Reforming American Professional Sports: A Proposal

Please see this article at the LeagueOfFans.org, a consumer advocacy group founded by Ralph Nader and part of the Center for Responsive Law.

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When many people think about professional sports, they think “it’s just a game”. They do not think too much about the organization of our largest leagues and likely would not consider anything to be wrong with the economies of pro sports in America. To most, everyone should be happy to be making whatever money they are already making.

Yet in actuality they are not just games but rather a massive multi-billion dollar industry that has benefited from “It’s just a game” to stifle the economic rights of both its labor and any potential competitors, directly harming consumers and public finances. In a closed sports system, current team owners alone control who is allowed to enter a league and are permitted to place extreme and onerous entry requirements upon any potential entrants.

There is no modern justifiable reason that leagues like the NFL or NBA should enjoy a monopoly and be permitted to prevent new businesses from joining the competition. Whereas the granting of antitrust exemptions were fruitful in the initial development and stabilization of pro sports in America, the industry has grown beyond their need and these protected corporations currently abuse their exempted status.

Considering the rapid evolution of pro sports over the last 40 years, Congress should remove all anti-trust exemptions given to pro sports and pass legislation to ensure that new entrants to each sport are permitted based on objective standards and identifiable criteria. The closed-system leagues must not be allowed to construct subjective and shifting barriers to entry into a marketplace and fandom should never trump the public benefits of economic competition.

Creating an open sports system for America would result in national and regional economic growth heretofore unforeseen and untapped, increased competition and resulting benefits to consumers, increased economic empowerment to minority communities, diversity of ownership of professional teams, the alleviation of the inequities of the NCAA and greatly benefit public finances.

If an investment group or an individual desires to start a sports team and can meet a pre-determine standard with reasonable threshold requirements for capital funding, business structure, etc., then they should not be required to seek the permission of already established entities to compete. The leagues can adjust their structures accordingly to their desire to meet an influx of new entrants.

Open Sports Systems Internationally

Around the world, we are provided countless examples of open sports systems that thrive within nations with weaker or less stable economies. The most prominent example is the league hierarchy system, more commonly known as promotion and relegation and widely used in Europe. Within this system, teams competing in the top league must earn their right to remain in the top league through their on-field performance. This is because the three teams that finish at the bottom of the standings at year’s end are subject to relegation to the next lower league.

Correspondingly, the three teams that finish at the top of the next lower league are promoted to the top league. This process is repeated throughout a multi-league structure with the total number of leagues depending upon how many eligible teams there are within the overall system. In England for example, there are currently five leagues considered professional national leagues atop a vast network of lower regional leagues.

The English Football System via englishsoccerguide.com

This process ensures that every team is incentivized to always compete and never ‘tank the season,’ as suffering relegation would cause them to miss out on large payouts, derived from media rights and profit sharing, that will be given to the teams in the top league in the next season. Instead, the relegated teams will receive an apportionment equal to other teams in the next lower league. Which is usually an amount much less than the apportionments given in the top league.

Other open systems merely employ a multiple conference or large group play system with an expanded playoff format but lack the quality of play benefits of a league hierarchy system.

Yet in all open systems, never are private corporations permitted to arbitrarily limit the number of competitors in the marketplace.

Economic Benefits Of An Open System

Every team created, like any business, means jobs and tax income based off of those jobs. As an example, the NBA has thirty teams, thirty administrative staffs, thirty coaching staffs and player rosters. In total, a few thousand people involved in the sport, deriving incomes they spend in their communities and taxable to local, state, and federal authorities. Along with the direct employees, many thousands more rely on the income the sport creates including support staff, stadium vendors, merchandise manufacturers, hotels workers, security staffs, local law enforcement agencies and so forth.

