Major League Soccer and the MLS Players Association announced an accord on a new five-year collective bargaining agreement Thursday, with huge increases in salaries, charter travel, and free agency.
The deal takes effect immediately, weeks before the league’s 25th season starts Feb. 29. This means there will be no player strike, and teams can roll on with preparations for their campaigns — including CONCACAF Champions League games that start Feb. 18. The last two CBA negotiations went right up to the eve of kickoff.
“Overall, we’re tremendously happy with where we got to," MLSPA executive director Bob Foose said. "We think it represents really broad progress across the player pool in ways that will help MLS grow. ... We got a deal that’s going to significantly change what it means to be an MLS player, and lead us into the future.”
MLS commissioner Don Garber said in a statement: “We had constructive, positive discussions with the leadership of the MLSPA and the players’ bargaining committee during the negotiations over the last few months, and I would like to thank them for their collaboration in concluding an agreement that will serve as the foundation for a new era of partnership with our players.”
Foose also thanked the league for having "negotiated in good faith throughout,”
The full CBA will be published when it is fully ratified. For now, here’s a look at key points of what the two sides agreed on.
The league’s salary budget baseline immediately rises to $4.9 million from last year’s $4.24 million. That’s a 15% increase, after the previous CBA’s annual increases of 5%. The baseline will continue rising to $6.425 million in 2024.
It’s called a baseline because it isn’t a cap or a floor, but more of a guideline for each team to aim for. There are still exceptions for Designated Players and Targeted Allocation Money, but not as many as there used to be.
There will also be notable increases in the league’s minimum salaries. For most players, that number jumps from $70,250 last year to $81,375 this year, and rises to $109,200 in 2024. For reserve players, the number is $63,547 this year, up from $56,250 last year, and will hit $85,502 in 2024.
In addition, there are are increases in player bonuses for winning games and tournaments.
Targeted Allocation Money
Over the last three years, teams were given $1.2 million each by the league in Targeted Allocation Money, a fund to use to buy or retain players with salaries above the Designated Player threshold but not count them as DPs. That fund of money still exists, but can now be used across the entire roster.
In addition, teams were able to buy a further $2.8 million in TAM each year, under a classification called Discretionary TAM. That still exists, but because of the increase in overall spending leaguewide, the amount of TAM available will decrease each year.
The players’ association wanted to get rid of TAM entirely, and while that didn’t happen, there has definitely been a simplification of the system. A TAM player can earn up to $1 million more than the DP threshold without counting as a DP. This year’s threshold is $612,500, an increase from last year’s $530,000. So the maximum amount a team can spend on a TAM player this year will be $1,612,500.
As with past years, DP threshold includes not just spending on salaries, but also transfer fees.
Teams will continue to be allowed three Designated Players per season, though there’s a twist on the third. That player’s salary is to be limited to the maximum allowable under the TAM spend threshold, with two exceptions. If the players is 23 years or younger, there’s no limit; and the league has the right to grant a team an exception.
The CBA also includes the option for MLS to implement a new player classification: Starting in 2021, the league may grant clubs the right to sign up to three players age 22 of younger with cap hits below their salaries.
“The provisions in this CBA have done a good job of advancing the the path and the process of teams having the freedom to construct their own rosters as they choose,” Foose said, “and starting to move away from such a heavy, centralized system. That’s certainly a positive development from our front.”
Here’s a table explaining all of the increases in spending. The new CBA is far more transparent with such figures than past editions has been especially when it comes to the total amount teams actually have to spend on salaries.
As previously noted, in past CBAs the numbers almost all went up by 5 percentage points each year. In the new agreement, the increases vary each season.
A reminder that the “total spending per team” level still isn’t necessarily the maximum, because there’s no formal limit on DP salaries.
The initial CBA announcement did not include specifics on the annual minimum salaries except for 2020 and 2024. Those details will be added when they are released.
Foose said that team owners’ spending will rise 37% over the course of the deal. The total sum put toward players’ pay and benefits will be just under $2 billion.
“We are getting to the point where even in our very expensive cities, every player is able to make enough money to live well,” he added.
In a huge win for the players, there’s an increase in charter flights, so players won’t have to fly commercial airlines as much.
Teams will now be required to fly charter for eight one-way trips in the 2020 regular season, and that number will rise to 16 one-way trips in the 2024 regular season. The old rule was that teams could use up to four one-way charter legs for league games per season. Some teams, including the Union, didn’t use any.
Teams will also be required to fly charter for all playoff games, and CONCACAF Champions League games played abroad. There will not be a requirement for the second-tier Leagues Cup between MLS and Mexican teams, which the Union are in this year
“There’s still room to grow there, but the way that it incrementally increases throughout the deal, and to have a mandatory portion, is great and it’s a huge stepping stepping stone for us as players,” said Atlanta United’s Jeff Larentowicz, a Chestnut Hill Academy product who serves on the MLSPA’s executive board..
Increasing charter flights was one of the players’ big priorities, and they had widespread support on it from fans.
A source said the league agreed with calls by the players and even some coaches for chartering more in the name of player health, increasing rest and recovery time. But the league wasn’t willing to go all the way on mandating charters for every game.
“We were not looking just for the comfy travel of a charter flight -- our primary reason for going for charters was to improve the game," Minnesota United’s Ethan Finlay said. "To be able to get players home the night after the game so that you don’t lose a day, you can have a recovery day, and hopefully have a better result come the weekend.”
The eligibility point for free agency has been significantly lowered. Previously, it was 28 years of age and eight years of service time. It’s now 24 years of age and five years of service time. Players earning a salary above the DP threshold can also become free agents.
Foose said the lowering of the threshold more than doubles the number of players eligible for free agency in a given year.
There are limits on how much more money a free agent player can get with a new contract. Some of them are complex, but the simplest explanation is that most players will be eligible for a 15% raise.
Players to share media revenue
For the first time in league history, players will get a direct share of media rights revenue when MLS strikes its next round of deals that will start in 2023.
The league will increase player spending based on a formula that works as follows: First, take the total media rights revenue earned in 2022 and add $100 million to it. Then take the total earned in rights deals in 2023 (which the league logically expects to be a higher number).
Subtract the first number from the second, then take 25% of that total. That’s the sum that will be divided among the players in the 2023 and 2024 seasons.
All of MLS’ domestic and international rights deals expire at the end of the 2022 season.
You might be wondering what the total sum earned in 2022 will be. A source with knowledge of the situation said the league doesn’t know yet because there are clauses for years before then that will affect the 2022 figure. Foose said the MLSPA has an expected figure, but is keeping it proprietary.