Less than a week after it informed its players that it is invoking the force majeure clause in their revised collective bargaining agreement due to the anticipated economic impact of the continuing COVID-19 pandemic in 2021, Major League Soccer sent them their proposed changes to the CBA.
They call for no pay-cuts in 2021 but rather a freeze on annual spending increases in 2022 and an extension on the length of the agreement by two years, through 2027. Yahoo Sports first reported the offer.
“According to public health officials, the restrictions on attendance at live sporting events will continue far into the 2021 MLS season,” MLS president and deputy commissioner Mark Abbott said in a statement provided to Soccer America. “In 2020, despite MLS and its clubs suffering extraordinary and unsustainable losses, players received 95 percent of their salaries. To address the ongoing impact of the pandemic in 2021, MLS is proposing to extend the term of the existing collective bargaining agreement for two years rather than seeking any salary reduction. This proposal will help ensure the long-term health of the league while paying MLS players 100 percent of their salaries.”
MLS and the MLSPA had reached a tentative agreement on a new five-year CBA in February 2020 but soon thereafter the pandemic hit, shutting down MLS and all other U.S. sports leagues and sending MLS and its players back to the bargaining table.
The revised agreement included a 5 percent cut in salaries and cap on league-wide bonuses at $5 million for the 2020 season but it also delayed annual spending increases by one season and extended the length of the agreement by one year (see original spending levels below).
The new MLS proposal in effect calls for spending levels in 2022 that were the original 2020 levels and an extension of the CBA, which was originally set to expire after the 2024 season, through 2027.
Each year of the original CBA agreement called for increases in a team's available spending (maximum salary charge, maximum general allocation money and discretionary targeted allocation money) of about $600,000. Freezing the increases for one year produces league-wide savings of upwards of $18 million a year. According to a source familiar with MLS's proposal, the savings over the term of the CBA would be about $110 million if it was approved.
From MLS's perspective, the proposal to extend the CBA from the end of the 2025 season to the end of the 2027 season allows the league to avoid holding negotiations in 2026, on the eve of the World Cup in the USA, Canada and Mexico.
The proposal also gives owners two more years of labor certainty as they regroup following the fallout from the pandemic. From the players' perspective, the delay postpones a chance to negotiate improved terms on an agreement originally negotiated almost a year ago by three years.
MLS invoked the force majeure clause on Dec. 29, opening a 30-day window in which the league and players are obligated to engage in good-faith negotiations. The terms of the CBA reached in June 2020 remain in effect.
The MLSPA has not yet issued a statement in response to the league proposal.
MLS player spending, per team (2020 tentative collective bargaining agreement):
Salary Budget: $4,240,000, TAM: $1,200,000, Discretionary TAM: $2,800,000.
Salary Budget: $4,900,000, GAM: $1,525,000, Discretionary TAM: $2,800,000.
Salary Budget: $5,210,000, GAM: $1,900,000, Discretionary TAM: $2,720,000.
Salary Budget: $5,470,000, GAM: $2,585,000, Discretionary TAM: $2,400,000.
Salary Budget: $5,950,000, GAM: $2,830,000, Discretionary TAM: $2,225,000.
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.