Overall, in our nation of over 300,000,000, the US sports industry represents only a tiny fraction of our GDP and employment, tallying approximately $14.5 Billion in earnings per year (less than 0.001% of US GDP) and contributing 456,000 jobs (0.3% of all US Jobs). (http://www.economicmodeling.com/2013/07/09/not-just-a-game-the-impact-of-sports-on-u-s-economy/)

England, a comparable economy and culture to the United States, has only a population of 50,000,000 but uses open sports systems. Though their population and GDP is less than one-sixth of the United States, their sports industry generates $24 Billion USD (1.9% of England’s GDP) and 400,000 full-time equivalent jobs (2.3% of all jobs in England). (https://www.sportengland.org/media/3465/economic-value-of-sport.pdf). If the labor percentages between these nations were equal, it would translate to an additional 2.8 Million American jobs. Under our current system, the United States is not close to fully tapping the incredible potential of the economies of sports to grow further in the future.

With an open system, there would not be only 30 or so professional teams across each sport. The amount would be determined by how many teams the American sports market could sustain. Accordingly, there would be multiple the number of executives, managers, trainers, vendors, manufacturers and athletes. The economic expansion of professional sports may be the largest short-term job creation vehicle available to our nation. Job creation that would also benefit the many minority groups which represent a large percentage of the labor within the sports industry.

For many cities like Austin and Louisville or states like Iowa or West Virginia, an open system is the only method by which they are ever likely to have a pro-sports team. Within England, there are thousands of professional football clubs in the interconnected league system, each ensured the same opportunity, based on performance, to enter into to the top league.

Is there any city in America with more than 150,000 people that would not have at least one professional sports team placed into an overall open system like England’s? Per the 2010 Census, there are over 170 cities in America with more than 150 000 people. Green Bay, the 283rd largest city in America and only the 153rd largest metropolitan area already hosts a professional sports team whereas metropolitan areas like Providence (38th), Louisville (44th) and Birmingham (49th) host none. Cities or metropolitan areas like New York, Chicago, and LA could likely sustain many multiple teams. By example there are over 30 professional football clubs in London alone, six of which currently compete in their nation’s top league.

Diversity of Ownership of Sports Teams

Creating objective standards to entry and enforcing capitalistic principles of fair competition would also eliminate long-standing concerns regarding diversity of ownership of sports franchises. In order to compete and start a franchise, minority or female ownership groups would no longer need permission from rich men maintaining their monopoly.

Public Financing of Stadiums

Beyond job creation or concerns regarding diversity of ownership, ending this system of corporate protectionism would end the game of exploitation teams routinely play with local governments when asking for handouts to build new stadiums. We allow these professional leagues to limit the number of entrants and their individual teams are able to hold cities and towns hostage with the threat of departure. As there can only be so many teams in the leagues in a closed system, the threat of a team leaving leaves local populations with the tough choice of coughing up millions or saying goodbye to professional sports with little hope of its return.

This scheme of public exploitation would not exist if these protected businesses knew a new entrant could immediately fill the market they left. Cities and towns would not feel as compelled to hand over money, often previously allocated to schools and social services, to a private business. Rather than be able to dangle the threat that a town would be permanently left without a sports franchise, the towns would know that if their market can support a franchise, another ownership group would come along.

via deadspin

The current system places all the negotiating leverage with private businesses and they use their leverage to extort local politicians. Requiring objective standards to entry within the sports marketplace would switch the dynamic and place the leverage with public officials and save billions for cities and towns across America.

The NCAA Monopoly

Open systems would also greatly alleviate many of the economic inequities that persist within the NCAA by providing alternative paths to professional sports. The NCAA owns a monopoly on the path to professional football and basketball and use it to profit immensely from the work of young Americans while exercising draconian rules against their behavior and holding their career hopes hostage. For a university, a scholarship and a dorm room, or simply not charging a student, is cheap currency. Yet, for the athlete, they must take a nominally compensated gamble on their future while actively doing an activity that generates millions in profits.

As we have seen among the many open systems in Europe, removing barriers to entry allows enough entrants into the marketplace that the paths to finding employment within the overall industry also multiply, from lower division or smaller teams holding tryouts to larger teams creating development academies to scout and sign young talent. With this system, young athletes are provided with a choice of whether to enter the workplace and receive compensation for their services immediately after high school or continue to college for an education while also playing sports.

Women’s Pro Sports

An open sports system would also have profound effects on women’s professional sports in America, which has failed to develop in comparison with our European counterparts. Many of America’s professional female athletes seek employment abroad because of the lack of opportunities within the major team sports in America. All notable attempts to start female sports leagues in the United States have been in the form of closed systems with similar obstacles placed upon new entrants to protect the already established entities and prevent open competition from any outside groups.

