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Report: Cosmos cutting spending on players, front office as financial issues mount

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The NASL’s future has long been in doubt, and it appears that the league’s top club is having financial issues.

According to a report from Empire of Soccer, the New York Cosmos are set to make cuts both on the field and in the front office following yet another season of dwindling attendance. The report says it would mark the second-straight season of massive cuts, although the upcoming round is much more concerning given the current state of the NASL.

Cosmos players reportedly went two weeks without pay in November leading up to the club’s victory in the league championship. The club has reportedly caught up on a majority of those payments, although several players are reportedly still owed money. The club is reportedly looking to command transfer fees for several players on the roster.

On the front office side, the Cosmos reportedly put 60-to-80 percent of the staff on furlough, with the leave of absence expected to last one week for a majority of those involved. A majority of those temporarily laid off reportedly came from the ticket sales department. Payroll has reportedly been an issue for several months, with several members of the Cosmos front office going several weeks without pay.

In addition, the Comsos have yet to officially announced their stadium situation. After several years at Shuart Stadium, the Cosmos are on the hunt for a new home, with Brooklyn’s MCU Park remaining the reported favorite. To date, the Cosmos have not yet begun accepting ticket deposits for next season, a concerning fact considering the reports of financial issues.

The Cosmos recently topped Indy Eleven in penalty kicks to claim the club’s third NASL crown in four years. However, the league is set to look vastly different next season following the departures of Minnesota United, the Tampa Bay Rowdies and Ottawa Fury FC.

26 comments
  • The Imperative Voice

    Major league spending, without someone simply endlessly signing blank checks, is unsustainable in the minor leagues with minor league ticket sales/merch/sponsors. I know they put a brave face on it and touted the no-cap benefits of NASL, but the lack of a cap is really an indicator how poor the league is, and more about minimum than maximum. Because if you spend a ton of money on a minors team that’s not getting promoted to MLS, you’re never getting out of your financial hole.

    The end was written on the wall when NYCFC came in. There is not going to be a third NY team for a while. To get to CCL or otherwise change their situation they had to beat all comers from MLS and it wasn’t happening. So it became a low income minor league team that wants to spend like a big league team but has no exit strategy. It might amuse an owner to win a couple years in the minors but without the MLS carrot it probably felt like wasting money, at which point, you’re on your own, and the thing collapses under its own spending.

    People need to quit pretending like the lack of a NASL cap is a virtue. This is what happens if you actually spend in a league like that. Heck, this should remind of how the original NASL went down.

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    • Old School

      People need to quit pretending like the lack of a NASL cap is a virtue.

      I always get confused when broad and general statements like that are made by fellow posters on SBI (i.e. us, the SBI community). Are you referring to “people” as SBI posters or just a general sentiment?

      I ask because I don’t think I’ve seen that simplistic argument made with any level of seriousness by an SBI poster. Although, try as I might I admit I haven’t seen every thread on the topic when it’s brought up.

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      • The Imperative Voice

        Sorry, there was definitely a set of people on here who, when NASL was touting their approach in recent winters, (a) were saying MLS needs to adopt open spending to imitate NASL, and (b) that it better represents American free enterprise. Your — and I will get specific here since you are readily identifiable and have chosen to lodge your silly and inaccurate process complaint on my post — head must have been in the sand at the time.

        Minor league teams pay minor league salaries because they have minor league economics and unless they are lucky and the one MLS wants, even as a title winner, there is no financial windfall that can change their situation and alter the economics. The vaunted no-cap is really more useful in a sustainable sense for paying minor league reserves peanuts rather than overpaying minor league starters, paying 6 figure transfer fees to bring people in, etc. Just because there is no cap in the abstract doesn’t mean the economics exist to support approaching it that way in a spending sense. They have ironically relearned the old NASL lesson.

        And there were people saying otherwise. A lot of them probably voiced it more as, MLS needs to ditch the cap, but when you do so in the context of Cosmos posts, you’re implying it’s wise for them too.

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      • Old School

        Sorry, there was definitely a set of people on here who, when NASL was touting their approach in recent winters, (a) were saying MLS needs to adopt open spending to imitate NASL, and (b) that it better represents American free enterprise. Your — and I will get specific here since you are readily identifiable and have chosen to lodge your silly and inaccurate process complaint on my post — head must have been in the sand at the time.

