ContractsProf Blog

Editor: Myanna Dellinger
University of South Dakota School of Law

Friday, June 9, 2006

Goals at the World Cup: Contracts?

SoccerballThe soccer World Cup begins today and, unlike other tournaments denominated "world championships" (e.g., the "World Series" of American baseball), the World Cup really does have a global sampling of teams, and soccer may even explain the world

For players on the U.S. team, the financial stakes of a stellar performance in Germany are "sky-high."  Soccer still isn't as popular in the U.S., and players in America's fledgling Major League Soccer average $90,000 a year.  Compare that to the average yearly salary in England's Premiership: $1.25 million — excluding "incentive-laden performance bonuses."  Even in the English second division, the average salary is about $375,000 a year.  With scouts watching in the stands at the World Cup, a good game in Germany can lead to a lucrative contract with a second-division English club or a club in Holland, France or Belgium which would "triple the player's base salary overnight."

The pay disparity seems simply explained by the dramatic difference in the popularity of professional soccer among the countries.  Perhaps in that connection, it is also explained by "the economics underlying the U.S. and European leagues":

When it comes to soccer, Europe is the quintessence of free-wheeling capitalism, with billionaire owners like Chelsea's Roman Abramovich bidding up the salaries of top players. The U.S. league is anythi ng but extravagant. After many years of rocky financial results for U.S. soccer, the MLS was set up with tight controls over the teams.

It's the league — not the teams — that negotiate salaries with players, and a salary cap for each team is strictly enforced. The goal is to have a balance of talent so no one team can dominate. The result is that just 22 players out of the 336 active players make more than $200,000. On most teams, there are one or two stars who are highly paid and many who make modest, journeymen salaries. Each team has four or so development players who earn $11,000 a year.

So, if you turn on the tube (or your computer, thanks to the BBC) and take in some of the World Cup fever, don't forget that the players' goals may not simply be matter of wining the games, but lucrative contracts as well.

[Meredith R. Miller]

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