As such, there is no incentive for individuals or groups to invest in new female teams unless they are provided assurances they will be allowed to enter the closed system or unless they intend to invest sufficiently to establish an entire league themselves. Since the already established entities limit and control competition to protect their investments and since seeking out sufficient investment to form an entire league is an incredibly high burden, the current dynamic works to dissuade new investment into female sports and limits the potential growth of the overall industry in America.

An open system of female sports would provide a stable and reliable structure for which new entities can enter the market and compete against already established entities upon meeting certain objective standards and criteria. Doing so would promote new investment into female sports since new teams would never need permission from established entities to enter the marketplace and never need to seek out sufficient capital to form an entire league.

Rather than permit the development of women’s pro sports to be constrained by closed systems that serve only the interests of a select few, it would be supported by a stable overall structure that allows it to grow organically with the free market determining where in America teams could thrive.

Conclusion

In summation, the potential benefits of reforming the economies of sport could be far reaching for many Americans. Unfortunately, the potential impact and benefit to us all through quality of play, economic growth, direct or indirect employment, tax revenues, consumer benefits, youth and minority economic empowerment, or public finances is prevented to preserve the status quo of current monopolies in our closed sports system.

Thus, I present this for your consideration: to urge Congress to reform the structures of American professional sports with the creation and enforcement of an open and inclusive sport system.

 

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Major League Soccer, Who Are You?

usa_soccer_world_cupThis ends only in speculation and is an attempt to catalog my thoughts and actions since Thursday. This is long, starts one way, ends another and has no resolution. I warned you.

A few months ago, we started this rambling site to flush out thoughts stuck in our heads and somewhat go on record with our opinions.

The first thing posted was “The Effects of Promotion and Relegation on American Sports”. Just always seemed like such a no brainer. Shortly after joining the site, I dared to venture out to Twitter to see what others think and engage in various discussions. Being new to twitter, I did not know what to expect. I am stunned at the amount of political cartoons (I know how to define hypocrite, thank you) and simple-minded bickering from all sides and every interest group.

However, if you think the political arguments have lost all sense of reason on twitter, I suggest you survey some of the back and forth between those who desire promotion and relegation and those who do not. It is pretty vicious. By example, just take a look at how much Ted Westervelt, @soccerreform, pisses these people off. He may be MLS’ public enemy numero uno. Either him or Jurgen Klinsmann. All because of their support for promotion and relegation: Mr. Westervelt consistently and Mr. Klinsmann occasionally but from an international media platform.

Personally, I do not like spinning my wheels in slow-moving endeavors. The very diligent Mr. Westervelt and the knows-something-about-soccer Mr. Klinsmann hope to change the game by creating public support and therefore putting pressure on MLS from its fans. A fine strategy but not the shortest path between two points in my humble opinion. Especially when confronted with an army of blindly-loyal MLS team fans, MLS employees and access-reliant media members. All of who are willing to waste hours of time with you arguing over of the pros and cons of changing the system.

I have always viewed promotion and relegation as an incredibly undervalued money-maker for all parties: the owners of the league, private team owners, American workers and our government while not even addressing the undeniably positive effect on the quality of play and development.

To me, the best and quickest option to get this done is to show rich people why it makes sense financially for them. And these kinds of people like boring reports with charts and projections and data for them to consider.

So I was going to create a mock business plan. Essentially, I was going to construct a report showing the benefits of:

