MLS labour negotiations leave a bleak picture for the 2015 season

Normally the week before the start of the season is a time for joy for football supporters. No longer are fans forced to watch preseason matches and rationalise to themselves that these matches bear importance.

It is a time for looking forward, for prognosticating about where one’s team stands against the rest, and for hopefully making plans for the MLS Cup. Oh, and do not forget about organising pre-game parties.

 

But there is a large dark shadow cast over the start to this 2015 Major League Soccer season and that is of course the ongoing labor negotiations between the MLS Players Union and the owners.

For the first time in league history there is a very real chance that matches might be lost due to a work stoppage. But why is this happening and how can this situation be resolved?

The biggest issue when talking about the MLS labor situation is that there seems to be a lack of knowledge about the issue. MLS is notoriously tight-lipped about all labour and contract matters.

The league never releases exact figures of the terms of contracts nor does it appreciate when members of management speak out on any labor issues. When Real Salt Lake owner Dell Loy Hansen spoke about the issue of free agency in the league this week, he was slapped with a huge fine by the league.

Interestingly enough that statement by the league is the only piece of information that you can find on the current contract situation on MLSSoccer.com, which is owned by the league.

To fully understand the issues in play it is really important to gain some level  of knowledge as to how the league was formed. When MLS was created in the middle 1990s it was created in an environment looking to avoid the fate of the North American Soccer League, which had folded about 10 years prior.

Although the NASL was obviously known for having players like Pele and Franz Beckenbauer, its owners were also known for their outlandish spending. The league folded due to teams spending beyond their means.

The original MLS owners wanted to avoid the same financial problems that the NASL had and thus adopted the single entity system, where the league maintains considerable control over how and where players can go.

Whereas in other countries players have the right to negotiate with other teams in MLS this does not exist. Players have almost zero control as to where they can play.

 

Going abroad does little to change this situation. In the MLS bylaws it states that MLS teams retain the right of first refusal for any player who comes back to the league after playing abroad unless the team did not offer a new contract or if it received allocation money from a transfer. MLS clubs can also retain the rights of international players via discovery claims, once again giving them the right of first refusal.

Players who are not affected by this (most of whom are US Men’s National Team Players) are placed in an Allocation Ranking, where certain teams are given priority over others in picking up quality players.

Teams can trade spots with one another to move up or down the rankings. Many of these players are then signed to Designated Player deals, contracts that are exempted from each team’s salary cap.

This is perhaps where we see cracks in the old ways of MLS; teams like the Los Angeles Galaxy and Toronto FC are more likely to trade up in the order and grab these lucrative players because they can afford them while others like the Colorado Rapids (who only picked up their first Designated Player two years ago) or D.C. United.

This system is not without its merits. For a league that nearly went out of business ten years ago, it makes sense that they would want to contain costs and to protect teams from over-spending. MLS wants to avoid a Portsmouth, Rangers, or Leeds situation because if a team were to go bankrupt the team would fold.

But the problem is that this system unequivocally favors the owners and not the players. Which is precisely why the Players Union is pressuring during this round of Collective Bargaining negotiations for a system that includes free agency. The MLS owners do not want players to have free agency because it will ostensibly drive up the salaries of players.

This is not the first time that the Players Union have brought up the issue of free agency. It was an issue back in 2010 during the last round of collective bargaining negotiations. The issue of single entity has also been brought up in Federal Court in the case of Fraser v Major League Soccer in 2002, a case very similar to the Bosman ruling in Europe in terms of its importance on player movement.

In the Fraser case, the United States Court of Appeals for the First Circuit ruled that MLS was not a monopoly because it was competing with other leagues in the US and international clubs for the services of players. This, in effect, upheld the single entity system.

 

So what makes the players believe that they can win this time in labor negotiations? Perhaps it is due to the league no longer being able to hide behind the notion that it is losing money.

With players like Steven Gerrard and Sebastian Giovinco coming into the league, with the league signing multi-million dollar television deals with ESPN, Fox/SkySports, and Univision (a Spanish language channel in the United States) the league seems to be as healthy as it ever has been.

There is also the issue of expansion. It would seem counter-intuitive that a league losing money would continue to expand as much as the league has in recent years.

Since the last CBA was signed, the league has added five teams to the league and will be adding three squads in the future (Atlanta, Los Angeles FC, Miami). Interested parties who want an MLS team must pay an expansion fee, which for Los Angeles FC was reportedly $110 million.

So will there be a work stoppage? It is certainly a possibility. If the players feel that strongly about the issue of free agency, and by all indications they do, then matches may be lost.

The problem is how long they can hold out. Although players like Michael Bradley or Clint Dempsey could hold out for extended periods, other players who earn much less may not be able to. MLS still holds the rights to these players and they cannot just go to another team.

Perhaps the players biggest asset might be with newer owners coming to the league who might not feel as strongly about single entity as older owners do.

Owners like the Kraft family (New England Revolution) and Phillip Anschutz (Los Angeles Galaxy) may feel strongly about the single entity system but does City Football Group (NYCFC) Inter Milan owner Erick Thohir (D.C. United,) or Arthur Blank (Atlanta) feel the same way?

MLS is evolving and as it does it will continue to confront these issues. The league cannot grow without looking at the fundamentals of how they do business. While one can debate the Fraser ruling, what the US Courts did get right is that the league is competing with other leagues in the world.

MLS is losing in many respects to international clubs on its own soil. Supporters are frustrated by the lack of answers that the league is giving them on player acquisition and are frequently tuning out the league.

Although MLS may not be going extinct, it could become irrelevant if it does not solve this labor issue.

The Author

Sean Maslin

BPF Columnist, Washington Spirit/D.C. United beat writer and general editor-Prost Amerika, Columnist-Playing for 90. Radio MLS: https://itunes.apple.com/us/podcast/radio-mls/id979377624?mt=2

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