Source: MLS reduces full-time workforce by 20%

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MLS reduced its full-time workforce by 20 percent on Thursday, the latest sign of the coronavirus pandemic’s impact on the sports industry, a source with knowledge of the situation confirmed to ESPN.

ESPN confirmed multiple reports regarding the extent of the layoffs.

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The workforce reduction included current staff as well as vacancies, and amounted to just under 70 people, a source confirmed. About 300 people were employed at the league’s headquarters prior to the layoffs.

The league declined to comment when contacted by ESPN.

MLS suspended its season on March 12 because of the coronavirus, and shortly thereafter announced a hiring freeze and that it would cut salaries of headquarters staff by up to 25 percent, though entry level employees were spared from taking a pay cut. The senior executives taking pay cuts included commissioner Don Garber, deputy commissioner Mark Abbott and Gary Stephenson. Middle managers saw their salaries cut between 10 and 20 percent.

In June, Garber announced that the league was on track to sustain a $1 billion hit to its revenues.

In July, MLS resumed its season with the MLS is Back Tournament, which was held in a bubble on the grounds of the Walt Disney World Resort. (ESPN is owned by the Walt Disney Co.)

Teams then resumed their seasons in home markets, but most venues didn’t allow fans to attend due to local restrictions, and those that did were only allowed to sell tickets at a fraction of their venue’s capacity.

A source with knowledge of the situation said that holding the tournament, and resuming the season allowed MLS to satisfy some aspects of its broadcast rights agreements. But MLS has also incurred additional costs, including those related to testing for COVID-19.

Because of the limits on attendance at games, the hit to MLS’s bottom line was considerable given that the league derives most of revenues from gameday operations such as ticket sales, concessions and parking. The current deal for domestic television rights, set to expire at the end of the 2022 season, brings in a modest $90 million per year.