Will Soccer (the real "football") Grow in America?
By MortazaviBlog on Jun 18, 2006
Despite a less than completely dazzling performance by the U.S.A. team in the World Cup this year, soccer continues rising in popularity.
While some economics and financial houses have commented on the economic aspects of the World Cup, The Wall Street Journal has started reporting on the growth of soccer (the real "football") in the U.S.:
MLS teams are enjoying a $700 million stadium-building spree that will result in seven of the league's 13 teams playing in venues designed for soccer by next year. And the league's exposure on television is increasing. For the first time, networks are paying MLS for the right to show its games.
The bright side should not blind us to the problems this sport still faces in the U.S. For example, there are a few strange institutional aspects of the MLS:
Unlike other sports leagues, which sell individual franchises, MLS was created as a "single entity," with investors owning all teams collectively. Players sign contracts with the league, not with a team, a system designed to control labor costs. League investors hold operating rights to one or more teams. Each team decides who plays for it, with input from the league office.
Concentrated ownership is bound to reduce market forces towards excellence and higher salaries for the players which may attract better players.