On Tuesday afternoon, Major League Soccer released the most poignant details of the recently announced collective bargaining agreement between the league and the players union.
“We had three very important objectives," MLS commissioner Don Garber said in a teleconference on Tuesday. "We needed to have a plan that would allow us to reduce our losses that would allow us to be able to be profitable league-wide, and to grow our attendance and grow our TV ratings. We needed that agreement to be able to achieve all three things.”
The agreement, according to a release from the league, is still subject to the approval of the MLS board of governors and the players.
The most interesting details of the new five-year deal concern the financials, including a 10.15% increase in each team’s salary budget, and loosened restrictions on player movement within the league. Minimum salaries are increasing to $40,000, and younger "development players" will now make more than before.
A so-called “re-entry draft” does not allow for full-blown free agency—one of the players’ main points of contention during negotiations—but does allow more freedom to players out of contract or whose contract is terminated.
"Frankly, I give the union credit for thinking about this concept of a re-entry draft that would capture all these players," Garber said. "We all know we don’t have enough noise in the offseason. Now we have a system prior to the SuperDraft that will give us something we think is interesting and exciting."
When asked about how the deal will affect the Designated Player rule, Garber stated the topic was not part of the discussions, but admitted that other changes will be coming later this season. He suggested the DP rule might be opened to include more than one per team.
"It’s in all of our best interest to ensure that we have star players in this league to grow our attendance and ratings in a mechanism that makes sense," he said. "It’s possible we might increase the number of designated players [per team]. We haven’t gotten there yet, but it makes sense that we try to achieve that."
Here are some of the CBA’s details spelled out:
TERM: 2010 – 2014.
GUARANTEED CONTRACTS: The CBA provides for guaranteed contracts for all players who are at least 24 years old with three years of MLS service. The majority of the players in the League will have guaranteed contracts each season.
SALARY BUDGET: An increase of the salary budget from $2.315 million per club in 2009 to $2.55 million in 2010 (10.15%) and an increase of 5% per year thereafter.
An increase of the minimum salary for senior roster players from $34,000 in 2009 to $40,000 in 2010 (17.64%) and an increase of 5% per year thereafter.
PLAYER MOVEMENT: While there will be no bidding by MLS clubs against each other for out-of-contract players, the League will establish a “re-entry draft” for players who are out of contract. Although the specific parameters of that draft are being finalized, it will address players in each of the following categories:
Option Not Exercised
- A player who is at least 23 years old with three years of MLS service and whose option is not exercised will be placed in a re-entry draft and made available to all clubs at his option salary.
Contract Terminated
- A player who is at least 22 years old with one year of MLS service and who is asked to take a pay cut after contract termination will be placed in a re-entry draft and made available to all clubs at his current salary.
Contract Expires
- A player who is at least 30 years old with eight years of MLS service and whose contract has expired will be placed in a re-entry draft unless his team makes him a qualified offer that must be at least 105% of his last salary. If placed in the re-entry draft, the player will be made available to all clubs at a salary equal to 105% of his last salary.
- A player who is at least 25 years of age with at least four years of MLS service whose contract has expired will be placed in a re-entry draft unless his team offers him a base salary of at least as much as the base salary paid to him in the last year of his contract. If placed in the re-entry draft, the player will be made available to all clubs at a salary equal to the salary in the final year of his contract.
OPTIONS IN PLAYER CONTRACTS: A limit on the number of options in player contracts to two for players who are at least 25 years old with four years of MLS service. Contracts for all other players may have up to three options.
For players whose annual compensation is less than $125,000, the minimum increase in base salary will be 10% for players who play in at least 66% of his club’s games and 12.5% for players who play in at least 75% of his club’s games.
PLAYER BENEFITS: The CBA includes a package of benefits that include increases in 401K contributions by the League, appearance fees, per diem when travelling and relocation expense reimbursement. Among the additional player benefits in the CBA are full health care benefits for every player and his family at no cost, 401(k) contributions and expanded insurance benefits.
BONUSES FOR WINS AND EXHIBITIONS: The CBA includes a package of bonuses for wins in MLS games and international tournaments as well as appearance fees for international exhibitions.
GROUP LICENSE: The League and Players Union reached agreement on an extension of the Group License that will run through 2015 (a year longer than the CBA).
RESERVE DIVISION: MLS and the Players Union will establish a joint committee to study the re-launch of a Reserve Division. In the event the rosters are expanded, the salary for those players will be a minimum of $31,250 with additional annual increases.
