Latest MLS Salary Data Indicates Continued Slow and Steady Progress

On Monday, the Major League Soccer (MLS) Players Union released the latest installment of league salary information, which boasts all-time highs for both total payroll and a single player’s compensation.  While overall salaries grew approximately 12% since the previous data release in April, the variances are largely attributable to a few major signings that occurred in and around the 2014 World Cup in Brazil.

Source: MLSPU ; Analysis by Bo$

Source: MLSPU ; Analysis by Bo$

Source: MLSPU ; Analysis by Bo$

Source: MLSPU ; Analysis by Bo$

Key Takeaways:

Kaká’s Payday

Orlando City SC’s most notable signing, Ricardo Kaká, is officially the highest salaried MLS’ player of all time, without ever stepping foot on the pitch.  The Brazilian’s annual payout alone equates to an amount greater than 14 out of 20 active teams’ total payrolls.

As a point of reference, Kaká will pull in close to half a million more ($473K) than Clint Dempsey, Captain of the US Men’s National Team and the Seattle Sounders, and close to $700K more than former Los Angeles Galaxy Midfielder and international icon, David Beckham.  NYCFC’s Frank Lampard is excluded from the listing, and David Villa noted as earning $60K.  This is most likely attributable to their respective loan agreements at Manchester City and Melbourne City FC, respectively.

Moving the Market

While total salaries increased 12% (~$14M), the increase in wealth is largely concentrated on a few key signings.  The additions of Kaká, Jermaine Jones, Liam Ridgewell, and DeMarcus Beasely account for a majority of the growth with a boost of approximately $12.4M.  Additional contract upgrades for Graham Zusi and Matt Besler at Sporting Kansas City lifted total compensation an additional $670K.

This high concentration of wealth among a few key stars in Major League Soccer is consistent with the general trend historically associated with the league.  The median salary of $92K stayed just about the same since April, indicative that the pay situation for a majority of MLS players has changed very little, despite the jump in average pay.  Nevertheless, MLS has made great progress over the years in improving compensation across the league, as noted in the chart below, where median compensation has nearly doubled since 2007.

Source: MLSPU ; Analysis by Bo$

Source: MLSPU ; Analysis by Bo$

Moneyball

This season, Real Salt Lake and DC United showcased some of the league’s best results on a budget, as the two clubs contended for the highest point totals in MLS while having the 15th and 16th smallest payrolls. Neither side featured any players on the Millionaire List (see below).

The Millionaire List

Source: MLSPU ; Analysis by Bo$

Source: MLSPU ; Analysis by Bo$

A few big name signings during the season have bumped up the MLS Millionaire List to an all-time high of 15 players.  The salaries noted amount to ~$56M, or an astounding 43% of total MLS compensation, leaving the remaining 57% of payroll to be shared among the 557 players around the league.  Unsurprisingly, compensation disparity is still a major issue.  However, a bigger Millionaire List translates into better talent, higher levels of play, and ultimately, a better US Men’s National Team.  There’s no way to prove it, but one would be hard pressed to argue that the National Team’s ascent and display at the World Cup can’t be partially attributed to MLS’ progress over the past ten years.

A notably different Millionaire List is expected ahead of the 2015 MLS campaign, as NYCFC finalizes their roster, and stars like Landon Donovan and Thierry Henry close out their MLS careers.

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