blog.forgreatjustice.net

I’m a fan of the local soccer team, the New England Revolution, and follow American soccer in general. At the moment, I’m not terribly happy with how the team has been treating its players in the off-season. Let me first share two comments from “Center Holds It”: link. (Read the post; I’ll be talking about similar stuff.)

Jeff: “The ‘Noonan situation,’ in particular, amounts to telling employees that this year’s Christmas bonus will be a punch to the kidneys. I mean, the guy finished fairly strong, he was pivotal in earning the Revolution their first-ever trophy (U.S. Open Cup) and, for this, he gets a $100K pay-cut?”

Martek (in the comments): “Can we really say that MLS has upheld their end of that bargain? It is with a real sense of foreboding that I, and you if I read your posts correctly, must conclude that the answer to that question is ‘No.’”

To summarize the problem: the tight-fisted financial behavior of the Revs has indeed kept their bottom line low, but also has disgruntled at least two of their starting players (Joseph and Twellman) and probably chased away several more (Noonan? Dorman?). Noonan’s situation is that his option was declined, was offered a drastically lower salary; Twellman received a generous transfer offer from the UK (which would have been a windfall for the team), but this was declined, presumably to avoid the cost of finding a new player to fill his role.

As a fan, I have various priorities about who should stay or go, but it’s most important that my team - the subject of my loyalty - to treat its players with respect. If they stay, I want them to be happy and motivated when wearing the badge; if they’d rather transfer, then I’ll thank them and hope they hit it big next time. (Clint Dempsey, after a stellar tour with the Revs, is making a name for himself with Fulham FC in England. I think that’s great, even as I miss having him as a starter.)

I’m not going to criticize Kraft (the Revs owner) for not spending more money, because that’s a silly criticism on its own. He has a reputation for thrift (even in the uber-profitable NFL), and thrift is vital for a pro soccer franchise to thrive. I’m not asking about money.

The problem is that I think that the franchise risks being “cheap” instead of “thrifty”. There’s a difference here. Thrift is a virtue; cleverness and foresight are used to avoid unnecessary expense, and focus investment on the best possible future investment. It is forward looking: you make your limited resources count in order to achieve the strongest outcome in your future.

To be “cheap”, however, is no virtue. In doing so, you’re specifically giving up foresight, and cannibalizing your existing resources in order to lower your current expenses. Cheapness looks towards getting by with lower quality (rather than making more of what quality you have); it seeks to retake what you’ve given to your partners (rather than being cautious in what you negotiate in the first place).

It can be “thrifty” to focus heavily on drafting and developing undiscovered, unproven American talent, as has been a core of Coach Nicol’s strategy. It would be “cheap” to pay your starting forward $220k in one year, and to offer him only half that after a strong season. (And isn’t this kind of cheapness just wasteful, in the end? All you’re doing is negotiating a clumsy, public sort of pink-slip.)

But some might say: isn’t this what negotiation is all about? Isn’t the ownership always going to fight, tooth and nail, against the solicitous players? Aren’t these players just getting stuck with contracts they chose to voluntarily sign? They should just suck up the consequences without whining, right? (I hear this in some quarters, even amongst loyal fans.)

The franchise could negotiate like this always, but should only do so if this is good for them in the long term; I fear this is not the case. The situation of modern American soccer affords much more bargaining leverage to the owners of the team, rather than the players. However: the modern American league still can attract underpriced native talent if young players feel trust that a team will be a stable place to grow, and a fair partner in their career development. (Martek refers to “hometown discounts” as an advantage in MLS.)

If the ownership is playing too much hardball, they’re giving up this potential advantage, and certainly salting the fields of future negotiation. (If a team killed a veteran player’s shot of a multi-million dollar payday, would you trust them with your long-term prospects? That’s exactly the charge at the feet of the Revs organization.)

Now, let me throw in some caveats: I don’t know the details of the negotiations that players went through. Perhaps the players who left the team did in fact get the best possible payoff. Perhaps there’s a larger strategy behind the scenes about the organization’s resources and its roster choices. Perhaps the challenge of keeping a pro-soccer team afloat is deeper than I anticipate, and this miserly attitude is necessary to stay alive. Still: I have no good justification for them killing the Twellman deal; it seems to be a lose-lose proposition, even taking into account the cost of reorganizing the post-Twellman team. There are possible answers, but I’m not yet convinced.

Cashflow might be a thin resource out there, but trust and reputation are also limited resources, and they too can be frittered away. Ultimately, the dynamic between ownership and talent will rebalance, and the deficits in trustworthiness will be revealed and corrected. In short: playing unfair is a losing game.

(And that follows for any venture, whether it’s a soccer team or a startup.)