Wanting to be, as Commissioner Don Garber often puts it, “a destination league” is an admirable goal and while the story goes that all sides are united in that goal, I have to wonder if that is in fact the primary focus for all involved?
Before the league can sit down with the players association and hammer out the details on the next collective bargaining agreement, the owners, or more accurately investors, will need to decide just what they really want out of their involvement with MLS. While the investors and investor groups are granted the title of owner and given charge of a franchise, the effect of the single entity business model tends to hinder owners’ abilities to maximize their influence on a particular market.
In the early years of the league, the single entity business model proved to be beneficial to the sustainability of the league. Now, however, I cannot help but wonder if these newer investment groups will have the same goals of league sustainability in mind. Do the groups making expansion pitches for the markets of Sacramento, Minneapolis, and Las Vegas have a greater interest in MLS or in their own community? Could some recent events change the minds of the tenured owners even?
The biggest issue that could crack the foundations of single entity status is that of Jermaine Jones. It is no secret that the Chicago Fire wanted to sign Jones but lost out to the New England Revolution, not because the Revolution came with a better or more lucrative contract offer but rather because New England won the “blind draw”. Chicago missed the playoffs, whereas, Jones’ arrival propelled the Revolution to the MLS Cup Final and became one of the biggest stories of the season.
Such circumstances, I imagine, would have to stick in the craw of the ownership group of Chicago. Undeniably and understandably the fans are frustrated and upset but in this case upper management cannot be held accountable nor are they able to do anything about it. The chance to sign a big name player with the talent to turn a season around instantly was taken from them and they were helpless to do anything about it.
If MLS is truly interested in becoming a destination league then they are going to have to face some hard truths that shake the foundations of the league themselves, and that is before they even meet with the players.
They must realize that a situation like Jones’ cannot be allowed to happen again. MLS will not attract the attention of big time talent with the promise of playing “somewhere” in North America. The clubs must be allowed to lure the talent over themselves. Which means first giving the clubs the freedom to open up their wallets and secondly, allowing the clubs to make their own mark in the world football/soccer landscape.
There is no denying the marketability of several Canadian and US cities across the world. Toronto, Montreal, Los Angeles, and New York stand as beacons of media exposure. Chicago, Dallas, and Houston are no slouches when it comes to the world market either. Franchises in these cities and across several sports have found a place in the world market but they did not do it by having their hands tied by their leagues. They did it by building successful championship caliber teams and by marketing their brand.
Sadly, while in the process of growing the league, winning MLS Cup championships will not be enough to elevate a clubs status. The best way for a MLS club to make their mark on the world map is going to be through CONCACAF and their Champions League. But with the salary restrictions and odd ball approach to player management providing a very uneven playing field, what are the realistic chances of an MLS club making the consistently deep runs into Champions League play that would be required to raise their status?
I do not think that we will see an outright replacement of the MLS business model but with some foresight, revisions could be made laying the groundwork for the ascension of MLS into their desired tier of soccer leagues.
Will the owners come to the table with the same conservative approach that has led to the steady albeit slow progress of the league or will they approach negotiations with an openness to the changes many would declare as imperative to push the league fully into the next stage of its evolution will be?
Like most labor negotiations the battle between the sides will ultimately come down to money but how the sides reach that point in this debate will be critical to maintaining the progress the league has made and maximizing the benefits of recently raised national team profile.
Clearly, and rightfully, the players association will be seeking drastic changes to the terms of player payroll and acquisition. Many of the terms included in the last collective bargaining agreement (CBA) are too short-sighted and conservative to maximize any sudden growth in the sport, while others need to be viewed as antiquated and removed.
In the expiring CBA, the league sought to control the player’s wages through a “Salary Budget” that served as an artificial salary cap. Each club was allowed up to 30 roster spots with the first 20 roster slots counting against the budget. Roster slots 19 and 20 however were not required to be filled. Roster slots 21-30 were reserved for off budget players such as those under the Generation adidas label.
