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Atlanta United’s ambitious signing of Ezequiel Barco will only matter if other MLS clubs step up too

This is not a big moment in MLS history unless 22 other owners want to match Atlanta’s ambition.

Flamengo v Independiente - Copa CONMEBOL Sudamericana 2017 Final Photo by Buda Mendes/Getty Images

Ezequiel Barco is certainly the most impressive signing in MLS history. His $15 million transfer fee is a league record, and it’s stunning that Atlanta United was able to convince an 18-year-old who’s starred for Argentina Under-20 to pick it over European suitors. But his capture will not signal a new era of MLS or set a new standard for ambitious buys unless its other 22 owners want it to.

Right now, Barco is just the league’s most impressive capture since Atlanta signed Paraguayan international Miguel Almiron. There is currently only one owner — Atlanta’s Arthur Blank — willing to make moves in the transfer market that would be considered daring by any kind of global standard. The rest of the owners in MLS continue to play it safe, keeping spending low while achieving slow, steady growth.

Between the signings of Almiron and Barco, eight other Designated Players under the age of 23 have been signed in MLS. The transfer fees for all eight of those players were under $5 million. No other team has spent even one-third as much as Atlanta in its big signings during the past year.

Based on their low spending on wages, MLS clubs should largely have plenty of spare cash to play around with in the market. Here are Forbes’ estimates of MLS clubs’ revenue in 2016, and here are the clubs’ total player payrolls from that same year complied by the Denver Post, based on salary data released by the MLS players’ union.*

According to UEFA, the average club spends about 44 percent of revenue on player salaries, and that’s not just a baseline percentage for rich clubs. Teams in League One — the third division of English football — can spend up to 60 percent of turnover on player-related wages, and many come close to that ceiling.

New York City FC, Toronto FC, and the Colorado Rapids are the only clubs that got to 44 percent of revenue spent on wages in 2016, according to those estimates. While revenue estimates for 2017 are not yet available, the Chicago Fire increased their spending on wages enough that they are likely now above this threshold as well.

Meanwhile, if the LA Galaxy paid three Designated Players the $7.16 million per year that the league’s highest earner, Kaká, made in 2016, it would still spend less than 44 percent of Forbes’ estimated revenue on player salaries.

Your favorite MLS club isn’t spending tens of millions less than Atlanta United because it doesn’t have any money. It’s doing so because it doesn’t want to take any kind of risk. Meanwhile, Blank is willing to put some cash on the line to improve his team and potentially make a large profit in the future.

It’s unsurprising that a group of conservative businesspeople wouldn’t want to get too deep into the transfer game. Players are a much more volatile investment than other things in sports because they’re people, and plenty of things can go wrong with people.

A team can get everything right with its scouting, analytics, and medical analysis, only for a player to get injured, or get homesick, or have a fight with the coaching staff. Any of these things could lead to a player performing poorly, causing his value to go down. But get it right, like Atlanta has so far with Almiron, and a club can double its initial outlay in less than a year.

MLS has added new and grown existing revenue streams considerably over the last decade while bringing in more wealthy owners. Most of the league’s clubs have the capacity to operate like Atlanta if they’re willing to take the risk. They have $15 million they could spend without bringing their clubs into financial peril even if their player purchases were disastrous. They choose not to.

Most MLS owners got into the game because it was a safe investment. There are clear exceptions, but not many. Between the growth of Soccer United Marketing, MLS expansion fees, sponsorships, and various other means of generating income, MLS clubs increase in value without putting much money into them, which is what makes them an attractive business proposition to many owners.

Blank messes with the program by choosing to invest in his business. Atlanta spends on scouts and data analysts to make sure it targets the right talent, then buys players and runs a large initial loss in the hopes of getting more money back down the line, much like any aggressive business in any sector.

Signing Barco will only be a big moment for MLS if a majority of its owners want it to be. Do MLS owners want to try to flip players like Barco for big profits and establish their league as the best bridge from South America to Europe, or is Atlanta out on its own? Right now, no other club is showing Atlanta’s level of ambition.

This is not yet a watershed moment for MLS. Right now, it is one club out on an island. A majority of teams seem content to spend just enough to keep fans from asking too many questions about where the money goes.