Where Does MLS Spend its Salary Cap?

Major League Soccer (MLS) continues to boast one of the most diverse soccer leagues in the entire world, with players from sixty different countries and each of the six inhabited continents.  Many fans of the league have seen the recent increase in value of the American players, seeing the likes of Michael Bradley, Omar Gonzalez, Graham Zusi, and Matt Besler each receive Designated Player (DP) contracts.  These players have earned their paycheck, but which country has the most desirable players?  The MLS Players Union recently released salary data for all players on the books in 2014.  Business of Soccer decided to take a look at the birth nations of all players and see which region of the world receives the highest salary and therefore the most “desirable”.

Last year, Business of Soccer took an exclusive look at this information for the first time.  The second year of this kind of analysis will allow for some interesting comparisons.

READ: MLS: A Melting Pot of Talent From All Over the World

First, it should be noted that the nationality of each player is determined by birthplace rather than citizenship.  For example, U.S National Team midfielder and newest member of the New England Revolution Jermaine Jones is given a “German” tag despite having dual citizenship.  Benny Feilhaber of Sporting Kansas City was born in Brazil despite being brought up mostly in the United States.  This is by no means a perfect way to measure player salaries by region, but it is arguably the best way to sort this kind of data.

Below is a chart of the number of players from each region of the world.

 

 

Next is a representation of the total salaries from each of these regions.

 

 

The number of players from each part of the world remained virtually the same when compared to last year, despite the seemingly noticeable influx of foreign talent to a few teams, such as Portland for example.  There was also no significant change in the percentage that each region represents with regard to the total players’ salary dollars.  However, it should be noted that European players received 55% more salary dollars in 2014 than in 2013, while money spent on South American players increased 50%, most likely due to Brazilian superstar Kaka signing a $7 million contract with Orlando City SC.  American players’ salaries also increased 25% versus 2013, as a result of big name signings of Michael Bradley, Jermaine Jones, and other U.S. Men’s National Team players who received multi-million dollar contracts.

It should also be noted the discrepancy between the number of players from each region and the percentage of total salary dollars that these regions represent in the league.  American players make up 54% of the league’s players but only receive 43% of the total salary dollars.  Europe makes the most money for the fewest amount of players, with nearly 11% of the total players making 24% of all players’ salaries.  This indicates the large number of American players in the league making the league minimum of $36,504 as well as the value of the European players currently in MLS.

The median salaries of MLS players is the most efficient measure of central tendency for this data.  This eliminates the outliers for Designated Players who inflate the mean salaries of players with their typically large contracts.

Below is a chart of the median salaries of players from each of the regions.

 

 

Each region’s median salary increased from 2013 with the exception of Asia.  Players from Europe and South America still have the top median salaries in the league, which means that MLS is still importing talent from other regions to fill a need that they otherwise could not find within U.S. borders.  The increase in median salaries for U.S. players is encouraging for homegrown talent, however, it is clear that the league finds greater value in players from South America and Europe – at least for the time being.  American and Canadian players have the lowest median salaries of all regions of the world, which is consistent with previous trends, but as previously noted this median salary has increased versus prior years, which is encouraging for the league and for the development of soccer in the U.S.

MLS has taken large strides since the league’s inception in 1996 to compensate players.  The league has also become more competitive by becoming one of, if not the most diverse league in the world.  American value is on the rise and foreign talent still continues to be an integral part of the league.  With two new teams entering the league in 2015, the competition for players will increase, and there are some who speculate the salary cap will be raised for next season.  Time will tell which region of the world MLS teams will target with a few extra dollars to spend.

 

What do you think about the latest MLS Players Union salary data and where MLS is spending its dollars on talent? Let us know in the comments section below, or via Facebook or Twitter.

Reporting on the business side of the world's game.