MLS CBA gives players big wins with salary and free agency, but league still holds the power
Rare is the negotiation where both parties walk away feeling pleased with the outcome, but such is the case with Thursday's announcement of a new collective bargaining agreement between MLS and the MLS Players Association. The good vibes don't appear to be simply due to the release of tension that comes with reaching an agreement, either. The deal was struck with over three weeks to go until the start of the regular season, speaking to the general satisfaction of both parties. The fact that discussions started two years ago helped lay the foundation for agreeing on a deal.
"This agreement addresses key strategic priorities for the league and our players while also retaining the basic player compensation structure that has been the foundation for the growth and stability of Major League Soccer," said MLS commissioner Don Garber.
"We got a deal that's going to significantly change what it means to be an MLS player, and lead us into the future," added MLSPA executive director Bob Foose. "We're thrilled with that."
That's a far cry from the mood five years ago during the last negotiations. Back then, the two sides hashed out their last CBA just days before the start of the campaign with the help of a mediator. At the time, the MLSPA received huge criticism (even from its own players) for not extracting a better deal. That sentiment was rammed home when the league unilaterally imposed new salary restrictions that same year and introduced Targeted Allocation Money (TAM) in a bid to attract players with salaries just under the Designated Player threshold.
The MLSPA and the rank and file seemed to have learned from that experience. The preparation, from more sustained outreach toward the league's foreign players to better communication regarding the MLSPA's objectives, was more thorough. MLS seemed to learn some lessons as well in terms of working with the union, perhaps seeing that there was little to be gained from simply imposing its will. The relationship between the MLSPA and the league seems less adversarial now, more of a partnership than in years past.
"We were able to iron things out things that were important to players that maybe we didn't get in 2015," said MLSPA executive board member and Minnesota United midfielder Ethan Finlay. "This agreement represents broad progress for all players, and that's something that wasn't quite solved in 2015."
The MLSPA appeared to get much, though not all, of what it wanted. Not only is there more money for the players, but their ability to compete for it has increased. There are now two main salary budget buckets of Guaranteed Spend (salary budget and General Allocation Money, with TAM converted into the latter) and Discretionary Spend (Designated Players, discretionary TAM, and investment in a still-to-be-hashed-out U-22 player initiative). What this means is that players will be able to compete for a greater share of the salary pie that had previously gone only to TAM players making between roughly $540,000 and $1.5 million.
There's good news for young players, too. Players at the bottom end of the pay scale -- those on what are called "senior minimum" and "reserve minimum" contracts -- saw their wages improve, with senior minimum contracts escalating from $70,250 in 2019 to $109,200 in 2024 and reserve minimum contracts increasing from $56,250 to $85,502. Senior minimum players are also eligible for performance-based bonuses (capped at $35,000) where they hadn't been previously.
"We are getting to the point where even in our very expensive cities, every player is able to make enough money to live well," said Foose.
The improved bonus structure in particular makes for more of a meritocracy among the players, where performance matters more for those lower wage-earners than it did in the past. This had been a fundamental plank of the MLSPA's platform and was one of the last aspects of this CBA to be negotiated.
Perhaps more critically, the league will no longer be able to impose future mechanisms like TAM unilaterally; instead, they must consult the MLSPA first. Also, players received guarantees from the league that it will add additional money to the salary budget and GAM based on the next media rights deal, which begins in 2023. Getting 25% of the difference between the new and old deals, plus $100m, ensures players will benefit from MLS growth.
The fact that the CBA terms ends before the 2026 World Cup, which is being co-hosted by Canada, Mexico and the U.S., is an underrated boost for the players, as it should position the MLSPA to take advantage of what is expected to be an acceleration of revenues ahead of that tournament.
Freedom of movement also received a boost, with relaxed eligibility requirements that have gone from 28 years of age and eight years of service to 24 and five. Designated players, who previously hadn't been able to take part in free agency, now can.
"More so than then free agents changing teams, what we will see is a significant change in how players interact with their current teams when they re-sign deals, and how they are able to negotiate those deals," said Foose.
The improvements perhaps cast that 2015 CBA in a different light. While considerable money was left on the table, the ability to crack open the free-agency door proved to be a significant shift. Over a quarter of the league's players will now be able to take part in free agency when their contracts expire, as opposed to just 11.5% before this CBA.
So is there any vindication for those who negotiated that deal?
"I do feel like when you step back and you look at this deal now, and how it relates to the last deal, I think they go hand in hand," said MLSPA executive board member and Atlanta United midfielder Jeff Larentowicz. "I think we feel like maybe the heat that we took ... we weren't going to see the fruits of our labor until now. I think that we see it here. Obviously, it's not perfect, but I think that where we are now is a much better spot because of 2015."
So where did the players lose out? The free-agency terms could always be better, and the continued presence of TAM still rankles. "We would have loved to have gotten rid of [TAM] entirely," said Foose. "I would say, the complexity and the transparency of the league, that's probably one of the areas where we came up a little shorter than we would have hoped. We will keep fighting that fight."
It's worth noting MLS got some wins of their own. The league still has control over where a large chunk of its salary budget gets spent. By and large, bidding wars over players will still be avoided in most cases.
One big question is the extent to which the deal might force those owners who have been reluctant to spend in the past to open up the checkbook more. The fact that the teams are allowed to book eight charter flights (but no more than eight) in 2020 hints that there remains some reluctance to spend more in order to improve the league. But there also appear to be enough owners now willing to push the financial envelope -- from Atlanta to LAFC to Seattle to Portland -- and those teams recognize that capturing a bigger audience depends on continuing to increase spending.
So what's next? The players must still ratify the agreement. The same is true for the MLS Board of Governors, though both processes are expected to be drama-free. For once, the same could be said of the negotiations.