Last time, there were federal mediators, there was a players’ vote to strike, and the first weekend of the 2015 MLS season—if not more—was in significant jeopardy. In comparison, these collective bargaining agreement negotiations were a cordial, cooperative breeze.
MLS and the MLS Players Association on Thursday morning announced that they have reached “an agreement in principle” on a new, five-year CBA that will run through the 2024 season and expire in January 2025. It’ll still need to be formally approved by the league and union, but progress was sufficient to prompt commissioner Don Garber to say that the deal “addresses key strategic priorities for the league and our players,” and “will serve as the foundation for a new era of partnership.”
MLSPA executive director Bob Foose said, “Players have secured an agreement that will substantially change what it means to be an MLS player. … We believe that the sweeping changes and increased investment in this agreement will not only be integral to the league’s continued growth, but will also move MLS closer to the systems in place in overseas leagues with which we aspire to compete.”
The key points include increased player salary spending, expanded free agency and more charter travel, all of which were priorities for the players. The league did retain, in some form, the Targeted Allocation Money (TAM) mechanism, which the players wanted abolished, and pushed back on the number of charter flights over the term of the deal. A couple of new wrinkles include the players' being given a share of media rights, starting with the new deal in 2023, and an emphasis on signing younger players at a reduced salary budget charge, which is a component that is still being fleshed out.
First discussions, according to sources with knowledge of the deal, began two years ago, with talks ramping up this past summer so both sides could establish a greater understanding of priorities and show commitment to avoiding a work stoppage ahead of more urgent and final talks this winter. The two sides had extended the terms of the previous CBA by a week until this Friday, with both having a desire to get a deal done by then. That's exactly how things played out.
According to MLS, the primary pillars of the new CBA are as follows:
—MLS will increase its investment in the player pool to approximately $11.6 million per club in 2024, from $8.5 million in 2019 and $9.2 million this season (including standard salaries, general allocation money and performance bonuses). The senior minimum salary will rise to $109,200 by 2024 from $70,250 in 2019. Clubs can spend even more via the designated player and targeted allocation money mechanisms.
—The MLSPA should be happy with the evolution of the TAM program, which previously allocated $1.2 million per club for use on players whose salary fell just below that of a DP. In practice, it usually was spent on new, foreign players instead of those already in the league (read, MLSPA members). That $1.2 million will become GAM. The limit on discretionary TAM, which comes out of an owners pocket, will decrease from $2.8 million in 2020 to $2.1 million in 2024.
—Players will share in media revenue for the first time. MLS’s current TV deal expires after the 2022 season. In 2023 and ’24, MLS said it “will increase player spending by an amount equal to 25% of the increased media revenue above the amount generated by the league in 2022 plus $100 million.”
—Charter flights will increase. Teams will be required to use eight during the 2020 regular season, and that figure will increase to 16 in 2024. That’s a significant increase from 0-4 in 2019. Chartering to MLS Cup playoff and Concacaf Champions League games abroad will be mandatory. According to the MLSPA, the mandatory minimum will increase by two flights each year of the new pact.
—The free agency program for which the MLSPA seemed to sacrifice substantial dollars last time around will be expanded. Players used to have to be 28 years old with eight years of MLS service to be eligible. Going forward, they’ll have to be only 24 with five years of service. The increase in salary a player can earn in free agency will be capped once again, though teams will not have a cap on how many free agents they can sign. DPs also will be eligible free agency under certain restrictions.
—Clubs once again will be able to sign up to three designated players. However, the league will have the authority to limit the salary of a third DP—if he’s 24 or older—to the maximum TAM salary. The DP threshold—the amount a DP will count against a club’s salary budget—will rise from $612,500 in 2020 to $803,125 in 2024.
—Beginning in 2021, teams will be able to sign up to three players age 22 or younger at a reduced salary budget charge. MLS said more details on this new initiative will be provided.