Seattle, Portland and Vancouver, would be carried forth into MLS.  The rivalry was front and center, and the league knew that if it could replicate it in other parts of the nation they could really have a top league on their hands.

Bonjour Quebec!

In 2012 Major League Soccer would say hello to a third team, the Montreal Impact.  Originally formed in 1992, the Impact played their soccer in the United Soccer League (USL) before moving to the revised and revamped NASL.  Under owner Joey Saputo the team would win 3 championships and come to be an essential part of the Montreal sporting environment.  Averaging at least 11,000 fans a game from 2005 on, it was clear that an MLS team could survive and compete. By now the expansion fee was $40 million due to the increased interest of many ownership groups, and gone were the days where teams were dissolved or contracted.  In 2012 the team made their home debut in Olympic Stadium, tying the Chicago Fire 1-1 in front of over 58,000 fans.  The trend of highly attended games would continue to show the league that they were making all of the right moves, and in 2013 Garber would announce that the league would expand to 24 teams by the year 2020.

Replicating Rivalries

There was one large swath of land that didn’t have any professional soccer clubs and that was the south.  Ever since the contraction of teams in Miami and Tampa Bay the league was nervous about moving back into the region.  But the Pacific Northwest had shown that it was possible to use a regional area to intensify a rivalry. Recently teams have been announced in Orlando and Atlanta, and David Beckham has exercised his option to buy into an MLS franchise and has been exploring stadium locations in Miami.  Orlando City FC, currently in the USL-Pro, a third tier league in the US, splashed the market by signing Brazilian superstar Kaka.  And Atlanta has recently released details on its new football stadium that will house the future soccer franchise.  MLS is going all in on the idea of a southern soccer rivalry and is looking to tap into large television markets.

In 2005 an executive at FC Barcelona started to make trips to the US to research how a club could tie itself with North American soccer.  His name was Ferran Soriano, and in 2013 while CEO of Manchester City of the English Premier League, he announced that the team would create a franchise in New York.  NYCFC has already made splashes throughout the league with the signings of David Villa and Frank Lampard, and with one more DP slot left to fill, it’s expected they’ll push the envelope once again.  In 2015 both Orlando and New York will kick off their seasons and Atlanta will begin play in 2017.

But one thing is known for sure, MLS is no longer strangled by low fan attendance, lack of television coverage and financial instability.  A new television deal will take place next year, putting games into homes across the country, while also netting the league $90 million a year, more than three times the previous deal.  Cities across the nation are fighting to get those last couple of expansion slots; from Sacramento to San Antonio.  The demand is there, and the league has found its place in the current sports environment.

In our next chapter of our MLS 3.0 series, Last Word on Sports will look into the future and see where the league can go, and how it can affect the US Men’s National Team on the World Cup stage.  Youth development, expansion teams, the upcoming collective bargaining agreement, NCAA soccer and minor league teams all play a part in the ultimate goal of growing our league.  We’ll tear into these topics and show that world class football isn’t a continent away, its right here in your backyard.  And it’s only getting better.

[1] A day before the vote on the Beckham Rule, the league voted to introduce a rule that allowed teams to sign players from their youth academies without having them go through the draft.  Overshadowed by the DP rule, this change would come to be important in the development of some of the talent you saw at the latest World Cup in Brazil.

[2] Most expansion franchises now tend to build soccer specific stadiums for their team, allowing the owners to control the parking and concession revenue that comes from hosting events.  But as we’ve seen recently, it’s not always that easy to get a stadium built.

[3] .  The San Francisco-Oakland-San Jose TV market is the 6th largest in the nation, with a population of about 1 million in San Jose alone in 2008. 

[4] Along with this idea the team asked the fans to vote on the name, and over 50% decided to stick with tradition and call the team the Seattle Sounders even though it wasn’t one of the original options. 

Check out Part 1 of our MLS 3.0 series here.

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