The Designated Player Policy Rule and Attendance Demand in Major League Soccer.

This article investigates the impact of Major League Soccer’s (MLS) designated player (DP) rule—introduced in 2007 to attract star talent—on match-day attendance using a difference-in-difference estimation strategy. Contrary to earlier studies suggesting that DPs increased attendance, the analysis finds no statistically significant overall effect when controlling for fixture and time fixed effects, though a positive attendance effect emerges when focusing solely on international DPs. The findings imply that while international DPs may boost attendance, the policy’s high costs raise questions about its financial viability, especially given that 80% of MLS revenue derives from match-day income. The study highlights important considerations for MLS policymakers, particularly as the league contemplates reducing the number of DPs per club and emphasizes the need to carefully select DPs to maximize attendance benefits.