  • Announcing the creation of open system hierarchy, dictating entry/membership fees, merchandising and TV rights allocations all controlled by MLS;
  • Selling off the teams at current values (as listed by Forbes) with a premium for the large-market established teams and smaller premium for all teams which would be included in the top division in the first year.
  • Using European or East Asian examples, show a representation or template of the fee structure for established teams as well as new entrants.
  • Using European or East Asian examples, provide some kind of real world example to highlight the positive earnings of the league hierarchy year over year.
  • Using NASL/Whomever attendance figures, point out there clearly exists 40 teams ready for a two division national structure in the USA. (Brazil had only two twenty team national divisions until 2009, when they rearranged after too many smaller teams had grown large enough to support increasing the national hierarchy)
  • Propose a regional structure to accommodate new and small teams since the United States is gigantic
  • Using the US Census, project the number of cities able to accommodate a team in such a hierarchy, also projecting the potential number of employees/players/team workers at a rate of 1 team per city.
  • Reflecting that under modest rate of 1 team per eligible city, MLS’ scope would surpass all sports organizations except perhaps NCAA initially.
  • Using plentiful European examples, note the humble facility and player salary requirements necessary to start a successful small club. – America’s high schools would suffice as stadiums for many new teams and they would still have larger capacity than many lower division European counterparts.
  • Noting the benefits of Billionaire Toy Men throughout the open systems of the world. Many individual teams like Real Madrid and Chelsea operate at massive losses because their billionaire owners do not care and are always willing to put more money into their toy. This cash influx strengthens the league and heightens interests by bringing players who would otherwise never come a la HAVE YOU SEEN REAL’S LINEUP AND BENCH!?! IT’S INSANE!!!
  • Reminding that leagues don’t actually care if the teams lose money or dissolve…i.e. no financial risks or worries regarding failing teams. Replacements are ready to fill the gap from the league below if an adjustment is needed. The league still gets paid and controls everything.
  • Finally, doing a lot of math and charts and providing some kind of revenue projection to a company operating the hierarchy alone in America, using whichever modern example I could locate and adjusting as best as I could justify.
  • Showing that while 20 or 25 MLS teams will never compete with aggregate economic market share of any of the big leagues individually (MLB/NHL/NBA/NFL/Liga/EPL/Bundesliga), a hierarchy of hundreds of teams in the USA (1st ever system here) would eventually match their market share and perhaps surpass many of those mentioned, with a rising tide rapidly increasing the value of the larger market or long-established teams. (My plan was to figure this math projection out later or fudge it completely – when you go this far, you do not turn back)
  • Noting the current single-entity structure means only MLS is reasonably capable of implementing such a system in the United States, thus the competitive advantage obtained against MLB/NHL/NBA/NFL would remain for the foreseeable future. The current structure of those leagues as independent corporations and not a single entity makes a conversion to such a system incredibly unlikely. Only when MLS’ wealth surpasses them would any consider changing and the multiple ownership structure would render it difficult even if a portion of their league wanted a switch to match MLS’ competitive advantage. MLS would likely be the sole promotion and relegation system in America for a very, very, long time.
  • EDITED UPDATE – Discussing the political and social benefits as well as the corporate goodwill having America’s first open system would create because of the positive effect on minority ownership in professional sports.

This was the audacious and somewhat crazy plan I hoped would get promotion and relegation going in this country. So as I started thinking about what it would take to write it, I wondered to whom it would be sent.

I decided I would locate the actual majority owner(s) of MLS since nothing is happening without them taking action, either directly or by allowing a sale of the corporation. It’s better to be denied by the real decision maker, even emphatically with them laughing at you, than to never get to ask the question. And I’d prefer an emphatic denial than arguing on twitter forever. Plus, it can be reproduced quickly if someone with sufficient capital power and balls is ever identified and within my meager electronic grasp.

As it is, another unfinished odyssey began.

So who matters in MLS and who doesn’t? And who are the majority owners?

When looking for info on any corporation, start with the best in the business: Bloomberg. MLS LLC is a private corporation so Bloomberg won’t have the data or info comparable to what is displayed for Apple or a public company but they should have something.

While most think Commissioner Garber runs MLS similar to the way Roger Goodoofus runs the NFL, they are very wrong. The NFL is comprised of individual corporations who essentially vote Goodell to be their King. While he can be removed by the actions of the owners together, there is no one above him. And while he is not an owner, he is the one person who is guaranteed to have direct access to and even leverage with every owner.

