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PAGE 36 Appendix D MLS AND J-LEAGUE SUMMARY MLS The MLS system is a “single entity” concept, with true power centralised in the League head office. The most important distinction between the single-entity League and the normal joint-venture League is the degree to which decisions about resource allocation and League membership are centralised. In a single entity League, like MLS: • Teams are not independent organisations, but are operating divisions of the League. • As well as a Chief Executive, there is a Board of Directors, made up of the major investors in the League. • In its pure form, team operators serve at the pleasure of the League and can be removed by the Chief Executive or the Board. In the current MLS, nine of the ten teams are owned by two entities. The drain of the best players from the US to overseas clubs still continues. The MLS retains the power to: • Delegate authority to owner-operators. • Negotiate player contracts (which are paid by the League). • Assign players to teams. • Sell or trade players to teams in other Leagues, including overseas. • Sell national broadcasting rights and product licenses. • Negotiate stadium leases (the costs of which are paid by the owner-operator). Owner-operators are given limited rights to: • Find talented young players who are signed by the League but allocated to their team. • Hire coaches. • Sell local broadcast rights and product licenses. Owner-operators retain: • 100% of local broadcasting and sponsorship revenues. • 100% of stadium revenue. • 100% of revenue from overseas tours by the team. • 70% of local ticket revenue. REPORT OF THE N S L T A S K F O R C E – DECEMBER 2003
Owner-operators are responsible for: • 100% of local game and administration costs. • 100% of local marketing and promotional costs. • 100% of stadium lease payments and operating costs. • 100% of general manager, local administrative personnel and coaches salaries. • 100% of team-related travel costs. The MLS receives: • 30% of local ticket revenue. • 100% of national sponsorship revenue, licensing and merchandising revenue, national broadcast rights revenue and revenue from player sales/loans.* * These revenues have been transferred to a marketing company (Soccer United Marketing) created by certain MLS owners for an amount of USD$5 million p.a. The MLS is responsible for: • 100% of player payments and acquisition costs. • 100% of game official costs, League office expenses, League marketing costs and insurance costs (including players workers’ compensation). There is an annual capital call to cover the difference between League revenues and expenses. Benefits of single-entity (MLS) system • More power vested in the League head office. • All clubs have a vested interest in the overall success of the League rather than just the success of their own club. Downsides of single-entity (MLS) system • The Board of the entity is made up of club owners and is not independent. • Centralised administration can affect the outcome of team performances if the allocation of quality players does not provide competitive balance. • Optimal resource allocation by the central body is dependent upon reliable and adequate information being provided by the club operators to head office. • This could lead to a perception by fans that the allocation of players to clubs by the League provides contrived outcomes. • Players may not wish to be relocated to another city or region. (This could give rise to restraint of trade issues where a player refused to move locations and was unable to gain employment. Legal advice should be obtained on this point.) • Potential reliance by club general managers on central office. REPORT OF THE N S L T A S K F O R C E – DECEMBER 2003 PAGE 37
Page 2 and 3: 1 December 2003 Mr Frank Lowy,AC Ch
Page 4 and 5: © 2003 Australian Soccer Associati
Page 6 and 7: PAGE 2 Section 1 TASK FORCE’S SUM
Page 8 and 9: PAGE 4 In stark comparison to all o
Page 10 and 11: PAGE 6 Section 2 PROCESS UNDERTAKEN
Page 12 and 13: PAGE 8 3. The members or shareholde
Page 14 and 15: PAGE 10 14. The Chair of the League
Page 16 and 17: PAGE 12 TERM OF REFERENCE 3 THE MIN
Page 18 and 19: PAGE 14 Central to this is ensuring
Page 20 and 21: PAGE 16 (c) direct costs related to
Page 22 and 23: PAGE 18 TERM OF REFERENCE 7 THE TIM
Page 24 and 25: PAGE 20 RECOMMENDATIONS That: 32. T
Page 26 and 27: PAGE 22 TERM OF REFERENCE 11 MEASUR
Page 28 and 29: PAGE 24 Section 4 SCHEDULE OF RECOM
Page 30 and 31: PAGE 26 11. All non-executive Direc
Page 32 and 33: PAGE 28 TERM OF REFERENCE 6 THE MET
Page 34 and 35: PAGE 30 TERM OF REFERENCE 11 MEASUR
Page 36 and 37: PAGE 32 The Task Force believes tha
Page 38 and 39: PAGE 34 Appendix B TERMS OF REFEREN
Page 42 and 43: PAGE 38 JAPAN’S J-LEAGUE • The
Page 44 and 45: PAGE 40 Rodney Feher ‘We consider
Page 46 and 47: PAGE 42 Appendix F BIBLIOGRAPHY NSW

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