For the third time last year, MLS and the MLS Players’ Association (MLSPA) are returning to the collective bargaining table (CBA). With the COVID-19 pandemic still raging, the MLS is concerned that the difficult economic conditions it faced in 2020 will continue this year.
The 2021 regular season is tentatively scheduled to begin in mid-March, although sources tell ESPN that date could be pushed back to May due to the pandemic. So it looks like we have plenty of time to work out the deal. But league sources say a work stoppage is possible. A source told ESPN that MLSPA has instructed players to prepare for such a scenario, which would be a brutal event for the league, which has suffered a billion dollar loss in 2020.
The fifth. In January, the MTSO submitted a proposal to impose a compensation moratorium until 2022 and to include a two-year grace period in the CBA.
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How did we get here? And how come both parties are doing this for the third time?
When the parties agreed in principle to the terms of the new ABC last February, it seemed that industrial peace would be achieved within the next five years. The MLSPA has provided a vesting extension, with players now eligible for 24 years and 5 years of service, compared to 28 years and 8 years of service under the old rule. The salary budget for each group increased from $8,490,000 in 2019 to $11,643,000 in 2024. There was also the prospect of participating in the league’s new media rights deal, due to start in 2023, although the details of this deal have not yet been agreed. (The current U.S. rights package with ESPN, FOX Sports and Univision Deportes runs through the end of 2022).
Then the pandemic started and the league closed on the 12th. The month of March was closed. The fact that neither side has ratified the CBA has allowed the League to resume negotiations. By comparison, the NHL receives $608 million for broadcast rights in the US and Canada, while the Premier League receives $4 billion per season. MLS relies heavily on game day revenue. MLS has asked players to shoulder some of the burden as the league runs short of money, layoffs and staff pay cuts.
The negotiations were controversial. The league originally planned a 50% reduction in player salaries by 2020. In June, while the season was still underway, the league and MLSPA agreed to cut players’ salaries by 5% by 2020, as well as a reduction in bonuses, which MLSPA said were 70% last year. The deadline for the CBA was extended by one year, to the end of the 2025 season, resulting in a freeze on total compensation from 2020 to 2021. The terms of a revenue-sharing agreement based on the aforementioned new media rights contract have been postponed for a year.
According to the MLSPA, current and potential players have given up about $150 million. The season continued in July with an abbreviated MLS campaign in which teams played between 18 and 23 regular season games.
What was the reaction of the actors?
The players accepted the deal, but didn’t like it, especially when MLS threatened to ban them last June. One player stated that relations with the league have returned to the level of 2015, when CBA negotiations were fierce. In this deal, MLSPA extracted some form of free agency but felt the money was on the table for the league to continue implementing a targeted distribution mechanism – a budgeted salary mechanism that benefited a few players at the top of the league’s salary scale.
The benefit to the players is that the five percent cut to their salaries was much lower than originally proposed.
Error! The file name is not specified. For the third time in less than a year, MLS owners and the players’ union are negotiating a new CBA. Major League Soccer
So this had to be the end, right?
I don’t think so. In the June agreement, MLS included a force majeure clause – and the players agree – that allows either side to suspend negotiations in the event of an economic disaster, such as an economic disaster. B. a situation caused by a pandemic, which must be resumed for 30 days. If a transaction fails, the CBA can be cancelled, although this is not mandatory.
ELEC wants to be able to resume negotiations if the economic outlook worsens; the MLCPD sees it differently. Last month, MLSPA executive director Bob Foose said it would be a mistake to invoke the clause, adding that we can’t let the pandemic set us back any further than it already has. And if you decide to fire the CBA a second time and force us all into a third major collective bargaining session within a year, that’s exactly what you’re doing.
The source confirmed a Sports Business Journal report that $725 million of the $1 billion loss was due to the pandemic. With the slow deployment of the KOVID-19 vaccine, fans won’t be returning to the stands anytime soon – at least not in large numbers. Faced with this perspective, the MLS cited the article in 29. December.
The league’s action last week, while no surprise, was disappointing in what it said about how the league views its relationship with the players, Fuss said.
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What does the last sentence of the MLS say?
Instead of asking players to accept a pay cut now, MLSPA is proposing to extend the current two-year contract until the end of 2027. Other than that, there will be no pay raises or other compensation during the 2022 season. In total, the division hopes to save between $100 million and $110 million over the life of the CBA.
Doesn’t look so bad, does it?
No, especially assuming MLS will require significant pay cuts in the short term. But the combined concessions from the two renegotiated CBAs – both last June and now – total up to $250 million. And all this in the run-up to the 2026 World Cup in the United States, Canada and Mexico, an event that is expected to give the sport a huge economic boost in North America, much like the 1994 World Cup.
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What’s the next step?
MLSPA is currently reviewing the league’s proposal, which was submitted on the 6th. January was presented to the League’s negotiating committee. However, a counter-offer is not expected until next week.
It should be noted, however, that the calculations are somewhat more complicated than they may at first appear to the union. Since MLSPA wants to extend the CBA for two years, this means that the union will relinquish the new CBA in early 2026. Because the terms of a hypothetical CBA that begins at that point are difficult to quantify, it is difficult to determine exactly what the MLSPA will specify. MLS insists he wants to start.
We made the players a very fair offer to pay 100% of their salary in 2021 in exchange for a two-year CBA extension. As we told them, we are prepared to meet at any time and as often as necessary to reach an agreement, said Mark Abbott, MLS President and Assistant Commissioner.
Do players have other options?
They could have gone on strike, but the MLSPA has stated that it intends to stick to the agreement reached in June. It’s also possible that members could vote to deactivate the union, which could lead to antitrust proceedings against MLS. MLS was established as a sole proprietorship to avoid this scenario, so there is no guarantee of success. According to a union source, there are no plans to implement decertification.
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Can the league suspend players?
This is the issue beyond MLSPA membership. A source familiar with the league’s situation said this was a highly speculative lockout, but given that the league has threatened before, it remains a possibility.
Preparing the MLSPA for closure would not continue. The latest filing with the National Labor Relations Board estimates MLSPA’s assets at nearly $13 million. A prolonged work stoppage would mean a loss of salary for the players, although it is unclear what would happen to their health.
Can MLS use expansion to address the pandemic?
This is a tactic the NBA is considering, especially since it doesn’t share the cost of the expansion with the players. But a source familiar with MLS thinking said the league has no plans for future expansion. Note that there are several teams already in the league: Austin starts next season and Charlotte starts in 2022. Sacramento Republic and St. Louis SC will join in 2023.
What are the chances of an agreement?
History has shown that regardless of the nature of negotiations between MLS and MLSPA, both sides have always managed to reach an agreement and avoid a work stoppage. In this case, there is no confirmed start date for the season. Although the league insists it is still targeting mid-March, sources told ESPN that MLS remains flexible and is considering a start date as early as May. If this happens, negotiations could become difficult. But there is a good chance that both parties will agree to a deal.