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In 2 weeks the MLS CBA expires, what is going to happen?

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So for the last year there have been talks going back and forth between the players with their union and the league with the owners, as the current contract between the two sides expires on the 31st of January 2010.  Yup, it is now just two weeks away and as is typical with all negotiations between unions and organizations a lot of talk happens when deadlines get close. 

That means people on both sides tend to start talking about strikes (labor-Players) or lockouts (management-the league):  We see it in the recent twitter posts from New England Revolution star Tyler Twellman (as noted in a matchfitusa.com post), where he seems to be indicating that the players are ready to up the ante and are prepared for a lockout (notice how he doesn't say strike).  It would seem that he is trying to establish that the delay and hold up will be caused by the league.  This is a typical tactic of labor in negotiations, very often the management side will not use the term lockout, but say the players are wanting to strike to make it seem like it is the players who are to blame.

Listen I honestly think both sides have issues that they can make, and neither side is going to get everything they want.  The core issues are:

  • Guaranteed Contracts (not sure if this is year to year or for the full length of contracts)
  • Free Agency (this is an interesting issue considering the player contracts are with the league and not the individual teams)
  • Quality of Life Concessions (things like moving expenses, per diem, and improvements to retirement plans) 
  • More Money (I think both sides know that the bottom of the salary scale has to move up, and that a larger salary cap is needed, I favor getting rid of developmental contracts as well.)
Let's tale a better look at each of those 4 things after the jump.

First up Guaranteed Contracts, I have always found this topic interesting as so few people in life have any guarantees.  I don't have one at my job and while I can understand the players desire for contacts that can't be cancelled, they currently do have a version of a guarantee, or at least according to the current CBA.  There is of course a catch and that is the type of SPA (Standard Player Agreement) and contract the player is under.  According to section 18.6 of the current CBA: "Section 18.6 Guaranteed Contracts: Where the Player's Category is Guaranteed, an SPA shall not be terminated by MLS by virtue solely of the quality of the Player's on-field performance or the fact that the Player may have sustained an injury (including one leading to death or disability) during the performance of his duties as an MLS Player as well as National Team duty, although it may be terminated pursuant to the other provisions of this CBA relating to termination of an SPA."

While there are other types of contracts (Semi-Guaranteed, and Non-Guaranteed), it is noted in section 18.8 that "Only Developmental Players and Players signed to Non-Guaranteed Call-Up Agreements may be signed to Non-Guaranteed contracts.  All other Players must be signed to Semi-Guaranteed or Guaranteed Contracts."   There is no real guidelines or further information about the contract types.  

So it would look like this issue may be a matter that the two sides are closer to than previously stated by people, I believe the issues comes down to the fact that the guarantee portion of contracts are year to year for players, versus the full term of a contract and that may be the real point of contention.  I am fine with the players who are asking for the entire length of their contract to be guaranteed, if the players are willing to allow teams to release them without compensation if they fail to meet on the field standards to be included in new contracts.  Asking your boss to say he will pay you even if you don't do your job is simply wrong and unfair, asking your boss to agree to guarantee your pay as long as you meet the standards of your job, I think is a fair thing to put on the table.

The second point is Free Agency, while I think Free Agency in itself is an OK concept when all the player contracts are owned by one entity the league it seems like the conflict of interest would be huge asking a team which is part of the league to negotiate with the league representing another team to move a player from one team to another without any compensation to the team the player is leaving.

If a player wants to leave a team, they can ask their GM to move them, from there it really is up to the other team to work out a deal.  I point to the recent trade of Clint Mathis to LA, Clint wanted to move to be closer to his family, he made his request known to management and they worked out a deal to make it happen.  I believe in most organizations this is the case, as having a player who doesn't want to be on your team can be a huge distraction.  

I would point to the issues RSL had this summer with Yura Movsisyan who had signed to play for Randers FC after his MLS contract expired, when his agent wanted him released early to play for Randers, RSL asked for compensation, when Randers offered a low dollar amount RSL said no.  For weeks the drama unfolded with both sides accusing the other of wrongdoing, in the end as the transfer window closed it took more time for player and team to recover from the accusations and fingerpointing.  In the end it was resolved but it cost both teams and the player to deal with issues that they shouldn't have had to.

I can only imagine the huge issues that could arise if Free Agency would hit MLS, say a player in a small market KC wants to play in LA, because he will get on TV more and could get seen by European coaches.  He makes his request to the team, but they play LA the next week, does he fail to perform for his current team because he wants to get in good with LA?  

