Tuesday, May 21, 2024

What Does Leo Messi’s Arrival Mean for MLS?

Veselin Trajkovic in Editorial, MLS 18 Jun 2023

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The future of Lionel Messi has finally been resolved. The drama around his Paris Saint-Germain exit has ended, as have the hopes of Barcelona having their arguably greatest icon ever back at the club, and the hopes of the Saudi Pro League of luring the seven-time Ballon d’Or winner to the Middle East with a financially lucrative offer.

The ranks of Inter Miami, the team sitting at the bottom of the Eastern Conference in the MLS, will shortly be boosted by the arrival of arguably the best player the world has seen in the last 15 years.

So how will Messi’s move to Florida impact the game in the USA?

Interest in MLS games goes through the roof

On June 24th, Inter Miami travel to Philadelphia to face Union at the Subaru Park, and the game between teams in fourth and 15th place, respectively, which one wouldn’t expect to generate too much interest, has been sold out.

The sudden interest in the match is probably the first of the many expected “Messi effects”. And what makes it bizzarre is the fact that the 35-year-old Argentinian superstar won’t even play in it – at the time of its kick-off, he will still officially be a PSG player as his contract with the Ligue 1 champions doesn’t not expire before the month is out. But it seems people are already keen to see the team that many believe will start climbing the table quickly through dazzling performances of a real soccer artist.

And if the Philadelphia game, which Messi won’t play in, is sold out, imagine what will happen when the Argentinian actually walks out onto the pitch wearing an Inter Miami shirt. With the 2026 World Cup looming closer, this is exactly what one of the co-hosting countries needs.

The interest is hardly a surprise. Some consider Messi the best player ever to play the game, and while those who had the privilege of watching the likes of Pele and Diego Armando Maradona may disagree, individual and team honors (seven Ballon d’Or awards, FIFA Player of the Year, 10 La Liga titles, two Ligue 1 titles, as well as the Copa America and World Cup trophies with Argentina), along with his 813 goals and 395 assists in 1050 matches played throughout an extremely successful career, surely make a case to be considered.

There’s no real need to tell anyone that this player, even at the age of 35, could have chosen to play anywhere in the world. So why Inter Miami, the team sitting at the bottom of its MLS conference?

Tax

Those who have been following Messi’s long career closely will be aware that the Argentina captain had issues with Spanish authorities over tax violations during his long spell with Barcelona. Other top names in various sports have chosen Florida as their place of residence in the past, and there’s obviously a reason for that.

Florida is considered an ideal location for top-earning athletes seeking a place to reside, train, and compete. One of the main advantages is that it does not impose a state individual income tax. Although this does not guarantee complete exemption from state income taxes for star athletes residing there, it significantly reduces their tax burden, especially if they are part of a Florida-based team. Generally, states with income taxes impose taxes based on both the individual’s residence and their work location. However, federal law prohibits two states from taxing the same income, so individuals who live in one state and work in another often have to file tax returns in both states, receiving a credit in their home state for taxes paid or withheld in the state of employment.

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For athletes, this can become complicated and consequential. While some states have provisions that exempt individuals from taxation if they spend a limited time within the state, usually 30 days or less, these rules generally do not apply to professional athletes, who are subject to taxation wherever they compete. Additionally, it’s worth noting that state income taxes, along with federal income taxes, are applicable to foreign nonresidents participating in sports in the United States.

This situation, sometimes referred to as the “jock tax,” means that athletes can be subject to taxation based on their residence, practice location, and competition venue. Each state determines its tax claim based on the percentage of time a player spends within its borders, although the precise calculation methods have been the subject of legal disputes. However, one thing remains clear: any day that a player like Messi spends training, competing, or simply residing in Florida, they can enjoy the benefit of not having to worry about state income taxes. It is worth noting that five states do not impose jock taxes due to their lack of a state income tax: Nevada, Tennessee, Texas, Washington, and, you know it – Florida.

Commercial impact

Messi’s imminent arrival to Inter Miami, partly owned by former Manchester United star David Beckham, has been described as a “game changer” for the MLS, set to raise the profile of the league greatly. With that, of course, comes the increase in value not only for Inter, but other American clubs as well.

Meanwhile, according to reports, the agreement between Messi, Inter Miami, and the MLS is said to incorporate various revenue-sharing components. One aspect involves a percentage of the revenue generated from new subscribers to Apple’s MLS package. Additionally, Messi is expected to receive a portion of the profits derived from the club’s apparel partner, which happens to be Adidas – a brand that has been his long-time sponsor.

Similar to Beckham, when he joined the MLS in 2007, Messi is rumored to be granted the opportunity to own a new MLS franchise in the future. This option would potentially enable him to extend his involvement in the league beyond his playing career.

For the fans of the MLS, exciting times are ahead.

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ABOUT THE AUTHOR

Veselin Trajkovic


Vesko is a football writer that likes to observe the game for what it is, focusing on teams, players and their roles, formations, tactics, rather than stats. He follows the English Premier League closely, Liverpool FC in particular. His articles have been published on seven different football blogs.

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