Major League Soccer is the fastest growing professional sports league in the United States. After a decade of struggling with the league on life support, the league has rebounded and is expanding at an incredible pace. In fact, my city of Nashville is getting a team in 2020. I was curious one Saturday night about where MLS stands with team revenue, player compensation, etc. when compared to other leagues. It turns out the MLS Players Association publishes player compensation on their website dating back to the 2013 season. So, I did what I do when I discover information like this – create a database and see what I can find with statistical analysis. This may sound like the worst Saturday night in existence; but for me, it’s like Christmas morning.
For my purposes, I am going to use Guaranteed Compensation as my player compensation number rather than Base Salary.
Total Clubs and Players
This first chart shows the number of clubs and players from 2013 to 2018.
Average and Median Compensation
The first thing I wanted to look at was Average Compensation from 2013 to 2018 and compare it to Median Compensation from the same time frame. You’ll see Average Compensation from 2013 was $165k and grew to $376k in 2018. About a 17.91% increase per year. Meanwhile, Median Compensation is much lower than Average Compensation. This is an instance where there are a few players whose compensation is so high that it skews Average Compensation higher. Median Compensation went from $75k to $157k in the same time span. About a 15.57% increase per year.
That tells me that the higher compensated players’ income is growing faster than the rest of the players. This makes sense given the league's history of paying superstar players in the twilight of their careers like David Beckham, Kaka, and Wayne Rooney. And I would make the argument that paying these players helped increase MLS revenues so much to where the growth of a regular player’s revenue increased much more than if the aging superstars weren’t in the league.
Clusters and Growth of Compensation
This next chart is a little more difficult to read because of the formatting. Each dot represents a player and his compensation. The part that doesn’t look like dots means there is a large clustering of players around that area. This graph not only shows the growth of player compensation but also that there are only a handful of players earning over $1M per year.
Breakdown of 2018 Player Compensation
The next graph details, even more, how few players earn more than 7 figures. Of the 694 players in 2018, 489 (70.5%) of them earned less than $300,000. 129 (18.6%) players earned between $300,000 and $750,000. Only 8 (1.2%) players earned more than $4,000,000. To compare against the NFL, the league minimum in the NFL for 2018 was $480,000. There were 146 (21%) players that earned more than $480,000 in 2018.
Revenue and Compensation - MLS vs NFL
That being said, the NFL is a much more established league than MLS. The NFL is 100 years old whereas MLS has 23 full seasons under its belt. To stay on the comparison with the NFL, player compensation in 2018 for the NFL was $3.17B to MLS $261M. Total league revenue for the NFL in 2018 was $15B to MLS $797M (assuming LAFC revenue was $34M). There is one area where the MLS beats the NFL – and that is player compensation as a percentage of revenue. The MLS pays out almost 33% of its league revenue to players whereas the NFL pays out 21% of its revenue to players. According to a study in 2013, MLS players also have a similar career length average as the NFL (3.2 to 3.5).
Future of Major League Soccer Player Earnings
The MLS finds itself in an interesting position as the league for the “working class professional athlete” in the United States. Of the 5 big professional team sports leagues in the US, the average MLS salary is by far the least. But as the youngest of the 5 leagues, there is tremendous growth potential. I imagine once the league has found the right number of teams and limits more growth via expansion teams, the league will find its footing and continue to grow revenue naturally. Attendance will grow, there will be more brand recognition of teams, player profiles will grow, which will then create a better TV deal environment. I expect player compensation to double again the next 5 years as it did in the 5 years before. And the league will create a lot of goodwill if it can continue to maintain the ratio of player compensation to league revenue. When compared to the NFL, MLS should grow at a faster rate over the next 20 years. Yet - I can’t foresee a scenario where the MLS is competing directly with the English Premier League. The EPL is far too popular.
As a “working class” professional athlete, it is even more important players have a financial plan, stick to it, and have an idea what they want to do when their playing career is over. You can earn some nice money for a few years in the MLS, but it’s unlikely it will be enough to sustain you through retirement. What you can do, is set yourself up for success off the field by laying the groundwork an opportunity an MLS career affords you.
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About The Author
Shaun Melby, CFP® provides fee-only financial planning and investment management services in Nashville, TN. Melby Wealth Management serves clients as a fiduciary and never earns a commission of any kind. Shaun has over 10 years of experience as a financial advisor in Nashville.