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MLS is now a transfer-market destination league

Written by 
Published in Soccer
Friday, 12 August 2022 14:59

When the summer transfer window closed the night of Aug. 4, it concluded a stellar period of business for MLS.

Some of the world's biggest names moved to the league, including Gareth Bale and Giorgio Chiellini to LAFC. Then there were well-known international names like Hector Herrera joining the Houston Dynamo, and Federico Bernardeschi joining Toronto FC along with compatriot Lorenzo Insigne, who signed last winter.

The window also saw younger players in their primes joining MLS sides, with former Watford forward Cucho Hernandez joining the Columbus Crew -- where he's already scored five goals in seven appearances -- and former Barcelona prodigy Riqui Puig arriving on a free transfer to the LA Galaxy. There was movement in the other direction as well, with Chicago Fire goalkeeper Gabriel Slonina going to Chelsea for a $10 million transfer fee.

"There's no question that we had a historic and significant increase, not only on the expenditure of the acquisition of players, but in many ways, more importantly, the transfer revenue that we have received in the last 12 months," said MLS executive vice-president for competition and player relations Todd Durbin. "That has been significant, and has been a marked change from the level of not only spend, but also with regards to transfer fees received.

The numbers reveal the extent to which MLS has become more of a player in the international market. According to the league, in 2022 MLS paid $175m in transfer/acquisition fees, and for the fourth consecutive year it set a new high for transfer fees paid, double the amount paid five years ago. Revenue generated for outgoing players in 2022 was around $100m. This doesn't include sell-on fees for the likes of Leeds United's Brenden Aaronson or Crystal Palace's Chris Richards.

And there is a sense that the arrivals in this window increased the momentum. In terms of the raw number of deals, not including free transfers, 2021 saw 99 combined moves, both incoming and outgoing, according to MLS. That number in 2022 is 105, though that is only through the end of July.

"I think the signings in this window mark a watershed in the history of the league. I really do," Columbus president Tim Bezbatchenko told ESPN.

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The window included the continuation of some trends. The arrivals of Chiellini, Bale and Herrera are by no means the first to grace MLS. After all, David Beckham, Thierry Henry and Cuauhtemoc Blanco all played in the league. Sebastian Giovinco's arrival to Toronto in 2015 at age 28 heralded an era when more players close to their prime began to move to MLS.

Recent years have seen a steady stream of South American players eager to use the league as a platform for bigger things, including Miguel Almiron. MLS academy products have moved in the other direction, be it Tyler Adams or Chris Richards. The difference now is that younger players with considerable pedigree like Hernandez and Puig are now moving to MLS, and as the transfer of Rayan Raveloson from the Galaxy to AJ Auxerre showed, a move to the league doesn't necessarily mean the end of a player's European ambitions.

"These are players ahead of their prime, looking to use the league to develop, win trophies, increase their market value and maybe find some stability," said Bezbatchenko. "Maybe they'll go back to Europe, maybe they won't, but they recognize this league as one that's getting a lot of attention."

It's tempting to think that what took place in the summer window was a sudden surge that crested over the dam. There were some unique factors, not the least of which was the proximity of the 2022 World Cup in Qatar, which is slated to start in November. There were players in the market needing to get playing time in order to get on a World Cup roster or at least sharpen up their preparations. Matt Miazga, who moved to FC Cincinnati, and Shaq Moore, who joined Nashville SC in a $2m deal, were in that category, as was Bale.

"I think [the World Cup] led to some opportunism, as players were looking from Europe, or players that were thinking about going to a World Cup and how they best prepare for that," said LAFC co-president and GM John Thorrington. "I think that was something that benefited us this summer."

But what took place was also the result of long-term, steady planning. This is especially true as it relates to the league's investment in its academies. For years MLS was caught in a vicious cycle: Teams weren't really spending that much to build their rosters, and the league's academies had yet to really produce players that were in demand. Then the international interest for academy products gradually began to change, and the vicious cycle became a virtuous one.

"The transfers out feed the transfers in," Durbin said. "Teams aren't viewing [player investment] as an expense, which is the way it was for many, many years.

"Now you start to get this very important dynamic where, as the transfer fees that you receive increase, that gives you the ability to then turn around and invest more back in the players, which then allows you to invest even more, and then so on, and so forth. So that dynamic is a really, really important one, at least in my judgment. You're really beginning to see us turn the corner with regards to that."

Some changes to the league's roster rules in 2020 also made it worth teams' while to engage in the transfer market. There was a time when MLS took 25% of any transfer fee. Now 95% goes to the team, and depending on the player's classification, some of that can be converted into General Allocation Money, usually $1.1m for players who aren't signed as homegrowns or through the U22 initiative. But the rest can be used to fund the team's discretionary spending, be it acquisition of Designated Players, U22 initiative players, and player development costs. All of this has resulted in MLS clubs being more engaged in the international market.

"That's a characteristic of a healthy league," said Bezbatchenko. "Not every league in the world can say they have the assets, the inflows and outflows, like we have seen the past year."

With that engagement has come more eyeballs on MLS from abroad. Players talk, and the league's stability and investment in infrastructure has made an impression throughout the game's ecosystem.

"I just I get a very clear sense when I speak to colleagues around the world that, whether it's the attention that our young players and the interest they're garnering from abroad or players in Europe seeing this as a really positive next step in their career at various stages of their career, I just see that that growing and growing with each year," Thorrington said.

Bezbatchenko added that in the past, when a player showed interest in MLS, there were plenty of agents and advisors who were not convinced that the league was a good landing spot.

"Now it's almost the reverse," he said. "Everyone around the player, including the player, believes that the future of soccer in MLS and North America is promising."

Can the league do more to facilitate transfers? Certainly the much derided, and at times overly complex roster rules seem to get in the way of teams doing deals. At this stage of the league's evolution, some mechanisms, like the league's allocation order, seem to have outlived their usefulness.

But the desire on the part of MLS to avoid any hint of teams bidding against each other for players, and thus suppressing spending, remains strong. As such, any changes in the near future will likely be around the edges. Bezbatchenko believes that increasing the investment in academies will continue to create growth in the transfer market. He also feels that enhancing a team's scouting department as it relates to bringing in academy prospects will aid that goal. The broader the net that is cast, the better the odds of finding a talented prospect. That will require some modification -- or even elimination -- of the concept of homegrown territories, which give MLS teams first dibs on young players from their geographic area.

"There's been conversations and discussions about how can we go into other territories," Bezbatchenko said. " And make sure that we are bringing players into the fold that might not have an opportunity if the territories were exclusive."

Durbin added that changes to the homegrown rules would be announced by the league "very soon."

The fact that the league's calendar isn't aligned with Europe is also a factor, in that MLS teams have to weigh the pros and cons of parting with a key player in midseason, like New York City FC did in loaning Valentin Castellanos to LaLiga side Girona. Durbin noted that the calendar is becoming less of an issue in that overseas teams are becoming more patient and willing to negotiate over multiple windows for a player, but the dynamic isn't going away, and Thorrington is resigned to the situation. "You have to roll with it," he said.

It feels like it will take more than maintaining the status quo to sustain the current level of momentum. Durbin isn't expecting the kind of hockey stick growth that was experienced in the past 12 months. That's why he's stopping short of calling the summer window a "tipping point," but he remains optimistic.

"There's no question that you're going to continue to see that grow, increase going forward," he said. "It's our hope that we that we see the level that has accelerated over the last two or three years. But that story is yet to be told."

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