Relegation System in Major League Soccer - Term Paper Example

 Relegation System in Major League Soccer Abstract In the field of sports, relegation and promotion is the process through which few teams get demoted and few gets promoted. In other words divisional transfer takes place based on the performance of the teams. The best positioned teams of the lower division gets a promotion to play in the upper division, while on the other hand below position teams of the upper division gets relegated into the second division. This system continues through all the levels or division, with the primary aim of uplifting new teams to the upper levels. Thus, relegation is essential for the progression of a new team. The report will present a brief overview of the Major League Soccer (MLS) and also insights about its rules and regulations. The report will also highlight about the internal and external environments of MLS. In that process SWOT analysis and PESTLE analysis will be used as the tool. Apart from that the report will also offer various strategic options for the purpose of developing a well defined relegation system. Among the various strategic options the most suitable strategic intent will be chosen. The chosen intent will then be used to formulate the relegation system in MLS. Major League Soccer Major League Soccer or what is popularly known as MLS is the official soccer league of United States of America. The tournament is endorsed by United States Soccer Federation (U.S. Soccer) and Don Garber is its present commissioner (MLS soccer, n.d.). Major League Soccer (MLS) was started in the year of 1993; however the first session of competition was staged in the year 1996 with just10 teams. The teams were owned by the franchisees and is operated and functioned by its stakeholders. The present format of MLS has 19 teams who play with each other on a home-away basis. Among the 19 teams, 16 are from US and the other 3 teams are from Canada. Some of the noticeable teams of the tournament include LA Galaxy, Montreal Impact, Toronto FC Dallas and Real Salt Lake among many others (MLS soccer, n.d.). The first season of the tournament witnessed record attendance however it felt below the expected level from the next season onwards. People started to lose interest on soccer as other sports such as baseball, basketball took the elite positions. The condition revived when players such as David Beckham, Cuauhtemoc Blanco joined the league as players of respective teams (Dure, 2010, p.xvi). The primary rational behind the commencement of MLS was to strengthen the national football team of US. Nonetheless the quality of the league was on doubt, when USA was eliminated from the opening stages in the 1998 soccer world cup. Apart from that, 1994 Soccer world cup that was staged in US was also another reason. The professional league helped the country to bid for the tournament. Formulation of Mission and Vision statements Mission and vision statements are important for running a venture. Also in case of MLS mission and vision statements, holds an important position. MLS was started in the year 1993 for the purpose of establishing a particular objective. Moreover in order to achieve the objective one needs to have clear vision of the future. While on the other hand a mission statement is being used to describe the purposes or aims of the new association. Hence it can be justified that mission and vision statement plays an indispensable role. The newly developed mission and vision statement for MLS are formulated below. Mission Statement To offer the country with new talents in football and also to encourage upcoming talents in the field of soccer. To enthuse the world of sports lovers by showcasing highest quality of entertainment. Vision Statement ‘We propose to offer our stakeholders with the best experience from the inception, with quality, entertainment, skills and innovation’. Stakeholder Analysis An association consists of population and heavily depends on them towards the attainment of objective. These populations are also known as stakeholders. Stakeholders are the individuals, group of individual or organizations who are directly or indirectly attached with the association. They plays central role towards its success. MLS also has a number of stakeholders to deal with. The stakeholders group includes players, owners of the franchisees, follower or supporters, sponsors and other associated members. They hold the power to influence the decision of the association. Therefore it becomes necessary for MLS to maintain a cordial relationship with the stakeholders. Internal and External Assessment SWOT Analysis SWOT analysis is about assessing the internal strengths, weaknesses and external opportunities and threats (IHS, n.d.). Thus SWOT analysis plays an indispensible role towards the formulation of a strategy. It provides insights about the internal resources and how those resources can be utilized to make use of the external resources. The four factors of SWOT are presented below:- Strengths: - MLS is getting increased popularity in the recent past. Especially after the joining of star players such as David Beckham, Blanco, Thierry Henry and Donovan; the popularity of the league skyrocketed. Most importantly MLS has been able to connect with the target segment of age 15-40. This will also help the League to draw investors. Apart from that MLS has a blend of cultures. The club official brings players from different parts of the world, and thus enhances its reach. For instance in the year 2010 Kansan city Wizard the famous club from MLS, had signed Sunil Chetri an Indian footballer. This depicts how MLS is spreading its wings. The biggest strength of MLS lies in its brand value. The league is considered as one of the richest league after the European leagues such as English Premier League and Spanish League. The media attention also gets a mark. Media has helped to develop huge amount of awareness in the minds of the followers. Also soccer is the most popular as well as populous game of the earth, which helped MLS to get easy acceptance in the sporting field. Channels such as Fox soccer plus, ESPN, GolTV, Sky sports broadcast the event, which gives an additional strength to the tournament. Moreover availability of superfast internet has allowed to the organizers to broadcast live actions through various media hosting websites. Weaknesses: - Since MLS is a domestic tournament, it is vulnerable to lose popularity with the lack of required resources. Furthermore lack of star