The San Jose Earthquakes acquired Designated Player Jamiro Monteiro from the Philadelphia Union on Monday. Photo credit: Philadelphia Union
This is now the third article in my series that examines whether Chris Leitch has the ability to make the Earthquakes back into a winning club in Major League Soccer. We are looking at both his ability as a general manager in the league, plus the tools that he is being given to enhance, and not hinder, his probabilities for success.
In the last article, I looked at the infrastructure improvements that are happening around the club to help it compete with the newer, shinier franchises coming into the league, including the stadium, pitch, practice facility, and hiring on the scouting and analytics side. More and more, the Quakes are getting closer to being part of the “have’s” rather than the “have not’s”.
Now we turn our attention to a burning question on a lot of Quakes fans’ minds: will majority owner John Fisher open up the pocketbook to spending more on players and how much is that necessary to Leitch being successful?
Playing the Market
Player Signings That You Didn’t Consider
There are players that are being signed directly out of John Fisher’s pocketbook today that you may not have considered: the MLS Next Pro team. No, really. MLS Next Pro contracts do not reside with MLS HQ as MLS contracts do, players are signed to team contracts. This will make for a very different accounting model than MLS has.
The budget for new players for Earthquakes II (not Quakes players playing for EQII) will come directly from John Fisher, not the San Jose Earthquakes first-team salaries budget. In other words, MLS Next Pro players and their contracts will come out of the club expense line without an expectation of top-line revenue attached to them.
Now that the roster rules for MLS Next Pro are released, we can see that this has a lot of potential for the Quakes. Gone are the days when we need to be concerned about international slots. The new roster allows for seven more of them. That means the recent Leitch strategy of acquiring players from the SuperDraft that take an international roster spot shouldn’t be feared. If Oskar Agren can’t fit in the first team (he currently can), then he can take an international spot Quakes II until someone obtains their green card or goes on loan.
Teams can also make a signing where an international player can temporarily play in MLS Next Pro while the club makes moves to free up spots. No more being held hostage to overspend on GAM when other GMs know you need an international spot.
The Player Signings You Were Thinking Of
Quakes Epicenter editor Alex Morgan and I got just a few minutes to talk a couple of weeks back with Chris Leitch, and he discussed more signings coming at that point: “We’re looking at some veterans to add to a good group of veterans that we already have. We are actively engaged in exploring possibilities to reinforce the team.”
One of the signings Leitch alluded to was an attacking midfielder. On Sunday, we learned from MLSsoccer.com’s Tom Bogert that the Earthquakes would be acquiring an attacking player who is also a Designated Player, Jamiro Monteiro, from the Philadelphia Union for $250K in GAM, an international slot (currently worth another $250K in GAM), and a potential $200K in GAM more if performance targets are met.
On Monday, the deal became official.
I point you back to Colin Etnire’s latest article on How Good MLS Teams Are Built because he saved 1,500 words on this article. A good clue to the future of the Quakes is found in the recent roster builds of the Colorado Rapids, which have been expertly constructed by General Manager Robin Fraser and Assistant General Manager Francis Taylor (keen readers may remember I proposed Taylor as one of several GM candidates, exactly for this reason). I had the opportunity to speak with Taylor two years back about the Rapids’ 2020 offseason build using MLS player signings and told him they would be in the top four in the West in two years with the moves they were making. Try the top team in the West in 2021.
You might think that’s not repeatable or that it’s a fad, but I can tell you right now, the Colorado Rapids are shaping up to be a consistent threat. The Seattle Sounders are taking them very seriously, throwing everything they can at getting back into first place. In the meantime, the Rapids are shipping players to Europe and within MLS, getting more GAM and more money, and getting ready to make another run. They have no current DPs, and they are still a legitimate threat. You know that whole concept about starting with a dollar and trading up things of value until you make a million? That’s the Rapids’ strategy in MLS, and it’s working.
The thing the Rapids do not have is a Bay Area youth talent level. Leitch is not only able to replicate much of what has worked for Rapids with in-league transfers and some Garber Bucks, but he can also stockpile top academy talent that can turn into homegrown talent and/or develop through Quakes II.
