MLS Drafts Show the Absurdity of the Single-Entity Structure

When MLS was founded, it was based on the idea of being a single entity, with all clubs owned and operated by the league but run by disparate investors. This impact of that now is a series of drafts that shows the ridiculousness of the system.

The early years of MLS saw the league’s teams playing in huge football stadiums with maybe 10,000 to 15,000 fans in attendance. With small crowds and having to rent big stadiums, the single-entity system, in which the league owns all teams to control salaries and parity, was an absolute must. Making things more difficult was that there were only three investors of teams: Phil Anschutz, Lamar Hunt, and Robert Kraft.

The league has grown substantially since the 2001 terminations of the Tampa Bay Mutiny and Miami Fusion. MLS teams now average over 20,000 fans, every team plays in a stadium at least partially owned by the team’s investor, and no longer does one investor operate multiple teams. That improvement and success is what makes this time of year so ludicrous.

In its dedication to decreasing competition, MLS has been steadfast against allowing free agency, something the players have been fighting over for nearly 20 years. During the 2015 collective bargaining agreement (CBA) negotiations between the league and the players’ union, the league finally provided a limited version of free agency, the first in the league’s history. However, free agency was only granted to those that are 28 years of age, have been in MLS for at least eight years, and are out of contract or have had their option declined.

It’s that lack of true free agency that causes this weird time of year where players change teams through a series of drafts. There are three drafts that are currently taking place, two different types. The first one was the Waiver Draft which took place on Dec. 12. Those that have been waived by their teams but have yet to meet the requirements to be eligible for the Re-Entry Draft are potentially chosen in the Waiver Draft. These are mostly younger players that have recently joined the league.

The second draft, and the one where more players are typically chosen, is the Re-Entry Draft. There are two stages of the Re-Entry Draft, usually separated by a week. Eligible players are those who have had options declined by their clubs, and are either 23 years of age with three years of MLS experience or 25 years of age with at least four years of MLS experience.

As mentioned, there are two stages of the Re-Entry Draft. The first stage this year took place this past Friday. In that stage, the clubs must extend a “bona fide offer” to the player chosen. If the player doesn’t agree, the club holds the first right of refusal for the player’s services. The second stage, which takes place this Thursday at 2 p.m. ET, features players who were not selected in the first stage. The clubs have the option to select players and negotiate a new contract. Those not selected are available to clubs on a first come, first serve basis.

The main problem with these drafts is that they are no longer necessary. When Phil Anschutz operated six MLS teams, it was necessary to keep the league afloat. Today, multiple teams are operated by billionaires and no investor operates more than one of the league’s teams.

While the league claims that it has the mechanisms because the league is losing money, the league’s real fear is a lack of parity. It fears that allowing players to choose where they play, as the players wish, would result in them flooding into New York and Los Angeles, huge cities where the teams are owned by billionaires. The lack of parity would see certain smaller markets perennially struggle both on and off the field.

The problem with this thought process though is that the league could still have a hard salary cap, which would limit how many big players a team could accumulate. In every league, including the NBA, where players most frequently attempt to sign with a huge market, the smaller markets still have an opportunity — and often do — sign lucrative free agents. The result of this fear and the league’s desire for control is that players are distributed through these odd methods.

There are many aspects of MLS’ single-entity structure that are ridiculous, such as discovery claims. But possibly no time of year exemplifies the absurdity of the league’s single-entity structure more than now with these two drafts. Leagues around the world have a time period during the off-season or transfer window where rumors of player moves are rampant, commonly known as “silly season.” This is the true silly season in the silliest of leagues.