How Philadelphia Union’s record-setting MLS rampage was built

Before he owned the Philadelphia Union, Jay Sugarman made his fortune by founding and running iStar, a commercial real estate company with billions of dollars worth of holdings.

The firm finances real estate deals, conceives and completes major lease agreements and develops its own properties, all while trying to project a whip smart image. iStar, the company writes on its website, “has always been about understanding where the inefficiencies lie and where gaps in the market exist,” then “creating solutions to help fill those gaps.”

Sugarman has organized his MLS outfit around those same principles. Philadelphia has never spent all that much on players, but there probably isn’t another team in the league that has done a better job of identifying and exploiting market inefficiencies than the Union over the last few years. That’s now paying off to incredible effect.

After winning the Supporters’ Shield in 2020 and finishing second in the East in 2021, the Union now lead the MLS standings by three points heading into the final few weeks of the regular season (though they have played one more game than second-place LAFC). They’ve been on an historic tear for the past couple of months, posting a 11-2-0 record and outscoring their opponents 46-9 in their last 13 regular season matches. Only 10 other teams in the league have scored 46 goals all season.

Some more incredible stats:

• The Union have won four games by six or more goals since July 8. No other team has won four games by six or more goals in MLS history. That’s not a single season stat. No other team in the 26-plus season history of MLS has won more than three games in their entire history by six or more goals. Philadelphia managed that in the last two months.
• If the season ended today, their +46 goal difference would be the second-best in league history. The all-time league record of +48 set by LAFC in 2019 is very much in play.
• The Union are giving up 0.71 goals per game. The best MLS single season goals against per game mark is 0.67 set by Real Salt Lake in 2010, when the season was only 30 matches. If the Union concede zero goals in their final three matches, they’ll break that record. As long as they concede fewer than five goals in their final three games, they’ll break the 34-game record of 27 goals conceded set by Sporting Kansas City in 2014.
• They’ve won their last five matches by a combined margin of 23-2. Their 23 goals in that stretch are the most goals scored by any team in MLS history in a five-game span.

A quick glance at their 10-game rolling average of expected goals for and against is impressive in its own right. The Union have been outpacing their opponents by a wide margin in the metric all season. Clearly, Philadelphia is no fluke.

What’s more, they’re doing all this with the 19th-highest payroll in the league, according to data released by the MLS Players Association this spring. And it’s not as if they’re spending on transfer fees, either. According to information compiled by TransferMarkt, Philadelphia has shelled out a grand total of $6.41 million for the six players on their current roster whose acquisitions necessitated transfer fees. The most expensive fee they’ve ever paid is the $2.8 million they spent to sign striker Mikael Uhre this winter. The notoriously thrifty San Jose Earthquakes are the only team whose record signing came with a smaller fee. Seventeen MLS teams have paid fees of more than $2.8 million just since the start of the summer of 2021. Atlanta United by themselves have paid at least that for eight different players in the last three seasons alone, according to TransferMarkt.

In fact, in the history of the club, TransferMarkt lists the Union as spending just $10.66 million in transfer fees on 11 players. That number would barely crack the top-10 of most expensive transfer fees paid for individual players in MLS history. For an entire club, it’s an absolute pittance.

There are a number of reasons why the Union have been able to succeed despite this low level of spending, many of which fit right in line with iStar’s credo of understanding market inefficiencies, and creating solutions.

The club declined to make Sugarman, head coach Jim Curtin or sporting director Ernst Tanner available to discuss any of those reasons, but sources in and around the organization explained some in conversations with The Athletic in recent days.

Development

A lot of MLS teams are putting resources into their academies these days, but the Union were among the first to really lean into the idea. Minority owner Richie Graham spearheaded their efforts in 2013 by opening the YSC Academy, a Union-affiliated private secondary school attended by a number of the club’s top youth players. Nutrition, sports science and the club’s organizational identity are all points of emphasis at the school, the main campus of which is located across the street from the fields where the Union’s youth teams train in Wayne, Penn.

“We’re investing with the model we believe is going to bring us sustainable, long-term success,” Graham told The Athletic in 2018. “We’re putting a lot into it. And we’re confident it’s going to create an environment that’s unique.”

