Major League Soccer, American soccer's largest employer with more than 300 employees in its league office, has reduced its staff by about 20 percent.
Reports followed an initial tweet
from Jonathan Tannenwald
of the Philadelphia Inquirer.
The Sports Business Journal reported
that staff was informed of the moves by Commissioner Don Garber
in a staff call on Thursday afternoon. The reductions include the elimination of existing and vacant positions. The New York Times reported
that most departments were affected and the layoffs included several high-ranking executives. The layoffs cover both those working on league business and those in the league's digital operations, including MLSSoccer.com.
MLS is one of the hardest hit major sports leagues due to the COVID-19 shutdowns.
In April, shortly after the pandemic hit in full force, MLS moved to cut pay for many employees at the league headquarters. At the time, they allowed the league to avoid laying off staff in the short term, but they also come with a hiring freeze. Those pay cuts in the range of 10-25 percent were for all but entry-level or lower-paid employees.
In June, 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.
Unlike teams in other U.S. sports leagues (NFL, NBA, MLB and NHL) or Europe's big five soccer leagues that have big lucrative deals, MLS teams rely much more heavily on game-day revenues, including season-ticket sales and sales of individual tickets in advance or on game-days.
The construction boom of MLS stadiums was driven by the desire to control in-stadium revenues such as VIP packages, concessions, food and beverage and parking. There are also club and league-wide sponsorship activations that depend on fans at stadiums.
It is not known what MLS's projected losses will be for 2021, in part because it is not clear how severe the COVID-19 pandemic will be in 2021, what will be the health restrictions and what be the desire of fans to return to large events.
MLS pushed back the launch of three expansion teams -- Charlotte FC, which will launch in 2022 instead of 2021, and St. Louis FC and Sacramento Republic FC, which will wait until 2023 to join the league.
The 2020 MLS regular season was reduced from 34 to 23 games. Seven of 299 games ended up being cancelled due to COVID-19 issues. Only 11 of 26 MLS teams played any games with fans socially distanced in the stands in their home markets after they returned home following the MLS is Back Tournament in Florida.
MLS and its clubs have been forced to spend millions of dollars on unanticipated expenses to continue its 2020 season:
-- Massive COVID-19 testing;
-- Game-day charter flights to get teams in and out of cities for away games without staying at hotels; and
-- Organization of the MLS is Back bubble for the summer tournament.
On the eve of the playoffs, there was an additional expense. Teams were chartering flights to retrieve players from national team duty abroad in order to have them eligible for the opening postseason games, assuming they pass COVID-19 testing protocols.
The postseason begins on Friday with two play-in games.