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A Look Back to Understand the Possible Future of the CBA

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A quick glance at the history of MLS's CBA with the player's union and past negotiations with the union.

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In order to understand what might happen the future one must look to the past. So, in order to understand what might happen when MLS and MLSPA get together to talk about about the new agreement we need to look back at the last two Collective Bargaining Agreements (CBA) and prehistory.

Pre-2004 CBA

Prior to the formation of the MLS Players Union there was no CBA. Rather, MLS set the salaries and budgets for all teams and all players. Among the many signing quirks it has been said that Mexican goal keeper Jorge Compos was given an expensive sports cars as an incentive to play in MLS (source), and others a pittance just to play with no real power over their contracts. MLS was challenged in court over their absolute control of players inside the league based on Federal anti-trust laws. MLS won after spending $10 million in legal fees. Read more on this court case in a lengthy post from fellow SF reader Kejsare here. In the aftermath of that failed challenge the MLS Players Union was formed and negotiations with the league began in 2003.  After a long negotiation, the 2004 CBA was signed on December 1, 2004.  It was set to expire after the conclusion of the 2009 season. So began the quinquennial talks.

2004 CBA

There is not a lot that can be found on the internet concerning the negotiations that occurred prior to the 2004 CBA being agreed upon but there are a few pieces of information we can look at which puts some things into focus. According to a New York Times piece the average salary at the time was $80,862 but the median salary was $52,250. The highest paid player at the time was Freddy Adu and he came in at $500,000. In the same article, it mentions that the rookie starting salary came in around $25,000 and according to the old CBA was the minimum salary a player could be payed. By the end of the CBA, it would raise to an astounding $34,000 per year.

In the old CBA, starting on page 37, it also mentions there were three types of contracts. The contracts were Guaranteed, Semi-Guaranteed and Non-Guaranteed. A couple other things to note in the CBA that there is no mention of designated players or the "Beckham Rule" and there is not one word about the Salary cap. This means a salary budget is not something that was put into the CBA but is taken care of by MLSHQ policy as well as designated players. Some of the other things the CBA did not address in 2004 was the movement of players and the rights of the players after their contract is up. In fact, most of those were also MLSHQ Policies.

Just reading the 2004 CBA you get the sense that the CBA was really bare bones and let MLSHQ set policies outside of the CBA. (Admittedly, I did not read all of the pages but did perform searches for certain keywords and read key sections.) The 2004 CBA was up after the 2010 season and based on that negotiation we can make a guess as to what might happen during this negotiation.

2010 Negotiations

The 2010 negotiations focused mainly on players rights and their contracts. Players wanted guaranteed contracts, higher salaries, and greater flexibility in player movement. MLS wanted to keep the status quo because at the time only three teams had supposedly earned a profit and those teams earned a combined $6.7 million on profit. In addition, the Portland -- and MLS -- financial feasibility study concerning adding Portland to MLS in early 2009 pinned annual capital calls from team owners at around $3.1 million per club, and Soccer United Marketing payouts at $1.6 million. (Interestingly enough a recent DC government funded study now has capital calls down to a projected $1.75 million in 2017. See page 43 of that report) With most clubs operating at a loss, the league wanted to ensure that contracts did not become completely guaranteed and did not want to allow a true free agent market where teams would get into a bidding war over certain players.

With both parties seemingly far apart on a couple of issues, the negotiations started in January of 2010. For a month and a half, neither side talked about the negotiations and the silence was a sign of trouble. It wasn't until February that the silence was broken and we started to see the battle lines and where they were drawn. Of course, when both sides broke the silence, they both wanted to win the public over to their side and thus for a month there was a war of words played out in the media. It wasn't until March that the negotiations were finally resolved and both parties would not have come to an agreement if it weren't for the work of a mediator. The mediator, George Cohen, was able to get both sides to compromise and find middle ground.

In the end, the new CBA was agreed upon and no labor stoppage would occur. The new CBA allowed MLS to keep it's single entity structure and kept the core principles in place. The players did not get their dream of free agency but did earn limited movement with the re-entry draft. MLS also agreed to raise median salaries and the developmental salaries to better help the young players. They also agreed to certain benchmarks, things like age or number of years in the league, which would guarantee higher pay, as well as a guaranteed contract, by meeting the benchmarks.

While the negotiations were not smooth sailing, both sides came out feeling good about their situation. Over the next five years, a lot more has happened to change the landscape of soccer in America and this means this year's negotiations may be even more contentious.

As a review this is what each of the last two CBAs accomplished(some of this is speculation):

2004

  • Very light on player rights and ability to move freely between clubs

  • Salaries laid out but most of them non-guaranteed

  • Most policies created outside of the CBA

2010

  • Player movement still restricted but an additional opportunity to move added through the re-entry draft

  • More guaranteed contracts added of players meet certain criteria

  • Median Salary increased

  • Possibility of salary budget added directly to the CBA in response to two above points.

Stay tuned for Part 2 and 3 which deal with what has happened since the last CBA was agreed to and what the negotiations might look like. (Special thanks to my head of research Kejsare! Thanks little bro!)