This is part three of a five-part series examining the key issues the MLS players and owners are negotiating in the CBA. The other parts can be read here.

Budget rules

Part III of our look at the issues animating the MLS Collective Bargaining Agreement negotiations will focus on the MLS budget rules.

Background: Designated Players, TAM/GAM (general allocation money), discovery lists, allocation order, re-entry/waiver drafts ... stop me before you go cross-eyed. To be fair, other sports leagues in the United States have mechanisms along these lines, but they all take a backseat to MLS. Most of these are designed to help the league maintain control over its players — the players sign with the league and not the individual teams after all.

And then there is the Designated Player of it all. Ushered in with Beckham’s handsome arrival in the league, DP’s allow teams to exceed the maximum salary budget to sign high-priced players. Like TAM, most agree that the DP mechanism has been a huge success on and off the field. The four teams to reach MLS Cup semifinals in 2019 (Atlanta, LAFC, Toronto and MLS Cup champion Seattle Sounders) all employed the full allotment of DP’s.

Current agreement: Where to begin. The current deal allows for two DP’s, with teams being able to purchase a third for $250,000 (distributed to teams who don’t have three DP’s). The allocation order is determined by reverse order of record in the league, while the re-entry draft allows teams to claim players who are out of contract, but don’t qualify for free agency based on age/service time. There are all sorts of subsections to the re-entry draft, mainly related to how much money a team must offer the player, which are incredibly tedious, especially given how few players are taken in these drafts.

What the MLSPA wants: Is there any room left on that rocket? Basically the Union would like two things: simplicity and transparency. “MLS oversees an overly complex and unnecessarily confusing system to build rosters and acquire players,” according to a release from the Union. “The system is littered with acronyms that fans, commentators and players struggle to understand.” Getting rid of the various waiver/re-entry drafts and allowing players to sign outright with teams would surely be a priority for the Union.

What MLS wants: Like Janet Jackson said, “Control.” And, maybe, more. A report out from Sam Stejskal indicates that some MLS owners would like to restrict the Designated Player program, as more “cash strapped” owners increasingly feel they can’t compete with the big-spenders. Many of those owners have influence over the relevant MLS committee who would propose any rule changes, which Sam in his report says are regularly “rubber-stamped by the league.” Additionally — and more relevant for this story — those changes would occur outside the context of a new CBA, unless the Union could negotiate otherwise.

Chances of an agreement: Before I handicap things, read this quote from Sam’s story above on low-revenue teams:

“They don’t think they generate enough revenue to justify spending the sums required to regularly compete for places at the top of the league. The uncertainty about how much revenue the league will generate from its next national broadcast deal, which will begin in 2023, adds to that feeling, according to the sources. Instead of upping their outlay, the sources said that the lower-budget teams would rather limit the options for their richer competition.”

If so-called low-spending owners have that much influence, and they’re thinking of implementing rules that *restrict* spending, it’s hard to see where there is room to go here. So either the union doesn’t even play on this field, or we’re at loggerheads. Now, it should be pointed out that the DP restriction would affect exactly ZERO teams (thus far) in 2020. No MLS teams right now have three DP’s who are over 23 AND make over $1.53 million per year in compensation, which is where this restriction kicks in.

The only teams that did in 2019 (LA Galaxy and Toronto) got rid of at least one of those players (Zlatan and Michael Bradley, respectively). Now what this new rule would do is prevent them from doing so going forward, but it’s impact would be relatively minimal across the league, as most teams are not buying three high-priced DP’s. What it does signal, though, is a restriction on investment, and a tightening of control by the league.

As it pertains to the other budget rules, it again seems unlikely that MLS would give up outright its ability to control player movement for young players with limited service time. That doesn’t even happen in the other major US sports leagues, which have Unions much older/stronger than the MLSPA.

That said, those other leagues don’t deal with nearly the player pool there is in soccer. But when it comes to young players, or those with limited options to go abroad (without risking not getting paid or worse), there is little leverage to be exerted over the league. Frankly, it’s more likely the Union punts on these issues (save TAM) to focus on other priorities, but maybe MLS decides things like the waiver draft are pointless at this point in the league’s development.

Part IV (Working Conditions) to come...