        That was an inquiry, and a sincere one at that. There’s no reason to be overtly hostile unless I responded in kind. You would know it if I did, and that was anything but. In regards to the conversation, I agree that if the general sentiment by some is “no cap is the way to go” it’s short-sighted and doomed for failure.

        While I’m not an economist, as a fan I’ve been a strong advocate of MLS allowing teams to spend what they make while remaining in the black. If so-called big market teams generate more revenue and can remain in the black, I believe they should be allowed to spend it as they see fit, so long as they remain solvent and out of the red. From my viewing entertainment, it would lend itself to a more interesting dynamic within the league to stray away from the parity model that has made MLS dull and boring and create a noticeable David vs Goliath match-ups that add intriguing story-lines (see one of the greatest sports stories in recent memory: Leicester City). I also think there’s added intrigue to marketing the league when you have classier level of clubs that undoubtedly rich with quality and style.

        Obviously foresight is needed from a financial perspective, but the main complaint I see (on SBI) is the training wheels create a hindrance of entertainment and the subsequent parity creates a tedious product.

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      • The Imperative Voice

        You are over-estimating how eager MLS fans and American sports fans in general would be to root for a no-hope outfit. Some teams like TFC are more elastic to lack of success, but fans are disappearing from BBVA in droves the more we suck.

        Part of what MLS benefits from is not just financial probity, but stability of business that the combination of cap plus parity produces. What would happen in practice with many lovable loser teams is teams would start to fold from diminished interest. And whether the good teams are financially stable or not, teams folding undermines the league’s image of stability. It is better for the league to look like all its teams are solid financially, and it’s better for that that the fans have at least a pretty strong illusion/reality of parity, that their team can compete and win.

        You are over-stating the degree of loyalty people are going to have to a team that doesn’t win. And one thing you’re over-looking is that pro-rel is usually the safety valve for struggling teams. You go down to a more suitable, competitive division. Many teams often yo yo back up because while not solidly EPL they are better than championship. So the fans earn back confidence and the team earns more tickets by stomping the lower division. But a permanent MLS underdog is just a crap team going nowhere and people aren’t going to attend a loser very long. Talk to Chivas.

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      • Old School

        You are over-estimating how eager MLS fans and American sports fans in general would be to root for a no-hope outfit. Some teams like TFC are more elastic to lack of success, but fans are disappearing from BBVA in droves the more we suck.

        It’s almost as if it would be imperative for a club to put together a functional team capable of competing and capturing interest instead of relying on LA, Seattle and NYCFC to subsidize their business.

        Imagine a league where owners were punished for absenteeism, and management was punished for poor team building. No, that isn’t discussion of promotion-relegation, that’s just wishful thinking that owners actually had consequences to their operation.

        If we’re throwing around assumptions on what we “estimate”, I believe you’re under-estimating the soccer knowledge of fans watching MLS and watching leagues around the world within this country and how uninspired they are by the watered down product built on parity and subsidy rather than competition.

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      • The Imperative Voice

        Sorry, there is a small but loud minority that wants pro-rel and spend what you want, who seem oblivious to what that renders leagues like EPL. The league starts most years and a short list of teams have a chance. That may work there but not here.

        Also, sorry, but MLS is a competition even when it focuses more on teams being relatively equal. You still have to assemble a team and it advances on wins and losses. What you are trying to lump in there is the “business competition” notion that I should also care about the competing organizations and what they spend, and respect the more profitable ones more. I respect soccer more.

        This is not MLB, the rich teams are not actually subsidizing the poor. Rather the question is whether as in NBA and NFL — competitive leagues, both — we are going to make this more a sporting contest between teams who spend similarly, or in part simply a contest of who has the larger bank account. I get that this results in a somewhat lesser product but it is a reasonable tradeoff for long term stability in a country where pro soccer leagues have come and gone. As the league grows and gets more and more stable, the cap can get increased accordingly.

        FWIW UEFA is copying us with the Financial Fair Play Regs. You want us to imitate their spending into the red and tiered competitions while they are looking at our fiscal probity for their example.

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      • Old School

        What you are trying to lump in there is the “business competition” notion that I should also care about the competing organizations and what they spend, and respect the more profitable ones more. I respect soccer more.

        Can’t have one without the other. Anyone suggesting other was has their “head in the sand”.

