Breaking down the 2020 MLS Collective Bargaining Agreement and how it affects the Portland Timbers

Five years ago, there was a real threat of a potential MLS lockout. With the Major League Soccer Players Union (MLSPA) and the league struggling to come to terms on a new collective bargaining agreement (CBA), players prepared to delay the start of the season and a majority even voted to go on strike. It came down to a federal mediator and MLSPA leadership to persuade players to continue negotiating, and eventually the two sides came to an agreement. The deal got done on March 4, just two days before the season kicked off.

In preparation for 2020’s upcoming CBA, players were issued a work stoppage guide, which emphasized the need to be ready to find new housing and to budget their money in case of a potential work-stoppage. Fortunately, there will be no lockout this upcoming season as both sides came to terms weeks before the regular season kicks off on February 29.

Recently, The Athletic’s Sam Stejskal and Paul Tenorio released multiple articles (and even a podcast episode) detailing the major talking points in the new CBA and explaining the league-wide significance.

Like any CBA, there are plenty of little details, but there are also a few major concepts that could change the shape and perception of the league over time. Here are a few bullet points and mechanisms that Portland Timbers fans should be aware of.

Prioritizing younger designated players

When MLS announced the designated player rule in 2007, many considered it a revelation that helped the league break away from roster limitations of the past. It’s a rule that allows teams to sign a maximum of three players from abroad whose total compensation and acquisition costs exceed the maximum budget charge. In the decade since its implementation, the mechanism has helped teams bring higher-end players into the league, such as Diego Valeri, David Villa, Carlos Vela, and Josef Martinez, among others. Oftentimes, a team’s three designated players are what elevates it from middle-of-the pack wannabes to legitimate MLS Cup contenders.

Over the past few seasons, there has been a switch in how teams approach their DP slots: Instead of searching for past-their-prime stars from Europe, franchises are beginning to opt for younger players from South America that they can sell in the future. You can see this era ushered in by teams such as Atlanta United with Miguel Almiron and Tito Villaba or LAFC with Diego Rossi and Brian Rodriguez. Winning teams often nail a majority of their DP slots, whereas teams in the lower half of the league sometimes miss on or don’t use their DP slots.

In 2018, MLS commissioner, Don Garber, pushed MLS to be more of a selling league in the global soccer economy, and the 2020 CBA looks to emphasize some those ideas. One of the biggest facets surrounding the newest CBA revolves around bringing younger DPs into MLS that have the potential to be sold in the future. Starting in 2021, the league will cap the spending on a team’s third DP player at the maximum TAM salary — roughly $1,612,500 million this season and $1,651,250 million in 2021 — if said player is above the age of 23. Any players under the age of 23 can be signed to a DP deal with no budgetary restrictions.

This new roster stipulation could very well impact the Timbers in the near future. Portland is a franchise that tends to bring in more-experienced DPs that are in their primes. This past offseason, they had two DP slots available and filled them with 28-year old winger Yimmi Chara and 24-year old Jaroslaw Niezgoda. The youngest completed DP signing in franchise history was Lucas Melano at 22.

Next season, every one of the Timbers DPs will be over the age of 23, which means that one will have to be capped at that maximum TAM salary number ($1,651,250 million). There will be some cap gymnastics involved to be sure, but it is worth noting that had this rule gone into effect starting this season, the Timbers would have been unable to acquire Niezgoda —or at least not on a DP contract.

Could a roster regulation like this force the Timbers to spend on a younger DP? How could Gavin Wilkinson work to turn it into an advantage? While this rule won’t come into effect until next offseason, it’s something well worth keeping an eye on.

U22

Aside from introducing an age-restriction on the third DP, it appears that MLS will be implementing a roster mechanic that could help skew teams even younger.

According to Stejskal and Tenorio, the concept is not fully fleshed out yet, but the gist of it seems to be that it will allow teams to sign three 22-and-younger players for a reduced budget hit, beginning in 2021. The Athletic reported that the number could be in the $150,000 to $200,000 dollar-a-year range, similar to a “young-DP” contract.

Jeremy Ebobisse and Marvin Loria are currently 22 years old, but think of a player like 21-year-old Tomas Conechny who has the potential to continue improving over the years. Having a mechanism like this in the new CBA could promote a team like the Timbers to take more risks on young, promising players, while not having to worry about a cap hit larger than roughly $200,000 at most.

Free agency

One of the biggest wins for MLS players in this new CBA has to be the reduction of free agency restrictions. Being a single-entity league, it’s not beneficial for MLS to essentially out-bid itself when players enter into free agency — this isn’t the NBA or NFL, where each team is run independently.