Big money doesn’t equal big production
You may not be happy where I’m saying this is heading, but it’s exactly where this is heading. There’s a good reason for that: buying a DP in MLS is a high-risk, high-reward scenario. When you hit, you win big. When you miss, you lose even bigger. You not only are stuck with a mediocre player, but you limit your salary cap flexibility and lose much of your ability to convince ownership to get the next one, lest you lose your job the next time you miss and the owner consolidates your job in with the coach’s the next time.
And the Quakes have missed much more than they have hit in the DP market until recently. You can’t blame Fisher for being a bit gun shy at spending on big-money players as an investment that helps the team in the long run when that simply hasn’t happened in Quakes history. You don’t have to like it, but put that blame on the GMs who burned that goodwill, and other GMs in the league who sold expensive failures to their ownership. You know they have owners’ meetings, right? These guys all talk.
But don’t take my word for it, I promised a few good people on Twitter I would prove the boom and bust nature of DP players, and so I shall.
First, a bit about transfer fees
They’re stupid. And if you pay a lot of them, you’re dumb, bad at the soccer business, or good at the money laundering business. On occasion, it may make sense for an MLS team to pay a club outside the league for the rights to a player on an existing agreement, but not very often.
Whether it is in Europe or in MLS, there is no data that suggests spending on transfer fees makes you better. In fact, in Europe, the data says the opposite is true. In MLS there is no reliable source of transfer fees paid, but it’s an even worse practice than in Europe due to the salary cap parity and lack of a promotion and relegation model (i.e., no penalty to write off a season and fix it in the off-season).
This is an area where the Quakes (read: John Fisher) have generally looked pretty competent.
Designated Player Analysis
We’ve done a bit of work at American Soccer Analysis on the impact of Designated Players. Keeping in mind that the only real difference between Designated Players and TAM Players is whether the club uses GAM and the owner’s money or TAM and league money (tougher to accomplish with more expensive players) to satisfy the salary cap requirements, I wanted to share a little of my own basic research on the topic. This should inform us what the right level of investment on players that exceed the threshold of $612,500 is. I’m going to use the guaranteed compensation numbers from the available MLSPA data for this analysis.
Keep in mind there are two ways of looking at Designated Player spending:
- Utility value – The value of a player on the pitch both in individual and team contributions
- Market value – aka “marquee value”, players whose names drive more fans to attend games or buy more merchandise
This article is primarily concerned with #1. There is a dubious-at-best connection with #2 and actual revenues when winning is removed from the equation. A great example of this disconnect is the Bastian Schweinsteiger effect in Chicago. Hoping for a big spike in enthusiasm thanks to the famous German, the team sold a mere 150 additional season tickets in the weeks after his announcement. After the first couple of games, fans didn’t really return in any greater numbers because the team wasn’t any good.
So with that in mind — and winning as the primary thing regardless if you get players that have “market value” or not — we will first evaluate if spending more on a team in general leads to more points in the table.
The Quakes and Guaranteed Compensation
Let’s start by looking at historical team spending in MLS and how the Quakes measure up.
So to replay a recurring narrative over the past few seasons, we’ve heard that Fisher hasn’t been spending on talent. But this shows that as soon as Matias Almeyda walked in the door, that spending increased by almost 30% on player payroll alone, not including paying Almeyda and all of his assistants. Immediately, that narrative completely falls apart, including comments that Almeyda himself has made because, at the severe risk of repeating myself, he is the investment.
But how does that spending stack up to the rest of MLS? One thing to keep in mind is that we didn’t see a real increase in spending MLS in 2021 due to uncertainties around the pandemic after almost a full season (longer for some teams) without fans in the stands. This chart demonstrates a bit of that.
The Earthquakes mostly kept pace with the league salary growth between 2013 and 2019, with an outlier in 2018, and they likely would have caught the league again in 2021 had they signed Layun. That miss looms large in many ways, but the intention was there, just not one to pay a big transfer fee (smart, but it still hurts a little not to get him given the current hole at right back). If the Quakes had paid full price for Chofis’ market value, they would also probably catch the league. It’s actually smarter spending that’s keeping them below the median now that they’ve let go so much of the dead weight.