Commissioner Garber is not that man. He is an employee who may have no access to owners. Though I’m sure he’s aware of the obvious influence of people like Mr. Kraft, he may not even know the exact ownership structure himself. Unlike the NFL or any well-known sports league, MLS LLC is one corporation and its C.E.O is Richard A. Peddie, the former C.E.O. of Maple Leaf Sports Entertainment. At least this is what Bloomberg surprisingly told me.

http://www.bloomberg.com/research/stocks/private/snapshot.asp?privcapId=4312581

Surprising because there is no mention of this esteemed position on his profiles online or on twitter, where it does list his former work for the Maple Leafs, Raptors, and so forth. (as of date of writing, 3/8)

Searching online was also made more difficult because of the similarity of MLSE (Maple Leaf Sports Entertainment, also an MLS team owner) and MLS itself but it is clear Mr. Peddie’s rule atop the league is obfuscated.

While @thesoccerdon (Commisioner Garber) has 150K twitter followers, the actual don of soccer has only 3K (as of Friday 3/6) and seemingly no one knows how powerful he is within American soccer. I have cousins with more followers. Imagine if Mr. Goodell’s or Mr. Stern’s powerless underlings had 50x the Twitter followers than them.

Nevertheless, someone was located for whom I could plausibly locate a business address and deliver a letter and dupe/convince them to read it. And by some small slither of a World-Cup-hoping chance, maybe the report would go up the ladder rung, only one step now, to the real owners of MLS LLC.

But I still had two questions scratching my curiosity.

  • If Mr. Peddie never gives it the time day (99.X% probable), who are the real owners so I can email bomb/somehow get it to whatever capital corporation they use as vehicle for their bidding (i.e. if it were Warren Buffet, I’d email bomb/certified mail the Board of Directors and various analysts/idea-needy-employees-looking-to-impress at Berkshire Hathaway – not Warren or his family themselves even if I could locate such contact info.) In fact, why not just do my best to go over Peddie’s head straight to the majority owner(s)?

And

  • Why has Mr. Peddie been hiding from what appears to me to be a pretty freaking awesome job? Since I planned to go over his head anyways, I decided to ask him directly. And about a lot of questions about promotion and relegation and MLS LLC.

While he maintains an active twitter account, he ignored me so I checked another favorite corporate site called Corporate Wiki looking for any data or leads.

http://www.corporationwiki.com/New-York/New-York/major-league-soccer-llc/34579837.aspx

You’ll notice MLS LLC is linked to an alternative/sister corp called MLS Partners LLC, which I didn’t think much about at first glance. I did ask Mr. Peddie but he ignored me.

As corporations file reports in many states, a site like Corporate Wiki will pull many duplicates from the public records. Here is the one from Florida:

http://www.corporationwiki.com/New-York/New-York/major-league-soccer-llc-6340548.aspx

Following the information provided, I checked Sunbiz.org, Florida’s Department of State site and located a list of twenty-one corporate directors I refuse to type:

Directors One

Directors Two

It should be intuitively obvious who owns a couple of these corporations but no information on ownership percentages or voting rights is provided.

Since MLS LLC is a large corporation, they get sued and sue people. If you have never been sued, there is this nasty thing called discovery where parties often have to file revealing information into the court system. But guess what, MLS has good lawyers and solid strategy. In every federal case in which they were a defendant (since 2005), they either won on Motion to Dismiss or settled before discovery was due. At least a couple of times with a discovery deadline looming large. There is no recent data on MLS LLC’s structure in the federal court system which I could see.

So next came logic. The voting power within MLS LLC has likely never changed since its inception or rather not significantly. Why would it ever? If you controlled a corporation, the only way you would ever yield voting power to a new investor or another party is if the corporation was struggling and desperately needed a capital infusion or you wanted to spread the risk of failure to others because you are worried. After its initial survival, the default risk of MLS was too low for an owner to consider selling voting stock to avoid financial loss in the event of failure. There is no need to worry about this. If MLS itself were struggling financially at any point, rest assured the billionaires behind the scenes are not. They would merely infuse cash and keep their stake since they themselves, or the parent corporations they control, are not struggling. And even if MLS LLC needed cash to grow or for a capital project, the parent corporations would likely infuse cash rather than yield control to a new investor.