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    • MLSsnob

      The issue here is not that the Cosmos weren’t generating revenue it’s the league in general not generating revenue and all but collapsing. They had the same issues the first time around. It’s a shame that they weren’t allowed/declined entrance into MLS, it’s a great brand.

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      • MTF

        MLSsnob, I think the Cosmos and MLS mutually rejected each other. The Cosmos didn’t like single-entity, salary cap, and sharing revenues from merchandising their vaunted ‘brand’ with the league; Don Garber and MLS didn’t like the Cosmos’ attitude. Regarding NASL vs. Cosmos revenue generation, while I don’t disagree with you, there are NASL teams selling more tickets than the Cosmos. The Cosmos’ attendance has been woeful on Long Island. The game day experience pales in comparison to watching a game at Red Bull Arena. Very overpriced tickets to sit on metal bleachers, awful turf field with college lacrosse lines painted on it, horrible concessions and facilities…the experience (minor league) wasn’t worth the price of admission (major league). The best thing about it for me is I could drive home and arrive 10 minutes after the game ended. That also made it the worst thing for most, as Shuart Stadium is not close to any real mass transit.

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    • Quit Whining About Soccer in the US

      I agree that the unlimited salary cap is NOT a virtue. The US does not need to do that and shouldn’t. I know others disagree, but when MLSsnob says no the Cosmos didn’t fail the league did, he is correct, buuuuuut, they won 3 out of 4 years, and after that the rest of the league is going to fail in the US. No one thinks that is going to change. We have already seen the old NASL fail in the exact same manner. NASL is all but dead, and if you were around and a huge fan like I was in 1982, you are not shocked, it feels exactly the same.

      Old School, don’t you think the Sounders/LA Galaxy are Goliath? The Sounders spend the most or close to it every year.
      They just went out and bought the best player in MLS, now are on the verge of winning it all. Plenty of Davids out there too. Dallas with homegrown, Colorado with, I don’t know how they kept winning, I guess Pablo M, KC won.

      I think MLS has hit a perfect balance between someone wanting the Goliath teams and someone that wants more parity like me. Not perfect for me, but maybe perfect for you?

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      • Old School

        Old School, don’t you think the Sounders/LA Galaxy are Goliath? The Sounders spend the most or close to it every year.

        I agree its the closest thing we have to such a dynamic. I don’t agree, however, that they are because of revenue sharing, limited cap space & maneuvering, along with the laundry list of MLS mechanics to ensure parity.

        I think MLS has hit a perfect balance between someone wanting the Goliath teams and someone that wants more parity like me. Not perfect for me, but maybe perfect for you?

        To an extent, but philosophically, if clubs make X-amount of revenue per year, they should be able to spend it as they see fit. Unfortunately, if clubs aren’t making money that’s really not the problem of the clubs that are. Whether it’s because of dysfunction (see: Chivas), lack of interest in improving the quality of the club (see: Fire) or being a small market club (see: Columbus), the parity driven mechanics that lend a hand to those clubs keep, perhaps, too much “balance” where the league is too homogenized.

        To be clear, MLS will never be the NFL and this dire need to replicate their parity model is failing to capture the unique market and game that soccer is within this country and around the world.

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      • The Imperative Voice

        My two cents the perfect balance was back at 1 DP when my Dynamo were competitive on a budget. You can’t buy victory at that level, and it matters who you pick and how well they actually play. The supporting cast is important and would have to be assembled within constraints.

        That being said, there are a lot of teams like Dallas doing well within significant constraints. I just think with the spending you’re tipping over into permanent overdogs and underdogs. During the Beckham exception (1 player) era, LA had some years they stunk. I think it’s now starting to tier somewhat and you see teams like LA making it every year, and teams like Houston/SJ/Chicago that are more frugal not even making it for multiple years. It remains somewhat mobile, and somewhat parity, but the teams that spend and aren’t total wrecks make the playoffs, and the teams that don’t spend had better have their crap together. My Dynamo don’t and have basically become uncompetitive. That to me reflects that this 3 DP + TAM + etc. stuff is removing some parity.

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      • The Imperative Voice

        To me MLS goes in Big Club – Parity cycles. There was a cycle when they tried to build up LA and DC into super teams. When the cap was on paper but finessed in practice, when players could force a destination, when trades were forced by the league that made no sports sense. It tipped over into hard cap mid 00s but has slid back towards superteams as the DP limit has risen + TAM.

