During the MLS offseason, there will be countless discussions about player signings and trades. There will be various drafts and other roster maneuverings as teams try to retool for next season.
Yet the biggest talks of all will involve every player from every team in the league. On Jan. 31, the existing collective bargaining agreement between MLS and the MLS Players Association will expire. The hope is that a new deal will be hashed out, and the two sides have actually been engaged in negotiations for the better part of the past year, but if an agreement can't be found before the start of the season, the league faces the prospect of a work stoppage.
What's at stake?
MLS has experienced considerable growth since the last CBA was hashed out in 2015. Heading into that campaign, the league had 20 teams. MLS will begin next season with 26, with another three set to join in the following two years. There has also been sizable investment made by owners, and not just in stadiums. Training facilities, once considered a luxury item, are now becoming ubiquitous. There has been greater investment in salaries as well, with the implementation of targeted allocation money (TAM) having the effect of increasing the salary budget for each team by $4 million a year. As such, according to Forbes, the average valuation of MLS teams has increased by 30% from 2017 to an average of $313 million.
Complicating the negotiations is the fact that the current media rights deal is set to expire at the end of 2022, meaning a new media deal will be approved in the middle of the term of the new CBA. It is expected that the next media rights deal will be multiples higher than the existing deal, which pays MLS $90 million a year. That figures to be a complicated topic to tackle, although that hasn't stopped the union from trying.
"We have made detailed proposals to the league on how to deal with that [media rights] issue," said MLSPA executive director Bob Foose.
For these reasons, a work stoppage of any kind would blunt this momentum, although to what degree obviously depends on its length.
What are the odds that there will be a work stoppage?
Historically, the union and the league have been able to avoid a work stoppage, although there have been close calls in the past, including the 2015 deal that was struck just days before the start of the regular season. Mediators were also needed to help the two sides hash out an agreement.
"The league isn't seeking to have a work stoppage, and based on the discussions we've been having with the union, we don't think they are either," said Mark Abbott, MLS president and deputy commissioner. "I think both we and the union are working in good faith to reach an agreement to extend the CBA. That being said, we certainly recognize that you can't eliminate entirely the possibility of work stoppage and we've been working with our teams over the course of the last year to ensure that they're prepared and that we're prepared in case that happened. Again, it's not something that we're seeking."
The MLSPA leadership has certainly made more noises about its willingness to go on strike, and has spoken of contingency plans players are making in case there is a work stoppage.
"We've been talking about and preparing for work stoppage for two and a half years now," Foose said. "At this point, talking about the details of what that would look like and how we would proceed, and how we would all work together, the players are very serious when they say they're ready to do what's best for the full player pool and the future of the [players' association] and the league."
A strike would see the MLSPA flying in the face of some serious headwinds, however. The fact remains that MLS' billionaire owners can withstand losing revenue to a much greater degree than the players can cope with missing paychecks. The latest annual filing from 2018 shows that the MLSPA has total assets of $10.5 million, a reflection of not only how relatively young the union is but also how low its salaries are compared with those of players in other North American sports.
By comparison, the National Basketball Players Association has total assets of more than $200 million. For the MLSPA, that $10.5 million would disappear pretty quickly in the face of an extended work stoppage. Foose stressed that union funds are not the only resource players can dip into should there be a work stoppage. The players have been preparing on their own as well.
"We obviously don't have the luxury that some of the other [players' associations] have with an extra zero in [their] resources," Foose told ESPN. "But we certainly have plenty of money to do what needs to be done on the [players' association] side of things."
All of that said, it behooves all involved to reach an agreement.
"We understand exactly where the business is, and I think we have a very good feel for where it's going," Foose said. "And we have no incentive to damage that."
"I think we were able to get a bit of a foundation [in late 2018], so going into 2019 we were further along on many issues than we ever had been," said executive board member Ethan Finlay. "But the process, it's still early."
So what are the chances that the two sides won't be able to come to an agreement and a work stoppage will interrupt MLS' 25th season? There is a 20% chance of that happening; both the league and the players have too much at stake to go down that road.
What's the timeline?
The CBA might expire on Jan. 31, but the real deadline will take place weeks later. The CONCACAF Champions League round of 16 begins in mid-February, and as long as there isn't a work stoppage, those games could go forward. The real deadline for a new CBA is the start of the MLS season, which will take place on the weekend of Feb. 29.
To hear the union tell it, the league has tended to take a long time to respond to proposals, so while there's a little more than two months to go until the CBA expires, time can get short in a hurry.