It is a presumption but more than likely, new investors or these “entrepreneur groups” that manage individual teams are only offered restricted/non-voting stock or minor voting interests. There is absolutely no logical reason to ever sell a significant voting interest within MLS. If a potential investor doesn’t like it, tough shit. MLS doesn’t financially need the new investor so much that it would agree to yield power. They’d just wait for another sports-enthused rich guy to come along who’ll happily get paid from a non-voting position and toy around with a team. The World Cup rejuvenates interest in MLS every four years, anyways.

So in searching for the original owners and limiting Google to hits before 1997, the best thing I could find was this Fifa news report about the new MLS league.

http://www.fifa.com/world-match-centre/news/newsid/714/11/index.html

Investors:

Boston: Robert and Jonathan Kraft; Columbus: Hunt family and a group of Columbus investors; Denver: Philip Anschutz; Kansas City: Hunt family and a group of Kansas City investors; Los Angeles: LA Soccer Partners, presided over by Marc Rapaport; New York/New Jersey: John Kluhe and Stuart Subotnick; Washington D.C.: Washington Soccer, L.P., led by API and presided over by Kevin Payne.Dallas, San Jose and Tampa as yet have no investors and may have to be financially supported by the league itself.

Going through the names, the biggest hitters I can tell are:

  • The Anschutz Family and therefore The Anschutz Corporation (mega-big, private), led by Chairman of the Board and owner Philip Anschutz. (TAC is in Denver but Los Angeles is Mr. Anschutz home/sports focus)
  • The Kraft Family and therefore The Kraft Group (mega-big, private), led by Chairman of the Board and owner Robert Kraft. (Boston)
  • The Hunt Family and therefore the Hunt Sports Group, LLC (mega-big, private) led by family patriarch Clark Hunt, son of departed Lamar Hunt and grandson of oil tycoon H.L Hunt (Columbus, Kansas City, Dallas)

The other guys are rich too but there is no way the three above handed over any amount of money without significant control from inception. Also, The Hunt Family and Anschutz Family are related together through a marriage so while I don’t know how independent/connected their interests are, we can assume at least some kind of close or amicable relationship regarding MLS. With Mr. Kraft as well but he does not appear to be as closely connected as Mr. Anschutz and Mr. Hunt are to each other.

It is clear promotion and relegation will not happen in America unless it is done by one of the three parent corporations controlled by these men or them in unison. There is no point in arguing with Alexi Lalas, whose brother is MLS editor-in-chief, or any media member connected to or paid by MLS. It is not their fault either: employees do not get to rock the boat of their own company. Go try it yourself and see how well it goes.

At this point, I was relatively certain I had located the entities who were more than mere minority holders with voting rights but rather the exact majority owners. Granted, the whole thing may also be owned by Lord Rothschild, the Ayatollah and Kim Jong-Un but it appears there is no way anything happens in MLS without the three above letting it happen.

There is also slight empirical evidence supporting this on the pitch. Is it a marvelous coincidence the hometown teams of these power brokers over-perform in MLS? Admittedly, twenty years is a not a large sample but MLS is a single-entity structure with player allocation rules and restrictions designed to provide parity. It is portrayed as pure competition but it is a toy they own and if they so desire they can subtly do as they please. While no one can control who scores a goal, it is essentially the WWF version of soccer. Go Wizards! Go Revolution! Go Galaxy!

I should have stopped here and started the report.

But what the heck is MLS Partners, LLC?

http://www.corporationwiki.com/p/2espfd/mls-partners-llc

(originally created in Delaware on 2/19/2014 but also recorded in California)

Corporations start other corporations all the time for various reasons. They are easy to start. So since first seeing it, I just presumed it does something ordinary and trite.

But I could not stop wondering. I could not find any news about it either and corporate wiki says it was only created last year. If the NFL started a joint corporation or venture, or does anything anywhere, there is always at minimum an online press release followed by an army of click-needy sports sites. Yet I could find nothing and the cross-references with other entities drowned out every search.

It does not appear to be an owner or part of MLS LLC but rather MLS LLC appears it may be an owner of it. So I tweeted Mr. Peddie, who I had been peppering with tweets and questions as well as Commissioner Garber hoping they’d respond if even a no comment. I would have pinned your ‘no comment’, Mr. Peddie.