players is an area of concern for the tournament. There are only few players who act as crowd pullers. In the context of foreign players’ category, it has to depend on the third world countries. Most of the renowned players from Europe or South America play for European clubs. The money offered as well as the popularity of football is quite high in Europe as compared to USA. Other weaknesses in the form of developing infrastructure, lack of specialized coaches and players creates weakness for the tournament. Apart from that media only promotes the tournament within the country, but it needs global promotion. Opportunities: - MLS has the opportunity to make its mark in front of the world. The tournament can certainly boost its legacy by adopting and incorporating some innovative actions into the format. For example if it adds a golden goal rule for the last 5 matches of the tournament will help in serving the purpose. Apart from that, it holds the opportunity to sign star players by offering lump sum amount of money. However, signing star players depends upon the investors and not the organizing committee. It can make rules such as a club has to sign a world cupper into its squad. This will add more value. Furthermore, prize money and coverage can be also increased to draw investors into it. Threats: - Consistent supremacy of basketball, baseball and American football is the biggest threat of the League. Rehabilitated expansion of international hockey also possessed threat for the tournament. In the international scenario other tournaments of different sports are affecting its popularity. Tournaments such as English Premier League, Spanish League, Wimbledon, English County Cricket and the recent cricketing buzz Indian Premier League (IPL) poses massive threat. Apart from that threats can be in also in the form of less investment of the stakeholders. If the investors do not get their Return on Investment (ROI), they will hinder further investment. PEST Analysis A PEST analysis is carried out to assess the external environment associated with the venture (Henry, 2008, p.51). It is a strategic tool for the assessment of various factors such as social, economical, political and technological. MLS has its origin in the USA. Hence a comprehensive analysis of USA will be carried out to identify the impacts of these factors in the MLS. Political: - The political aspect of PEST analysis gives us information regarding the political scenario of the country. The political factor also represents the current political stability of the country. USA is considered as the most powerful country of the world in terms of its economy, armed forces and other aspects. USA has substantial influence on the global economy. USA has a well defined environmental regulations and protection act. It helps the country to preserve the environment. Apart from that it also has structure policies for Tax. It collects tax from the custom duties and sales taxes. Economic: - It includes the issues like the economic stability of a country, the level of income, and other economical factors. US have a mixed, capitalist economy, which is run by the presence of superior infrastructure, natural resources and high amount of productivity. International Monitory Fund stated that the U.S. has a GDP of $14.870 trillion which is about 24% of the global GDP. Hence USA has a stable economic situation. Apart from that disposable income among the US citizens are also high, therefore it gives MLS an opportunity to sell large number of tickets. Social: - Social factors play a major role for an association to commence and run its venture. The social factors include trends in demographics such as population size, age, cultural factors and consumer activities. The total area of USA is close to 1.9 billion acres. Apart from that USA also has cultural diversity. It is a home of various racial groups. Technological: - Technological factor analyzes the technical infrastructure of a country such as information system, electronic data exchange and management information system. It also includes rate of new product development, increase in process automation and impact of internet on human being. USA ranks among the top technically developed countries. It develops a number technical consumer goods and gadgets. Some of the biggest technological companies have their headquarters in the US. Apple, Microsoft, Intel and Google are some of the technical giants. Hence it can be concluded that USA has well developed technical infrastructure. Strategic Options Strategic options are the alternative courses of action, developed for various external issues (MDF, 2005). After comprehensively analyzing the internal and external environment of MLS, it has now become possible to generate the strategic options. The rationale of this section is to develop and analyze the possible strategic options. The intention or aim is to offer a various options for the purpose of evaluating the relegation system of MLS. Its aim is also to remain consistent with the objective and vision. Hence in the context of this study it has been proposed that 3 strategic options will be developed to serve the purpose. Apart from that the options need to be realistic (Caerphilly, 2009). The strategic option will be based on the scenario planning as differentiation and cost strategy do not hold relevance to the topic. Issue Relegation system of MLS: The intention is to develop a logical and realistic relegation system in Major league soccer. MLS consists of 19 teams, divided into two group namely western conference and eastern conference (MLS soccer, n.d.). Among the 19 teams based on the point 5 teams from each group qualifies for the play-offs to win the title. Presently there no rule defined regarding the relegations, as the teams are operated through franchisees. Therefore options will be provided for developing a logical relegation system. Moreover a relegation system will also increase the level of competition among the franchisees, and they will spend more for signing better players and coaches to circumvent relegation. In this aspect, it is assumed that the relegation will be faced by 2 teams and consequently 2 teams from the 2nd division will be promoted to play in the MLS premier division. Again since it is a franchisee based tournament, it is recommended that MLS must appoint 6 more franchisees to compete in the second division. The options Option 1:- Relegation based on performance The relegation will occur based on the performances of the teams who fails