60/40 revenue split a poison pill that will kill US Open Cup - USL must stand firm in opposition for the good of the league's clubs
MLS lack of empathy for lower division clubs is unacceptable
As first reported by others on Twitter (I can’t keep track of who reported what and when at this point as Open Cup news is flying fast) and later confirmed by my reporting, some USL Championship clubs might opt-out of the Open Cup if that possibility is in play should the USSF’s (or is it MLS’?) proposed 60/40 revenue split happens for Open Cup matches at non-MLS venues.
The new “opt-out” clause for the 2024 US Open Cup has been apparently developed with MLS teams in mind, but could be used by individual USL clubs. Let’s at this point remember USL clubs are independent entities - franchises. On the other hand, MLS is a single-entity league. While this distinction may not matter much to most fans it makes a huge difference not only from a business standpoint but from a legal one as well.
The original reporting on the 60/40 revenue split came from Michael Battista at Hudson River Blue
“The number being floated was a 60/40 revenue split for any match in which an MLS team traveled to a lower-division opponent. Currently, the away team does not get a percentage of gate revenues for Open Cup games. The only deductions for host teams, especially lower league ones, is the hosting fee set by US Soccer (which varies per round and opponent) and a percentage of revenue, less a deductible.”
I will freely admit when I first read the report, despite being a great fan of Michael’s (he is one of the best in the business) I thought the analysis had to be over-the-top - it seemed too crazy to be true.
But within hours after engaging sources, I realized he was spot on throughout his story. The situation really was this dire and the 60/40 revenue split was not only a real proposal but was moving forward. Make no mistake about it - this idea is a threat to financial security of lower division clubs, not just in USL, but also in NISA and NPSL, if they happen to be awarded a home match versus an MLS side. Not long ago here in Florida, we had an NPSL side host an MLS side in a US Open Cup 4th Round match. I shudder to think about what would have happened if Miami United had to give 40% of its ticket revenue that night, revenue that sustained that club for many more years to MLS.
As terrible as all this is, I am also hearing that solidarity within USL is growing in the wake of MLS’ approach to US Open Cup and that the some teams “opt-out” may or may not come to pass - but that USL will have a response to the ongoing situation.
As someone who worked in NASL’s league office and has worked with multiple clubs that are currently in the USL league structure, I can safely say US Open Cup home games against MLS clubs are drivers of both revenue and fan interest. This is why the idea of MLS first teams not competing and now the proposed 60/40 revenue split has put USL into a real bind.
Let’s lay out a scenario here. Let’s say Orange County FC (OCFC) draws LAFC in whatever round LAFC enters the competition. This hypothetical match is played in Irvine at a stadium ironically enough MLS once tried to get its hands on is hosted by OCFC. The game sells out. Under the proposal for this year’s competition, LAFC would walk home with 40% of the ticket revenue. But let’s reverse the situation and say OCFC plays at LAFC. The crowd is a smallish by LAFC standards 8,000. LAFC keeps all the ticket revenue. The premise or defense I have heard from MLS fans is “MLS teams are the ones that draw,” and with this comes an arrogant (and wrong) assumption that a well-supported USL team like New Mexico United or Indy Eleven needs an MLS team to draw fans in their home stadium. Similarly, the assumption would be that any fans who come to an MLS stadium do so because of the MLS team, not the lower-division side.
In other countries, revenue models are created so that the LOWER DIVISION SIDE which is obviously more revenue-needy than the first division club can maximize revenue. What this “poison pill” does is actually reverse that in the United States. Instead the first division will have every effort to maximize revenue from the competition while lower divisions, already suffering from the pitfalls of a closed system will be further choked. Quite frankly, if this arrangement were to go into place, I believe USL teams should strongly consider passing on the US Open Cup. That’s how bad it is for their business and how morally corrupt it is in a sport based around solidarity as its chief organizing principle.
Beyond the obvious legal questions around this arrangement and how it was made (something we will park on this side for today’s discussion) the bottom line is it's bad for soccer, bad for USL, bad for NISA and bad for NPSL. I firmly believe if it goes forward, the Open Cup might as well be a dead competition. It is a poison pill which will be impossible to eliminate from the body if it goes through. And while the claim is it would be for a single season, once one of these things is put in place, we know how hard it is to break precedent and go back to the previous arrangements. Especially when MLS and their insatiable appetite to maximize profits is in the picture.
This feels like cloud cover for MLS getting out of playing in the USOC. Employ revenue splits and other things to create conditions bad enough that USL teams opt out, and then make the claim that USOC is unsustainable.
USSF needs to grow some teeth, WTF are they doing?!
Sorry for getting too technical but USSF needs a Board overhaul. The perceived and real conflicts of interest in these high level decisions are harming its ability to make strategic decisions, and too beholden to louder stakeholders. It needs more business and sports leaders instead of heads of various constituencies with a direct reliance on USSF. That’s one reason I am 100% opposed to salaries for their Board members.