Thursday, March 5, 2015

We have an Agreement - what does it mean?

As a follow up to my article yesterday on the MLS labor negotiations, now that we have at least the preliminary indications about the agreement that was apparently reached yesterday, we can make an initial evaluation.

Note, though, that we are still working off of indirect information, and the actual document has not been drafted. These details discussed below are probably what will end up being the real numbers, but read Jeff Carlisle's article critically first, as that is where most of the information used in this article comes from.

Also, bear in mind a few disclaimers. First, I am doing this in my spare time. As luck would have it, we have been under some winter weather lately in Dallas, freeing my schedule a bit. I am not a full-time journalist. Second, and as a result of that, all of the underlying facts come from other reporters. I am using them because from what I have seen, these are the best, most accurate reports available - so to that extent, I am clearly responsible for choosing them. But at the end of the day, the full agreement is not public, so no information is 100% at this point.

On the other hand, hopefully my background as a journalist and attorney, as well as being a follower of the game and the league since 1996, can bring some insight to all this. So here goes.

Basic details. Five Year Agreement. Limited Free Agency. Raise in minimum salary. Overall salary cap increase. Again, read Jeff Carlisle's article critically for background.

Five Year Agreement

This, to me, was a surprising point of contention. Unless I missed it in previous years, I thought a 5 year agreement was what most people expected. Did ownership start at 8 years to create another negotiation point? Either way, this is probably the right thing for both parties.

Limited Free Agency

Here we have the 28/8/%. A player who is 28 years of age with 8 years of service in MLS can get a limited form of free agency, albeit with a percentage cap on their potential increase in salary. For more detail, read this article by Steven Bank of ASN. (Credit to him for predicting the exact model that the agreement apparently contains. That article is definitely worth your time to read.) This is, in fact, a way businesses currently allow for subdivision/sub-units to compete for employees under their overall umbrella. As such, it apparently does not threaten the Single Entity structure but allows some of the kind of freedom of movement the players want.

For perspective on the 28/8 - in Major League Baseball, a similar provision allows for free agency after 6 years of service in the Majors, but does not have an age limit. Other leagues have similar age or years of service limits.

I am of a few minds on this issue. First, as you will see below, I think the players put more effort into this than maybe they should have as it cost them time to negotiate on other issues that would impact more players over the life of the agreement. On the other hand, it does make sense that if you take a macro look at things, this was another big step that needed to happen at some point, and they found a way to make it happen. Future agreements can refine this negotiating point to make it more favorable to the players.

The ultimate solution for this agreement on free agency was what many predicted - a creative version of free agency that did not in fact jeopardize the Single Entity structure - although credit again for Steven Bank for nailing its exact nature.

Minimum Salary

Here, I think you can say that the players were successful. The minimum salary went from $36,500 to $60,000 - close to a 50% increase. For a number of players, this is probably a significant change and one that will benefit them throughout their careers considering that they start at a higher level.

But some have raised the question is does this price out some players? Are there players who would have been playing in MLS in the $36,500-$40,000 range that will not be signed at $60,000? Most likely. On the other hand, with most MLS clubs having USL teams to sign players to at lower salaries then loan them to the MLS club if/when they establish their worth at that level, a lot of those players - certainly the ones that have MLS-potential - ought to have an option there.

Salary Cap

There have been a variety of reports on this. Carlisle is reporting that it is a 7% increase. Others on Twitter have mentioned 15%. It will be interesting to see what the final actual number is. If Carlisle is right, and since he has consistently been ahead of the curve on reporting much of this, and considering that the new television deal brings an additional $1-2 million per club, a $250,000 increase in the salary cap seems shallow. All things considered, while I don't think the players had a right to ask for all of the television money to go to increasing the salary cap, it seems that they could have pushed harder on this issue, especially considering here is where it likely would have had a larger impact on membership as a whole.


The devil is in the details, and so this will need revisiting once the details are known. But for now, there is credit due to both sides. All told, the players got a new wrinkle to the overall structure regarding the limited free agency issue, significantly impacted the minimum salary, got the owners off of their initial demand of an 8 year CBA and made at least some progress on increasing the salary cap - all without a work stoppage - you have to give them credit for moving the needle. Owners should get credit for finding creative ways to do what they could to work with the players while clearly not jeopardizing either the Single Entity structure or their overall salary system.

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