MLS Collective Bargaining Agreement

Just as I finished writing this article, I received news that the MLS and the MLS Players Union decided to extend their collective bargaining agreement (“CBA”) negotiations to February 12th, as opposed to their original deadline of February 1st. However, this doesn’t change my thoughts or analysis on the situation so I left the rest of the article as is.

Although they may not be as major as the CBA talks of the NFL, NBA and MLB, the Major League Soccer CBA talks are both more urgent and threatening – urgent because the agreement expires this Sunday (but talks will go through the 12th), and threatening, because there has been looming rumors of a players’ strike.

Neither side feels like it can give in, but neither side can afford to miss the season. The league needs fans in the seats and the players need to get paid, especially those that are already strapping for cash because they make the minimum league salary of $34,000.

The union advised players to report to training camp last week as planned, but the sides have made little progress the past few months and time is running out.

MLS officials, team owners and labor interests all understand how potentially destabilizing such action would be to the entire pro soccer platform. In a recent ESPN article, Pat Onstad, the veteran Houston Dynamo goalkeeper and a labor representative for his side, was quoted as saying, “Obviously, we’re not one of the bigger sports, where we can go by the wayside for a time and expect fans to come right back… In the last couple of weeks, I think both sides will tell you progress has been made, and we’re all cautiously optimistic of getting a CBA in place before the deadline.”

FIFPro, a worldwide organization based in the Netherlands that represents professional players, including MLS players, claims the league’s single-entity structure, where players sign with the league rather than a team, therefore restricting player movement and free agency, violates FIFA regulations. However, the MLS claims it has complied with FIFA regulations and points to a jury decision in 2000 that ruled against a federal antitrust suit filed by MLS players prior to forming a union. In that case, the court held that the creation of MLS, “did not reduce competition in an existing market because when the company was formed there was no active market for Division I professional soccer in the United States.” Fraser v. Major League Soccer, LLC, 97 F.Supp.2d 130, 135-39 (D.Mass.2000). Does this “single-entity” issue ring a bell in recent sports news? I think so. NFL v. American Needle (see Darren’s multitude of posts for further information). Here are a few arguments from both sides of the MLS case:

League: A single-entity structure is necessary to limit additional financial strain and exposure of clubs that aren’t making money in the first place. Without the financial structure that the MLS has put into place, the league would crumble like the NASL did in 1985.
Team: The league can exercise multiple, unilateral one-year options on player contracts. Players can be transferred within the league without player consent. Player’s salaries are not guaranteed and the structure inhibits movement within MLS for a player whose contract expires.

To briefly argue for both sides, the league is correct in saying it needs to limit additional financial strain. Between 1996-2004 the MLS lost over $350 million. There have been signs of resurgence in the last few years, however, with the additions of overseas players such as Beckham and Juan Pablo, and successful expansion teams such as Seattle. On the other side of the coin, players are attached to teams through inequitable contracts like white on rice. Players have zero leverage (except for the rare exception, i.e. Guillermo Barros Schelletto, Juan Pablo Angel, Landon Donovan) because the league has put together contracts of adhesion (a.k.a. boilerplate or standard form contracts) whose terms are non-negotiable. For example, the only contract extension options lie with the team/league, players are restricted to certain types of endorsements and 80% of the contracts are only semi-guaranteed. “What we are looking for are the same basic rights that players enjoy in other leagues around the world,” Seattle goalkeeper Kasey Keller said in a statement released three weeks ago by FIFPro.

The main things players are looking for are guaranteed contracts, team bonus increases, an increase in the minimum league salary and an increase in salary cap. The league on the other hand, wants to maintain complete control over the league and its fiscal allocations. Who’s going to give? Lets hope someone does or US soccer could dissipate before our eyes.

I’d love to hear your thoughts on the single-entity structure of the MLS, players rights, the leagues rights or any other observations.

  • Mitch

    The single-entity argument by MLS, while found at the district court level, will no doubt be examined in the American Needle decision. I think from a practical standpoint that MLS is in a much different stand point than say, the NFL or even the NHL, in using the defense because of the niche sports area that it is because of its size and popularity. MLS depends on the cohesiveness for the struggling teams to continue existence.

    The fact remains that without the league controlling all aspects, including contracts for players that you mention, this league would probably have never have gotten to the point that it is at today, both in popularity and in league size. It will be interesting to see how far the SCOTUS takes any single-entity argument and if it does find that the NFL falls under the defense, whether other sports leagues, i.e. MLS, should similarly fall in the same scope.

    • Collin Roberts

      Mitch,

      I appreciate your thoughtful response. I definitely agree that the league would not have gotten to where it is today without the single-entity control. What I really wonder, however, is whether the league can get much stronger/larger/globally competitive, without relinquishing some of this control? MLS salaries aren’t going to cut it at this point. The leagues decision to create a designated player was a step in the right direction.

  • I completely agree. Relinquishing some control would be highly beneficial if it meant retaining more quality talent in the MLS.

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