At this point, you are likely saying, “okay, Mr. Smarty-pants, but that chart isn’t reflecting the top teams in the league, just the baseline to keep up.” Fair enough, let’s take a look at the correlations between things that matter up against compensation, like, points-per-game. Nothing more important than points in the table, correct?
Total guaranteed compensation is on the y-axis and points per game increasing to the right is on the x-axis in the visualization below.
I have circled the correlation values between 2016 and 2021. Blue circles are an indicator that compensation has some correlation with points per game in those seasons. Red circles are ones that don’t have almost any correlation or even show some negative correlation. In effect, since 2018, there has been a very weak correlation at best between total team guaranteed compensation and points per game. In fact, if we look at goal differential, which is a better predictor of future success than points, we find even weaker correlations.
Keep in mind, this is not total spending. Total spending would include transfer fees, and, repeat after me, “transfer fees are usually bad and stupid (or indicate corruption).”
Evaluating Attacking Players
Now that we see that team compensation is not a key factor in success in MLS, we still need to know more about constructing the roster with the budget that a team like the Earthquakes will have and how to maximize it. For this, we will use the philosophy that there is inherent value for fielding a team of 11 professional players in a league game. There is a baseline level of production for any player, regardless of their position on the roster. Even on FC Cincinnati, somebody is going to score goals and somebody is going to pass the ball to that guy. We just need to ascertain what that baseline (replacement) value for a player is.
Since Designated Players and Targeted Allocation Money (TAM) Players are overwhelmingly attacking players, we will focus on a simple evaluation of impactful attacking players at different salary bands. We want to see where players above the DP threshold make an outsized impact on team performance. For our simple evaluation, we will look at goals and assists per game for forwards, wingers, and attacking/central midfielders — i.e., the things you expect DPs to be better at.
We will then use this method to evaluate current Quakes attacking players that are making over the threshold, and also see where the Quakes have some gems.
More money, More problems
First, we’ll examine whether DPs and TAM players contribute a higher number of goals and assists that affect their team’s points-per-game.
Allow me to orient you to the chart above. First, the Earthquakes are identified in each season based on the goals + assists of their DPs and TAM players. Follow the line from the label to the dot for each season. The x-axis shows compensation in Guaranteed 100Ks, so 100 = $10M. The y-axis shows the total goals and assists of the DPs and TAM players. The color of the circle is in points-per-game: the greener the circle the better the team, the redder/oranger the worse. Apologies for 2021, but the Quakes circle is the orange one behind the greener one.
Looking at the Earthquakes, you can see they’ve gotten pretty good production for their TAM and DP players post-2019 for a team that is consistently around only $5M in guaranteed compensation for those players, but consistently not very good. Keep in mind 2020 was only about two-thirds of a normal season, so move that dot closer to 30 in a full season.
We’ve also highlighted all the teams that spent over $10M in guaranteed compensation, had more than 30 goals and assists from DP and TAM players and got over 1.6 points per game. The result? Two teams, both in 2017. Remember 2017 from the point-per-game chart above? It had the highest correlation between money and success of any season in the TAM Era. In other words, most of us are stuck in year-2017 thinking. That thinking no longer applies.
Let’s look at the same type of visualization, but this time identify teams that had over 1.6 points per game with a median over 15 goals and assists and a spend over $3M median per DP and TAM player.
Aaaaand it appears there aren’t any. In fact, the green teams you see in 2018 through 2021 spend less per player and do a better job finding players who produce more.
While there is some correlation between spending and goals, the fact is that it doesn’t often lead to more winning.
This crude illustration I made for a tweet response the other night demonstrates it better than any graph I can make does. The playoff position of each team is shown below. Data is from the MLSPA and captured from the American Soccer Analysis salaries area.
The top teams from both conferences and the second-place team from the Eastern Conference are not shown. Imagine that.
Moving to 2022 Thinking about Designated Players and TAM Players
Here’s how the money math actually works in the MLS TAM Era: as the chart demonstrates below, your average MLS attacking player (forwards, wingers, attacking mids, and central mids — but not defensive mids) making $500K or less contributes 0.23 goals+assists (G+A) per 96 minutes as marked by the 1x line below.
If you pay more than $500K for an attacking player, they need to produce more than the 1x line (0.23 G+A/96) or justify helping other players do it, to make sense in a salary cap league.
