Major League Soccer and the MLS Players Association have reached an agreement in principle on a new Collective Bargaining Agreement, the league and the union announced on Thursday.
The new deal will last five years and commence during the 2020 season, and is also subject to approval by the MLS Board of Governors and the MLSPA.
The deal was reached with considerably more time before the start of the season than in past negotiations. In 2015, a deal was reached just days before the start of the campaign. It helped that talks have been taking place over the past two years, allowing more time to hash out issues and come to an agreement. It also helped that there was no single sticking point to hamper negotiations.
“As we prepare to celebrate our 25th season, we are very pleased to finalize a new five-year Collective Bargaining Agreement with our players,” said MLS Commissioner Don Garber. “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.”
A quick scan of some of the terms indicates that the players achieved much of what they were seeking in terms of changes to the CBA, including increased spending — which includes a share of the league’s new media rights deals in 2023 and 2024 — a reduction in the amount of Targeted Allocation Money, relaxed free agency rules and charter flights. In return, the league retained much of the salary structure that it credits with creating stability during the life of MLS.
MLS will increase investment in the salary budget, General Allocation Money and performance bonuses for players, raising the spending power per club every year, from $8,490,000 in 2019 to $11,643,000 in 2024. In addition, the minimum annual salary for senior roster players will go up each season from $70,250 in 2019 to $109,200 in 2024, and 401(k) contributions and other benefits are also increasing with the new CBA. The reserve minimum salary, which was $56,250 in 2019, will increase over time to $85,502 in 2024.
For the first time, players will receive a share of increased revenue from the league’s next broadcast deal.
In 2023 and 2024, 25% of the net increase in media revenue that exceeds $100 million above 2022 levels (aka before the new deal) will flow into Salary Budget and GAM on a per-team basis. The current rights deal expires in 2022.
Other changes in the new CBA
A significant agreement revolves around Targeted Allocation Money (TAM). Simply put, it’s money that teams can use to sign players with salaries between $540,000 and $1.5 million — and one that the MLSPA had chafed against given that it could only be spent on a handful of players — and has been reduced to a large degree. All TAM ($1.2 million per season) has now been converted to General Allocation Money (GAM) and can be used across the entire roster, but discretionary TAM will remain as a mechanism to sign eligible players.
Clubs will also be required to use charter flights for eight legs of travel during the 2020 regular season, growing to 16 legs for the 2024 season. In the previous CBA, clubs had the discretion, but not the requirement, to charter up to four legs per season. This became a sore point with the players given that the league is spread out over four time zones. In addition, clubs will be required to use charter air travel for all Audi MLS Cup Playoff matches and Concacaf Champions League games involving international travel.
Free agency, which the MLSPA spent considerable capital on during the last CBA negotiations in 2015, has seen its rules relaxed. Previously, only players who were 28 years of age and had eight years of service in the year could qualify for free agency when their contracts expired. Now the requirements are 24 years and five years of service. This is expected to more than double the number of eligible players from 11.5 percent under the old deal to 26.1 percent, and there is no cap on the number of free agents a team can sign, though there are still considerable constraints on salary increases for free agents.
Meanwhile Designated Players, who in the past could not become free agents, are now able to take part in this mechanism, though there remain considerable restraints on what they can earn from a free agent deal.