Op Ed: The $5 Million Dollar Man

15 Sep 2015 12:14 PM | 107ist Admin (Administrator)

—by Garrett Dittfurth

This summer the Timbers announced they had acquired Lucas Melano from Argentina club Lanus. While the terms of the deal were not officially announced, it was widely reported the Timbers paid a $5 million transfer fee and signed Melano to a 4 year guarantee contract fee paying him just over $1 million a year; making him the 2nd highest paid player on the Timbers and about the 20th in the league.

The disparity in those two numbers jumped out at me: a $5 million transfer fee for a non-U.S. National team star is basically unprecedented in this league. A $1 million a year salary is not.

It was a historic move by the Timbers that in many ways represented a shift in how MLS does business for one very important reason: the Timbers expect to recoup their $5 million invesement.

A Little MLS History

MLS (and it’s member franchises) has long been a league very reluctant to play in the high stakes world of big money buying and selling players we see in international football.  There was a good reason for this: for much of MLS existence the financial wherewithal was simply not there to pay millions in transfer fees on top of the salary requirements that accompany such players.

So MLS has shopped in the “free transfer” section of the world football market. Most of the big names all came to MLS “on a free” (meaning they were out of contract and no compensation was paid to a club for their rights) : David Beckham, Thierry Henry, Carlos Valderamma, Guillermo Barros Schelotto, Cuauhtémoc Blanco, Rafa Marquez, Frank Lampard, Andres Pirlo, Steven Gerrard and Didier Drogba.

Still the best hair to ever play in MLS.

Of course these big names command(ed) big salaries and MLS and it’s clubs have paid these salaries with no hope of recovering that cost in the world transfer market as these players are coming stateside for one last swansong prior to retirement. They are/were willing to accept these sunken costs in the form of high salaries in hope these big names would pay off in the ticketing and marketing columns of the club spreadsheet.

Even when clubs were willing to invest in buying players, the league office has famously stepped in and blocked clubs from doing so when they didn’t like the terms of the deal or precedent it would have set.

So $5 million for a relative unknown forward from Argentina represents a rather radical shift away from MLS traditional business model.

A New Approach

In fact in the history of MLS, only one non-U.S. national team player has commanded more than Lucas Melano: Jermaine Defoe.  When MLS has paid transfer fees for foreign players it has been for relatively known quantities (Robbie Keane, Obafemi Maertins etc) and generally in the $1 to $3 million range.

Here are the top 10 transfer fees paid by MLS/member clubs:

 

So why does all this matter and why should you care as a Timbers fan?

You should care for three reasons:

1) It means this club has money. Despite the recent high profile acquisition of aging Euro-stars (Lampard, Pirlo, Gerard) I believe MLS willingness to allow the Timbers to spend $5 million dollars on a “flyer” speaks volumes to the financial health of both this club and the league.

2) The Timbers invested in potential (and future profit) in lieu of current skills. Lucas Melano is NOT a $5 million a year striker. Do not confuse transfer market investment in a player’s potential with his current worth as a player. The players making $4 million a year or more in MLS are:  Top10Salaries No sane Timbers fan will argue that right now Lucas Melano is in the same company as Keane, Martins or Giovinco. The Timbers have pegged Melano’s skill as worth $1 million a year which puts him in the same company as Federico Higuain, Innocent Emeghara, Liam Ridgewell, Kennedy Igboananike and Octavio Rivero.

3) The Timbers will want a return on their investment so don’t get too used to the player in a Timbers jersey if he starts banging in the goals for the boys in Green and Gold.

 

Only time will tell whether Lucas Melano will be a success in MLS.   If he has a great year or two in a Timbers jersey Merritt Paulson, the team and the league will profit handsomely when some European club comes calling. If that happens, the Melano signing may very well mark the moment MLS moved from a “retirement league” to a “sell on” one.


Comments

  • 28 Sep 2016 11:35 AM | 107ist Admin (Administrator)
    Keegan says:
    Wednesday, September 16, 2015 at 11:10 am

    Great analysis and article dude!
    Link  •  Reply


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