New MLS collective bargaining agreement brings new balance to player spending

Major League Soccer and the MLS Players Association won't be again going down to the wire on a new collective bargaining agreement.

With more than three weeks to go before the start of the 2020 season, they announced a new five-year agreement.

Here are the key highlights of the agreement that brings new balance to desires of players and their clubs ...

Increased spending.
Old: The maximum a team could spend on players (besides the three Designated Players) was $8,490,000 in 2019.
New: That amount will increase each year to $11,643,000 in 2024.
MLS player spending (per team)

MLS player spending (per team):
2019 ($8,240,000)
Salary Budget: $4,240,000, TAM: $1,200,000, Discretionary TAM: $2,800,000.
2020 ($9,225,000)
Salary Budget: $4,900,000, GAM: $1,525,000, Discretionary TAM: $2,800,000.
2021 ($9,830,000)
Salary Budget: $5,210,000, GAM: $1,900,000, Discretionary TAM: $2,720,000.
2022 ($10,455,000)
Salary Budget: $5,470,000, GAM: $2,585,000, Discretionary TAM: $2,400,000.
2023 $11,005,000
Salary Budget: $5,950,000, GAM: $2,830,000, Discretionary TAM: $2,225,000.
2024 ($11,643,000)
Salary Budget: $6,425,000, GAM: $3,093,000, Discretionary TAM: $2,125,000.
Note: Doesn't include Designated Player spending above maximum salary charge or spending as part of U-22 player initiative.

TAM remains, in part.
Old: Spending on players consists of payments under the salary budget -- total compensation and acquisition costs -- plus Targeted Allocation Money (a required spend on salary charges over the maximum salary charge), Discretionary Targeted Allocation Money (a discretionary spend on the same salary charges) and General Allocation Money (money that teams receive for various things, notably, if they are expansion teams or if they sell a player for a transfer fees and that can be used to pay down most player charges).
New: In the allocation of a team's player spending, Targeted Allocation Money is replaced by General Allocation Money -- ie. it can be used for more than just the salary charges over the maximum salary charge of higher-end players -- and the portion of allocation money that is General Allocation Money moves up each year while the portion that is Discretionary Targeted Allocation Money decreases.

Maximum Salary Budget Charge
2019: $530,000
2020: $612,500
2021: $651,250      
2022: $683,750
2023: $743,750
2024: $803,125

Share of future media money.
New:
Players will share in a portion of the increase in money MLS receives each year from its next agreement with its media partners. (The current agreement expires at the end of the 2022 season.)  Players will get -- spread over each team's salary budget and general allocation money -- an amount equal to 25 percent of the increased media revenue above the amount generated by the league in 2022 plus $100 million. (The changes in 2023 and 2024 will come as the increases in total compensation otherwise are reduced year over year.)

Minimum salaries.
Old: The minimum salaries for players vary according to whether they count on the senior roster (players 1-20) or reserve players (players below that). They were $70,250 (senior) and $56,250 (reserve) in 2019.
New:
The minimums will gradually increase from $81,375 in 2020 to $109,200 in 2024 (senior) and from $63,547 in 2020 to $85,502 in 2024 (reserve).
 
Expanded free agency, but caps remain.
Old:
Players 28 years old and older with eight of more years in the league were eligible for free agency within MLS with compensation restrictions.
New:
Players who are 24 years or older with five of more years in the league are eligible for free agency within MLS, again with compensation restrictions. Also: TAM can be used to sign free agents (a big ask of the players).

Charter flights double, at minimum.
Old: In 2020, teams were allowed to charter no more than four legs of flights over the course of the regular season.
New: Teams will be required to use charter flights for at least eight legs during the 2020 regular season, growing to 16 legs for the 2024 season. (All MLS playoff games and international Concacaf Champions League matches will be chartered.)

Designated Players.
Old:
Each team is allowed to have three Designated Players -- the third with some conditions -- whose salary charge is above the maximum salary charge -- and notably above the maximum amount that TAM can be applied toward ($1,530,000 in 2019).
New: Each team is allowed to have three Designated Players -- the third must be 23 years old or younger or the league reserves the right to limit the compensation for the third Designated Player to the maximum TAM compensation.

'Under-22' player initiative.
New: Beginning in 2021, MLS will have the discretion to allow clubs to sign up to three players who are 22 years old or younger with a reduced budget charge.

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1 comment about "New MLS collective bargaining agreement brings new balance to player spending".
  1. Santiago 1314, February 9, 2020 at 3:43 p.m.

    Looks like a Great Deal for the Charter Flight Business Industry.!!!
    85k to be on a Reserve Team.!!!
    Maybe I will come out of Retirement. I got 4 years to get in Shape.!!!
    Otherwise, I am not sure this even Keeps up with the COLA.
    Depends on the Future TV Revenues. Bit of a Gamble, but You GO BOYS.!!!

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