"If things don't move more quickly and [the league] takes the same approach that was taken the last time through, the odds of a stoppage skyrocket, so hopefully that won't be the case," Foose said. "A strategy to run out the clock is not going to be looked upon favorably by the player pool or the [players' association]."
What the MLSPA wants
The growth and investment of MLS has been noticed by the MLSPA, and it understandably is keen to carve out a bigger chunk for its members. But the union's core issues are centered less on total salary numbers and more on systemic changes such as freedom of movement and allowing the players a greater ability to compete for the league's dollars.
A greater degree of free agency is one of the union's goals. Although the union faced criticism in 2015 for not extracting more concessions from owners, one goal it did achieve was a limited form of free agency. As it stands, players who are at least 28 years old and who have played in the league at least eight years can be free agents when their contracts expire. They can also receive raises of only between 15% and 25%, depending on their salary level. The union wants the age and time of service threshold to be reduced and wants the cap on salary increases removed or at least raised considerably.
The MLSPA would also like to see the salary budget rules simplified. Although the union was pleased to see the league pump more money into player salaries during the existing CBA, the implementation of TAM grated in that it was money that was available only to players making a salary of between $530,000 and $1.5 million. That excludes a large chunk of the rank and file, who are shoehorned into senior, supplemental and reserve roster categories that limit what those players can make.
The union would also like to see the league allow its teams greater autonomy in terms of how they build their rosters, rather than have rules dictated by league headquarters.
"In the simplest terms, TAM is silly," Foose said. "It's not necessary to try and tell our front offices how to sign players; they're perfectly capable of doing that themselves. And frankly, if they're not, then they should suffer the consequences, and that's the kind of accountability that we want to see happen."
The union's stance is that simplifying the rules would lead to more of a meritocracy. Players' earnings would be a reflection of how they have performed on the field. It's worth noting that, according to salary data provided by the MLSPA, 37.4% of the players make annual salaries under $100,000.
The union also wants increased spending on charter flights. At present, the vast majority of teams fly commercially, which can lead to long travel days, especially when teams are flying through multiple time zones. This can hamper a player's physical recovery. Teams are allowed four discretionary charter flights a year, but there is no mandate that they have to use them. Philadelphia Union midfielder Alejandro Bedoya recalled how his team didn't use a single charter flight during the regular season. Foose added that, at the end of 2018, only about half of the available charter flights were used.
"It's unfortunate that this is discussed in a CBA context, because this isn't a CBA issue," Foose said. "It isn't in other sports and shouldn't be in ours. It is an infrastructure issue and is tied to player performance."
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It's difficult to imagine this being a "hill to die on" issue for the MLSPA, but Atlanta United midfielder Jeff Larentowicz said, "This is one piece of the pie for us, a very important piece, a commonsense piece, but one that we're taking very seriously."
What MLS wants
Broadly -- beyond avoiding a work stoppage -- MLS wants the same thing it always wants: a level of cost certainty as it pertains to player expenses. Its single-entity structure, whereby the player contracts are with the league rather than with individual teams, has helped achieve this to a large degree. This is especially true to the extent that in most instances teams retain the MLS rights of players even after that player has been transferred or his contract has expired.
But MLS also wants control over where that money goes. The introduction of TAM is proof of this, whereby it wanted its teams spending more on players within a specific salary range. The league feels that a program such as TAM has been successful, and MLS will want to retain that kind of discretion as to where investments are made. Could the league have gotten to where it is without TAM? Who knows, but MLS doesn't sound as if it wants to find out.
"There are a variety of different areas that will be the subject of discussion as to where we should be making investments, whether it's the senior team, whether it's player development, whether it's on other benefits," Abbott told ESPN. "And in the CBA what we're seeking to do is within the limits of what we're able to spend that we ensure that we're allocating those expenditures in the areas that are most likely to have the most impact."
What happens now?
There were rumblings that an agreement was almost reached in 2018, although that ultimately didn't take place. At present, the respective positions have been laid out and the two sides have exchanged proposals, but it's also still early. The talks likely won't get into serious mode until early January.
"We have a ways to go to reach an agreement," Foose said.
Foose had stated previously that the league has been fully transparent in terms of its financials at the league, team and SUM [Soccer United Marketing] level. He has no doubt that MLS is leveling with the union on this topic. He added, "We also have a common understanding with them on the cost of various proposals, so we're clear on what the changes that we're seeking are going to cost."