It has — and it’s also produced results. U.S. men’s national team and Leeds United attacker Brenden Aaronson is a product of the Union academy, as is World Cup hopeful and Genk center back Mark McKenzie. Both players made the MLS Best XI when the Union claimed the Supporters’ Shield in 2020, then were sold to European clubs for a combined sum that netted out around $15 million. Homegrown right back Nathan Harriel is playing a major role for the team this season; midfielder Jack McGlynn has been excellent over the last couple of months; fellow academy products Paxten Aaronson and Quinn Sullivan have both impressed at various points over the last couple of years. Aaronson, McGlynn, Sullivan and 18-year-old center back Brandan Craig all starred for the U.S. during their run to the Under-20 CONCACAF Championship title earlier this summer.

Academy graduates aren’t the only players who have developed in Philadelphia. Curtin and his coaching staff have also done a nice job with draft picks Andre Blake, the No. 1 overall selection in 2014 who has long been one of the top goalkeepers in the league, and Jack Elliott, a 2017 fourth-round pick who has become one of the top center backs in MLS over the last couple of seasons.

Homegrown players and draft picks are perhaps the best embodiment of a market inefficiency in MLS — with good selection and development they have the potential to be economic cheat codes. Essentially all of them begin their careers on either the supplemental or reserve rosters, meaning their salaries don’t count towards their team’s budget. If they’re contributing to the first team on those initial deals, their clubs can spend at the bottom of the league and still compete. If they’re starring like Aaronson and McKenzie did in 2020, their teams can more easily aim for trophies while operating with a small budget.

Those players remain good value even after they move off their initial, cheaper contracts. Blake ($869,375) and Elliot ($793,750) are now two of the higher-paid players on the Union, but they’re still performing well relative to where their salaries rank among their MLS peers, and Philadelphia didn’t have to pay a fee to acquire either of them. Fees not only can be cost-prohibitive for the Union ownership group, but they also add to a player’s salary budget charge, which limits what teams can do with the rest of their roster.

Recruitment

It’s not just homegrowns and draftees that drive the Union. They’ve also had a remarkable amount of success in the international market, consistently making signings who significantly outperform their initial contracts with the club.

That starts with their defined playing style, something that many MLS teams have a hard time building.  Though they’re the highest scoring team in the league this season, the Union possess the ball just 43.6 percent of the time. That’s the third-lowest mark in the league, according to FBref’s StatsBomb data. They’ve added a bit of flair and increased ability to keep the ball as this season has developed, but their most effective method of attack this year has been to try to turn teams over in dangerous positions and hit them while they’re still unbalanced, often through MVP candidate Daniel Gazdag, who has 19 goals and nine assists in 31 matches this season.

Having a clear style has allowed the Union to create crystalline player profiles. Those profiles obviously vary by position, but, broadly, most call for players to be direct when on the ball, supremely fit and aggressive with their pressing and tackling.

Tanner and his staff recruit to those profiles. Analytics, another area undervalued by many MLS teams, plays a real role in their evaluations. Director of analysis Dean Costalas has designed a formula that spits out a number that the club calls “Philadelphia Union Value” — PUV for short. The formula weighs characteristics that the club deems as important to their system of play higher than those they view as secondary, allowing the club to easily measure large swaths of players based on how well the data shows they’ll fit their system.

The Union know they don’t really have the budget to sign players from big European leagues or from markets like Mexico or Argentina, where a handful of other MLS teams have spent huge sums in recent years. Instead, they focus their energies further afield. Gazdag arrived from Budapest Honved, which had just finished in 10th in the 12-team Hungarian top-flight when he arrived. Defensive midfielder Jose Martinez came from a Venezuelan club for a low fee and salary; his contract remains one of the best values in all of MLS. Center back Jakob Glesnes signed from a mid-table Norwegian club. Even Uhre, the club’s record signing, came from the Danish Superliga, a decidedly mid-tier European circuit. Data was beneficial in identifying all four of those players as targets.

The Union have also been opportunistic. Tanner, who spent much of his career working for teams in his native Germany before he signed on with the Union in October 2018, took advantage of his own network to pluck Kai Wagner out of the German third-division, sign Leon Flach from 2. Bundesliga side St. Pauli and acquire current Chicago striker Kacper Przybylko, who couldn’t find a team in Germany and was a free agent at the time he joined Philadelphia. All were signed to extremely team-friendly contracts.

