MLS Players Union Ratify 5-Year Collective Bargaining Agreement

The MLS Players Union overwhelmingly ratified a Collective Bargaining Agreement that will last until the 2019 season. For the first time, MLS will allow a form of free agency. We will take a look at how this contract will affect players and Orlando City.

The MLS Players Union announced yesterday in a press release key points of the agreement listed here:

Free Agency

The requirements for an MLS player to become a free agent are as follows:

• 28 years old or older
• At least eight years of MLS service
• The player’s salary is below the max salary

Players that do not fit these criteria may be able to take place in a Re-Entry Draft if they fit the following:

• 23 years old and at least three years of MLS Service and whose contracts were not renewed
• 25 years old with at least four years of MLS Service and played out their contract and have not received an offer from their existing team.

This is a start for a league that had no free agency before this CBA and the requirements for the Re-Entry Draft include more of the quality players. Eric Avila is the only Orlando City player that will fit these criteria. Toronto FC has no one on their team that fit the criteria, whereas San Jose has six players that will be eligible for free agency. According to this report, the percentage of players that would qualify for free agency is around 13%.

MLS uses a single entity structure, which is to say the club owners own a financial stake in the League, not just their individual teams. The league owns the contracts and for the league to control costs they share revenues and hold the contracts. This actually worked well for a league in its infant stages, but times have changed and the league has grown a lot over the last 20 years.

Salary Budgets

MLS's team budgets will increase 12.5% in 2015 and will increase by roughly 5% every year until 2019, according to the MLS Players Union press release. The yearly breakdown of budgets are $3.49 million for 2015, $3.66 million for 2016, $3.84 million for 2017, $4.03 million for 2018, and in the last year of the CBA in 2019, $4.24 million. Allocation money, which is money teams can use to either sign a player or make available to get a player's salary under the cap, will be increased from $250,000 to $300,000 in 2017 and 2018, and topping off at $350,000 in the last year of the CBA.

The MLS Players Union sees this as a win, as players who are not designated players will get an increase of roughly $60,000 and the salaries of those players should approach $200,000 by 2019. The belief of some of the players is that it isn't enough. MLS trails all other professional leagues in the United States and is nowhere near competitive with other soccer leagues as well. The minimum salary for a senior roster player will increase from $60,000 in 2015 to $70,250 in 2019.

Guaranteed Contracts

All players that are at least 24 years old, who have one year of MLS service and are on an MLS team’s opening day roster the following season, will have a guaranteed contract for the rest of their MLS career. This is a huge win for the players as the MLS Players Union states that now 81% of players will have a guaranteed contract. Many professional leagues limit the guaranteed money, but MLS gives a majority of their players this contract. Orlando City’s roster for 2015 would have 17 players eligible for a guaranteed contract if they had the same opening day team as 2014.

This CBA almost didn’t get done in early March, but there was lots of pressure from owners to get the deal done after a successful World Cup for the United States and large ticket sales from the two expansion teams in New York City FC and our Orlando City. The players have been pushing for higher salaries and guaranteed contracts, which they got for most of the players. The one thing that will be on the table in 2019 is free agency. A free agency that only covers roughly 13% of the players is not what the players wanted, and they will look to make a bigger stand on it in 2019.

The league is now in its 20^th year of existence, and MLS has excelled in smaller markets and larger markets alike. The owners' defense for not allowing full free agency is that the league was financially fragile. Sponsors like Audi, Chipotle, Advocare, and Heineken have started long-term partnerships with MLS. These partnerships, grouped with a $90-million dollar television deal with ESPN, Fox Sports, and Univision, have helped to grow the league.

The argument for owners saying this league is financially fragile is slowly going away, but one thing is for sure: When 2019 comes around, the players will be more likely to strike if they don't get more free agency.