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Dom Dwyer’s trade to Orlando City illustrates MLS’s selling problem

Written by Will Parchman

Dwyer-Hero

Europe’s breathtaking transfer jet stream appeared to be sweeping Dom Dwyer into its irresistible flow during the summer of 2016. Transfer rumor piled upon rumor as Dwyer bagged goals in clumps, until one finally caught in July.

Olympiacos, the biggest club in Greece and an on-again off-again Champions League group stage punching bag, offered a reported $3 million to Sporting KC for its stunning rags-to-riches striker.

This was not a windfall, so to speak, but it did represent a significant offering in a league with fewer than 20 $3+ million transfers in its 20-year history. On a personal level, it offered Dwyer a chance to crack into the world’s biggest club competition and provided an in to European soccer itself. On the other end, if it so chose, Sporting KC could turn around and use that money on a striker far more lauded than Dwyer was. Three million goes a ways in South America.

Except this is not, as we know now, how MLS works.

Sporting KC ultimately rejected the deal, which at the time smacked somewhat of the league’s growing import in the global game. Surely, if $3 million was seen as a pittance for a striker like Dwyer, and if a lower/mid-tier economic club like Sporting KC can thumb its nose at that particular stack of money, MLS is seeing itself through haughtier prisms now? And perhaps that has shades of truth.

But the real bedrock of these deals is not in their perception but in their economic reality. It is chopped and filleted in pieces before it gets to the plate for practical consumption. For starters, Sporting KC would never see the entire $3 million. No team would. MLS slices off 33 percent of every non-Homegrown outbound transfer for itself (MLS only takes 25 percent for Homegrowns), meaning a $3 million deal on paper is in reality a $2 million deal for the club. So we start there.

But only a fraction of that $2 million would’ve been actually usable for allocation purposes. MLS limits the amount teams can drop into their allocation kitty off the back of a transfer to $650,000. It was a statute presumably dropped into place to keep mega-transfers (which don’t happen anyway) from skewing the parity-driven balance the league has worked so feverishly to cultivate. So even if Olympiacos had spent $333 million on Dwyer, Sporting KC still would’ve only had $650,000 to use on player acquisition. The rest is poured into endeavors like academies, infrastructure, facilities. Sporting KC could’ve built a privately funded 100,000-seat stadium on top of downtown Kansas City, at least.

This was the framing backdrop for the proverbial mic drop Orlando City just flung at the rest of the league’s feet. A year after a transfer offer would’ve taken Dwyer to Europe, Dwyer just broke an MLS trade record. This is the mountain now looming above us.

The US national team striker was traded to Orlando for $400,000 in General Allocation Money, $500,000 in Targeted Allocation Money, and $700,000 in future allocation money based on performance. In total, the trade package could reach $1.6 million in allocation monies, a new record for MLS.

For the math kingpins among us, $1.6 million is less than $3 million. It is less than $2 million. It is not less than $650,000. And now we are here.

It’s entirely possible there were contributing personal reasons behind the rejected Olympiacos deal and any others that slipped through the wire. Dwyer’s wife Sydney Leroux was seven months pregnant at the time, for one, and there’s a chance Dwyer simply had zero interest in moving to Greece and moved to block it. But even still, from Sporting KC’s perspective there would have been very little incentive to press him to change his mind had that been the case. Losing a player of Dwyer’s caliber and production for $650,000 in usable allocation money is highway robbery.

This passage from Jeff Carlisle’s article in the aftermath of last summer’s Fabian Castillo deal is worth revisiting here.

In most cases, a team only receives two-thirds of the transfer fee, and even then it can be difficult to spend that money due to the salary cap restraints and other considerations. The agent feels that MLS franchises are reluctant to sell players for small profits, unlike many small clubs in Belgium and Scandinavia that rely on buying and selling players to sustain their teams on the field and their bottom lines off it.

“[Those clubs] aren’t looking to buy for $100,000 and sell for $10 million,” he said, adding that at least a few of his clients would have already been sold if they were playing in Scandinavia. But because they are in MLS, they haven’t gone anywhere.

For some, the problem with MLS and transfers is less about the calendar and more about the fact that the league’s structure doesn’t encourage teams to sell players. “The financial mechanisms don’t incentivize clubs to move players,” one agent said. In his eyes, while MLS teams and executives say they want to become an exporting league, the reality is that it rarely makes financial or sporting sense to sell a player.

This is the irregularly beating heart of MLS’s selling problem. The clubs themselves have largely been content, if not entirely happy, to work under the heavy hand of MLS’s at times oppressive cap because it kept the league solvent and within a workable operating margin. The clubs have even been largely silent on MLS’s policy of swiping a not insignificant chunk of money off the top of the few outbound transfers that actually do sneak through.

But the one area clubs cannot abide, or at least not willingly, is selling on their best players for peanuts as an operational tool to fund more buys. Smaller clubs like PSV Eindhoven, for example, use the sales of players like Memphis Depay and Georginio Wijnaldum to bankroll modest $10-15 million purchases and funnel the rest into infrastructure and scouting. Even scaled to size, the biggest MLS clubs can’t even afford that off the strength of a transfer. They’ll simply go deep into the red to do it.

As it is currently constructed, player transfers to clubs outside MLS only serve to soothe personal player contentment issues while raking the club’s ability to turn it into anything approaching a viable transfer fee over the coals. This is a major bulwark to progress as MLS sees its academy system grow to the point that its alumni earn looks from abroad. Just last week, FC Dallas technical director Fernando Clavijo noted that Kellyn Acosta will “probably” be sold to Europe within the next year. It will be good for Acosta, good for the league’s perception, even good for FCD’s general operating budget. On balance, considering Acosta’s price tag will assuredly be in the millions, it will not be good for FCD’s turnaround transfer spend.

Sporting KC’s front office is among the league’s most nationally lauded for this reason. They understood the deep limitations of the transfer system and simply chose to blaze a record-setting domestic trail instead. As a result, they doubled the amount of allocation money they’d be able to use had they opted to sell Dwyer to anyone, anywhere in the world for any price exceeding $650,000.

Until that figure goes up, expect outbound sales to continue to be a reluctant and restrained result of a transfer system straining and largely failing to contain the league’s growth. And until the incentive balloons, change will be slow in coming.

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