I do think once each team owns the contracts of the players that make up their roster, this issue becomes easier to deal with but I would favor a limited Free Agency similar to what they have in the NFL.  

The third issue is an easy one, as many of the Quality of Life issues addressed in the original contract no longer fit within the economy of the world today.

I think that MLS should adjust from their current 3% contribution to a players 401K, to a matching program in which the league will do a 100% match up to 5% of the players salary.  This forces both the player and the league to be involved in the retirement planning.  I also think the league should design an education plan, in which player can contribute a portion of their salary to set aside funds for educational uses (theirs or their families) and the league will match a portion of that deduction.

I think the nitpicking details of the current per diem system needs to be replaced, with a simple system that says if you are on the road you get per diem of $75 per day.  I do think the $5,000 for player moves is a fair amount.

The final major issue on the table is More Money, and this would seem to be a no brainer, but I think one has to carefully look at the issues.  The league still has a majority of the team operating at a annual loss, and with so many teams having recently invested in new stadiums (Colorado, Dallas, New York, Philly, Salt Lake) and others soon doing so there is a huge amount of debt that teams are carrying.

I do believe that two things should happen in regards to salary caps, first the cap should be raised to 3 million dollars for 2011, with an annual increase of .5 million for the length of the CBA (likely 4 years).  This would mean that teams would have more money to spend and with the likely end of the CBA in 2014, the same time the ESPN and Adidas deals end it would be prime for a total re-evaluation of how the league finances are dealt with (this is also my timeline for the league to turn over contracts to teams for management, as well as most of the things that the league currently manages that should be team level decisions).

As part of the new salary cap each team should be allocated two exempt players (DP's) for which the league pays the top end individual player salary (I believe should be raised to $450,000 with an annual $50,000 increase) and the team pays any additional compensation.  With this should be an improvement on the bottom of the scale, a minimum of $40,000 per year should be established with a $5,000 raise per year.  

I believe those guidelines allow teams with great resources to spend them without gaining an unfair advantage, I also believe it allows each team to secure higher quality players, while allowing players to earn a fair wage.

Would it work?  I don't know but I think too many individuals on both sides are playing games, there are players that think the owners in MLS are rolling in dough and while many may have large bankrolls, so few teams are operating in the black that there simply is some level of misunderstanding.  I also think the league in particular is playing poor while they have leveraged SUM into a huge footprint controlling almost all professional soccer in the US, and while the data isn't public I have little doubt that there is profits within properties owned by SUM.  Soccer is still a fringe sport in the US, and failure to understand that leads to people thinking there is room for a labor dispute to happen that wouldn't impact the sport.  Soccer already has taken a black eye this year with the issues of USL and NASL needing US Soccer to step in and resolve the 2nd division issues.

I believe that any stoppage, strike or lockout would not impact the dedicated fans of the sport, but with the casual sports fan in the US it would likely be the death of interest in MLS.  With this being a World Cup year, soccer will be at the peak of its ability to grab headlines, and having labor issues be the headline would be devastating, in my opinion.

We are not the EPL, or Ligue One, we do not have billion dollar TV deals and huge jersey endorsements, those deals were negotiated (right or wrong) as long term deals and MLS 5 years ago was starved for income.  When you compare the million dollars a year a MLS side might get from TV revenue to the 40 million plus of a premiership side, it is easy to see why the finances of one should not influence the finances of the other.  

I am going to go out on a limb and predict what will happen, the current CBA will expire, both sides will agree to start pre-season activities on schedule while talks continue and before the end of February, a new 4 year deal will be in place.  

It will deal with contract types, but not end up with the full term of all contacts being guaranteed.   There will be no Free Agency, the league simply isn't there yet.  Adjustments to the quality of life issues will be made, and this is an area where a little money can go a long way towards making players feel more appreciated by the team and the league.  The salary cap will be raised and a second DP slot will be issued, but DP issues will not be included in the CBA, but the league minimum salary will be and it will be increased as developmental salaries are done away with, which is a real gain for players.

If you want some decent reads on the salary cap here are some links I have found:

http://www.gingetalksthefooty.com/2010/01/in-defense-of-mls-players.html

http://www.matchfitusa.com/2010/01/super-fun-guide-to-mls-cba-demands.html

http://www.majorleaguesoccertalk.com/mls-futurewatch-salaries-the-cba-and-tv/6169

Here is hoping that no match dates are affected and that both sides can come to an agreement that is for the good of the sport in the US.

OFF MY SOAPBOX