MLS commissioner Don Garber: Owners will accept burden of 2021 losses in return for future savings

MLS commissioner Don Garber says the league has not heard from the MLS Players Association since it sent its proposal to modify their collective bargaining agreement by freezing pay salaries in 2022 and extending the CBA by two years.

That proposal followed MLS's decision on Dec. 29 to invoke the force majeure clause inserted in the revised agreement negotiated by the league and owners last June ahead of the resumption of the 2020 season following a four-month layoff due to the COVID-19 pandemic.

"We are laser focused to reach an agreement with our players, ready to sit down with them every night, to try to reach an agreement," Garber said in a media call on Tuesday. "So there has to be a real sense of urgency from both the MLS league office, our ownership and certainly from the player pool and the MLSPA."

Under the terms of the collective bargaining agreement the league and players have a 30-day window to negotiate in good faith. Garber termed the deadline a "hard deadline" though the terms of the agreement remain in effect until there is a labor stoppage. The more likely deadline for the players and league to reach an agreement is the start of 2021 preseason.

Garber reiterated MLS's goal to start the 2021 season in mid-March. The earlier the league starts the 2021 season, the more restrictions there will likely be on fans attending games. But Garber said MLS faces the prospect of fixture congestion with the Gold Cup in July and start of the 2022 World Cup qualifying and needs wiggle room to account for rescheduled matches impacted by COVID-19 outbreaks. (MLS also wants to reintroduce the Leagues Cup and Campeones Cup with Liga MX and play the Concacaf Champions League and U.S. Open Cup, which was cancelled in 2020.)

Anastasia Danias, MLS's executive vice president and general counsel, said there were a number of different conditions that would trigger the force majeure provision.

"One of those is it being reasonably foreseeable that there will be material limitations on fans attending matches," she said on the media call. "One of the litmus tests for whether it is reasonably foreseeable is what's happening with other sports leagues today. And as we all know, there continue to be material limitations on capacity in stadiums and for the foreseeable future, based on what we are hearing from medical experts and others that it will persist in 2021."

In the agreement reached seven months ago, MLS and the MLSPA agreed to freeze 2021 spending levels at 2020 levels and extend the term of the agreement from the end of 2024 season to the end of 2025 season. The new MLS proposal calls for those spending levels to remain the same in 2022 and an extension of the agreement through 2027.

Each year of the original CBA 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. (The league and players reached a tentative agreement on a new five-year CBA in February 2020.) 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 $100 million-$110 million if it was accepted.

"We are optimistic about the vaccine," said Garber. "I am optimistic as a parent and for my own personal safety and the safety of my family and those dear to me. But the reality as we sit hear today is that the country is setting records for COVID cases, and frankly many of us are a little less optimistic that we even might have been a few months ago."

Garber said it was now likely the economic impact of the pandemic on sporting events would extend into 2022. He added that club owners are willing to absorb the anticipated losses in 2021 and not seek more pay-cuts following those incurred in 2020 if they achieve concessions on increases in later years. The revised agreement included an annual 5 percent cut in salaries and cap on league-wide bonuses at $5 million for the 2020 season.

The revised agreement also reduced the players' share of the anticipated revenue increases in MLS's media deal that will take effect in 2023. It did not change provisions related to free agency, (The expanded 2021 free-agent class is a product of shortened service requirements for player to enter MLS's version of free agency.)

Any agreement between the league and players will likely come down to a balancing act between how much certainty players are willing to give owners on the spending front in 2022-27 and what concessions owners are willing to make on new terms to the agreement's later years.

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