The salary budget was increased yearly by 5% from $2.55 million in 2010. Player’s salary, depending on playing time, would increase between 10 and 12.5% annually. For 2014, the salary budget was $3.1 million. The maximum contract allowed was $387,500 and the minimum for on budget players was $48,500. However, the inclusion of Designated Players and Allocation Money allows teams to circumvent the salary budget.
Every team is allotted two Designated Player (DP) slots on their roster with the option of buying a third. The DP slot only counts for a set price against the salary budget but allows the club to pay a player over the maximum salary.
Allocation money is money allotted to a club that enables them to pay down a player’s salary budget hit. For example, a club with $100,000 in allocation money could sign a player in 2014 to a $487,500 contract and not violate the salary budget. A club’s allocation money amount is not disclosed and is tradable.
Taking into consideration that the salary budget increases at a lower rate than player salary, clubs can acquire allocation money through trade or by transferring a player out of MLS. There is a limited number of players per roster that can be paid at real market value, so it comes as no surprise that the league has established a payroll system that is highly unfavorable to the majority of the players.
A more transparent and straight forward salary structure is a must in the new CBA. Mysterious allocation money and a slotted wage scale have no place in a league trying to contend with the world’s elite. Players of all levels within MLS must be allowed to earn a fair market price without crippling a team’s ability to go out and sign that big name player.
Toronto FC is the best example of how faulty and crippling the current system can be to a team. The management at TFC understood the need to go out and do something to break the cycle of failing to make it to the postseason. They spent big money on big names but essentially ran out of room within the salary budget to supplement the stars with a talented supporting cast. Now, after one season they are unable to reload the roster and their only options left are to continue with a faulty supporting cast or sell off the newly acquired talent and start all over once more.
While completely eliminating the salary cap might seem like the most beneficial option for the players, it is unrealistic and would be too drastic a change of course at this time. However, a streamlined system of a salary budget with a luxury tax penalty would allow those clubs seriously interested in pursuing top flight talent to do so without the worry of it blowing up in their face one year in.
The salary structure is going to be a major hurdle to overcome in the negotiations but if the owners are serious about moving the league forward and a new system is implemented, the next major issue to hit the table will be player acquisition and roster regulations.
The big issue in that debate will be of course Free Agency but also look for a debate on just how tied MLS should be to the US and Canadian National Teams.
With current regulations in place limiting the number of international player allowed into MLS, true free agency is not a possibility at the moment. In 2014, only 152 International slots were available to the 19 MLS clubs. Canada’s three teams could sign either US or Canadian citizens to domestic roster spots, but the US clubs would have to use an International slot to sign a Canadian. Immediately the league places the US Men’s National team in higher priority than the Canadian counterpart.
National team success can be a great benefit to the league profile, therefore the league should not be making the decision to add a Canadian National team player to a roster more difficult than the decision to add a USMNT player. If the league is going to represent both countries rules like that cannot be in place.
Logically, the next question would have to be, should there even be a limited number of International roster spots? As long as there is a limited number of roster spots available to the international players, free agency will remain highly improbable. Without free agency, however, the ability to become a destination league also remains improbable.
MLS has just wrapped up a season full of feel good stories, World Cup stars, late-season drama and playoff intensity. They just signed a TV deal worth triple the amount of their last deal. It feels like there is a new momentum driving the sport into the offseason. There is a new level of attention on the league. There is a hope for the future and a sense that a breakthrough is just on the horizon.
MLS is standing on the precipice of unheard of domestic popularity, but if this off-season’s negotiations are not handled properly it could all come crashing down. A players strike or a management lockout could ruin all the good vibes and momentum developed up to this point.
The players wants are pretty clear. A fairer pay scale for all levels of talent in the league, fair market value for the top stars, and freedom to choose the best club for themselves. What the league and the owners want is a little less certain. Their talking points remain vague and guarded but their intentions will be known soon enough. Do they really want to move the league closer in line with the rest of the soccer world? Are they willing to make the changes and take the risks associated with becoming a destination league? Come February, we will know.
The season may have just ended but the biggest MLS match of the year has just begun.
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