MLS Getting Expansion Happy

With new teams in Philadelphia and Seattle slated to enter MLS in the next two years, the league announced last month plans to expand two more by 2011 for a total of 18. Riding increases at the box office, new found popularity helped by the injection of overseas talent, and an incredibly successful expansion story in Toronto MLS wants to capitalize now and try to take the next step. They should proceed with more caution, more is not always better, as evidenced by the four major sports.

One major implication is diluting an already second-class talent pool. MLS can’t compete with the competition level of European League’s now, adding four teams in four seasons would inject an additional 50+ players currently not good enough to play in the league, further diminishing the product on the field. Soccer has not reached the point in this country where the sport itself sells. If the competition level suffers, fan support will dwindle. The NBA, NHL, and MLB all suffered the same problem when haphazardly expanding in the 1990’s. Baseball, for example, saw record offensive numbers in expansion seasons because expansion forced 22 previously minor-league players into major-league action.

Not all expansion stories start as good as Toronto. Keep in mind, they are the first soiree into Canada for the league, a different dynamic then most US cities. MLS already has plans to add Seattle and Philadelphia within two years, both operations are off to successful starts with pre-sales and local buzz, why not see those start-ups through to completion, measure the impact on the league, how league dynamics change, then make a decision on where and when future expansion should take place. Rushing leads to haphazard decisions and mistakes.

Why the rush? Money. Owners plan to vote to increase expansion fees up to 500%. They have high interest in getting into the league and can inject a nice cash flow into their own operations. It’s a tactical thought process. Owners simply want to cash in while the going’s good. The league needs to make strategic considerations for the long-term, not take a cash injection now only to lose fans in the end.

Finally, all is not perfect in MLS. They have only recently switched to a franchise model after the league used a centralized league office from its birth until a few years ago, which some teams are still struggling to adjust to. MLS has a relatively small national television contract they are trying generate interest in. Not to mention to the two planned expansion teams, MLS has a lot on of critical issues on its plate that should be addressed before taking on any monumental changes in the business structure.

Expansion has many benefits – the cash flow from expansion fees, entry into new markets to expand the fan base, the excitement of new teams and players, but at some point expansion reaches the point of diminishing returns. MLS is near that line. They need to let the current changes breathe and take shape. Expansion is one area where moving quick can do more harm than good.

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