After failing to get over the hump in 2020 and 2021, the Union got a little ruthless with their striker corps. Tanner flipped Przybylko to Chicago this winter in exchange for $1.15 million in general allocation money (GAM), then later used some of that money to land forward Julian Carranza from Inter Miami. The Argentine was a steal. Philadelphia capitalized on the sanctions MLS slapped on Miami to nab him on loan in exchange for a second-round draft pick in December, then exercised an option to fully acquire the 22-year-old for $500,000 in GAM in July. With Carranza sitting on 14 goals and nine assists in 28 appearances this season, that move looks like one of the best in recent MLS history. Carranza, who Miami paid a $6 million transfer fee to sign in 2019, likely could have been had by anyone in the league.

With Carranza and Uhre thriving atop the attack, Philadelphia traded another forward, Sergio Santos, to FC Cincinnati in July for $300,000 in guaranteed GAM and $625,000 in conditional GAM depending on if certain conditions are met. The Union don’t necessarily need a ton of GAM to buy down players’ budget charges, but that money could be valuable in acquiring players in future trades. No matter what they do with it, it’s good business. Philadelphia upgraded their forward line and got good value back.

It can sometimes get lost in all the deserved praise around their academy, but the Union haven’t done this entirely with young players. Rarely do they play more than two or three homegrowns at a time; the rest of their team mostly consists of established pros led by 35-year-old captain Alejandro Bedoya. That kind of blend is helpful to get good results.

Sources around the club say that the low budget has bred an attitude that has helped the Union over the years. People at all levels of the organization understand that they can’t throw money at problems in the same way that teams like Toronto or Atlanta can, which has motivated them to be very careful and calculated in how they proceed. It’s also bred a legitimate us-against-the-world mindset in the locker room, which, trite or not, sometimes provides real boosts to teams down the stretch.

Stability

In order for a club to compete at the level the Union have over the last three seasons while spending near the bottom of the league, executives, coaches and players all need to punch above their weight. That’s damn near impossible to do without the clear vision that has been established and executed on in Philadelphia over the years. Other key figures like former sporting director Earnie Stewart, ex-technical director Chris Albright and former assistant coach Pat Noonan have since moved on to bigger roles at other organizations, but Curtin, Tanner and others have built a positive culture, stacked success on top of success and kept the overall philosophy the same in Philadelphia.

That continuity wasn’t a given — particularly with Curtin. He had a lot of developing to do when he took over as head coach after John Hackworth was fired midway through the 2014 season. There were a couple of occasions when Sugarman could’ve justifiably changed directions.

That he didn’t was once seen as a mark against the Union, a sign that the club didn’t care as much about winning as it should. Same with the club’s emphasis on developing young players over spending more money to sign established stars. The critique about a lack of ambition probably has a degree of truth to it, but it’s undeniable that the Union’s unwavering commitment to their people and their processes have produced positive outcomes. Curtin is now one of the best coaches in MLS. The Union’s dedication to development has helped foster a positive environment in the locker room, produced strong results on the field and created millions in revenue. Even the comparatively low amount the club spends on its first team has probably helped create a culture where efficiency is thought of as more important than it is at other MLS clubs.

That’s the paradox with the Union. The same things that people have dinged them for over the years have, with time, effort, skill and luck, helped turn them into one of the best (and, from an economic perspective, likely one of the most sustainable) teams in MLS.

Could they be more? Absolutely. Philadelphia is thought of as an underdog city, but it’s one of the biggest markets in North America. The Sixers and Phillies behave as such; they have two of the largest payrolls in their respective leagues. The Union, conversely, don’t put as much into their team as most other clubs in MLS. Sugarman, it should be pointed out, doesn’t appear to have the same kind of net worth as many other owners in MLS. It’d be nice for Philadelphia fans if that were different, but the Union have still succeeded in spite of it. They’ve found market inefficiencies and executed at a very high level, but their margin for error is far slimmer than it is for clubs with bigger budgets. They have a good shot to claim the Shield and look like one of two or three leading contenders to win MLS Cup, but that might catch up to them at some point down the road.

(Top photo: Mitchell Leff / USA TODAY Sports)