MLS moves forward after settlement to 'incredibly difficult' labor talks
- by Paul Kennedy @pkedit, Jun 4, 2020
The changes in the collective bargaining agreement include:
-- Implementing a pay-cut at an annualized rate of 5 percent (7.5 percent for the remainder of the season) for all players and a reduction of the bonus pool by around $5 million ($1 million of which will go toward bonuses related to the Orlando tournament) in 2020;
-- Pushing back the terms of the collective bargaining agreement by one year with the effect of extending the agreement by one year, through the 2025 season;
-- Reducing the percentage amount the players will share from the first year of MLS's new national media deal in 2023 from 25 percent to 12.5 percent of the amount above the amount MLS receives in 2022 plus $100 million; and
-- Introducing a force majeure clause.
Players accepted a revised offer from MLS after the league threatened to lock players out if they didn't accept its terms. That revised offer included a version of the conditions of the force majeure clause the players had proposed in the offer they made on Sunday.
MLS commissioner Don Garber said the league was facing a $1 billion revenue hit from the 2020 shutdown and the impact of the economic downturn even after cutting hundreds of millions of dollars of spending. MLS had pushed for much deeper cuts in salaries. It settled on smaller cuts in 2020 but got an agreement to extend the CBA by one year and the insurance policy of a force majeure clause.
MLS is particularly vulnerable because clubs rely upon game-day revenue -- tickets, premium seating, concessions, merchandising, parking on-site sponsorships -- for the bulk of their income and don't have the lucrative national or local media deals that teams in other major U.S. leagues and big European leagues have.
“We don’t know what it’s going to look like going forward,” he said of the economic picture over the next five years, "but I think it speaks to the desire of our ownership to continue to be courageous and to continue to believe in a league. And frankly, I think it represents on our part this belief that this pandemic is going to end at some point, and we're going to get this country back and the economy back."
MLS had never previously attempted to negotiate a force majeure clause. The only major U.S. league with a force majeure clause in its CBA is the NBA. The clause gives the NBA protection in the event of an event like war or an epidemic. It allows the NBA to reduce payments on a pro-rata basis for every game that can't be played as well as the right to terminate the agreement after notice of 60 days, with the proviso the parties engage in good-faith negotiations to reach a revised agreement.
A person with the knowledge of the CBA negotiations said MLS and the MLSPA only agreed to the second clause: the right to terminate the agreement after proper notice -- the length was not disclosed -- with the proviso the parties engage in good-faith negotiations to reach a revised agreement. The clause will take effect in 2021.
“I can assure you, our entire industry and really all business globally," Garber said, "force majeure clauses are
going to be a part of agreements going forward."
The March shutdown after just two weeks of play came as the MLS was celebrating its 25th year. Garber said MLS's relative youth was
a critical factor in the decision by the league to develop a plan for the return to play in 2020 even if there is no guarantee how many games will be played or if fans will be allowed to attend.
"Unlike the other leagues, their fan bases are deeply matured and been around for generations," he said. "Our absence created a void in the lives of fans and their love and care for our
players. Clearly, our absence from the sports scene was really crucial for us to get back."
Garber said the negotiations were challenging, considering everything that has gone on since
the pandemic shut the league down on March 12 and more recently since the killing of George Floyd. He described the talks as "incredibly difficult" amid the backdrop of "the fear from an uncertainty
of a pandemic and the emotional and rightful feelings of rage and concern and frustration with what has been going on with the protests over the last eight days."
"Although the process
and tactics used by MLS left a mark," Nashville SC defender Eric Miller tweeted, "I’m incredibly
proud of our player pool." In a media call, Daniel Lovitz, Miller's Nashville SC teammate, said, “There was no winner. I want to be clear about that. This is a really terrible situation for all
parties involved.”
Garber added that labor negotiations are always difficult, especially on resolving the final points of contention.
"They are never easy and
they shouldn't be," he said. "The labor movement should not be about making things easy. They should be difficult for both sides to ensure that they're doing everything possible to not leave anything
on the field and address everybody's concerns. I believe the players have done that, and I believe their leadership has done that. And I believe our owners and the leadership of the league
representing the owners in negotiations have done that as well."
Just imagine the effect of the pandemic on Lower League Soccer
I understand all the consternation about the pandemic and the youth of the league. I am not sure the clubs really have their head around the difference between the MLS and the NBA, MLB and NFL - that this is a global game. They should - but their lack of grasp of the youth market shows they may not. In any case the difference is that there is a global marketplace for players. If in the agreement the took the opportunity to squeeze the players - and are patting themselves on the back now - unlike in the MLB NFL and NBA - their best players can do like the best youth do - go abroad. If this happens, and I'm not saying it will, it is a constraint on the growth of the league. We'll see.