After being sufficiently annoyed by my repeated questions and tweets, Mr. Peddie simply blocked me. They could have just said it was a marketing vehicle or anything bland and I’d probably left it alone. I pondered starting a new handle just to ask him more questions but thought he may at this point wrongfully construe me to be some kind of stalker.

When you are in a rabbit hole, sometime you fail to see what is going on overtly at the surface. I had completely forgotten MLS is negotiating a collective bargaining agreement, which will dictate exactly how everyone gets paid going forward.

Early in my career, I was at an organization under going such a negotiation and I wanted to be on the union team even if just to learn. This was a good-guy, for-the-people type of organization too. To bystanders and myself going in, you would have thought they’d behave appropriately.

Immediately, management said they are struggling financially and we’d all have to accept no raises rather than what was provided in the past plan. They bellowed and whined in a self-righteous manner about how all of our jobs are so valuable and we should be so happy to not be searching like all the other unfortunate souls out there.

We asked politely to see a current account statement of all accounts and tax returns for two years so that we could be sure the corporation was struggling to a point where we would need to accept their horrible first offer. Let’s just say we did not get good looks from across the table that day. They did not expect this request and because they had brought nothing, we had to adjourn. The next day, they brought a budget from an excel spreadsheet and said this is “the situation”. We advised a budget is useless in determining health unless we can see the actual results and pre-projections of last year’s budget to compare as well as the documents demanded yesterday. We adjourned again but without rescheduling a date to continue. Annoyed, we searched ourselves and obtained five years of tax records because they had a hidden reporting requirement with a particular agency that maintained an active website we could access publicly.

Guess what? The mofos were lying through their teeth. The organization was in awesome financial health and negotiations ended with a properly increased raise plan rather than what they wanted.

This is how bargaining negotiations go. One side hides the ball to project a worse financial situation to get a better deal. Imagine yourself as a tourist in a market overseas: You do not let the merchant know how much money is in your pocket when negotiating the price of whatever you want to buy. Same principle applies.

MLS LLC was the stand-alone umbrella corporation for all of Major League Soccer since 1995. In 2014, they founded/became involved with a sister corporation, MLS Partners, whose purpose is totally unknown. In 2015, they undertook extremely valuable collective bargaining negotiations with the players union. I still believe in the high probability MLS Partners is completely innocuous. I would not be able to conceive the size of the balls of these guys otherwise. Enron-ish. But the timing is definitely curious and modestly suspicious.

So after all this and getting distracted from my original purpose of doing a report to convince rich men to see an obvious light, I am left wondering if MLS would dare commit large-scale commercial manipulation (fraud?). Doing it so they would be able to present the Players Union with financial statements from MLS LLC which would be stamped, signed and audited appropriately but not showing the full picture of the organization.

All of this can be resolved with one question to the Players Union: Do you know of MLS Partners, its purpose or its financials and did you know prior to getting strong-armed?

EDITED 4/8(((: Of course, no one in MLS is going to answer me no matter how many times I ask. And the Players Union has not responded either despite my emails, phone calls, tweets and various attempts. Deadspin and Gawker media advised they would seek an answer, along with others, but no response from either MLS or MLSPU has been made known. )))

Depending on what the answer is (and if it is ever received), this could go several different ways. Some of them would not be good for many people. I hope it was disclosed and not another casually ignored secret like Mr. Peddie’s role as C.E.O. of MLS LLC, as indicated by Bloomberg News as of 3/8/15. Or the other secret regarding the exact ownership structure of MLS LLC.

But maybe, just maybe we will find what is going on within MLS and why the organization sanctioned as division one in America operates so shadily.

_________

As for the business plan, it will have to sit for a while. If some college finance major or graduate student would like to do it as a project, you’d get an A from me. Also, please let me borrow it if you don’t mind.

Finally, if you desire to make an attempt to change the system here in America, I suggest you speak in terms of $$$ rather than sense. That is all these people care about. Do not hate. It is normal.

___________

Edit: Fraser vs MLS discussed the structure in 2002. There is no reason to think this has changed. And as MLS became profitable, it is even less likely to change.   Fraser - MLS structure 1Fraser - MLS structure 2

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