In the past, players had to be 28 years of age with at least eight years of MLS experience to qualify for free agency. In that structure, DPs couldn’t enter into free agency. In the 2020 CBA, the MLSPA cut the free agency limit to 24 years old with at least five years of MLS experience while allowing DPs to become a free agent (with more restrictions, of course).

The issues surrounding MLS’ convoluted free agency structure came to light recently when Atlanta United vice president, Carlos Bocanegra, explained some of the reasoning for trading star outside-back Julian Gressel to D.C United earlier in the offseason:

“If we really wanted to, we could have had him play on $130,000 this season, extend him a bona fide offer at the end of the season and (we’d still own his MLS rights),” Bocanegra said in a conference call. ”We’re also trying to do the right thing for a guy who has given so much to the club and is really just a good kid all around.

This quote spells out exactly one of the major problems in the previous CBA. Bocanegra flat-out told reporters that the team could have tossed Gressel the minimum-possible offer, which would have forced him to sign and stay in Atlanta under team control. Situations such as that should not occur under the new CBA.

According to The Athletic, teams can continue to extend that bona fide offer — which pays a minimum of $15,000 in the first year or a 15-percent raise on the player’s previous contract — but players will not be forced to take it like in years past.

Take Timbers striker Jeremy Ebobisse as a prime example: By the time his contract is up, he can be a free agent because he hits that age range and will have more than five years of MLS experience by that point. Portland can extend the bona fide offer to the American striker, but he wouldn’t be forced to take it if it conflicts with his timeline as a free agent.

Meanwhile, Conechny and Loria have contracts that expire this December. However, neither player is 24 yet and neither has five years of MLS experience. In these situations, the Timbers can extend a bona fide offer to them, but the contracts can only offer guaranteed years until the player meets the qualifications of becoming an MLS free agent. That means that a potential contract for Conechny would have to max out at around three guaranteed years, while one for Loria would max out at roughly two guaranteed years.

Minimum contracts are also also increasing, especially with the new TV rights deal being negotiated in 2022. The upcoming TV deal could boost salary numbers even higher come the latter half of the five-year CBA cycle. This year, the senior minimum contract is $70,250, whereas next season it is projected to be $81,375. By 2024, that minimum number could raise to $109,200.

The first Timber to keep an eye on to see how this new free agency structure influences decision-making is Dairon Asprilla. According to Transfermarkt, he is on an expiring contract and meets all the prerequisites of becoming a free agent in the new CBA.

Other money numbers

Much like player salary numbers, the league’s mandatory minimum spending requirement will also be making a sharp increase in the coming years. Next season, that number is slotted to be $5.69 million; by 2024 the minimum amount a front office can spend on a team is $9.518 million — that’s roughly a 67-percent leap over four years! This can only be good for the league as TAM begins to lump into GAM, which means that this money can be spent on a wider range of players.

Below are some of the noteworthy numbers laid out in The Athletic’s CBA analysis article:

Bonuses

• Every team receives a $14,000 win bonus over the next two seasons. That total leaps to $18,000 by 2022–23.
• This season, Supporters Shield winners receive a $150,000 bonus, conference champions receive a $40,000 bonus, and qualifying for the playoffs results in a $30,000 bonus.
• Between 2021 and 2024, the second-place team receives a $70,000 bonus, the third-place team receives $60,000 bonus, and the total continues to decrease by $10,000 until it reaches $20,000 for the seventh-place team.
• MLS Cup Champions take home a $300,000 bonus for winning the trophy; the runner-up receives a $100,000 bonus.

All of these numbers are interesting, but mean very little to fans a majority of the time. Because of that, I decided to do the math and put those numbers into context for the Portland Timbers. Let’s pretend that we can use the new bonus numbers to contextualize past seasons. We’ll use the Timbers’ overachieving 2018 season as an example.

15 wins x $14,000 = $210,000

Qualifying for playoffs: $30,000

Finish fifth place in Western Conference: $40,000

Advancing past first three rounds: $140,000

MLS Cup runners-up: $100,000

Grand total: $520,000

That’s a half-a-million dollars of bonuses if the Timbers go on a 2018-esque run under the new CBA — a lot of extra money in MLS.

Could the Timbers win the shield in the next few seasons? Maybe, but that’s probably unlikely. The numbers above show why a team might have incentive to make the playoffs. Even if they don’t make a deep run, a high finish, winning games, and advancing a round or two could make a huge difference when it comes down to a team’s finances.

Of course this is a CBA, and there are so many other complexities in the deal that can be broken down in due time. Increasing the amount of mandated chartered flights from four to eight is a step up for the league, no matter how minor it might be. But the big bullet points surround the multiple incentives around encouraging younger signings and an improved free agency structure — all things that could impact the Timbers both in the present as well as into the future.