to qualify for the play offs. Hence the remaining 9 teams will be evaluated for the purpose of relegation. The evaluation will be based upon the performance or in other words the number of goals for and against the team. Based on that a goal difference will be calculated and the two teams with lowest score will be eliminated. Calculation of goal difference = (Goal scored for Team A – Goal score against team A). Option 2:- Relegation based on points The relegation will take place based on the number of point the team achieved throughout the season. Again the relegation will be for those teams who fail to qualify for the play-offs. The two teams with the lowest points in their respective groups will be eliminated from the league. However it may also happen that from the eastern conference two teams get eliminated. In other words sheer points will e taken as the evaluation criteria. Now since the numbers of teams are different i.e. 9 and 10, proportionate points or average points will be used for getting the result. For example if in group A has team XYZ has played 24 games and secured 48 points, its average score will be 2. While a team WWY from group B has played 28 games and scored 51 points, its average score will be 1.82. Hence team WWY will be relegated. Option 3:- Relegation based on final qualification. This relegation system will be based upon the final playoff between the last 9 teams. As the 9 teams fails to qualify for the play-offs, they are required to again appear for the title ‘save the relegation’. In this format, one team with highest point among them will be automatically saved. Further the remaining 8 teams have to appear for the short race. It will be a on a random selection where one team has to play with two opponents and at the end two with lowest score gets eliminated. Evaluating and Selecting Strategic Intents Now from the aforementioned options one option needs to be selected for the purpose of formulating the relegation system. Factors such as business valuation, financial assessments need to be carried out. However such factors will generate complexity and since the study is based on a sports tournament, these factors must be neglected. Only performance should be the evaluation criteria. It may happen that MLS may lose some sponsors or investors, for the relegation of a specific team, but such factors needs to be considered. To remain fare in all aspects should be the motto of the league. Now for the available strategic options, Relegation based on points has been chosen as the strategic intent. The primary reason for its selection is the simplified rule. Since points will become vital at the end, teams will also take every game seriously. This will also ensure enhanced competition. While the other two options has complexity in nature and may raise controversies. The third option also elongates the tournament, which may have bad impact on the stakeholders. Thus option 2 has been chosen as the relegation criteria. Integrating Action Plan The strategic objective in this context is to identify the possible relegation plan for the tournament. In this SMART approach will be followed. It states that the objectives must be specific, achievable, realistic, time bound as well as measurable. All the aforementioned factors have been taken into account while formulating the strategic options. The chosen relegation system is in accordance with measurable characteristics, time specified as well as realistic. The action plan can be divided into three phases. The first phase is to identify the objectives; the next phase is about evaluating the task in a detailed manner and formulating the strategic options. The final step is to check with the available resources. The next step will highlight the implementation process. Implementation The newly formed relegation system can be implemented by incorporating the system within the rules and regulations of the system. However in order to avoid the controversies, the communication strategy needs to be sound. Certain steps need to follow when implementing the relegation system. The first thing is to ensure all the franchisee owners are agreed with the newly formed relegation system. They must provide a no objection certificate to the organizers. The handout of the tournament should clearly mention about the relegation system. The communication can be done through print and broadcasting media. The organizers must provide a hand book of all the rules and regulations to the press media and broadcasting. During any controversies in the future, it can be used for clarification. Monitoring Monitoring process in this aspect is simple. Persons who maintain the points table, team standings etc. will hold the responsibility for monitoring the relegation process. They will ensure the bottom teams get relegated and the top teams of the second division join the premier division. Table of Contents Stakeholder Analysis 3 Internal and External Assessment 3 SWOT Analysis 3 PEST Analysis 6 Strategic Options 7 Evaluating and Selecting Strategic Intents 9 Integrating Action Plan 10 Implementation 10 Monitoring 11 11 Table of Contents 12 References 13 Bibliography 14 References Caerphilly. (2009). The Local Development Plan for Newport: Your Community, Your Plan. Retrieved from http://www.caerphilly.gov.uk/pdf/Environment_Planning/LDP-Examination-Documents/W81-Newport-Strategic-Options.pdf. Dure, B. (2010). Long-Range Goals: The Success Story of Major League Soccer. Washington: Potomac Books, Inc. Henry, A. (2008). Understanding Strategic Management. Oxford: Oxford University Press. IHS. (No Date). Practice Assessment Using SWOT Analysis. Retrieved from http://ihsinfo.org/IhsV2/hearing_professional/2003/050_September-October/020_Practice_Assessment_Using_SWOT_Analysis.cfm. MDF. (2005). MDF Tool: Strategic Options. Retrieved from http://www.toolkitsportdevelopment.org/html/resources/9E/9EB316CD-083E-4C09-B7A5-E22DEA312F05/06%20Strategic%20Options.pdf. MLS soccer. (No Date). Clubs. Retrieved from http://www.mlssoccer.com/clubs. MLS soccer. (No Date). Competition Rules and Regulations. Retrieved from http://pressbox.mlssoccer.com/content/competition-rules-and-regulations. MLS soccer. (No Date). MLS Executives. Retrieved from http://www.mlssoccer.com/executives. Bibliography Markovits, A. S., & Hellerman, S. L. (2001). Offside: Soccer and American Exceptionalism. New Jersey: Princeton University Press. Rosner, S., & Shropshire, K. L. (2011). The Business of Sports (2nd ed.). Burlington: Jones & Bartlett Publishers. Read More