The 2x line shows where players double the baseline output (0.46 G+A) and 3x shows where they triple the baseline output (0.69 G+A).
There is no difference in this chart between the 124 players making less than $250K and the 330 players making between $250K to $500K. As we add on $250K to the guaranteed compensation above $500K, we see the median goals + assist output exceeding the 1x line and moving toward the 2x line. Right around $1.25M, the output is about 1.5x.
The first salary band to hit around the 2x line is $3M, with a tangible jump around $1.75M. If you were to make player tiers, those are good places to make them.
An attacking player doesn’t double the output (2x line) of a baseline attacking player until around $3M. After that point, it’s up and down until closer to $7M.
After $3M, it appears you might get triple the production (3x line), or you might get less than double. I’ve created a second graph with $1M buckets and kept the 1x/2x/3x lines in the same places.
All the sample size caveats continue to apply, particularly with many of the same players at the higher compensation playing multiple seasons. From this, there is no guarantee that a player between $6M and $7M ($7,000,000 bucket) is going to give you any more goal-scoring + assist-generating production than a player in the $2M to $3M range ($3M bucket) will.
This is just salary. Transfer fees on top of this would throw this even further out of wack.
From these visualizations, it’s very clear: unless you are willing to pay almost $8M for triple the production (and John Fisher most likely is not) or you think you are going to make up the difference in market value over utility value (highly unlikely), then you need to maximize the output of your attackers between the league minimum and $3M while staying below the salary cap and using MLS roster mechanisms.
Paying more has no guarantee that you will get more on the pitch. You’ll probably just pay more.
The 2021 Quakes
Let’s take a look at the Earthquakes attackers and their goals+assists for all players over 500 minutes in 2021. The median minutes for players over $612,500 since 2015 is 2,056. This chart is sorted by Total Compensation.
The final Throughput column shows the goals+assists per 96 minutes utilization compared to the compensation bracket median times the average of the minutes played for the compensation bracket median. This estimates the amount of production relative to peer salaries, roughly.
Player | Type | Min | % of Min Med | Total Comp | G+A / 96 Min | % of G+A Med | Through-put |
Cristian Espinoza | DP | 2,431 | 102% | $1,265,000 | 0.44 | 133% | 136% |
Andy Rios | TAM | 1,123 | 47% | $939,250 | 0.0 | 0% | 0% |
Carlos Fierro | TAM | 1,309 | 55% | $908,800 | 0.44 | 147% | 81% |
Chofis Lopez | DP | 2,418 | 101% | $860,000 | 0.60 | 200% | 202% |
Jeremy Ebobisse (POR+SJE) | TAM | 1,887 | 79% | $691,250 | 0.25 | 89% | 70% |
Chris Wondolowski | Senior | 1,427 | 64% | $400,000 | 0.34 | 148% | 95% |
Cade Cowell | HGP | 1,847 | 88% | $130,000 | 0.52 | 226% | 199% |
Benji Kikanovic | Rookie | 890 | 43% | $69,322 | 0.54 | 234% | 101% |
Jackson Yueill | TAM | 2,818 | 118% | $636,875 | 0.10 | 36% | 43% |
Shea Salinas | Senior | 1,559 | 70% | $280,000 | 0.12 | 52% | 36% |
Note that Siad Haji and Jack Skahan didn’t have enough minutes to be shown, and Jackson Yueill and Eric Remedi were classified as DMs, although Yueill met the MLSPA standard for an attacker. Yueill’s numbers should be taken with that in mind. Shea Salinas in the last row was classified as a FB in 2018 and 2021 and a W in 2019 and 2020 on American Soccer Analysis’ site (https://app.americansocceranalysis.com)
(I’m using an overly-simplistic approach and applying the 80/20 rule here that it gets us “close enough”.)
What did Chofis + Espinoza give the Quakes last year in goals + assists per 96? 0.52 average. That’s two players at the 2x DP level. In other words, the Quakes’ DPs are giving them the output, and the Quakes are paying a grand total of $2.1M for $4M+ of production. Bingo, that’s good business. Some might call it “Moneyball” even.