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      • Quit Whining About Soccer in the US

        I want to see MLS owners spend, I have no desire for them to get rich while we watch crap soccer, like I did way too often with the Mariners ( baseball ) here.

        But I think MLS has done a good job of balancing and keeping it a league, rather than collection of clubs, some of which have no prayer or are hoping they can be LCity for one year in their lifetimes.
        That won’t fly in US, nor should it.

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      • Quit Whining About Soccer in the US

        One more thing I don’t think the league is “too homogenized”. To me that seems crazy to say that.

        Dallas had the best season with a group of homegrown kids on a major budget. Youth and speed and athletes.
        Seattle will win it all with buying Lodeiro for unaffordable money to many, great coaching and a homegrown kid.
        Colorado had a great season with a bunch of nobodies. Toronto with a bunch of somebodies. NYCFC/LA failed with major names. LA succeeded through the years with THE name in US soccer.

        Not even going into styles of play, which was vastly different, even if most used the same formation.

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      • Old School

        Yes, you’re referencing anomalies or exceptions which are the antithesis of what the league is trying to build or have for their infrastructure.

        I look at a club like SKC, who is a small market (and on a budget) and they have a rabid fanbase just a few years after playing in a horrid minor league stadium. They’re an example that David vs Goliath is compelling when ownership, management and player development are put as a premium.

        Build a quality product and people will follow. Budget be damned. Marquee clubs with spending power, that is earned, shouldn’t have to write checks to owners that have no interest in building a product worthy of interest from fans.

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  • The Imperative Voice

    Fair or unfair, monopoly activity or not, you can see where this is building towards not pro-rel or the current system, but a pyramid of MLS and USL, which may eventually split into separate layers as sheer numbers accumulate.

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    • Quit Whining About Soccer in the US

      I don’t understand what you are saying, not building towards current system. The current system is MLS being relevant, with a handful of people like me following anything else….maybe two handfuls, but probably not.

      We are most definitely still on course for that.

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      • The Imperative Voice

        I am referring to NASL as technically second and USL technically third, as well as the general structure of the present day, which has teams inside and outside MLS, as well as a league affiliated with MLS and one not.

        I think it’s fixing to be consolidated into MLS over USL, with most if not all of USL being affiliated and/or owned by MLS teams. There will be no NASL, there will be no real league competition, and there will be no real debate over who is over who. One will be over the other, one will be the competition league and the other the development league. It will be more like minor league baseball.

        You may have a handful of unaffiliated USL teams and PDL will probably exist, but that will be the exception.

        I am not a pro-rel fan but if it ever happens it will be that MLS and USL get so big they divide into 2 levels each, and teams can slide between MLS 1 and 2 and USL 1 and 2. I can’t see us ever agreeing to open pro-rel because it’s not very compelling here and the owners wouldn’t accept the business risk with what they are plowing into expansion or purchasing a franchise.

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      • Quit Whining About Soccer in the US

        Obviously we don’t want to see it fold, but it was crazy to think you could do that and have it succeed.
        Old NASL folded, plus….
        Remember the Cascadia rivalry was in one of those leagues. Teams were drawing about 5k fans.
        If the Seattle Sounders couldn’t make it in the league, with the exact same circumstances, stadium that held 65k, same fans, etc.

        Come on. Not happening. Maybe I am wrong and it will just take time. Not holding my breathe.

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  • Beto

    And there it is..nasl rip.

    Sunil, would you like to comment on the death of the second division?

    Like

  • BrianK

    Pity what has happened to such a great brand. Sounders, Timbers, Earthquakes and Whitecaps are thriving in MLS and Cosmos are in the backwater. I still don’t understand what went wrong in 1996. Metrostars??? Best outcome is for the owners buy the Red Bull’s and re-brand as Cosmos.

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    • The Imperative Voice

      I know the NASL history and Pele and Beckenbauer and so on paint a picture, but technically the Metrostars->Red Bulls have existed 21 continuous years and the old Cosmos lasted just 15. In a few years the NYRB name will have lasted as long as the original Cosmos. They don’t have the same history of dominance and glamorous name, but I associate NASL and Cosmos with defunctness and past history.

      I also think that you’re buying into the Faux Cosmos business model that the new owners cooked up which is that they are going to acquire the name and trade on it for either a MLS team or at least the willingness to buy the name rights. I don’t think we need the legacy association or to spend money to acquire our own fake patina of history.

      Like

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