Leitch has taken that Andy Rios and Chris Wondolowski money and brought in Jamiro Monteiro from Philadelphia who averaged around 3 goals and 6 assists a season (when factoring for a shortened 2020). Add in Jan Gregus, who averaged a few assists in 2019 and 2020 as a defensive midfielder, and the Quakes may have something in the attack. It’s a bit more clear who is distributing, but a little less clear who finishes these opportunities.
But as Asher Kohn wrote, despite Chofis’ independent production he has made it more difficult for others around him to fill in the holes he leaves. Jackson Yueill had a down season in overall production because he was running around plugging holes instead of doing what he does best. Judson wasn’t proactively winning tackles and stopping counters higher up the pitch, and instead, Remedi was taking fouls and committing them just the same.
Chris Leitch eliminated the biggest underperformer from this list (Andy Rios) and also the player who had the toughest time staying healthy (Carlos Fierro). Combined, Rios and Fierro took up a combined $1.8M of guaranteed compensation.
So far, Leitch has opted for healthy (they missed a combined seven games with injuries the last three seasons) and consistently-productive players like Monteiro and Gregus who are a step up technically and creatively. Is it enough? We’ll see. There’s also the defensive side of the equation to worry about.
Questions for 2022
Without Wondo and Fierro (a combined 0.78 G+A/96) the Quakes will have to replace that production with Monteiro and others. One way is to give more minutes to players like Cowell and Kikanovic. Another way is to move Shea Salinas, who was 0.44 G+A/96 in 2020 and 0.52 G+A/96 in 2019, back into a more regular winger role, if still primarily as a sub, from a backup fullback role. The Quakes will look to Ebobisse to give them both minutes and production as the likely starting #9.
But there is still a problem: the Quakes were 16 goals behind Sporting KC’s conference-leading 58 goals in the West. They need to get more out of the attack without expecting defensive midfielders and defenders to contribute a bunch. This is particularly true if the man-marking methodology continues to make them leak too many goals in the back with defensive breakdowns and Almeyda doesn’t come up with a better set piece defensive scheme.
Answering the Spending Question
Of course, we have Colin Etnire’s famous salary spreadsheet to let us see what the spending will probably be in 2022. Taking some educated guesses thanks to improving transparency around these transactions from the Earthquakes, Colin is estimating the current 2022 roster spend as:
- Cap Spend: $7,854,375 (Total must be below $9.325M)
- Total Comp Spend: $11,210,199 ($11,058,293 in 2021 per Colin)
Keep in mind these are unofficial numbers and do not represent all incentive payments in these contracts.
According to these estimates, Leitch has given himself some room, but not a lot of room (~$1.5M of cap space), for additions. Given there are two senior roster spots and one international spot remaining, per our estimates, and Leitch’s own indication at least one more defensive signing is coming before the start of the season, you easily envision a situation where the first team compensation spend will be over $12M this season and perhaps approach $13M. Plus, almost all of the available cap space will be used.
Add onto that the costs of the Quakes II team, and you have a higher overall investment into the players in 2022. If Chofis leaves after June, additional cap, budget, and a roster spot (including an international spot) will likely be available for the summer window for further improvements.
Conclusion
Money does not guarantee or even correlate to team success in today’s Major League Soccer and hasn’t in several years. Smarter teams get the right players with the right production without overpaying on players that are good for PR but don’t result in a winning team. Maybe things will need to be different in order to compete with Liga MX in the Leagues Cup starting in 2023, but, for now, smarter = better until the data tells us otherwise.
I’m not saying the Quakes should not go sign a big-money DP. They potentially could once Chofis sheds the label or if that’s even necessary (depending on how the roster rules are interpreted).
What I am saying is that big-money DPs don’t correlate to guaranteed success on the pitch, and, in fact, they really haven’t correlated to success. Fans in the stands? Perhaps. Jersey sales? Probably. And what I’m also saying is that it’s important to not rush into it and have a miss, or this club will be set back another two or three years with the loss of valuable cap space.
So Fisher has given Leitch enough resources to be competitive? My answer is a definitive “maybe.” In the final article of this series, I’ll look at the complete roster Chris Leitch is giving to Matias Almeyda heading into the season, we’ll talk about Almeyda’s likely tactics to start the season, and I’ll let you know if the Earthquakes look like they will turn it around in 2022.